EXHIBIT 10.2
EXECUTION COPY
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SALE AND SERVICING
AGREEMENT
among
BANKERS TRUST (DELAWARE),
not in its individual capacity but solely as owner
trustee of M&I Auto Loan Trust 2001-1
as
Owner Trustee
BOND SECURITIZATION, L.L.C.
as
Depositor
M&I XXXXXXXX & XXXXXX BANK
as Servicer
and
BANK ONE, NATIONAL ASSOCIATION
as Indenture Trustee
Dated as of August 30, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS............................................................... 1
SECTION 1.1. Definitions.......................................................... 1
SECTION 1.2. Other Interpretive Provisions........................................ 1
ARTICLE II. CONVEYANCE OF RECEIVABLES................................................. 2
SECTION 2.1. Conveyance of Receivables............................................ 2
ARTICLE III. THE RECEIVABLES........................................................... 3
SECTION 3.1. Representations and Warranties as to Each Receivable................. 3
SECTION 3.2. Purchase by Servicer upon Breach of Representation or Warranty....... 7
SECTION 3.3. Custodian of Receivable Files........................................ 8
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES............................... 11
SECTION 4.1. Duties of Servicer................................................... 11
SECTION 4.2. Collection of Receivable Payments.................................... 12
SECTION 4.3. Realization upon Receivables......................................... 13
SECTION 4.4. Physical Damage Insurance............................................ 13
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles............... 14
SECTION 4.6. Covenants of Servicer................................................ 14
SECTION 4.7. Purchase by Servicer upon Breach of Covenant......................... 14
SECTION 4.8. Servicing Fee........................................................ 15
SECTION 4.9. Servicer's Report.................................................... 15
SECTION 4.10. Annual Statement as to Compliance; Notice of Default................. 16
SECTION 4.11. Annual Independent Certified Public Accountants' Report.............. 16
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables........................................................ 17
SECTION 4.13. Reports to the Rating Agencies....................................... 17
SECTION 4.14. Servicer Expenses.................................................... 17
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS
AND NOTEHOLDERS; ADVANCES................................................. 17
SECTION 5.1. Establishment of Collection Account.................................. 17
SECTION 5.2. Collections.......................................................... 20
SECTION 5.3. [Reserved]........................................................... 20
SECTION 5.4. Additional Deposits.................................................. 20
SECTION 5.5. Distributions........................................................ 20
SECTION 5.6. Statements to Certificateholder and Noteholders...................... 22
SECTION 5.7. Net Deposits......................................................... 23
SECTION 5.8. Reserve Account...................................................... 23
SECTION 5.9. Monthly Advances..................................................... 24
ARTICLE VI. DEPOSITOR................................................................. 24
SECTION 6.1. Representations of Depositor......................................... 24
SECTION 6.2. Continued Existence.................................................. 26
SECTION 6.3. [Reserved]............................................................ 26
SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations
of, Depositor.................................................. 26
SECTION 6.5. Limitation on Liability of Depositor and Others...................... 27
SECTION 6.6. Depositor May Own Certificates or Notes.............................. 27
SECTION 6.7. Security Interest.................................................... 27
SECTION 6.8. [Reserved]............................................................ 27
ARTICLE VII. SERVICER.................................................................. 27
SECTION 7.1. Representations of Servicer.......................................... 27
SECTION 7.2. Indemnities of Servicer.............................................. 29
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer................................................... 30
SECTION 7.4. Limitation on Liability of Servicer and Others....................... 31
SECTION 7.5. M&I Bank Not To Resign as Servicer.................................... 31
SECTION 7.6. Existence............................................................ 31
SECTION 7.7. Servicer May Own Notes or Certificates............................... 31
ARTICLE VIII. SERVICER TERMINATION EVENTS............................................... 32
SECTION 8.1. Servicer Termination Event........................................... 32
SECTION 8.2. Appointment of Successor............................................. 33
SECTION 8.3. Payment of Servicing Fee............................................. 34
SECTION 8.4. Notification to Noteholders and Certificateholders................... 34
SECTION 8.5. Waiver of Past Defaults.............................................. 34
ARTICLE IX. TERMINATION............................................................... 35
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice............. 35
ARTICLE X. MISCELLANEOUS PROVISIONS.................................................. 35
SECTION 10.1. Amendment........................................................... 35
SECTION 10.2. Protection of Title to Trust Property............................... 37
SECTION 10.3. Notices............................................................. 38
SECTION 10.4. Assignment.......................................................... 38
SECTION 10.5. Litigation and Indemnities.......................................... 39
SECTION 10.6. Limitations on Rights of Others..................................... 39
SECTION 10.7. Severability........................................................ 39
SECTION 10.8. Separate Counterparts............................................... 39
SECTION 10.9. Headings............................................................ 40
SECTION 10.10. Governing Law...................................................... 40
SECTION 10.11. Assignment to Indenture Trustee.................................... 40
SECTION 10.12. Nonpetition Covenant............................................... 40
SECTION 10.13. Limitation of Liability............................................ 40
SECTION 10.14. Further Assurances................................................. 41
SECTION 10.15. No Waiver; Cumulative Remedies..................................... 41
SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Location of Receivables
Schedule C -- Perfection Representations
EXHIBITS
Exhibit A -- Form of Servicer's Report
APPENDIX
Appendix X -- Definitions
SALE AND SERVICING AGREEMENT dated as of August 30, 2001, (this
"Agreement") among BANKERS TRUST (DELAWARE), not in its individual capacity but
solely as owner trustee of M&I Auto Loan Trust 2001-1, a Delaware common law
trust ("Owner Trustee"), BOND SECURITIZATION, L.L.C., a Delaware limited
liability company (in its capacity as depositor, "Depositor"), M&I XXXXXXXX &
ILSLEY BANK, a banking corporation organized under the laws of the State of
Wisconsin ("M&I Bank" and in its capacity as servicer, "Servicer") and BANK ONE,
NATIONAL ASSOCIATION, a national banking association (in its capacity as
indenture trustee, "Indenture Trustee").
WHEREAS, Owner Trustee desires to purchase from Depositor a portfolio of
receivables arising in connection with Motor Vehicle Loans secured by new and
used automobiles and light trucks purchased from motor vehicle dealers by M&I
Bank or its Affiliates and sold to Depositor by Preferred Receivables Funding
Corporation, a Delaware corporation ("PREFCO") and by M&I Bank under the
Purchase Agreement;
WHEREAS, Depositor is willing to sell such receivables to Owner Trustee;
and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
SECTION 1.1. Definitions. Capitalized terms are used in this Agreement as
defined in Appendix X to this Agreement.
SECTION 1.2. Other Interpretive Provisions. For purposes of this Agreement,
unless the context otherwise requires: (a) accounting terms not otherwise
defined in this Agreement, and accounting terms partly defined in this Agreement
to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles; (b) terms defined in Article 9
of the UCC as in effect in the relevant jurisdiction and not otherwise defined
in this Agreement are used as defined in that Article; (c) the words "hereof,"
"herein" and "hereunder" and words of similar import refer to this Agreement as
a whole and not to any particular provision of this Agreement; (d) references to
any Article, Section, Schedule, Appendix or Exhibit are references to Articles,
Sections, Schedules, Appendices and Exhibits in or to this Agreement and
references to any paragraph, subsection, clause or other subdivision within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (e) the term "including" means
"including without limitation"; (f) except as otherwise expressly provided
herein, references to any law or regulation refer to that law or regulation as
amended from time to time and include any successor law or regulation; (g)
references to any Person include that Person's successors and assigns; and (h)
headings are for purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.
ARTICLE II. CONVEYANCE OF RECEIVABLES.
SECTION 2.1. Conveyance of Receivables. In consideration of Owner Trustee's
delivery to, or upon the order of, Depositor of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amounts of the Notes
and the initial Certificate Percentage Interests, respectively, Depositor does
hereby sell, transfer, assign, set over and otherwise convey to Owner Trustee,
without recourse, subject to the obligations herein (collectively, the "Trust
Property"):
(a) all right, title and interest of Depositor in and to the Receivables,
and all moneys received thereon after the Cutoff Date;
(b) all right, title and interest of Depositor in the security interests
in the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of Depositor in the Financed Vehicles and any other property that
shall secure the Receivables;
(c) the interest of Depositor in any proceeds with respect to the
Receivables from claims on any Insurance Policies covering Financed Vehicles or
the Obligors;
(d) rebates of premiums relating to Insurance Policies and rebates of
other items such as extended warranties financed under the Receivables, in each
case, to the extent the Servicer would, in accordance with its customary
practices, apply such amounts to the Principal Balance of the related
Receivable;
(e) the interest of Depositor in any proceeds from (i) any Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement, (ii) a default by
an Obligor resulting in the repossession of the Financed Vehicle under the
applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other rights
relating to the Receivables under Dealer Agreements ;
(f) all right, title and interest in all funds on deposit from time to
time in the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);
(g) all right, title and interest of Depositor under the Purchase
Agreement;
(h) all right, title and interest of Depositor in any instrument or
document relating to the Receivables; and
(i) the proceeds of any and all of the foregoing.
The sale, transfer, assignment, setting over and conveyance made hereunder
shall not constitute and is not intended to result in an assumption by Owner
Trustee of any obligation of M&I Bank, Dealer Finance or Depositor to the
Obligors, the Dealers or any other Person in
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connection with the Receivables and the other assets and properties conveyed
hereunder or any agreement, document or instrument related thereto.
It is the express intention of Depositor and Owner Trustee that (i) the
assignment and transfer herein contemplated constitute a sale of the Receivables
and the other Trust Property described above, conveying good title thereto free
an clear of any Liens, encumbrances, security interests or rights of other
Persons, from Depositor to Owner Trustee and (ii) the Receivables and the other
Trust Property described above not be a part of Depositor's estate in the event
of a bankruptcy or insolvency of Depositor. If, notwithstanding the intention of
Depositor and Owner Trustee, such conveyance is deemed to be a pledge in
connection with a financing or is otherwise deemed not to be a sale, Depositor
hereby grants, and the parties intend that Depositor shall have granted, to
Owner Trustee a first priority perfected security interest in all of Depositor's
right, title and interest in the items of the Trust Property and all proceeds of
the foregoing, and that this Agreement shall constitute a security agreement
under applicable law and Owner Trustee shall have all of the rights and remedies
of a secured party and creditor under the UCC as in force in the relevant
jurisdictions.
ARTICLE III. THE RECEIVABLES.
SECTION 3.1. Representations and Warranties as to Each Receivable.
Servicer hereby makes the following representations and warranties as to each
Receivable conveyed by it to Owner Trustee hereunder on which Owner Trustee
shall rely in acquiring the Receivables. Unless otherwise indicated, such
representations and warranties shall speak as of the Closing Date, but shall
survive the transfer and assignment of the Receivables to Owner Trustee and the
pledge thereof to Indenture Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. The Receivable has been fully and
properly executed by the parties thereto and (i) has been originated by a Dealer
in the ordinary course of such Dealer's business to finance the retail sale by a
Dealer of the related Financed Vehicle and has been purchased by M&I Bank,
Dealer Finance or their predecessors in interest in the ordinary course of their
business, (ii) was underwritten in accordance with M&I Bank's underwriting
standards, (iii) is secured by a valid, subsisting, binding and enforceable
first priority perfected security interest in favor of Dealer Finance or M&I
Bank in the Financed Vehicle (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), which security interest is assignable together with
such Receivable, and has been so assigned to Depositor, and subsequently
assigned to Owner Trustee pursuant to the Sale and Servicing Agreement, and
pledged to Indenture Trustee pursuant to the Indenture, (iv) contains customary
and enforceable provisions such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the benefits of
the security, (v) provided, at origination, for level monthly payments (provided
that the amount of the first or last payment may be minimally different), which
fully amortize the Initial Principal Balance over the original term, (vi)
provides for interest at the Contract Rate
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specified in the Schedule of Receivables, (vii) was originated in the United
States and (viii) constitutes "chattel paper" as defined in the UCC.
(b) Individual Characteristics. The Receivables have the following
individual characteristics as of the Cutoff Date (i) each Receivable is secured
by a Motor Vehicle; (ii) each Receivable has a Contract Rate of no less than
6.00% and not more than 18.09%; (iii) each Receivable had an original term to
maturity of not more than 72 months and not less than 12 months and each
Receivable has a remaining term to maturity, as of the Cutoff Date, of six
months or more; (iv) each Receivable had an Initial Principal Balance less than
or equal to $69,859.45; (v) each Receivable has a Cutoff Date Principal Balance
of greater than or equal to $504.25; (vi) no Receivable has a scheduled maturity
date later than August 9, 2007; (vii) no Receivable was more than 29 days past
due as of the Cutoff Date; (viii) no Financed Vehicle was noted in the related
records of M&I Bank as being the subject of any pending bankruptcy or insolvency
proceeding as of the Cutoff Date; (ix) no Receivable is subject to a force
placed Physical Damage Insurance Policy on the related Financed Vehicle; (x)
each Receivable is a Simple Interest Receivable; and (xi) the Dealer of the
Financed Vehicle has no participation in, or other right to receive, any
proceeds of such Receivable. The Receivables were selected using selection
procedures that were not intended by M&I Bank or Dealer Finance to be adverse to
the Depositor.
(c) Schedule of Receivables. The information with respect to each
Receivable set forth in the Schedule of Receivables, including (without
limitation) the account number, the Cutoff Date Principal Balance, the maturity
date and the Contract Rate, was true and correct in all material respects as of
the close of business on the Cutoff Date.
(d) Compliance with Law. 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 Reporting Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Fair Debt Collection
Practices Act, Federal Reserve Board Regulations B and Z and any other consumer
credit, consumer protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable in
all material respects by the holder thereof in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally, and the
Receivable is not subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury.
(f) Lien in Force. The Receivable has not been satisfied, subordinated or
rescinded and M&I Bank or Dealer Finance has not taken any action which would
have the effect of
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releasing the related Financed Vehicle from the Lien granted by the Receivable
in whole or in part.
(g) No Amendment or Waiver. No material provision of the Receivable has
been amended, waived, altered or modified in any respect, except such waivers as
would be permitted under the Sale and Servicing Agreement and as are reflected
in the Receivable File, and no amendment, waiver, alteration or modification
causes such Receivable not to conform to the other representations or warranties
contained in this Section.
(h) No Liens. There are no Liens or claims, including Liens for work,
labor, materials or unpaid state or federal taxes, relating to the Financed
Vehicle securing the Receivable, that are or may be prior to or equal to the
Lien granted by the Receivable.
(i) No Default. Except for payment delinquencies continuing for a period
of less than 30 days as of the Cutoff Date, no default, breach, violation or
event permitting acceleration under the terms of the Receivable exists and no
continuing condition that with notice or lapse of time, or both, would
constitute a default, breach, violation or event permitting acceleration under
the terms of the Receivable has arisen.
(j) Insurance. The Receivable requires the Obligor to insure the Financed
Vehicle under a Physical and Damage Insurance Policy, pay the premiums for such
insurance and keep such insurance in full force and effect.
(k) Good Title. It is the intention of the Depositor that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Depositor to Owner Trustee and that the beneficial interest in and title to the
Receivables not be part of the Depositor's estate in the event of the filing of
a bankruptcy petition or insolvency proceeding by or against the Depositor under
any bankruptcy or insolvency law. No Receivable has been sold, transferred,
assigned, or pledged (i) by M&I Bank to any other Person other than PREFCO, (ii)
by PREFCO to any other person other than the Depositor, and (iii) by the
Depositor to any Person other than the Owner Trustee. Immediately prior to the
transfer and assignment herein contemplated, the Depositor had good and
marketable title to the Receivable free and clear of any Lien and had full right
and power to transfer and assign the Receivable to Owner Trustee and immediately
upon the transfer and assignment of the Receivable to Owner Trustee, Owner
Trustee shall have good and marketable title to the Receivable, free and clear
of any Lien; and Owner Trustee's interest in the Receivable resulting from the
transfer has been perfected under the UCC. All filings (including UCC filings)
necessary in any jurisdiction, to give Owner Trustee a first priority perfected
ownership interest in the Receivables, and to give Indenture Trustee a first
priority perfected security interest therein, shall have been presented to
Indenture Trustee for filing in the appropriate filing offices. Upon such filing
by the Indenture Trustee, the Indenture Trustee will have a first priority
perfected security interest in the Receivables.
(l) Obligations. M&I Bank has duly fulfilled all material obligations on
its part to be fulfilled under, or in connection with, the Receivable.
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(m) Possession. There is only one original executed Receivable, and
immediately prior to the Closing Date, M&I Bank or one of its Affiliates will
have possession of such original executed Receivable.
(n) 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.
(o) Marking Records. By the Closing Date, M&I Bank shall have caused the
portions of M&I Bank's electronic master record of Motor Vehicle Loans relating
to the Receivables to be clearly and unambiguously marked to show that the
Receivable is owned by the Owner Trustee in accordance with the terms of this
Agreement.
(p) No Assignment. As of the Closing Date neither M&I Bank nor any of its
Affiliates shall 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 or Dealer Agreements, or payments due under the Receivable,
that is senior to, or equal with, that of the Owner Trustee.
(q) Lawful Assignment. The Receivable has not been originated in, and is
not subject to the laws of, any jurisdiction under which the sale, transfer or
assignment of such Receivable hereunder or pursuant to transfers of the Notes or
Certificates are unlawful, void or voidable. Neither M&I Bank nor any of its
Affiliates has entered into any agreement with any Obligor that prohibits,
restricts or conditions the assignment of any portion of the Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Receivable is in effect
whereby the Dealer warrants title to the Motor Vehicle and indemnifies Dealer
Finance and its assigns against the unenforceability of each Receivable sold
thereunder, and the rights of Dealer Finance thereunder, with regard to the
Receivable sold hereunder, have been validly assigned to and are enforceable
against the Dealer by the Depositor, along with any Dealer Recourse.
(s) Composition of Receivable. No Receivable has a Principal Balance which
includes capitalized interest, late charges or amounts attributable to the
payment of the premium for any Physical Damage Insurance Policy.
(t) Database File. The information included with respect to each
Receivable in the database file delivered pursuant to Section 4.9(b) of the Sale
and Servicing Agreement is accurate and complete in all material respects.
(u) No Bankruptcies. No Obligor on any Receivable was noted in the related
Receivable File as having filed for bankruptcy in a proceeding which remained
undischarged as of the Cutoff Date.
(v) Amounts. The Original Pool Balance was $347,000,000.07.
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(w) Aggregate Characteristics. The Receivables had the following
characteristics in the aggregate as of the Cutoff Date: (i) approximately 44.72%
of the Original Pool Balance was attributable to loans for purchases of new
Financed Vehicles, and approximately 55.28% of the Original Pool Balance was
attributable to loans for purchases of used Financed Vehicles; (ii)
approximately 13.07% of the Original Pool Balance was attributable to
Receivables the mailing addresses of the Obligors with respect to which are
located in the State of Minnesota, 72.16% of the Original Pool Balance was
attributable to Receivables the mailing addresses of the Obligors with respect
to which are located in the State of Wisconsin and no other state accounts for
more than 5% of the Original Pool Balance; (iii) the weighted average Contract
Rate of the Receivables was 9.01%; (iv) there are 25,198 Receivables being
conveyed by M&I Bank to the Owner Trustee; (v) the average Cutoff Date Principal
Balance of the Receivables was $13,770.93; (vi) the weighted average original
term and weighted average remaining term of the Receivables were 59.79 months
and 51.25 months, respectively; and (vii) 100 % of the Receivables have their
next scheduled payment date in either September or October of 2001.
(x) Perfection Representations. The Perfection Representations shall be a
part of this Agreement.
SECTION 3.2. Purchase by Servicer upon Breach of Representation or
Warranty. Depositor, Servicer, Indenture Trustee or Owner Trustee, as the case
may be, shall inform the other parties to this Agreement promptly, in writing,
upon the discovery (or, with respect to the Indenture Trustee or Owner Trustee,
upon actual knowledge of a Responsible Officer) of any breach or failure to be
true of the representations or warranties made by the Servicer in Section 3.1,
provided that the failure to give such notice shall not affect any obligation of
the Servicer. If the breach or failure shall not have been cured by the last day
of the Collection Period which includes the 60th day (or if the Servicer elects,
the 30th day) after the date on which Servicer becomes aware of, or receives
written notice from Owner Trustee or Indenture Trustee of, such breach or
failure, and such breach or failure materially and adversely affects the
interests of Owner Trustee and the Holders in any Receivable, the Servicer shall
purchase each such affected Receivable from Owner Trustee as of such last day of
such Collection Period at a purchase price equal to the Purchase Amount for such
Receivable as of such last day of such Collection Period, which amount shall be
deposited in the Collection Account. Notwithstanding the foregoing, any such
breach or failure with respect to the representations and warranties contained
in Section 3.1 will not be deemed to have such a material and adverse effect
with respect to a Receivable if the facts resulting in such breach or failure do
not affect the ability of Owner Trustee to receive and retain payment in full on
such Receivable. In consideration of the purchase of a Receivable hereunder, the
Servicer shall remit the Purchase Amount of such Receivable, no later than the
close of business on the next Deposit Date, in the manner specified in Section
5.4. The sole remedy (except as provided in Section 7.2 of this Agreement) of
the Owner Trustee, the Indenture Trustee or the Holders with respect to a breach
or failure to be true of the representations or warranties made by Servicer
pursuant to Section 3.1 shall be to require the Servicer to purchase Receivables
pursuant to this Section; provided that this Section shall not limit the right
of the Servicer, Owner Trustee or Indenture Trustee to enforce (or to cause
Depositor to enforce) the obligation of M&I Bank pursuant to the Purchase
Agreement.
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With respect to all Receivables purchased pursuant to this Section 3.2,
Owner Trustee shall assign to the Servicer without recourse, representation or
warranty all of Owner Trustee's right, title and interest in and to such
Receivables and all security and documents, relating thereto.
SECTION 3.3. Custodian of Receivable Files. Custody. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, Owner
Trustee, upon the execution and delivery of this Agreement, revocably appoints
Custodian, as agent, and Custodian accepts such appointment, to act as agent on
behalf of Owner Trustee to maintain custody of the following documents or
instruments, which are hereby constructively delivered to Owner Trustee with
respect to each Receivable (collectively, a "Receivable File"):
(i) the fully executed original Receivable;
(ii) the original credit application, fully executed by the Obligor
or a photocopy thereof, or a record thereof on a computer file, diskette or
on microfiche;
(iii) the original certificate of title or confirmation of security
interest, or such other documents as M&I Bank or its Affiliates keeps on
file, in accordance with its customary procedures, evidencing the security
interest of M&I Bank or Dealer Finance in the Financed Vehicle;
(iv) originals or true copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the Receivable or
a photocopy thereof, or a record thereof on a computer file, diskette or on
microfiche; and
(v) any and all other documents or electronic records that M&I Bank
or its Affiliates, keep on file, in accordance with their customary
procedures, relating to the Receivable, any Insurance Policies, the Obligor
or the Financed Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall hold the
Receivable Files as agent on behalf of Owner Trustee and maintain such accurate
and complete accounts, records and computer systems pertaining to each
Receivable as shall enable Servicer and Owner Trustee to comply with the terms
and provisions of this Agreement applicable to them. In performing its duties as
Custodian hereunder, Custodian shall act with reasonable care, exercising the
degree of skill, attention and care that Custodian exercises with respect to
receivable files relating to other similar motor vehicle loans owned and/or
serviced by Custodian and that is consistent with industry standards. In
accordance with its customary practice with respect to its retail installment
sale contracts, Custodian shall conduct, or cause to be conducted, periodic
audits of the Receivable Files held by it under this Agreement, and of the
related accounts, records, and computer systems, and shall maintain the
Receivable Files in such a manner as shall enable the Owner Trustee and the
Indenture Trustee to verify, if the Owner Trustee or the Indenture Trustee so
elects, the accuracy of the record keeping of Custodian. Custodian shall
promptly report to Owner Trustee any failure on its part to hold the Receivable
Files and maintain its accounts,
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records and computer systems as herein provided, and promptly take appropriate
action to remedy any such failure. Custodian hereby acknowledges receipt of the
Receivable File for each Receivable listed on the Schedule of Receivables.
Nothing herein shall be deemed to require Owner Trustee, Owner Trustee or
Indenture Trustee to verify the accuracy of the record keeping of the Custodian.
(c) Maintenance of and Access to Records. Custodian shall maintain each
Receivable File at the location specified in Schedule B to this Agreement, or at
such other office of Custodian within the United States (or, in the case of any
successor Custodian, within the State in which its principal place of business
is located) as shall be specified to Owner Trustee by 30 days' prior written
notice. Custodian shall make available to Owner Trustee, Indenture Trustee and
their respective agents (or, when requested in writing by Owner Trustee or
Indenture Trustee, their respective attorneys or auditors) the Receivable Files
and the related accounts, records and computer systems maintained by Custodian
at such times as Owner Trustee or Indenture Trustee shall instruct for purposes
of inspecting, auditing or making copies of abstracts of the same, but only upon
reasonable notice and during the normal business hours at the respective offices
of Custodian.
(d) Release of Documents. Upon written instructions from Indenture Trustee
(or, if no Notes are then Outstanding, Owner Trustee), Custodian shall release
any document in the Receivable Files to Indenture Trustee or Owner Trustee or
its respective agent or designee, as the case may be, at such place or places as
Indenture Trustee or Owner Trustee may designate, as soon thereafter as is
practicable. Any document so released shall be handled by Indenture Trustee or
Owner Trustee with due care and returned to Custodian for safekeeping as soon as
Indenture Trustee or Owner Trustee or its respective agent or designee, as the
case may be, shall have no further need therefor.
(e) Title to Receivables. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time have
or in any way attempt to assert any interest in such Receivable File or the
related Receivable, other than solely for the purpose of collecting or enforcing
the Receivable for the benefit of Owner Trustee and that the entire equitable
interest in such Receivable and the related Receivable File shall at all times
be vested in Owner Trustee.
(f) Instructions; Authority to Act. Custodian shall be deemed to have
received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer of Indenture
Trustee or Owner Trustee, as applicable. A certified copy of excerpts of certain
resolutions of the Board of Directors of Indenture Trustee or Owner Trustee, as
applicable, 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 Custodian of written notice to the contrary given by Indenture
Trustee or Owner Trustee, as applicable.
(g) Custodian's Indemnification. Subject to Section 10.5, Custodian shall
indemnify and hold harmless Owner Trustee (individually and in such capacity)
and Indenture Trustee
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(individually and in such capacity), and each of their respective officers,
directors, employees and agents and the Holders from and against any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses (including reasonable legal fees and expenses if any) of any kind
whatsoever that may be imposed on, incurred or asserted against Owner Trustee,
Indenture Trustee or the Holders as the result of any act or omission of
Custodian relating to the maintenance and custody of the Receivable Files;
provided that Custodian shall not be liable hereunder to the Owner Trustee or
Indenture Trustee to the extent that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith or negligence of Owner Trustee or Indenture Trustee, as
the case may be. Indemnification under this subsection (g) shall survive
termination of this Agreement and the resignation or removal of Owner Trustee or
Indenture Trustee, as the case may be. If Custodian shall have made any
indemnity payments to Owner Trustee or Indenture Trustee pursuant to this
Section and Owner Trustee or Indenture Trustee thereafter shall collect any of
such amounts from Persons other than Custodian, Owner Trustee or Indenture
Trustee, as the case may be, shall, as soon as practicable following such
receipt thereof, repay such amounts to Custodian, without interest.
(h) Effective Period and Termination. 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 subsection (h). If Servicer shall
resign as Servicer in accordance with Section 7.5 or if all of the rights and
obligations of Servicer shall have been terminated under Section 8.1, the
appointment of Servicer as Custodian hereunder may be terminated by the Owner
Trustee or Indenture Trustee or by the Holders of Notes evidencing not less than
25% of the aggregate Outstanding Amount of the Notes of the Controlling Note
Class (or, if no Notes are then Outstanding, the Holders of Certificates
representing not less than 50% of the Certificate Percentage Interests), in each
case in the same manner as Owner Trustee or Indenture Trustee or such Holders
may terminate the rights and obligations of Servicer under Section 8.1. As soon
as practicable after any termination of such appointment Servicer shall deliver,
or cause to be delivered, the Receivable Files to Indenture Trustee or Owner
Trustee, as applicable, or its respective agent or designee at such place or
places as Indenture Trustee or Owner Trustee, as applicable, may reasonably
designate. Notwithstanding any termination of Servicer as Custodian hereunder
(other than in connection with a termination resulting from the termination of
Servicer, as such, pursuant to Section 8.1), from and after the date of such
termination, and for so long as Servicer is acting as such pursuant to this
Agreement, Indenture Trustee shall provide, or cause the successor Custodian to
provide, access to the Receivable Files to Servicer, at such times as Servicer
shall reasonably request, for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
(i) Delegation. Custodian may, at any time without notice or consent,
delegate any or all of its duties under the Basic Documents to any Affiliate;
provided that no such delegation shall relieve Custodian of its responsibility
with respect to such duties and Custodian shall remain obligated and liable to
Owner Trustee and the Holders for its duties hereunder as if Custodian alone
were performing such duties.
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ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES.
SECTION 4.1. Duties of Servicer. (a) Servicer is hereby authorized to act
as agent for Owner Trustee and in such capacity shall manage, service,
administer and make collections on the Receivables (other than Purchased
Receivables), and perform the other actions required by Servicer under this
Agreement, with reasonable care. Without limiting the standard set forth in the
preceding sentence, Servicer shall use a degree of skill, attention and care
that is not less than Servicer exercises with respect to comparable Motor
Vehicle Loans that it services for itself or others and that is consistent with
prudent industry standards. Servicer's duties shall include 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, sending payment coupons or monthly invoices to Obligors,
reporting required tax information to Obligors, accounting for Collections,
furnishing monthly and annual statements to Owner Trustee and Indenture Trustee
with respect to distributions, providing collection and repossession services in
the event of Obligor default and performing the other duties specified herein.
Without limiting the generality of the foregoing, Servicer is hereby
authorized and empowered by Owner Trustee to execute and deliver, on behalf of
itself, Indenture Trustee, Owner Trustee and the Holders, 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
that notwithstanding the foregoing, 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 of any Receivable from the Obligor, except in connection with a de
minimis deficiency which Servicer would not attempt to collect in accordance
with its customary procedures. If Servicer shall commence a legal proceeding to
enforce a Receivable, Owner Trustee shall thereupon be deemed to have
automatically assigned such Receivable to Servicer, which assignment shall be
solely for purposes of collection. Owner Trustee shall furnish Servicer with any
powers of attorney and other documents or instruments necessary or appropriate
to enable Servicer to carry out its servicing and administrative duties
hereunder.
(b) Servicer may, at any time without notice or consent, delegate (i)
any or all duties under this Agreement to any Person that is an Affiliate of the
Servicer, so long as M&I Bank acts as Servicer, or (ii) specific duties to sub-
contractors who are in the business of performing such duties; provided that no
such delegation shall relieve Servicer of its responsibility with respect to
such duties and Servicer shall remain obligated and liable to the Indenture
Trustee, the Owner Trustee and the Holders for servicing and administering the
Receivables in accordance with this Agreement as if Servicer alone were
performing such duties.
(c) The Servicer shall pay the Administrator the fee pursuant to the
Administration Agreement.
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SECTION 4.2 Collection of Receivable Payments. (a) 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 Physical Damage Insurance
Policies, the Dealer Agreements and related property in such manner as will, in
the reasonable judgment of Servicer, maximize the amount to be received by Owner
Trustee with respect thereto, in accordance with the standard of care required
by Section 4.1. Servicer shall be entitled to grant extensions, rebates or
adjustments on a Receivable, or amend or modify any Receivable in accordance
with its customary procedures if Servicer believes in good faith that such
amendment or modification is in Owner Trustee's best interests; provided that
Servicer may not, unless ordered by a court of competent jurisdiction or
otherwise required by applicable law, (i) extend a Receivable beyond January 31,
2008 or (ii) reduce the Principal Balance or Contract Rate of any Receivable. If
Servicer fails to comply with the provisions of the preceding sentence, Servicer
shall be required to purchase the Receivable or Receivables affected thereby,
for the Purchase Amount, in the manner specified in Section 4.7 as of the last
day of the Collection Period in which such failure occurs. Servicer may, in its
discretion (in accordance with its customary standards, policies and
procedures), (i) waive any prepayment charge, late payment charge, extension fee
or any other fee that may be collected in the ordinary course of servicing a
Receivable and (ii) treat a partial scheduled payment as being a full scheduled
payment in the ordinary course of servicing a Receivable.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor against
an amount payable by the Obligor with respect to such Receivable, Servicer shall
deposit the amount so set off in the Collection Account, no later than the close
of business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.
SECTION 4.3. Realization upon Receivables. On behalf of Owner Trustee,
Servicer shall charge off a Receivable in accordance with its customary
standards (and, in no event later than 150 days after a Receivable shall have
become delinquent) and shall use reasonable efforts, consistent with its
customary standards, to repossess and liquidate the Financed Vehicle securing
any Defaulted Receivable as soon as feasible after such Receivable becomes a
Defaulted Receivable, in accordance with the standard of care required by
Section 4.1. In taking such action, Servicer shall follow such customary and
usual practices and procedures as it shall deem necessary or advisable in its
servicing of Motor Vehicle Loans, and as are otherwise consistent with the
standard of care required under Section 4.1, which shall include exercising any
rights under the Dealer Agreements and selling the Financed Vehicle at public or
private sale. Servicer shall be entitled to recover all reasonable expenses
incurred by it in the course of repossessing and liquidating a Financed Vehicle
into cash proceeds or pursuing any deficiency claim against the related Obligor,
but only out of the cash proceeds of such Financed Vehicle or any deficiency
obtained from the Obligor. The foregoing shall be subject to the provision that,
in any case in which a Financed Vehicle shall have suffered damage, Servicer
shall not expend funds in connection with the repair or the repossession of such
Financed Vehicle unless it shall determine
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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.
If Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement, the act of commencement shall be deemed to be an automatic assignment
from Owner Trustee to Servicer of the rights under such Dealer Agreement. If,
however, in any enforcement suit or legal proceeding, it is held that Servicer
may not enforce a Dealer Agreement on the grounds that it is not a real party in
interest or a Person entitled to enforce the Dealer Agreement, Owner Trustee, on
behalf of Owner Trustee and the Indenture Trustee, subject to the Indenture, at
Servicer's expense, shall take such steps as Servicer deems necessary to enforce
the Dealer Agreement, including bringing suit in the name of Owner Trustee or
Indenture Trustee.
SECTION 4.4. Physical Damage Insurance. (a) The Receivables require that
each Financed Vehicle be insured under a Physical Damage Insurance Policy. If
Servicer receives notice that an Obligor has failed to obtain or maintain a
Physical Damage Insurance Policy covering the related Financed Vehicle, Servicer
shall use reasonable efforts in accordance with its customary servicing
procedures to enforce the rights of the holder of the Receivable under the
Receivable to require the Obligor to obtain such physical damage insurance,
provided that Servicer shall not be required to take such actions if there is in
place a lender's single interest policy with respect to the related Financed
Vehicle that complies with Servicer's customary requirements. It is understood
that Servicer will not "force-place" any Physical Damage Insurance Policy on any
Financed Vehicle.
(b) Servicer may xxx to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Owner Trustee.
If Servicer elects to commence a legal proceeding to enforce a Physical Damage
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of Owner Trustee under such Physical Damage Insurance
Policy to Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that Servicer may not enforce a
Physical Damage Insurance Policy on the grounds that it is not a real party in
interest or a holder entitled to enforce the Physical Damage Insurance Policy,
Owner Trustee, on behalf of Owner Trustee and the Indenture Trustee, subject to
the Indenture, at Servicer's expense and written direction, shall take such
steps as Servicer deems necessary to enforce such Physical Damage Insurance
Policy, including bringing suit in Owner Trustee's name or the name of Owner
Trustee or Indenture Trustee. Servicer shall make all claims and enforce its
rights under any lender's single interest insurance policy (to the extent such
claims or rights relate to Receivables) for the benefit of the Owner Trustee and
shall treat as Collections all related proceeds of such policies.
SECTION 4.5 Maintenance of Security Interests in Financed Vehicles.
Servicer, in accordance with the standard of care required under Section 4.1,
shall take such reasonable steps as are necessary and as are consistent with its
customary business practices to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle for the benefit of
Owner Trustee and the Indenture Trustee. Owner Trustee hereby authorizes
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Servicer, and Servicer hereby agrees, to take such reasonable steps as are
necessary and as are consistent with its customary business practices to re-
perfect such security interest on behalf of Owner Trustee in the event Servicer
receives notice of the relocation of a Financed Vehicle.
SECTION 4.6. Covenants of Servicer. Servicer makes the following covenants
on which Owner Trustee relies in acquiring the Receivables:
(a) Security Interest to Remain in Force. Servicer shall not release any
Financed Vehicle from the security interest granted by the related Receivable in
whole or in part, except upon payment in full of the Receivable or as otherwise
contemplated herein.
(b) No Impairment. Servicer shall not impair in any material respect the
rights of the Owner Trustee or the Holders in the Receivables, the Dealer
Agreements or the Physical Damage Insurance Policies or, subject to clause (c),
otherwise amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of Owner Trustee and the Holders hereunder would be
materially adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify any
Receivable (including the grant of any extension thereunder), except in
accordance with Section 4.2.
SECTION 4.7. Purchase by Servicer upon Breach of Covenant. Depositor,
Servicer, Indenture Trustee or Owner Trustee, as the case may be, shall inform
the other parties promptly, in writing, upon the discovery (or, in the case of
the Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach by Servicer of its covenants under Section 4.5 or 4.6;
provided that the failure to give such notice shall not affect any obligation of
Servicer. Unless the breach shall have been cured by the last day of the
Collection Period which includes the 60th day (or the 30th day, if Servicer so
elects) after the date on which Servicer becomes aware of, or receives written
notice of, such breach, and such breach materially and adversely affects the
interests of Owner Trustee and the Holders in any Receivable, Servicer shall
purchase such Receivable from Owner Trustee as of the last day of the Collection
Period at a purchase price equal to the Purchase Amount for such Receivable as
of the last day of such Collection Period, which amount shall be deposited in
the Collection Account; provided that in the case of a breach of the covenant
contained in Section 4.6(c), Servicer shall be obligated to purchase the
affected Receivable or Receivables on the Business Day preceding the Deposit
Date immediately succeeding the Collection Period during which Servicer becomes
aware of, or receives written notice of, such breach. In consideration of the
purchase of a Receivable hereunder, Servicer shall remit the Purchase Amount of
such Receivable in the manner specified in Section 5.4. The sole remedy (except
as provided in Section 7.2) of Owner Trustee, Owner Trustee, Indenture Trustee
or the Holders against Servicer with respect to a breach pursuant to Section 4.5
or 4.6 shall be to require Servicer to purchase Receivables pursuant to this
Section.
With respect to all Receivables purchase pursuant to this Section 4.7,
Owner Trustee shall assign to Servicer, without recourse, representation or
warranty, all of Owner Trustee's
14
right, title and interest in and to such Receivables and all security and
documents relating thereto.
SECTION 4.8. Servicing Fee. The servicing fee for each Payment Date shall
equal the sum of (i) product of one-twelfth of the Servicing Rate and the Pool
Balance as of the first day of the Collection Period (the "Servicing Fee").
Servicer shall also be entitled to retain any extension fees and certain non-
sufficient funds charges and other administrative fees or similar charges
allowed by applicable law with respect to Receivables collected (from whatever
source) on the Receivables (the "Supplemental Servicing Fee"). It is understood
and agreed that Available Collections shall not include any amounts retained by
Servicer which constitute Supplemental Servicing Fees. The Servicing Fee in
respect of a Collection Period (together with any portion of the Servicing Fee
that remains unpaid from prior Payment Dates), if the Rating Agency Condition is
satisfied, may be paid at the beginning of such Collection Period out of
Collections for such Collection Period.
SECTION 4.9. Servicer's Report. On each Determination Date, Servicer shall
deliver to Owner Trustee, Indenture Trustee, each Paying Agent and Depositor,
with a copy to the Rating Agencies, a Servicer's Report substantially in the
form of Exhibit A, containing all information necessary to make the transfers
and distributions pursuant to Sections 5.4 and 5.5 (including amounts required
to be transferred from the Reserve Account to the Collection Account) for the
Collection Period preceding the date of such Servicer's Report together with all
information necessary for the Owner Trustee to send statements to
Certificateholders pursuant to Section 5.6 and Indenture Trustee to send copies
of statements received by the Indenture Trustee to Noteholders pursuant to the
Indenture and Section 5.6 of this Agreement. Receivables to be purchased by the
Servicer shall be identified by Servicer by account number with respect to such
Receivable (as specified in the Schedule of Receivables).
(b) Servicer shall provide Indenture Trustee with a database file for
the Receivables at or prior to the Closing Date (but with information as of the
close of business on the Cutoff Date).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
Servicer shall deliver to Owner Trustee, Indenture Trustee and each Rating
Agency, on or before May 30 of each year beginning on May 30, 2002, an Officer's
Certificate, dated as of December 31 of the preceding year, stating that a
review of the activities of Servicer during the preceding 12-month period (or,
in the case of the first such report, during the period from the Closing Date to
December 31, 2001) and of its performance under this Agreement has been made
under such officer's supervision and to the best of such officer's knowledge,
based on such review, Servicer has fulfilled all its obligations in all material
respects under this Agreement throughout such year or, if there exists any
uncured default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Noteholder by a request in writing to Indenture Trustee addressed to the
Corporate Trust Office.
15
(b) Servicer shall deliver to Owner Trustee, Indenture Trustee and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five (5) 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 a Servicer Termination Event
under Section 8.1.
SECTION 4.11. Annual Independent Certified Public Accountants' Report. The
Servicer shall cause a firm of independent certified public accountants (who may
also render other services to the Servicer or Depositor and their Affiliates) to
deliver to the Depositor, Owner Trustee, Indenture Trustee and each Rating
Agency on or before April 30 of each year beginning on April 30, 2002, a report
to the effect that, as to objectively determinable matters, such firm has
examined the Servicer's assertion that it has fulfilled its obligations in all
material respects under this Agreement for the twelve months ended December 31
of the preceding year (or, in the case of the first such certificate, from the
Closing Date until December 31, 2001) set forth in the Officer's Certificate
delivered pursuant to Section 4.10(a), and that (1) such examination was made in
accordance with the standards established by the American Institute of Certified
Public Accountants, (2) except as described in the report, the assertions in the
Officer's Certificate are, as to objectively determinable matters, fairly stated
in all material respects and (3) that the firm is independent of Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
In the event such firm requires the Indenture Trustee or Owner Trustee to
agree to the procedures performed by such firm, Servicer shall direct the
Indenture Trustee or Owner Trustee, as the case may be, in writing to so agree;
it being understood and agreed that the Indenture Trustee or Owner Trustee, as
the case may be, will deliver such letter of agreement in conclusive reliance
upon the direction of Servicer, and the Indenture Trustee or Owner Trustee, as
the case may be, need not make any independent inquiry or investigation as to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. Servicer shall provide to the Owner Trustee, Indenture Trustee,
Certificateholders, Noteholders, Bank Regulatory Authorities, and the
supervisory agents and examiners of Bank Regulatory Authorities access to the
Receivable Files, as to the latter in such cases where the Certificateholders,
Noteholders or Bank Regulatory Authorities shall be required by applicable
statutes or regulations to review such documentation as demonstrated by evidence
satisfactory to Servicer in its reasonable judgment. Access shall be afforded
without charge, but only upon reasonable request and during the normal business
hours at the respective offices of Servicer. Nothing in this Section shall
affect the obligation of Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section. Any Holder, by its acceptance of a
Certificate or Note, as applicable, shall be deemed to have agreed to keep any
information obtained by it pursuant to this Section confidential and not to use
such information for any other purpose, except as required by applicable law.
16
SECTION 4.13. Reports to the Rating Agencies. Servicer shall deliver to
each Rating Agency 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 any other information reasonably requested
by such Rating Agency to monitor this transaction.
SECTION 4.14 Servicer Expenses. Except as otherwise provided herein,
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder, including fees and disbursements of the Owner Trustee,
Indenture Trustee, independent accountants, taxes imposed on Servicer and
expenses incurred in connection with distributions and reports to
Certificateholders and Noteholders.
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS
AND NOTEHOLDERS; ADVANCES.
SECTION 5.1. Establishment of Collection Account. Servicer shall cause to
be established:
(i) For the benefit of the Noteholders and the Certificateholders,
in the name of Indenture Trustee, an Eligible Deposit Account (the
"Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders and the
Certificateholders, which Eligible Deposit Account shall be established and
maintained with the Indenture Trustee or its designee.
(ii) For the benefit of the Noteholders, in the name of 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, which Eligible Deposit Account
shall be established and maintained with the Indenture Trustee or its
designee.
(iii) An administrative subaccount within the Note Distribution
Account at the Eligible Institution then maintaining the Note Distribution
Account, which subaccount shall be designated the "Interest Distribution
Account". The Interest Distribution Account is established and maintained
solely for administrative purposes.
(iv) An administrative subaccount within the Note Distribution
Account at the Eligible Institution then maintaining the Note Distribution
Account, which subaccount shall be designated the "Principal Distribution
Account". The Principal Distribution Account is established and maintained
solely for administrative purposes.
(b) Funds on deposit in the Collection Account and the Note Distribution
Account (collectively, the "Trust Accounts") shall be invested by Indenture
Trustee with respect to the Trust Accounts and by Owner Trustee with respect to
the Certificate Distribution Account (or any custodian with respect to funds on
deposit in any such account) in Eligible Investments
17
selected in writing by Servicer and of which Servicer provides notification
(pursuant to standing instructions or otherwise); provided that it is understood
and agreed that neither Servicer, Indenture Trustee nor Owner Trustee shall be
liable for any loss arising from such investment in Eligible Investments. All
such Eligible Investments shall be held by or on behalf of Indenture Trustee for
the benefit of the Noteholders and the Certificateholders or by Owner Trustee
for the benefit of Certificateholders, as applicable; provided that on each
Payment Date all interest and other investment income (net of losses and
investment expenses) (other than from the Deposit Date to the Payment Date) on
funds on deposit in the Trust Accounts shall be distributed to Servicer and all
interest and other investment income (net of losses and investment expenses)
from the Deposit Date to the Payment Date on funds on deposit in the Trust
Accounts shall be distributed to the Indenture Trustee, and in each case shall
not be available to pay the distributions provided for in Section 5.5 and shall
not otherwise be subject to any claims or rights of Holders. Funds on deposit in
the Trust Accounts shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the Deposit Date
preceding the next Payment Date; provided that upon satisfaction of the Rating
Agency Condition and with the approval of the Indenture Trustee, funds on
deposit in the Trust Accounts may be invested in Eligible Investments that
mature on such Payment Date. No Eligible Investment shall be sold or otherwise
disposed of prior to its scheduled maturity unless a default occurs with respect
to such Eligible Investment and Servicer directs Indenture Trustee in writing to
dispose of such Eligible Investment. Funds deposited in the Trust Accounts or
Certificate Distribution Account on a Deposit Date shall be invested overnight.
(c) Indenture Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (excluding investment income thereon) and all such funds, investments
and proceeds shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and control
of Indenture Trustee for the benefit of the Noteholders and the
Certificateholders; provided, however, the Indenture Trustee shall not be
charged with any obligation for the benefit of the Certificateholders except as
provided by the terms of this Agreement. If, at any time, any of the Trust
Accounts or the Certificate Distribution Account ceases to be an Eligible
Deposit Account, the Servicer or Owner Trustee, as applicable, shall within 10
Business Days (or such longer period as to which each Rating Agency may consent)
establish a new Trust Account or Certificate Distribution Account, as
applicable, as an Eligible Deposit Account and shall transfer any cash and/or
any investments to such new Trust Account or new Certificate Distribution
Account, as applicable. In connection with the foregoing, Servicer agrees that,
in the event that the Collection Account is not an account with Indenture
Trustee or its designee, Servicer shall notify Indenture Trustee in writing
promptly upon the Collection Account ceasing to be an Eligible Deposit Account.
(d) With respect to the Trust Account Property, Servicer and the Indenture
Trustee agree that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts and, except as
otherwise provided herein, each
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such Eligible Deposit Account shall be subject to the exclusive custody and
control of Indenture Trustee, and, except as otherwise provided in the
Basic Documents, Indenture Trustee and its designee shall have sole
signature authority with respect thereto;
(ii) any Trust Account Property that constitutes Physical Property
shall be delivered to Indenture Trustee or its designee, in accordance with
paragraph (a) of the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by Indenture Trustee or such designee;
(iii) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by Indenture Trustee or
its designee or a financial intermediary (as such term is defined in
Section 8-313(4) of the UCC) acting solely for Indenture Trustee or such
designee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such paragraph;
and
(iv) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (iii) above
shall be delivered to Indenture Trustee or its designee in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained by
Indenture Trustee or such designee, pending maturity or disposition,
through continued registration of Indenture Trustee's (or its designee's)
ownership of such security.
Effective upon Delivery of any Trust Account Property, Servicer shall be deemed
to have represented that it has purchased such Trust Account Property for value,
in good faith and without notice of any adverse claim thereto.
SECTION 5.2. Collections. Servicer shall remit within two Business Days of
receipt thereof to the Collection Account all payments by or on behalf of the
Obligors with respect to the Receivables (other than any amounts constituting
Supplemental Servicing Fees) and all Liquidation Proceeds, both as collected
during the Collection Period. Notwithstanding the foregoing, if M&I Bank is the
Servicer and (i) shall have the Required Rating or (ii) Indenture Trustee
otherwise shall have received written notice from each of the Rating Agencies
that the then outstanding rating on the Notes would not be lowered, qualified or
withdrawn as a result, Servicer may deposit all amounts referred to above for
any Collection Period into the Collection Account not later than 11:00 a.m. (New
York time) on the Deposit Date with respect to such Collection Period; provided
that (i) if a Servicer Termination Event has occurred and is continuing, (ii)
Servicer has been terminated as such pursuant to Section 8.1 or (iii) Servicer
ceases to have the Required Rating, Servicer shall deposit such amounts
(including any amounts then being held by Servicer) into the Collection Account
as provided in the preceding sentence. For purposes of this Article V the phrase
"payments by or on behalf of Obligors" shall mean payments made with respect to
the Receivables by Persons other than Servicer or any Affiliate.
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(b) With respect to each Receivable (other than a Purchased Receivable),
collections and payments by or on behalf of the Obligor (other than any amounts
constituting Supplemental Servicing Fees) for each Collection Period shall be
applied first to the Servicer of Excess Simple Interest Collections, if any, and
next to interest and principal in accordance with the Simple Interest Method, as
applied by Servicer. Any excess shall be applied to prepay the Receivable.
SECTION 5.3. [Reserved].
SECTION 5.4. Additional Deposits. Servicer shall deposit or cause to be
deposited in the Collection Account the aggregate Purchase Amounts with respect
to Purchased Receivables and Servicer shall deposit therein all amounts, if any,
to be paid under Section 9.1. All such deposits shall be made not later than the
11:00 a.m. (New York time) on the Deposit Date following the end of the related
Collection Period.
SECTION 5.5. Distributions. On or before 11:00 a.m. (New York time) on the
Business Day immediately preceding the Deposit Date related to each Payment
Date, Servicer shall instruct Indenture Trustee in writing (based on the
information contained in the Servicer's Report delivered on the related
Determination Date pursuant to Section 4.9) to withdraw from the Reserve Account
and deposit in the Collection Account, and Indenture Trustee shall so withdraw
and deposit in the Collection Account by 11:00 a.m. (New York time) on such
Deposit Date, the Reserve Account Excess Amount, if any, and the Reserve Account
Transfer Amount, if any, for such Payment Date.
(b) On or before each Payment Date, the Indenture Trustee shall transfer
from the Collection Account to the Servicer, in immediately available funds,
reimbursement of Outstanding Simple Interest Advances pursuant to Section 5.9,
and payment of Excess Simple Interest Collections, if any, pursuant to Section
5.2(b).
(c) Subject to the last paragraph of this Section 5.5(c), on or before
11:00 a.m. (New York time) on the Business Day immediately preceding the Deposit
Date related to each Payment Date, Servicer shall instruct Indenture Trustee in
writing (based on the information contained in the Servicer's Report delivered
on the related Determination Date pursuant to Section 4.9) to make, and
Indenture Trustee shall make, the following deposits, distributions and payments
from the Collection Account by 11:00 a.m. (New York time) on such Payment Date,
to the extent of the Total Distribution Amount in the following order of
priority:
(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the Interest Distribution Account, the Accrued Class
A Note Interest;
(iii) third, to the Principal Distribution Account, the Priority
Principal Distribution Amount, if any;
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(iv) fourth, to the Interest Distribution Account, the Accrued Class
B Note Interest;
(v) fifth, to the Reserve Account, the amount, if any, required to
reinstate the amount in the Reserve Account up to the Specified Reserve
Balance;
(vi) sixth, to the Principal Distribution Account, the Regular
Principal Distribution Amount, if any; and
(vii) seventh, to the Certificate Distribution Account, the Total
Distribution Amount remaining on deposit in the Collection Account.
Notwithstanding any other provision of this Section 5.5, following the
occurrence and during the continuation of an Event of Default specified in
Section 5.1(a), 5.1(b), 5.1(d) or 5.1(e) of the Indenture which has resulted in
an acceleration of the Notes (or following the occurrence of any such event
after an Event of Default specified in Section 5.1(c) of the Indenture has
occurred and the Trust has been liquidated), the Servicer shall instruct the
Indenture Trustee at or before aforesaid time to transfer the funds on deposit
in the Collection Account pursuant to Section 5.4(b) of the Indenture.
In the event that the Collection Account is maintained with an institution
other than Indenture Trustee, Servicer shall instruct and cause such institution
to make all deposits and distributions pursuant to this Section 5.5(c) on the
related Deposit Date.
(d) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to zero and
the Indenture has been discharged in accordance with its terms. The
protections, immunities and standard of care afforded the Indenture Trustee
under the Indenture shall apply to the performance of its duties hereunder.
SECTION 5.6. Statements to Certificateholder and Noteholders. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to Owner Trustee
for Owner Trustee to forward to each Certificateholder of record, a statement
setting forth at least the following information (based on the information
contained in the Servicer's Report delivered on the related Determination Date
pursuant to Section 4.9) as to the Notes and the Certificates to the extent
applicable:
(a) the amount of such distribution allocable to principal of each class
of Notes;
(b) the amount of such distribution allocable to interest on or with
respect to each class of Notes;
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(c) the Reserve Account Transfer Amount, if any, for such Payment Date,
the Specified Reserve Balance for such Payment Date, the amount deposited into
the Reserve Account on such Payment Date, and the balance of the Reserve Account
(if any) on such Payment Date, after giving effect to changes therein on such
Payment Date;
(d) the amount of the Servicing Fee paid to Servicer with respect to the
related Collection Period and with respect to previously accrued and unpaid
Servicing Fees;
(e) the Noteholders' Interest Carryover Shortfall if any, in each case as
applicable to each class of Securities, and the change in such amounts from the
preceding statement;
(f) the amount of any previously due and unpaid payment of principal on
the Notes, and the change in such amount from that of the prior Payment Date;
(g) the aggregate outstanding principal balance of each class of the Notes
and the Note Pool Factor for each such class after giving effect to payments
allocated to principal reported under clause (a) above;
(h) the aggregate Purchase Amounts paid by Servicer with respect to the
related Collection Period;
(i) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(j) the number, and aggregate Principal Balance outstanding, of
Receivables past due 30-59, 60-89 and 90 and over days;
(k) the weighted average Contract Rates of the Receivables, weighted based
on the Principal Balance of each such Receivable as of the last day of the
related Collection Period;
(l) the weighted average remaining term to maturity of the Receivables,
weighted based on the Principal Balance of each such Receivable as of the last
day of the related Collection Period;
(m) the amount of the aggregate Principal Balances of any Receivables that
became Defaulted Receivables, if any, during such Collection Period;
(n) the aggregate net losses on the Receivables incurred during the period
from the Cutoff Date to and including the last day of the related Collection
Period;
(o) the amount distributed to Certificateholders; and
(p) the amount of Outstanding Simple Interest Advances on such Payment
Date.
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Each amount set forth pursuant to paragraph (a), (b), (e) or (f) above relating
to the Notes shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes (or Class thereof).
SECTION 5.7. Net Deposits. As an administrative convenience, unless
Servicer is required to remit Collections within two Business Days of receipt
thereof, Servicer will be permitted to make the deposit of Collections and
Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to Servicer with respect to the Collection Period.
Servicer, however, will account to Owner Trustee, Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.8. Reserve Account. (a) On or before the Closing Date pursuant
to Section 8.6 of the Indenture, the Owner Trustee shall establish or cause to
be established in the name of the Indenture Trustee, as secured party of and
agent for the Noteholders and Certificateholder, an Eligible Deposit Account
(the "Reserve Account"). The Reserve Account and any amounts therein shall be
pledged to the Indenture Trustee and held for the benefit of the Noteholders and
Certificateholders. The Reserve Account shall be established and maintained with
the Indenture Trustee or its designee (the "Securities Intermediary"). On the
Closing Date, Servicer shall deposit or cause to be deposited in the Reserve
Account an amount equal to the Reserve Account Deposit.
SECTION 5.9. Monthly Advances. As of the last day of each Collection
Period, the Servicer shall advance an amount equal to the excess, if any, of (i)
the amount of interest that would be due during such Collection Period on all
Simple Interest Receivables held by the Owner Trustee (assuming that the payment
on each such Receivable was received on its respective due date) over (ii) all
payments received during such Collection Period on all Simple Interest
Receivables held by the Owner Trustee to the extent allocable to interest (such
excess, a "Simple Interest Advance"). In addition, Liquidation Proceeds with
-----------------------
respect to a Simple Interest Receivable allocable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer but only to the extent of any Outstanding Simple
Interest Advances. The Servicer shall not make any advance with respect to
principal of any Simple Interest Receivable and the Servicer shall only make
advances of interest with respect to any Receivable to the extent that the
Servicer, in its sole discretion, shall determine that such advance shall be
recoverable from subsequent collections or recoveries on such Receivable.
Excess Simple Interest Collections shall be paid to the Servicer as provided in
Section 5.2 of this Agreement.
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ARTICLE VI. DEPOSITOR
SECTION 6.1. Representations of Depositor. Depositor makes the following
representations on which Owner Trustee is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate and the Indenture Trustee is deemed to have relied in accepting
administration of its trusts. The representations speak as of
23
the execution and delivery of this Agreement and shall survive the sale of the
Receivables to Owner Trustee and the pledge thereof to Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. Depositor has been duly organized and
is validly existing as a Delaware limited liability company in good standing
under the laws of the State of Delaware, 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 has,
full power, authority and legal right to acquire, own and sell the Receivables
and the other properties and rights included in the Owner Trust Estate assigned
to Owner Trustee pursuant to Article II.
(b) Due Qualification. Depositor is duly qualified to do business as a
limited liability company in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications,
except where the failure to so obtain would not have a material adverse impact
either on Depositor, the transactions contemplated in the Basic Documents or the
Receivables.
(c) Power and Authority. Depositor has the power, authority and legal
right to execute and deliver this Agreement and the Basic Documents to which it
is a party and to carry out their respective terms and to sell and assign the
property to be sold and assigned to and deposited with Owner Trustee as the
Owner Trust Estate; and the execution, delivery and performance of this
Agreement and the Basic Documents to which it is a party have been duly
authorized by Depositor by all necessary action.
(d) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement or the Basic Documents to which it is
a party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(e) Valid Sale; Binding Obligation. Depositor intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the other
properties and rights included in the Owner Trust Estate conveyed by Depositor
to Owner Trustee hereunder, enforceable against creditors of and purchasers from
Depositor; and each of this Agreement and the Basic Documents to which it is a
party constitutes a legal, valid and binding obligation of Depositor,
enforceable against Depositor in accordance with its respective terms, subject,
as to enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws affecting
enforcement of the rights of creditors generally and to equitable limitations on
the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by Depositor of
this Agreement and the Basic Documents to which it is a party and the
consummation of the
24
transactions contemplated hereby and thereby will not conflict with, result in
any material breach of any of the terms and provisions of, constitute (with or
without notice or lapse of time) a material default under or result in the
creation or imposition of any Lien upon any of its material properties pursuant
to the terms of, (i) the limited liability company agreement of Depositor, (ii)
any material indenture, contract, lease, mortgage, deed of trust or other
instrument or agreement to which Depositor is a party or by which Depositor is
bound, or (iii) any law, order, rule or regulation applicable to Depositor of
any federal or state regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over Depositor.
(g) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of Depositor, threatened, before any court, regulatory
body, administrative agency, or other tribunal or governmental instrumentality
having jurisdiction over Depositor or its properties: (i) asserting the
invalidity of this Agreement, any other Basic Document, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or Certificates
or the consummation of any of the transactions contemplated by this Agreement or
any other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Depositor of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable, or (iv) that
may materially and adversely affect the federal or state income, excise
franchise or similar tax attributes of Owner Trustee, the Notes or the
Certificates.
(h) Chief Executive Office. The chief executive office of Depositor is 0
Xxxx Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000.
SECTION 6.2. Continued Existence. During the term of this Agreement,
subject to Section 6.4, Depositor will keep in full force and effect its
existence, rights and franchises as a limited liability company organized under
the laws of the State of Delaware and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby.
SECTION 6.3. [Reserved].
SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations
of, Depositor. Any Person (a) into which Depositor may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Depositor shall be a party or (c) which may succeed to the properties and assets
of Depositor substantially as a whole, shall be the successor to Depositor
without the execution or filing of any document or any further act by any of the
parties to this Agreement; provided that Depositor hereby covenants that it will
not consummate any of the foregoing transactions except upon satisfaction of the
following: (i) the surviving Depositor if other than Bond Securitization,
L.L.C., executes an agreement of assumption to perform every obligation of
Depositor under this Agreement, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.1 or 6.1
shall have
25
been breached, (iii) Depositor shall have delivered to Owner Trustee and
Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, and that the Rating Agency Condition shall have been satisfied with
respect to such transaction, (iv) the surviving Depositor shall have a
consolidated net worth at least equal to that of the predecessor Depositor, (v)
such transaction will not result in a material adverse federal or state tax
consequence to Owner Trustee, the Noteholders or the Certificateholders and (vi)
unless Bond Securitization, L.L.C. is the surviving entity, Depositor shall have
delivered to Owner Trustee and Indenture Trustee an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of Owner Trustee and
Indenture Trustee, respectively, in the Receivables and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
SECTION 6.5. Limitation on Liability of Depositor and Others. Depositor
and any director or officer or employee or agent of Depositor may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Document. Depositor shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 6.6. Depositor May Own Certificates or Notes. Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not Depositor or an Affiliate thereof, except as expressly provided herein
or in any Basic Document. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to Depositor or any
such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement and the other Basic Documents, without preference,
priority, or distinction as among all of the Notes and Certificates of the same
class.
SECTION 6.7. Security Interest. During the term of this Agreement,
Depositor will not take any action to assign the security interest in any
Financed Vehicles other than pursuant to the Basic Documents.
SECTION 6.8. [Reserved].
ARTICLE VII. SERVICER.
SECTION 7.1. Representations of Servicer. Servicer makes the following
representations on which Owner Trustee is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate and the Indenture Trustee
26
and the Owner Trustee are deemed to have relied in accepting administration of
their trusts. The representations speak as of the execution and delivery of the
Agreement and shall survive the sale, transfer and assignment of the Receivables
to Owner Trustee and the pledge thereof to Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. Servicer has been duly organized and
is validly existing as a state banking corporation in good standing under the
laws of the State of Wisconsin, 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 and
the other properties and rights included in the Owner Trust Estate.
(b) Due Qualification. Servicer is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including the servicing of the Receivables as
required by this Agreement) shall require such qualifications.
(c) Power and Authority. Servicer has the power, authority and legal right
to execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms; and the execution, delivery and
performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.
(d) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement, the Basic Documents to which it is a
party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(e) Binding Obligation. Each of this Agreement and the Basic Documents to
which it is a party constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by Servicer of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under, or result in the creation or disposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the organizational documents
of Servicer, (ii) any material indenture, contract, lease, mortgage, deed of
trust or other instrument or agreement to
27
which Servicer is a party or by which Servicer is bound, or (iii) any law,
order, rule or regulation applicable to Servicer of any federal or state
regulatory body, any court, administrative agency, or other governmental
instrumentality having jurisdiction over Servicer.
(g) No Proceedings. There are no proceedings or investigations pending,
or, to Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency, or tribunal or other governmental instrumentality having
jurisdiction over Servicer or its properties: (i) asserting the invalidity of
this Agreement, any other Basic Document, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Servicer of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable, or (iv) that
may materially and adversely affect the federal or state income, excise,
franchise or similar tax attributes of the Certificates.
SECTION 7.2. Indemnities of Servicer. Subject to Section 10.5, Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by Servicer under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), PREFCO, Indenture Trustee
(individually and in its capacity as such), Depositor, the Certificateholders
and the Noteholders and any of the respective officers, directors, employees and
agents of Owner Trustee, Indenture Trustee, PREFCO or Depositor from any and all
costs, expenses, losses, claims, damages and liabilities (including reasonable
attorneys' fees and expenses) to the extent arising out of, or imposed upon any
such Person through, the gross negligence, willful misfeasance, breach of
contract or bad faith (other than errors in judgment) of Servicer in the
performance of its obligations and duties under this Agreement or any other
Basic Document or in the performance of the obligations and duties of any
subcustodian or subservicer in the performance of its obligations and duties
under any custody or subservicing agreement. Notwithstanding the foregoing, if
Servicer is rendered unable, in whole or in part, by virtue of an act of God,
act of war, fires, earthquake or other natural disasters, to satisfy its
obligations under this Agreement, Servicer shall not be deemed to have breached
any such obligation upon the sending of written notice of such event to the
other parties hereto, for so long as Servicer remains unable to perform such
obligation as a result of such event. This provision shall not be construed to
limit Servicer's or any other party's rights, obligations, liabilities, claims
or defenses which arise as a matter of law or pursuant to any other provision of
this Agreement.
(c) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), and Indenture Trustee and their
respective officers, directors, employees and agents from and against any taxes
that may at any time be asserted against any such Person with respect to the
transactions contemplated in this Agreement or in the other Basic Documents,
including any sales, gross receipts, general corporation, tangible or intangible
28
personal property, franchise, privilege, or license taxes, or any taxes of any
kind which may be asserted (not including any federal or other income taxes
arising out of transactions contemplated by this Agreement and the other Basic
Documents) against the Owner Trustee (individually and in its capacity as such),
and costs and expenses in defending against the same.
(d) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), PREFCO, Indenture Trustee (not
individually but solely in its capacity as Indenture Trustee), Depositor,
Certificateholders and the Noteholders or any of the respective officers,
directors, employees and agents of Owner Trustee, Indenture Trustee, PREFCO, or
Depositor from any and all costs, expenses, losses, claims, damages and
liabilities (including reasonable attorneys' fees and expenses) to the extent
arising out of or imposed upon any such Person as a result of any compensation
payable to any subcustodian or subservicer (including any fees payable in
connection with the release of any Receivable File from the custody of such
subservicer or in connection with the termination of the servicing activities of
such subservicer with respect to any Receivable) whether pursuant to the terms
of any subservicing agreement or otherwise.
(e) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), Indenture Trustee (individually and
in its capacity as such), Depositor, the Certificateholders and the Noteholders
or any of the respective directors, officers, employees and agents of Owner
Trustee, Indenture Trustee and Depositor 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.
Indemnification under this Section shall survive the resignation or removal of
Owner Trustee or Indenture Trustee and the termination of this Agreement and the
other Basic Documents, as applicable, and shall include reasonable fees and
expenses of counsel and other expenses of litigation. If Servicer shall have
made any indemnity payments pursuant to this Section and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Servicer,
without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (a) into which Servicer may be merged or consolidated,
(b) which may result from any merger or consolidation to which Servicer shall be
a party, (c) which may succeed to the properties and assets of Servicer,
substantially as a whole, or (d) 50% of the voting stock of which is owned
directly or indirectly by Xxxxxxxx & Xxxxxx Corporation may become the successor
to Servicer; provided that, unless M&I Bank is the surviving party to such
transaction, Servicer hereby covenants that it will not consummate any of the
foregoing transactions except upon satisfaction of the following: (i) the
surviving Servicer if other than M&I Bank, executes an agreement of assumption
to perform every obligation of Servicer under this Agreement, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 7.1 shall have been breached and no Servicer Termination
29
Event, and no event that, after notice or lapse of time, or both, would become a
Servicer Termination Event shall have occurred and be continuing, (iii) Servicer
shall have delivered to Owner Trustee and Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Servicer shall have a consolidated net worth at least equal to that of
the predecessor Servicer, and (v) such transaction will not result in a material
adverse federal or state tax consequence to Owner Trustee, the Noteholders or
the Certificateholders.
SECTION 7.4. Limitation on Liability of Servicer and Others. Neither
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to Owner Trustee, Indenture Trustee, PREFCO, Depositor, the
Noteholders or the Certificateholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action by Servicer
or any subservicer pursuant to this Agreement or for errors in judgment;
provided that this provision shall not protect Servicer or any such person
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith, breach of contract or gross negligence in the
performance of duties (except for errors in judgment) under this Agreement.
Servicer or any subservicer and any of their respective directors, officers,
employees or agents may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.
Except as provided in this Agreement, Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided that Servicer may (but shall not be required to) undertake any
reasonable action that it may deem necessary or desirable in respect of the
Basic Documents to protect the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the legal
expense and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
SECTION 7.5. M&I Bank Not To Resign as Servicer. Subject to the provisions
of Section 7.3, M&I Bank hereby agrees not to resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon
determination that the performance of its duties hereunder shall no longer be
permissible under applicable law or if such resignation is required by
regulatory authorities. Notice of any such determination permitting the
resignation of M&I Bank as Servicer shall be communicated to Owner Trustee and
Indenture Trustee at the earliest practicable time (and, if such communication
is not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel to
such effect delivered to Owner Trustee and Indenture Trustee concurrently with
or promptly after such notice. No such resignation shall become effective until
the earlier of Indenture Trustee or a Successor Servicer having assumed the
responsibilities and obligations of
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the resigning Servicer in accordance with Section 8.2 or the date upon which any
regulatory authority requires such resignation.
SECTION 7.6. Existence. Subject to the provisions of Section 7.3, during
the term of this Agreement, M&I Bank will keep in full force and effect and its
existence, rights and franchises as a Wisconsin state banking corporation and as
a foreign corporation in all jurisdictions which the ownership or lease of
property or the conduct of its business (including the servicing of Receivables
as required by this Agreement) shall require such qualifications.
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity, become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Servicer or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Except as set forth herein or in the
other Basic Documents, Notes and Certificates so owned by or pledged to Servicer
or any such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement and the other Basic Documents, without preference,
priority, or distinction as among all of the Notes and Certificates of the same
class.
ARTICLE VIII. SERVICER TERMINATION EVENTS.
SECTION 8.1. Servicer Termination Event. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing:
(a) any failure by Servicer to deliver to Indenture Trustee and Owner
Trustee the Servicer's Report in accordance with Section 4.9, or any failure by
Servicer to deliver to Indenture Trustee or Owner Trustee for deposit in any of
the Trust Accounts or the Certificate Distribution Account any required payment
or to direct Indenture Trustee or Owner Trustee to make any required
distributions therefrom that shall continue unremedied for a period of five
Business Days after written notice of such failure is received by Servicer from
Owner Trustee or Indenture Trustee or after discovery of such failure by an
Authorized Officer of Servicer; or
(b) failure on the part of Servicer duly to observe or to perform in any
material respect any other covenants or agreements of Servicer set forth in this
Agreement or any other Basic Document to which it is a party (other than a
breach of the representations and warranties regarding the Receivables set forth
in Section 3.1), which failure shall (i) materially and adversely affect the
rights of either the Certificateholders or Noteholders and (ii) continue
unremedied for a period of 60 days after discovery of such failure by an
Authorized Officer of Servicer or after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to
Servicer or Depositor by Owner Trustee or Indenture Trustee or (B) to Servicer
or Depositor and to Owner Trustee and Indenture Trustee by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes of the
Controlling Note Class or, if no Notes are outstanding, Holders of Certificates
evidencing not less than 25% of the outstanding Certificate Percentage
Interests, as applicable; or
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(c) an Insolvency Event occurs with respect to Servicer or any of its
respective successors;
then, and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of Notes
evidencing greater than 50% of the Outstanding Amount of the Notes of the
Controlling Note Class (or, if no Notes are then Outstanding, either the Owner
Trustee or the Holders of Certificates evidencing greater than 50% of the
Certificate Percentage Interests), by notice then given in writing to Servicer
(and to Owner Trustee or Indenture Trustee, as applicable, if given by the
Holders, and the Rating Agencies) may terminate all the rights and obligations
(other than the obligations set forth in Section 7.2) of Servicer under this
Agreement and the rights and obligations of any subcustodian or subservicer
pursuant to the terms of any related custody or subservicing agreement. On or
after the receipt by Servicer of such written notice, all authority and power of
Servicer under this Agreement, whether with respect to the Notes, the
Certificates or the Receivables or otherwise, shall, without further action,
pass to and be vested in Indenture Trustee or such Successor Servicer as may be
appointed under Section 8.2; and, without limitation, Indenture Trustee and
Owner Trustee are hereby authorized and empowered to execute and deliver, on
behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the Successor Servicer, Indenture Trustee and Owner Trustee in effecting
the termination of the responsibilities and rights of the predecessor Servicer
under this Agreement, including the transfer to the Successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
predecessor Servicer for deposit, or shall thereafter be received by it with
respect to a Receivable. Servicer shall promptly transfer its electronic records
relating to the Receivables to the Successor Servicer in such electronic form as
the Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with transferring
the Receivable Files to the Successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer upon presentation of reasonable documentation of such
costs and expenses.
SECTION 8.2. Appointment of Successor. Upon Servicer's receipt of notice
of termination, pursuant to Section 8.1 or Servicer's resignation (if and to the
extent permitted in accordance with the terms of this Agreement), the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation, until
the earlier of (i) the date 45 days from the delivery to Owner Trustee and
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (ii) the date
upon which the predecessor Servicer shall become unable to act as Servicer, as
specified
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in the notice of resignation and accompanying Opinion of Counsel. In the event
of Servicer's termination or resignation hereunder, Indenture Trustee shall
appoint a Successor Servicer (which may be the Indenture Trustee), and the
Successor Servicer shall accept its appointment by a written assumption in form
acceptable to Owner Trustee and Indenture Trustee. In the event that a Successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section, Indenture Trustee
without further action shall automatically be appointed the Successor Servicer
and Indenture Trustee shall be entitled to the Servicing Fee. Notwithstanding
the above, Indenture Trustee shall, if it shall be unwilling or unable so to
act, appoint or petition a court of competent jurisdiction to appoint, any
established institution, having a net worth of not less than $100,000,000 and
whose regular business shall include the servicing of consumer receivables, as
the successor to Servicer under this Agreement; provided, that the appointment
of any such Successor Servicer will not result in the withdrawal, qualification
or reduction of the outstanding rating assigned to the Certificates or Notes by
any Rating Agency.
(b) Upon appointment, the Successor Servicer (including Indenture Trustee
acting as Successor Servicer) shall be the successor in all respects to the
predecessor Servicer and shall be subject to all the responsibilities, duties
and liabilities arising thereafter relating thereto placed on the predecessor
Servicer and shall be entitled to the Servicing Fee and all the rights granted
to the predecessor Servicer by the terms and provisions of this Agreement. No
Successor Servicer shall be liable for any acts or omissions of any predecessor
Servicer.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
the predecessor Servicer pursuant to Section 4.7, 7.1 or 7.2) other than those
relating to the management, administration, servicing, custody or collection of
the Receivables and the other rights and properties included in the Owner Trust
Estate. 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
predecessor Servicer (in whatever capacity) is paid or reimbursed all amounts it
is entitled to receive under this Agreement on each Payment Date subsequent to
the date on which it is terminated as Servicer hereunder.
SECTION 8.3. Payment of Servicing Fee. If Servicer shall be replaced, the
predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees and any Supplemental Servicing Fees and any Outstanding Simple
Interest Advances accrued and unpaid or received to the effective date of the
termination of the predecessor Servicer, in each case, in accordance with
Section 4.8.
SECTION 8.4. Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, Owner Trustee shall give prompt written notice thereof to
Certificateholders and Indenture Trustee shall give prompt written notice
thereof to Noteholders.
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SECTION 8.5 Waiver of Past Defaults. The Holders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes of the Controlling
Note Class (or the Holders of Certificates evidencing not less than a majority
of the outstanding Certificate Percentage Interests, as applicable, in the case
of any default which does not adversely affect Indenture Trustee or the
Noteholders) may, on behalf of all Noteholders and Certificateholders, waive in
writing any default by Servicer in the performance of its obligations hereunder
and its consequences, except a default in making any required deposits to any of
the Trust Accounts in accordance with this Agreement. Upon any such waiver of a
past default, such default shall cease to exist, and any Servicer Termination
Event arising therefrom shall be deemed to have been remedied for every purpose
of this Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereto.
ARTICLE IX. TERMINATION.
SECTION 9.1 Optional Purchase of All Receivables; Termination Notice. On
the last day of any Collection Period immediately preceding a Determination Date
as of which the then outstanding Pool Balance is 5% or less of the Original Pool
Balance, Servicer shall have the option to purchase the Owner Trust Estate other
than the Trust Accounts, the Certificate Distribution Account and any funds or
investments therein. To exercise such option, Servicer shall deposit pursuant to
Section 5.4 in the Collection Account an amount which, when added to the amounts
on deposit in the Collection Account for such Payment Date, equals the sum of
(a) the unpaid principal amount of the then outstanding Notes, plus accrued and
unpaid interest thereon, plus (b) any amounts owed to Certificateholders. The
Notes and the Certificates will be redeemed concurrently therewith.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.
(c) Notice of any termination of Owner Trustee shall be given by Servicer
to Owner Trustee, Indenture Trustee and the Rating Agencies as soon as
practicable after Servicer has received notice thereof.
ARTICLE X. MISCELLANEOUS PROVISIONS.
SECTION 10.1 Amendment.(a) This Agreement may be amended by Depositor,
Servicer, Owner Trustee and Indenture Trustee, but without the consent of any of
the Noteholders or the Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided that such action shall not
34
adversely affect in any material respect the interests of any Noteholder or
Certificateholder;
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of Owner Trustee
to qualify as, and to permit an election to be made to cause all or a
portion of Owner Trustee to be treated as, a "financial asset
securitization investment trust" under the Code and (B) in connection with
any such election, to modify or eliminate existing provisions set forth in
this Agreement relating to the intended federal income tax treatment of the
Notes or Certificates and Owner Trustee in the absence of the election; it
being a condition to any such amendment that the Rating Agency Condition
shall have been satisfied; and
(iii) to add, modify or eliminate such provisions as may be necessary
or advisable in order to enable (a) the transfer to Owner Trustee of all or
any portion of the Receivables to be recognized as a sale under generally
accepted accounting principles ("GAAP") by Depositor to Owner Trustee, (b)
the Trust to avoid becoming a member of M&I Bank's consolidated group under
GAAP or (c) M&I Bank, the Depositor or any of their Affiliates to otherwise
comply with or obtain more favorable treatment under any law or regulation
or any accounting rule or principle; it being a condition to any such
amendment that the Rating Agency Condition shall have been satisfied.
(b) This Agreement may also be amended from time to time by Depositor,
Servicer, Owner Trustee and Indenture Trustee, with the consent of the Holders
of Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Percentage Interests for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (ii)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Percentage Interests, the Holders of which are required to consent
to any such amendment, without the consent of the Holders of all the outstanding
Notes and the Holders of all the outstanding Certificates of each class affected
thereby.
(c) Prior to the execution of any such amendment or consent, Servicer
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
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(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied has been
delivered. Owner Trustee and Indenture Trustee may, but shall not be obligated
to, enter into any such amendment which affects Owner Trustee's or Indenture
Trustee's, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
SECTION 10.2 Protection of Title to Trust Property. Depositor shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of Owner
Trustee and the interests of Indenture Trustee in the Receivables and the
proceeds thereof. Depositor shall deliver (or cause to be delivered) to Owner
Trustee and Indenture Trustee file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such
filing.
(b) Neither Depositor nor Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of (S) 9-507 of the UCC, unless it shall
have given Owner Trustee and Indenture Trustee at least thirty days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) Each of Depositor and Servicer shall have an obligation to give Owner
Trustee and Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall promptly file any such amendment or new financing
statement. 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) Servicer shall maintain (or shall cause its subservicer to maintain)
accounts and records as to each Receivable accurately and in sufficient detail
to permit the reader thereof to know at any time the status of such Receivable,
including payments and recoveries made and payments owing (and the nature of
each) and reconciliation between payments or recoveries on (or with respect to)
each Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) Servicer shall maintain (or shall cause its subservicer to maintain)
its computer systems so that, from and after the time of sale under this
Agreement of the Receivables, Servicer's and its subservicer's master computer
records (including any backup archives) that refer to a Receivable shall
indicate clearly the interest of Owner Trustee and Indenture Trustee in such
Receivable and that such Receivable is owned by Owner Trustee and has been
pledged to Indenture Trustee pursuant to the Indenture. Indication of Owner
Trustee's and Indenture
36
Trustee's interest in a Receivable shall be deleted from or modified on
Servicer's and its subservicer's computer systems when, and only when, the
related Receivable shall have been paid in full or purchased by Servicer.
(f) If at any time Servicer shall propose to sell, grant a security
interest in or otherwise transfer any interest in automotive receivables to any
prospective purchaser, lender or other transferee, Servicer shall give to such
prospective purchaser, lender or other transferee computer tapes, records or
printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate clearly that
such Receivable has been sold and is owned by Owner Trustee and has been pledged
to Indenture Trustee.
(g) Servicer, upon receipt of reasonable prior notice, shall permit
Indenture Trustee, Owner Trustee and their respective agents at any time during
normal business hours to inspect, audit and make copies of and abstracts from
Servicer's and its subservicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall have
reasonable grounds to believe that such request is necessary in connection with
the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to Owner Trustee or to Indenture Trustee,
within thirty Business Days, a list of all Receivables (by contract number and
name of Obligor) then owned by Owner Trustee, together with a reconciliation of
such list to the Schedule of Receivables and to each of Servicer's Reports
furnished before such request indicating removal of Receivables from Owner
Trustee.
SECTION 10.3 Notices. All demands, notices and communications upon or to
Depositor, Servicer, Owner Trustee, Indenture Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered, sent by
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt in the case of Depositor,
to Bond Securitization, L.L.C., 0 Xxxx Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxxxxx, in the case of Servicer, to M&I Xxxxxxxx &
Ilsley Bank, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx XX0, Xxxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxx in the case of Owner Trustee, at the Corporate Trust Office,
in the case of Indenture Trustee, at the Corporate Trust Office, in the case of
Moody's, to Xxxxx'x Investors Service, Inc., to 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention of Asset Backed Securities Group, and in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention of Asset Backed Surveillance Department. Any notice required or
permitted to be mailed to a Noteholder or Certificateholder shall be given by
first-class mail, postage prepaid, at the address of such Person as shown in the
Note Register or the Certificate Register, as applicable. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
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SECTION 10.4 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 4.1, 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
Servicer, this Agreement may not be assigned by Depositor or Servicer without
the prior written consent of the Owner Trustee, Indenture Trustee, the
Noteholders evidencing not less than 66 2/3% of the Outstanding Amount of the
Notes and the Certificateholders evidencing not less than 66 2/3% of the
outstanding Certificate Percentage Interests.
SECTION 10.5 Litigation and Indemnities. If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any Person in respect of which indemnity may be
sought pursuant to Section 7.2, such Person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. The
Indemnifying Person shall not be liable for any settlement of any claim or
proceeding effected without written consent, but if settled with such consent of
if there be a final judgment for the plaintiff, the Indemnifying Person agrees
to indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
SECTION 10.6 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of Depositor, PREFCO, Servicer, Owner
Trustee (individually and in its capacity as such) and Indenture Trustee (not
individually but solely in its capacity as Indenture Trustee) and for the
benefit of the Certificateholders and the Noteholders, as third-party
beneficiaries, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 10.7 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.
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SECTION 10.8 Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.9 Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 10.10 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.11 Assignment to Indenture Trustee. Depositor hereby
acknowledges and consents to any pledge, assignment and grant of a security
interest by Owner Trustee to Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders of all right, title and interest of Owner Trustee in,
to and under the Receivables and/or the assignment of any or all of Owner
Trustee's rights and obligations hereunder to Indenture Trustee.
SECTION 10.12 Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, Owner Trustee, Indenture Trustee, Servicer and Depositor
shall not, prior to the date which is one year and one day after the termination
of this Agreement with respect to the Trust or the Depositor, acquiesce,
petition or otherwise invoke or cause Owner Trustee to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Trust or the Depositor under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or the
Depositor or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trust or the Depositor. This Section 10.2
shall survive the termination of this Agreement.
SECTION 10.13 Limitation of Liability. It is expressly understood and
agreed by and between the parties hereto (i) that this Agreement is executed and
delivered by Bankers Trust (Delaware), not in its individual capacity but solely
as Owner Trustee under the Trust Agreement dated as of August 30, 2001 between
Bond Securitization, L.L.C. and M&I Xxxxxxxx & Xxxxxx Bank (the "Trust
Agreement") in the exercise of the power and authority conferred and vested in
it as such Owner Trustee, (ii) each of the representations, undertakings and
agreements made herein by the Owner Trustee are not personal representations,
undertaking and agreements of Bankers Trust (Delaware), but are binding only on
the Trust Estate created pursuant to the Trust Agreement, (iii) nothing
contained herein shall be construed as creating any liability on Bankers Trust
(Delaware), individually or personally, to perform any covenant of the Owner
Trustee either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties hereto and by any person claiming by,
through or under any such party, and (iv) under no circumstances shall Bankers
Trust (Delaware) be personally liable for the
39
payment of any indebtedness or expense of the Owner Trustee or be liable for the
reach of failure of any obligations, representation, warranty or covenant made
or undertaken by the Owner Trustee under this Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bank One, National Association, not in its
individual capacity but solely as Indenture Trustee, and in no event shall it
have any liability for the representations, warranties, covenants, agreements or
other obligations of Owner Trustee 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 Owner Trustee. For the purposes of this
Agreement, in the performance of its duties or obligations hereunder, Indenture
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Article VI of the Indenture.
SECTION 10.14 Further Assurances. Depositor and the Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by Owner Trustee or
Indenture Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 10.15 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Owner Trustee, Indenture Trustee, the
Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
BANKERS TRUST (DELAWARE), not in its individual
capacity but solely as owner trustee of M&I Auto Loan
Trust 2001-1
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
S-1
BOND SECURITIZATION, L.L.C.,
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President
S-2
M&I XXXXXXXX & XXXXXX BANK, Servicer,
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
S-3
Acknowledged and Agreed to:
Bank One, National Association,
not in its individual capacity
but solely as Indenture Trustee,
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
S-4
SCHEDULE A
(Delivered on Disk to Indenture Trustee and Owner Trustee)
Schedule A-1
SCHEDULE B
Location of Receivables Files
-----------------------------
The Receivables sold by M&I Xxxxxxxx & Ilsley Bank and Preferred Receivables
Funding Corporation to Depositor and sold by Depositor to Owner Trustee are
located at the offices of M&I Xxxxxxxx & Xxxxxx Bank listed below:
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Schedule B-1
SCHEDULE C
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained in
the Sale and Servicing Agreement, the Servicer hereby represents, warrants, and
covenants to the Depositor and the Owner Trustee as to itself as follows on the
Closing Date and on each Payment Date thereafter:
1. The Sale and Servicing Agreement creates a valid and continuing
security interest (as defined in UCC Section 9-102) in the Receivables in favor
of the Owner Trustee, which security interest is prior to all other Liens, and
is enforceable as such as against creditors of and purchasers from the
Depositor.
2. The Receivables constitute "tangible chattel paper" within the meaning
of UCC Section 9-102.
3. M&I Bank has taken all steps necessary to perfect its security
interest against the Obligor in the property securing the Receivables that
constitute chattel paper.
4. The Depositor owns and has good and marketable title to the
Receivables free and clear of any Lien, claim or encumbrance of any Person,
excepting only Liens for taxes, assessments or similar governmental charges or
levies incurred in the ordinary course of business that are not yet due and
payable or as to which any applicable grace period shall not have expired, or
that are being contested in good faith by proper proceedings and for which
adequate reserves have been established, but only so long as foreclosure with
respect to such a Lien is not imminent and the use and value of the property to
which the Lien attaches is not impaired during the pendency of such proceeding.
5. The Servicer has caused or will have caused, within ten days after the
effective date of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from M&I Bank and
Preferred Receivables Funding Corporation to the Depositor, the transfer and
sale of the Receivables from the Depositor to the Owner Trustee, and the
security interest in the Receivables granted to the Indenture Trustee hereunder.
6. With respect to Receivables that constitute tangible chattel paper,
such tangible chattel paper is in the possession of the Custodian and the
Indenture Trustee has received a written acknowledgment from the Custodian that
the Custodian is holding such tangible chattel paper solely on behalf and for
the benefit of the Indenture Trustee.
Schedule C-1
7. The Servicer has not authorized the filing of, or is aware of any
financing statements against either Preferred Receivables Funding Corporation,
M&I Bank, the Depositor or the Servicer that include a description of collateral
covering the Receivables, the Trust Estate and proceeds related thereto other
than any financing statement (i) relating to the sale of Receivables by M&I Bank
and Preferred Receivables Funding Corporation to the Depositor under the
Purchase Agreement, (ii) relating to the sale of Receivables by the Depositor to
the Owner Trustee under the Sale and Servicing Agreement, (iii) relating to the
security interest granted to the Indenture Trustee hereunder, or (iv) that has
been terminated.
8. The Servicer is not aware of any judgment, ERISA or tax Lien filings
against either Preferred Receivables Funding Corporation, M&I Bank, the
Depositor or the Servicer.
9. None of the tangible chattel paper that constitute or evidence the
Receivables has any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than the Indenture Trustee.
10. Survival of Perfection Representations. Notwithstanding any other
--------------------------------------
provision of the Purchase Agreement, the Sale and Servicing Agreement, the
Indenture or any other Basic Document, the Perfection Representations contained
in this Schedule shall be continuing, and remain in full force and effect
(notwithstanding any replacement of the Servicer or termination of Servicer's
rights to act as such) until such time as all obligations under the Purchase
Agreement, Sale and Servicing Agreement and the Indenture have been finally and
fully paid and performed.
11. No Waiver. The parties hereto: (i) shall not, without obtaining a
---------
confirmation of the then-current rating of the Notes, waive any of the
Perfection Representations; (ii) shall provide the Ratings Agencies with prompt
written notice of any breach of the Perfection Representations, and shall not,
without obtaining a confirmation of the then-current rating of the Notes (as
determined after any adjustment or withdrawal of the ratings following notice of
such breach) waive a breach of any of the Perfection Representations.
Schedule C-2
EXHIBIT A
Form of Servicer's Report
-------------------------
Exhibit A-1
M&I Auto Loan Trust 2001-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End Date:
------------------------------------------------------------------------------------------------------------------------------------
A. Initial Bond Characteristics Cutoff Coupon Accrual Legal Final Maturity CUSIP
Balance Calendar
------------------------------------------------------------------------------------------------------------------------------------
i. Class A-1 Notes
ii. Class A-2 Notes % 30/360
iii. Class A-3 Notes % 30/360
iv. Class A-4 Notes % 30/360
v. Class B Notes % 30/360
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
X. Xxxx Balances Balance as of % of Original Balance Unpaid Interest Unpaid Interest
------------------------------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date] [Date] [Date]
i. Class A-1 Notes %
ii. Class A-2 Notes %
iii Class A-3 Notes %
iv. Class A-4 Notes %
v. Class B Notes %
------------------------------------------------------------------------------------------------------------------------------------
Exhibit A-2
M&I Auto Loan Trust 2001-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End Date:
--------------------------------------------------------------------------------
C. Reserve Account
--------------------------------------------------------------------------------
i. Initial Reserve Deposit
ii. Beginning of Period Reserve Balance
iii. Specified Reserve Account Percent % of Initial Pool Balance
iv. Specified Reserve Account Floor
v. Specified Reserve Account Balance
vi. Reserve Account Release
vii. Reserve Account Draws
viii. Reserve Account Deposits
ix. End of Period Reserve Balance
x. Outstanding Simple Interest Advances
--------------------------------------------------------------------------------
-----------------------------------------------------------
D. Servicing
-----------------------------------------------------------
i. Servicing Fee Percentage %
ii. Beginning of Period Shortfall
iii. End of Period Servicing Shortfall
-----------------------------------------------------------
M&I Auto Loan Trust 2001-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End Date:
--------------------------------------------------------------------------------------------------------------------
E. Portfolio Characteristics Initial Balance Balance as of Percentage of Original as of
--------------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date] [Date]
i. Principal Balance %
ii. Number of Contracts %
iii. Weighted Average Coupon (WAC) % %
iv. Weighted Average Original Term
v. Weighted Average Remaining Term
vi. Weighted Average Seasoning
--------------------------------------------------------------------------------------------------------------------
Exhibit A-4
M&I Auto Loan Trust 2001-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End Date:
------------------------------------------------------------------------------------------------------------------------------------
F. Portfolio Characteristics # of Contracts % of Number of Contracts Principal Balance % of Principal Balance
------------------------------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date] [Date] [Date] [Date] [Date]
i. 30-59 Days Delinquent % %
ii. 60-89 Days Delinquent % %
iii. 90-119 Days Delinquent % %
iv. 120+ Days Delinquent % %
v. Repo in Inventory (Charged-off) % %
vi Repo in Inventory (Not Charged-Off) % %
vii. Gross Charge-Offs in Period % %
------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
G. Portfolio Charge-Offs $ % of Original Balance
----------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date]
x. Xxxxx Charge-Offs in Period %
ii. Cumulative Gross Charge-Offs %
iii. Net Losses in Period %
iv. Cumulative Net Losses %
----------------------------------------------------------------------------------------------------------------
Exhibit A-5
M&I Auto Loan Trust 2001-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End Date:
--------------------------------------------------------
H. Pool Collections
--------------------------------------------------------
i. Borrower Interest Collections
ii. Borrower Principal Collections
iii. Net Liquidation Proceeds
iv. Recoveries
v. Repurchase Amounts (Interest)
vi. Repurchase Amounts (Principal)
vii. Total Interest Collections
viii. Total Principal Collections
--------------------------------------------------------
--------------------------------------------------------
I. Pool Balance Reconciliation
--------------------------------------------------------
i. Beginning Pool Balance
ii. Principal Collections
iii. Gross Charge-Offs in Period
iv. Ending Pool Balance
--------------------------------------------------------
----------------------------------------------------------------------------
J. Total Available
----------------------------------------------------------------------------
i. Total Pool Collections
Reserve Account Balance
Specified Reserve Account Amount
ii. Reserve Account Release
iii. Collected Funds
----------------------------------------------------------------------------
Exhibit A-6
M&I Auto Loan Trust 2001-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End Date:
------------------------------------------------------------------------------------------------------------------------------------
K. Waterfall Calculation Amount Due Amount Reserve Reserve Amount Paid
Steps Available Balance Account Draw
for Distribution
------------------------------------------------------------------------------------------------------------------------------------
Servicing Fee
Previous Servicing Fee Shortfall
i. Total Servicing Fee
ii Class A Notes Interest Distribution
Class A Notes Balance
Pool Balance
iii. Priority Principal Distribution
iv. Class B Notes Interest Distribution
Class A and B Notes Balance
Pool Balance
v. Reserve Fund Deposit
Outstanding Money Market Securities
Notes and Certificate Balances
Specified Reserve Account Amount
Target Securities Balance
vi. Regular Principal Distribution
vii. Release to Seller
------------------------------------------------------------------------------------------------------------------------------------
Exhibit A-7
M&I Auto Loan Trust 2001-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End Date:
------------------------------------------------------------------------------------------------------------------------------------
X. Xxxx Interest Distributions Coupon Number of Current Previous Accrued Interest on Total Bond Total Bond Interest
Days in Interest Interest Interest Shortfall Interest Due Interest Paid Shortfall
Period Shortfall
------------------------------------------------------------------------------------------------------------------------------------
Total Class A Notes -
Class A-1 Notes % -
Class A-2 Notes % -
Class A-3 Notes % -
Class A-4 Notes % -
Class B Notes % -
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------
X. Xxxx Principal Distributions
--------------------------------------------------------
Priority Principal Distribution
Regular Principal Distribution
Total Principal Distribution
Class A-1 Notes Principal Distribution
Class A-2 Notes Principal Distribution
Class A-3 Notes Principal Distribution
Class A-4 Notes Principal Distribution
Class B Notes Principal Distribution
--------------------------------------------------------
Exhibit A-8
APPENDIX X
DEFINITIONS
"Accrued Class A Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class A Noteholders' Monthly Accrued Interest for such
Payment Date and the Class A Noteholders' Interest Carryover Shortfall for such
Payment Date.
"Accrued Class B Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class B Noteholders' Monthly Accrued Interest for such
Payment Date and the Class B Noteholders' Interest Carryover Shortfall for such
Payment Date.
"Act" is defined in Section 11.3(a) of the Indenture.
"Administration Agreement" means the Administration Agreement among M&I
Xxxxxxxx & Xxxxxx Bank, as Administrator, Bankers Trust (Delaware), not in its
individual capacity but solely as owner trustee of M&I Auto Loan Trust 2001-1
and Bank One, National Association, as Indenture Trustee, dated August 30, 2001,
as the same may be amended and supplemented from time to time.
"Administration Fee" is defined in Section 4 of the Administration
Agreement.
"Administrator" means M&I Xxxxxxxx & Ilsley Bank, in its capacity as
administrator under the Administration Agreement, and each successor
Administrator.
"Affiliate" means, with respect to any specified Person, any other
Person controlling, controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
or act as servicer with respect to the financial assets of such specified Person
unless such other Person controls the specified Person through equity ownership
or otherwise.
"Authenticating Agent" is defined in Section 2.13 of the Indenture.
"Authorized Officer" means, with respect to Owner Trustee, Indenture
Trustee and Servicer, any officer of Owner Trustee, Indenture Trustee or
Servicer, as applicable, who is authorized to act for Owner Trustee, Indenture
Trustee or Servicer, as applicable, in matters relating to Owner Trustee,
Indenture Trustee or Servicer and who is identified on the list of Authorized
Officers delivered by each of Owner Trustee, Indenture Trustee and Servicer to
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
Appendix X, Page 1
"Available Collections" shall mean, for any Payment Date, the sum of
the following amounts with respect to the Collection Period preceding such
Payment Date: (i) all payments collected with respect to the Receivables; (ii)
all Liquidation Proceeds attributable to Receivables which became Defaulted
Receivables during such Collection Period in accordance with the Servicer's
customary servicing procedures, and all Recoveries in respect of Defaulted
Receivables which were written off in prior Collection Periods; (iii) all Simple
Interest Advances with respect to the Receivables, (iv) the Purchase Amount
received with respect to each Receivable that became a Purchased Receivable
during such Collection Period; and (v) partial prepayments of any refunded item
included in the principal balance of a Receivable, such as extended warranty
protection plan costs, or physical damage, credit life, disability insurance
premiums; provided, however, that in calculating the Available Collections the
following will be excluded: (1) any Excess Simple Interest Collections, (2)
Liquidation Proceeds with respect to Receivables paid to the Servicer to
reimburse Outstanding Simple Interest Advances, (3) all payments and proceeds
(including Liquidation Proceeds) of any Receivables the Purchase Amount of which
has been included in the Available Funds in a prior Collection Period and (4)
amounts consisting of the Supplemental Servicing Fee.
"Available Funds" shall mean, for any Payment Date, the sum of (i) the
Available Collections for such Payment Date and (ii) the Reserve Account Excess
Amount for such Payment Date.
"Average Delinquency Ratio" means, for any Payment Date, the average of
the Delinquency Ratios for the three immediately preceding Collection Periods.
"Average Net Loss Ratio" means, for any Payment Date, the average of
the Net Loss Ratios for the three immediately preceding Collection Periods.
"Bank Regulatory Authorities" means the Federal Reserve Board, the
Federal Deposit Insurance Corporation, Office of the Comptroller of Currency and
the Wisconsin Department of Financial Institutions.
"Basic Documents" means the Purchase Agreement, the Indenture, the Note
Depository Agreement, the Sale and Servicing Agreement, the Trust Agreement, the
Administration Agreement, the Notes, the Certificates and other documents and
certificates delivered in connection therewith.
"Benefit Plan" is defined in Section 3.12 of the Trust Agreement.
"Book-Entry Note" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10 of the Indenture.
"Business Day" means a day that is not a Saturday or a Sunday and that
in the States of New York, Wisconsin and the State in which the Corporate Trust
Office is located is neither a legal holiday nor a day on which banking
institutions are authorized by law, regulation or executive order to be closed.
Appendix X, Page 2
"Certificate" means a certificate evidencing the beneficial interest of
a Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"Certificate Account Property" means the Certificate Distribution
Account, all amounts and investments held from time to time therein (whether in
the form of deposit account, Physical Property, book entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Certificate Distribution Account" is defined in Section 5.1 of the
Trust Agreement.
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 of the Trust Agreement and shall
initially be the Owner Trustee.
"Certificate Percentage Interest" shall mean with respect to any
Certificate, the percentage interest of ownership in the Trust represented
thereby as set forth on the face thereof.
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Class" shall mean a class of Notes, which may be the Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes or the Class B
Notes.
"Class A Notes" shall mean, collectively, the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes and, the Class A-4 Notes.
"Class A Noteholders' Interest Carryover Shortfall" shall mean, with
respect to any Payment Date, the excess of the Class A Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class A
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
A Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class A Notes on the preceding Payment Date,
to the extent permitted by law, at the respective Interest Rates borne by such
Class A Notes for the related Interest Period.
"Class A Noteholders' Monthly Accrued Interest" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes at the respective Interest Rate for such Class and on
the outstanding principal amount of the Notes of each such Class on the
immediately preceding Payment Date or the Closing Date, as the case may be,
after giving effect to all payments of principal to the Noteholders of the Notes
of such Class on or prior to such preceding Payment Date.
Appendix X, Page 3
"Class A-1 Final Scheduled Payment Date" shall mean the August 20,
2002.
"Class A-1 Interest Rate" means 3.51% per annum. Interest with respect
to the Class A-1 Notes shall be computed on the basis of actual days elapsed and
a 360-day year for all purposes of the Basic Documents.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1
Note is registered on the Note Register.
"Class A-1 Notes" means the Class A-1 3.51% Asset Backed Notes,
substantially in the form of Exhibit A-1 to the Indenture.
"Class A-2 Final Scheduled Payment Date" shall mean the December 20,
2004 Payment Date.
"Class A-2 Interest Rate" means 3.89% per annum. Interest with respect
to the Class A-2 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class A-2 Noteholder" shall mean the Person in whose name a Class A-2
Note is registered on the Note Register.
"Class A-2 Notes" means the Class A-2 3.89% Asset Backed Notes,
substantially in the form of Exhibit A-2 to the Indenture.
"Class A-3 Final Scheduled Payment Date" shall mean the April 20, 2006
Payment Date.
"Class A-3 Interest Rate" means 4.49% per annum. Interest with respect
to the Class A-3 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class A-3 Noteholder" shall mean the Person in whose name a Class A-3
Note is registered on the Note Register.
"Class A-3 Notes" means the Class A-3 4.49% Asset Backed Notes,
substantially in the form of Exhibit A-3 to the Indenture.
"Class A-4 Final Scheduled Payment Date" shall mean the March 20, 2007
Payment Date.
"Class A-4 Interest Rate" means 4.97% per annum. Interest with respect
to the Class A-4 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
Appendix X, Page 4
"Class A-4 Noteholder" shall mean the Person in whose name a Class A-4
Note is registered on the Note Register.
"Class A-4 Notes" means the Class A-4 4.97% Asset Backed Notes,
substantially in the form of Exhibit A-4 to the Indenture.
"Class B Final Scheduled Payment Date" shall mean the June 20, 2008
Payment Date.
"Class B Noteholder" shall mean the Person in whose name a Class B Note
is registered on the Note Register.
"Class B Interest Rate" means 5.88% per annum. Interest with respect to
the Class B Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Class B Noteholders' Interest Carryover Shortfall" shall mean, with
respect to any Payment Date, the excess of the Class B Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class B
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
B Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class B Notes on the preceding Payment Date,
to the extent permitted by law, at the Class B Rate for the related Interest
Period.
"Class B Noteholders' Monthly Accrued Interest" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class B Notes at the Class B Rate on the outstanding
principal amount of the Class B Notes on the immediately preceding Payment Date
or the Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Class B Notes on or prior to such preceding
Payment Date.
"Class B Noteholder" shall mean the Person in whose name a Class B Note
is registered on the Note Register.
"Class B Notes" means the Class B 5.88% Asset Backed Notes,
substantially in the form of Exhibit B to the Indenture.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"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 and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means August 30, 2001.
Appendix X, Page 5
"Code" means the Internal Revenue Code of 1986 and Treasury Regulations
promulgated thereunder.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Collection Period" means, (a) in the case of the initial Collection
Period, the period from but not including the Cutoff Date to and including
September 30, 2001 and (b) thereafter, each calendar month during the term of
the Sale and Servicing Agreement. With respect to any Determination Date,
Deposit Date or Payment Date, the "related Collection Period" means the
Collection Period preceding the month in which such Determination Date, Deposit
Date or Payment Date occurs.
"Collections" means all collections on the Receivables and any proceeds
from Insurance Policies.
"Commission" means the Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate per annum
of interest charged on the outstanding principal balance of such Receivable.
"Controlling Note Class" shall mean, with respect to any Notes
Outstanding, the Class A Notes (voting together as a single class) as long as
any Class A Notes are Outstanding, and thereafter the Class B Notes as long as
any Class B Notes are Outstanding (excluding Notes held by the Servicer or their
Affiliates).
"Corporate Trust Office" means:
(a) as used in the Indenture, or otherwise with respect to
Indenture Trustee, the principal office of Indenture Trustee at which
at any particular time its corporate trust business shall be
administered which office at date of the execution of the Indenture is
located at 1 Bank One Plaza, Mail Code IL1-0481, Xxxxxxx, Xxxxxxxx
00000-0000, Attention: Global Corporate Trust Services Division or at
such other address as Indenture Trustee may designate from time to time
by notice to the Noteholders, Servicer and Trust, or the principal
corporate trust office of any successor Indenture Trustee (the address
of which the successor Indenture Trustee will notify the Noteholders
and the Owner Trustee); and
(b) as used in the Trust Agreement, or otherwise with respect
to Owner Trustee, the principal corporate trust office of Owner Trustee
located at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust Services; or at such other address as Owner Trustee may
designate by notice to the Certificateholders and Depositor, or the
principal
Appendix X, Page 6
corporate trust office of any successor Owner Trustee (the address of
which the successor owner trustee will notify the Certificateholders
and Depositor).
"Custodian" means Servicer in its capacity as agent of the Trust, as
custodian of the Receivable Files.
"Cutoff Date" means the close of business on August 21, 2001.
"Cutoff Date Principal Balance" means, with respect to any Receivable,
the Initial Principal Balance of such Receivable minus the sum of the portion of
all payments received under such Receivable from or on behalf of the related
Obligor on or prior to the Cutoff Date and allocable to principal in accordance
with the terms of the Receivable.
"Dealer" means, with respect to any Receivable, the seller of the
related Financed Vehicle.
"Dealer Agreement" means an agreement between an Dealer Finance and a
Dealer pursuant to which Dealer Finance acquires Motor Vehicle Loans from the
Dealer or gives such Dealer the right to induce persons to apply to Dealer
Finance for loans in connection with the retail sale of Motor Vehicles by such
Dealer.
"Dealer Finance" means M&I Dealer Finance, Inc., a Wisconsin
corporation.
"Dealer Recourse" means, with respect to any Dealer, any rights and
remedies against such Dealer under the related Dealer Agreement (other than with
respect to any breach of representation or warranty thereunder) with respect to
credit losses on a Receivable secured by a Financed Vehicle sold by such Dealer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which Servicer has determined to
charge off during such Collection Period in accordance with its customary
servicing practices (and, in no event later than 150 days after a Receivable
shall have become delinquent).
"Definitive Notes" is defined in Section 2.1 of the Indenture.
"Delinquency Ratio" means, for any Collection Period, the ratio,
expressed as a percentage, of (a) the aggregate Principal Balance of all
Receivables that are 60 or more days delinquent as of the last date of such
Collection Period or Receivables as to which the related Financed Vehicle has
been repossessed but not sold to (b) the aggregate principal balance of the
Receivables as of the last day of such Collection Period.
"Delivery" when used with respect to Trust Account Property means:
Appendix X, Page 7
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" as defined in Section 9-102(47) of the UCC and
----------------
are susceptible of physical delivery, transfer thereof to the Indenture
Trustee or its nominee or custodian by physical delivery to the
Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a "certificated
security" (as defined in Section 8-102 of the UCC) transfer thereof (i)
-------------
by delivery of such certificated security endorsed to, or registered in
the transfer thereof (i) by delivery of such certificated security
endorsed to, or registered in the name of, the Indenture Trustee or its
nominee or custodian to the Indenture Trustee or its nominee or
custodian, or to another person, other than a "securities intermediary"
(as defined in Section 8-102(14) of the UCC), who acquires possession
----------------
of the certificated security on behalf of the Indenture Trustee or its
nominee or custodian or, having previously acquired possession of the
certificate, acknowledges that it holds for the Indenture Trustee or
its nominee or custodian or (ii) by delivery thereof to a "securities
intermediary", endorsed to the Indenture Trustee or its nominee or
custodian, and the making by such "securities intermediary" of entries
on its books and records identifying such certificated securities as
belonging to the Indenture Trustee or its nominee or custodian and the
sending by such "securities intermediary" of a confirmation of the
purchase of such certificated security by the Indenture Trustee or its
nominee or custodian, or (iii) by delivery thereof to a "clearing
corporation" (all of the foregoing, "Physical Property"), and, in any
-----------------
event, any such Physical Property in registered form shall be in the
name of the Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such
financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Indenture Trustee
or its nominee or custodian of the purchase by the Indenture Trustee or
its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records
identifying such book entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations as belonging to the
Indenture Trustee or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the
Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Trust Account Property to
the Indenture Trustee or its nominee or
Appendix X, Page 8
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security (as defined in Section 8-102(18) of the UCC)
-----------------
and that is not governed by clause (b) above, (i) registration on the
books and records of the issuer thereof in the name of the Indenture
Trustee or its nominee or custodian, or (ii) registration on the books
and records of the issuer thereof in the name of another person, other
than a securities intermediary, who acknowledges that is holds such
uncertificated security for the benefit of the Indenture Trustee or its
nominee or custodian.
"Deposit Date" means, with respect to any Collection Period, the
Business Day preceding the related Payment Date.
"Depositor" means Bond Securitization, L.L.C., a Delaware limited
liability company, and any Successors pursuant to Section 6.4 of the Sale and
-----------
Servicing Agreement.
"Determination Date" means with respect to any Collection Period, the
Business Day preceding the related Payment Date by two Business Days.
"Dollar" and the sign "$" mean lawful money of the United States.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution acting in its fiduciary capacity
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as the long-term unsecured debt of such depository
institution shall have a credit rating from each Rating Agency in one of its
generic rating categories which signifies investment grade. Any such trust
account may be maintained with the Owner Trustee, Indenture Trustee or any of
their respective Affiliates and any such trust account (other than the Reserve
Account) may be maintained with M&I Xxxxxxxx & Xxxxxx Bank, or any of its
Affiliates, if such accounts meet the requirements described in clause (b) of
the preceding sentence.
"Eligible Institution" means a depository institution (which may be
Servicer, Owner Trustee or Indenture Trustee, or any of their respective
Affiliates) 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), (a) which has (i) either a long-term senior unsecured debt rating
of AA- or a short-term senior unsecured debt or certificate of deposit rating of
A-1 or better by Standard & Poor's and (ii)(A) a short-term senior unsecured
debt rating of A-l or better by Standard & Poor's and (B) a short-term senior
unsecured debt rating of P-1 or better by Moody's, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (b) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified, Servicer, any Affiliate of Servicer, Owner Trustee or Indenture
Trustee may be considered an Eligible Institution.
Appendix X, Page 9
"Eligible Investments" shall mean any one or more of the following
types of investments:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution (including any Affiliate of Depositor,
Servicer and the Indenture Trustee, Owner Trustee or any of their
Affiliates) or trust company incorporated under the laws of the United
States of America or any state thereof or the District of Columbia (or
any domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution
authorities (including depository receipts issued by any such
institution or trust company as custodian with respect to any
obligation referred to in clause (a) above or a portion of such
obligation for the benefit of the holders of such depository receipts);
provided that at the time of the investment or contractual commitment
to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Payment Date), the commercial paper
or other short-term senior unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person
other than such depository institution or trust company) of such
depository institution or trust company shall have a credit rating from
Standard & Poor's of A-1 and from Moody's of P-1;
(c) commercial paper (including commercial paper of any
Depositor, Servicer and the Indenture Trustee, Owner Trustee or any of
their Affiliates) having, at the time of the investment or contractual
commitment to invest therein, a rating from Standard & Poor's of A-1
and from Moody's of P-1;
(d) investments in money market funds (including funds for
which Indenture Trustee or Owner Trustee or any of their respective
Affiliates or any of Seller's Affiliates is investment manager or
advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G and
from Moody's of Aaa;
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) referred to in clause (b) above;
and
(g) any other investment with respect to which each Rating
Agency has provided written notice that such investment would not cause
such Rating Agency to downgrade, qualify or withdraw its then current
rating of any class of Notes.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
Appendix X, Page 10
"Event of Default" is defined in Section 5.1 of the Indenture.
"Excess Simple Interest Collections" represent the excess, if any, of
(1) all payments received during such Collection Period on all Receivables to
the extent allocable to interest over (2) the amount of interest that would be
due during such Collection Period on all Receivables, assuming that the payment
on each such Receivable was received on its respective due date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any limited
liability company or partnership, a similar official with respect to any direct
or indirect member or general partner thereof.
"Final Scheduled Payment Date," for each Class of Notes, means the
respective Class A-1 Final Scheduled Payment Date, Class A-2 Final Scheduled
Payment Date, Class A-3 Final Scheduled Payment Date, Class A-4 Final Scheduled
Payment Date and Class B Final Scheduled Payment Date or, if such date is not a
Business Day, the next succeeding Business Day.
"Financed Vehicle" means a new or used automobile or light duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"GAAP" is defined in Section 10.1 of the Sale and Servicing Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, xxxxx x Xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto. Other forms of the verb "to Grant"
shall have correlative meanings.
"Holder" means, as the context may require, a Certificateholder or a
Noteholder or both.
"Indemnified Parties" is defined in Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of August 30, 2001, between
Owner Trustee and Indenture Trustee, as the same may be amended and supplemented
from time to time.
Appendix X, Page 11
"Indenture Trustee" means Bank One, National Association, not in its
individual capacity but as indenture trustee under the Indenture, or any
successor trustee under the Indenture.
"Independent" means, when used with respect to any specified Person,
that the person (a) is in fact independent of Owner Trustee, any other obligor
upon the Notes, Sellers and any Affiliate of any of the foregoing persons, (b)
does not have any direct financial interest or any material indirect financial
interest (other than less than 5% of the outstanding amount of any publicly
traded security) in Owner Trustee, any such other obligor, Servicer or any
Affiliate of any of the foregoing Persons and (c) is not connected with Owner
Trustee, any such other obligor, Servicer or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Administrator in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"Initial Principal Balance" means, in respect of a Receivable, the
amount advanced under the Receivable toward the purchase price of the Financed
Vehicle and related costs, including accessories, service and warranty
contracts, insurance premiums, other items customarily financed as part of
retail motor vehicle loans and/or retail installment sales contracts and other
fees charged by M&I Xxxxxxxx & Xxxxxx Bank, its Affiliates or the applicable
Dealer and included in the amount to be financed, the total of which is shown as
the initial principal balance in the note and security agreement or retail
installment sale contract evidencing and securing such Receivable.
"Insolvency Event" means, for a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver (including any
receiver appointed under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended), liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
Appendix X, Page 12
"Insurance Policies" means, all credit life and disability insurance
policies maintained by the Obligors and all Physical Damage Insurance Policies.
"Interest Distribution Account" shall mean the administrative
subaccount of the Note Distribution Account established and maintained as such
pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Interest Period" shall mean, with respect to any Payment Date (i) with
respect to the Class A-1 Notes from and including the Closing Date (in the case
of the first Payment Date) or from and including the most recent Payment Date on
which interest has been paid to but excluding the following Payment Date and
(ii) with respect to each Class of Notes other than the Class A-1 Notes from and
including the Closing Date (in the case of the first Payment Date) or from and
including the twentieth day of the calendar month preceding each Payment Date to
but excluding the twentieth day of the following calendar month.
"Interest Rate" means, with respect to the (a) Class A-1 Notes, the
Class A-1 Interest Rate, (b) Class A-2 Notes, the Class A-2 Interest Rate, (c)
Class A-3 Notes, the Class A-3 Interest Rate, (d) Class A-4 Notes, the Class A-4
Interest Rate and (e) Class B Notes, the Class B Interest Rate.
"IRS" shall mean the Internal Revenue Service.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of Owner Trustee by any one of its Authorized Officers and
delivered to Indenture Trustee.
"Lien" means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind, other than liens for taxes
not yet due and payable, mechanics' or materialmen's liens and other liens for
work, labor or materials, and any other liens that may attach by operation of
law.
"Liquidation Proceeds" means, with respect to any Receivable that has
become a Defaulted Receivable, (a) insurance proceeds received by Servicer with
respect to the Insurance Policies, (b) amounts received by Servicer in
connection with such Defaulted Receivable pursuant to the exercise of rights
under that Receivable and (c) the monies collected by Servicer (from whatever
source, including proceeds of a sale of a Financed Vehicle, a deficiency balance
recovered after the charge-off of the related Receivable or as a result of any
Dealer Recourse) on such Defaulted Receivable net of any expenses incurred by
Servicer in connection therewith and any payments required by law to be remitted
to the Obligor.
"M&I Bank" means M&I Xxxxxxxx & Ilsley Bank, a banking corporation
organized under the laws of the State of Wisconsin.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Motor Vehicle" means a new or used automobile or light duty truck.
Appendix X, Page 13
"Motor Vehicle Loan" means retail installment sales contract secured by
a Motor Vehicle originated by a Dealer and purchased by M&I Xxxxxxxx & Xxxxxx
Bank or its Affiliates.
"Net Loss Ratio" means, for any Collection Period, the ratio, expressed
as an annualized percentage, of (a) Realized Losses minus Recoveries for such
Collection Period, to (b) the average of the aggregate Principal Balance of the
Receivables as of the last day of the immediately preceding Collection Period
and the last day of such Collection Period.
"Note" means a Class A Note or Class B Note.
"Note Distribution Account" means the account designated as such,
established and maintained as such pursuant to Section 5.1 of the Sale and
Servicing Agreement.
"Note Depository Agreement" means the letter of representations among
the Owner Trustee, the Note Paying Agent and The Depository Trust Company, as
the initial Clearing Agency, dated as of the Closing Date, relating to the
Notes, as the same may be amended or supplemented from time to time.
"Note Owner" means, with respect to a Book-Entry Note, the person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Paying Agent" shall mean 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 Owner Trustee to make
payments to and distributions from the Trust Accounts, including payment of
principal of or interest on the Notes on behalf of the Trust.
"Note Pool Factor" for each class of Notes as of the close of business
on a Payment Date means a seven-digit decimal figure equal to the outstanding
principal balance of such class of Notes divided by the original outstanding
principal balance of such class of Notes. The Note Pool Factor for each class of
Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor
for each class of Notes will decline to reflect reductions in the outstanding
principal balance of such class of Notes.
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
"Note Register" and "Note Registrar" are defined in Section 2.4 of the
Indenture.
"Obligor" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the Receivable or
other Person who owes or may be primarily or secondarily liable for payments
under such Receivable.
Appendix X, Page 14
"Officer's Certificate" means: (a) for purposes of the Indenture, a
certificate signed by any Authorized Officer of the Owner Trustee, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1 and TIA ss. 314, and delivered to Indenture
Trustee; and (b) otherwise, a certificate signed by the chairman, the president,
any vice president or the treasurer of Seller or Servicer, as the case may be,
and delivered to Indenture Trustee. Unless otherwise specified, any reference in
the Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Owner Trustee.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be employees of or
counsel to the Owner Trustee and who shall be satisfactory to Owner Trustee or
Indenture Trustee, as applicable, and which opinion or opinions shall be
addressed to Owner Trustee, or Indenture Trustee, as applicable and shall be in
form and substance satisfactory to the Owner Trustee, and Indenture Trustee, as
applicable.
"Original Pool Balance" means the Pool Balance as of the Cutoff Date,
which is 347,000,000.07.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(a) Notes theretofore canceled by Note Registrar or delivered
to Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture or provision
therefor, satisfactory to Indenture Trustee); and
(c) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to the Indenture unless proof
satisfactory to Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Owner Trustee, any other obligor upon the Notes, Seller or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of Indenture
Trustee either actually knows to be so owned or has received written notice
thereof shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of Indenture Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Owner Trustee, any other obligor upon
the Notes, Seller or any Affiliate of any of the foregoing Persons.
Appendix X, Page 15
"Outstanding Amount" means the aggregate principal amount of all Notes,
or class of Notes, as applicable, Outstanding at the date of determination.
"Outstanding Simple Interest Advances" as of the last day of a Monthly
Period, the sum of all Simple Interest Advances made as of or prior to such date
minus the sum of all payments to the Servicer as of or prior to such date
pursuant to Section 5.5(b) of the Sale and Servicing Agreement; provided,
however, that Outstanding Simple Interest Advances shall never be deemed to be
less than zero.
"Owner Trust Estate" means all right, title and interest of Owner
Trustee in and to the property and rights assigned to Owner Trustee pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of Owner Trustee from time to time, including any rights of Owner
Trustee pursuant to the Sale and Servicing Agreement.
"Owner Trustee" means Bankers Trust (Delaware), a banking corporation
incorporated in the State of Delaware, not in its individual capacity but solely
as owner trustee under the Trust Agreement, and any successor Owner Trustee
hereunder.
"Paying Agent" means: (a) when used in the Indenture or otherwise with
respect to the Notes, Indenture Trustee or any other Person that meets the
eligibility standards for Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by the Owner Trustee 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
Owner Trustee; and (b) when used in the Trust Agreement or otherwise with
respect to the Certificates, Owner Trustee or any other paying agent or
co-paying agent appointed pursuant to Section 3.9 of the Trust Agreement.
"Payment Date" means the 20th day of each month (or, if the 20th day is
not a Business Day, the next succeeding Business Day), commencing October 22,
2001.
"Perfection Representation" means the representations attached as
Schedule C to the Sale and Servicing Agreement or Schedule A to the Purchase
Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Physical Damage Insurance Policy" means a theft and physical damage
insurance policy maintained by the Obligor under a Receivable, providing
coverage against loss or damage to or theft of the related Financed Vehicle.
"Physical Property" is defined in the definition of "Delivery" above.
Appendix X, Page 16
"Pool Balance" means, at any time, the aggregate Principal Balance of
the Receivables at the end of the preceding Collection Period, or in the case of
the first Collection Period, the Cutoff Date, after giving effect to all
payments received from Obligors, Liquidation Proceeds and Purchased Amounts to
be remitted by the Servicer, all for such Collection Period and all Realized
Losses during such Collection Period.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PREFCO" means Preferred Receivables Funding Corporation, a Delaware
corporation.
"Principal Balance" means, as of any time, for any Receivable, the
principal balance of such Receivable under the terms of the Receivable
determined in accordance with the Servicer's customary practices.
"Principal Distribution Account" shall mean the administrative
subaccount of the Note Distribution Account established and maintained as such
pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Priority Principal Distribution Amount" shall mean, with respect to
any Payment Date, an amount equal to the excess, if any, of (a) the aggregate
outstanding principal amount of the Class A Notes as of the preceding Payment
Date (after giving effect to any principal payments made on the Class A Notes on
such preceding Payment Date) over (b) the Pool Balance at the end of the
Collection Period preceding such Payment Date; provided, however, that the
Priority Principal Distribution Amount shall not exceed the sum of the aggregate
outstanding principal amount of all of the Notes on such Payment Date (prior to
giving effect to any principal payments made on the Notes on such Payment Date);
and provided, further, that the Priority Principal Distribution Amount on and
after the Final Scheduled Payment Date of a Class of Class A Notes shall not be
less than the amount that is necessary to reduce the outstanding principal
amount of such Class of Class A Notes and all earlier maturing classes of Class
A Notes to zero.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Agreement" means the agreement dated as of August 30, 2001
between M&I Bank, Depositor and Seller under which Seller sold the Receivables
to Depositor and M&I Bank sold any right, title and interest it owned in the
Receivables to Depositor.
"Purchase Amount" of any Receivable means, with respect to any Deposit
Date and the last day of the related Collection Period, an amount equal to the
sum of (a) the outstanding Principal Balance of such Receivable as of the last
day of such Collection Period and (b) the amount of
Appendix X, Page 17
accrued and unpaid interest on such Principal Balance at the related Contract
Rate from the date a payment was last made by or on behalf of the Obligor
through and including the last day of such Collection Period, in each case after
giving effect to the receipt of monies collected on such Receivable in such
Collection Period.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by Servicer pursuant to Section
4.7 or Section 3.3 of the Sale and Servicing Agreement.
"Rating Agencies" means Moody's and Standard & Poor's.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified Seller, Servicer, Owner Trustee or
Indenture Trustee in writing that such action will, in and of itself, result in
a reduction, qualification or withdrawal of the then current rating of any class
of Notes, or the Certificates.
"Realized Losses" means, for any Collection Period and for each
Receivable that became a Defaulted Receivable during such Collection Period, the
excess of the outstanding Principal Balance of each such Receivable over
Liquidation Proceeds received with respect to such Receivable during such
Collection Period, to the extent allocable to principal of such Receivable.
"Receivable" means each Motor Vehicle Loan described in the Schedule of
Receivables, but excluding (i) Defaulted Receivables to the extent the Principal
Balances thereof have been deposited in the Collection Account and (ii) any
Purchased Receivables.
"Receivable Files" is defined in Section 3.4 of the Sale and Servicing
Agreement.
"Record Date" means, with respect to any Payment Date or Redemption
Date, the close of business on the day immediately preceding such Payment Date
or Redemption Date; or, if Definitive Notes or Definitive Certificates have been
issued, the last day of the month preceding such Payment Date or Redemption
Date.
"Recoveries" mean, with respect to any Collection Period, all monies
received by the Servicer with respect to any Defaulted Receivable during any
Collection Period following the Collection Period in which such Receivable
became a Defaulted Receivable, net of any fees, costs and expenses incurred by
the Servicer in connection with the collection of such Receivable and any
payments required by law to be remitted to the Obligor.
"Redemption Date" means in the case of a redemption of the Notes
pursuant to Section 10.1 of the Indenture, the Payment Date specified by
Servicer or the Owner Trustee pursuant to such Section 10.1.
Appendix X, Page 18
"Redemption Price" means, in the case of a redemption of the Notes
pursuant to Section 10.1 of the Indenture, an amount equal to the unpaid
principal amount of the then outstanding Notes plus accrued and unpaid interest
thereon to but excluding the Redemption Date.
"Regular Principal Distribution Amount" shall mean, with respect to any
Payment Date, an amount not less than zero equal to (x) the greater of (i)
aggregate outstanding principal amount of the Class A-1 Notes as of the
preceding Payment Date (after giving effect to any principal payments made on
the Class A-1 Notes on such preceding Payment Date) or the Closing Date, as the
case may be; and (ii) the excess, if any, of (a) the sum of the aggregate
outstanding principal amount of all the Notes as of the preceding Payment Date
(after giving effect to any principal payments made on the Notes on such
preceding Payment Date) or the Closing Date, as the case may be, over (b) the
Pool Balance, minus (y) of the Priority Principal Distribution Amount, if any,
with respect to such Payment Date; provided, however, that the Regular Principal
Distribution Amount shall not exceed the sum of the aggregate outstanding
principal amount of all of the Notes on such Payment Date (after giving effect
to any principal payments made on the Notes on such Payment Date in respect of
the Priority Principal Distribution Amount, if any);
"Related Agreements" shall have the meaning specified in the recitals
to the Administration Agreement.
"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 Standard & Poor's.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 8.6 of the Indenture.
"Reserve Account Deposit" means an amount equal to $1,735,000.
"Reserve Account Excess Amount" means, with respect to any Payment
Date, means an amount equal to the excess, if any, of (a) the amount of cash or
other immediately available funds in the Reserve Account on that Payment Date,
prior to giving effect to any withdrawals from the Reserve Account relating to
that Payment Date, over (b) the Specified Reserve Balance with respect to that
Payment Date.
"Reserve Account Property" means the Reserve Account, the Reserve
Account Deposit and all proceeds of the Reserve Account and the Reserve Account
Deposit, including all securities, investments, general intangibles, financial
assets and investment property from time to time credited to and any security
entitlement to the Reserve Account.
"Reserve Account Transfer Amount" means, with respect to any Payment
Date, an amount equal to the lesser of (a) the amount of cash or other
immediately available funds on deposit in the Reserve Account on such Payment
Date (after giving effect to any withdrawal of the Reserve Account Excess Amount
on such Payment Date, but before giving effect to any other withdrawals
Appendix X, Page 19
therefrom relating to such Payment Date) and (b) the amount, if any, by which
(i) the Total Required Payments for such Payment Date exceeds (ii) the Available
Funds for such Payment Date.
"Responsible Officer" means, with respect to Indenture Trustee, any
officer within the Corporate Trust Office of Indenture Trustee and having
responsibility with respect to the Notes and the other Basic Documents, and,
with respect to the Owner Trustee, any officer within the Corporate Trust Office
of the Owner Trustee and having direct responsibility for the administration of
the Trust, including any Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary, or any other officer of Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
among Owner Trustee, Indenture Trustee, M&I Bank, as Servicer, and Bond
Securitization, L.L.C., as Depositor, dated as of August 30, 2001, as the same
may be amended and supplemented from time to time.
"Schedule of Receivables" means, with respect to the Motor Vehicle
Loans to be conveyed to Depositor by Seller and M&I Bank and to Owner Trustee by
Depositor, the list identifying such Motor Vehicle Loans delivered to Indenture
Trustee on the Closing Date.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Intermediary" is defined in Section 5.8 of the Sale and
Servicing Agreement.
"Sellers" means M&I Bank and PREFCO, collectively. "Servicer" means M&I
Bank and each Successor Servicer.
"Servicer Termination Event" means an event specified in Section 8.1 of
the Sale and Servicing Agreement.
"Servicer's Report" means a report of Servicer delivered pursuant to
Section 4.9 of the Sale and Servicing Agreement, substantially in the form of
Exhibit A to that agreement.
"Servicing Fee" is defined in Section 4.8 of the Sale and Servicing
Agreement.
"Servicing Rate" means, if M&I Bank or its Affiliate is the Servicer,
0.50% per annum, otherwise 1.00% per annum.
"Specified Reserve Balance" for a Payment Date will be the greater of
(a) 1.00% of the aggregate Principal Balance of the Receivables as of the last
day of the related Collection Period and (b) 0.75% of the aggregate principal
balance of the Receivables as of the cutoff date. However, the Specified Reserve
Balance will be calculated using a percentage of 2.50% in (a) above and 1.00%
Appendix X, Page 20
in (b) above for any Payment Date for which the Average Net Loss Ratio exceeds
1.25% or the Average Delinquency Ratio exceeds 1.25%. The higher percentage will
remain in effect until each of the Average Net Loss Ratio and the Average
Delinquency Ratio is equal to or less than 1.25% and 1.25%, respectively, for at
least six consecutive Payment Dates. In no event will the Specified Reserve
Balance exceed the aggregate principal balance of the Receivables at the end of
the related Collection Period.
"Simple Interest Advances" has the meaning set forth in Section 5.9 of
the Sale and Servicing Agreement.
"Simple Interest Method" means the method of allocating fixed level
payment monthly installments between principal and interest, pursuant to which
such payment is allocated first to accrued and unpaid interest at the Contract
Rate on the unpaid principal balance 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.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or its successor.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Successor Servicer" is defined in Section 3.7(e) of the Indenture.
"Supplemental Servicing Fee" is defined in Section 4.8 of the Sale and
Servicing Agreement.
"Total Distribution Amount" means, for each Payment Date, the sum of
(a) the Available Funds, and (b) the Reserve Account Transfer Amount, in each
case in respect of such Payment Date.
"Total Required Payment" shall mean, with respect to any Payment Date,
the sum of the Servicing Fee and all unpaid Servicing Fees from prior Collection
Periods, the Accrued Class A Note Interest, the Priority Principal Distribution
Amount, the Accrued Class B Note Interest and on and after the Class B Final
Scheduled Payment Date, an amount that is necessary to reduce the outstanding
principal amount of the Class B Notes to zero; provided, however, that following
the occurrence and during the continuation of an Event of Default which has
resulted in an acceleration of the Notes, on any Payment Date until the Payment
Date on which the outstanding principal amount of all the Notes has been paid in
full, the Total Required Payment shall mean the sum of the Servicing Fee and all
unpaid Servicing Fees from prior Collection Periods, the Accrued Class A Note
Interest, the Accrued Class B Note Interest and the amount necessary to reduce
the outstanding principal amount of all the Notes to zero.
Appendix X, Page 21
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code.
"Trust" shall mean M&I Auto Loan Trust 2001-1, a Delaware common law
trust established pursuant to the Trust Agreement.
"Trust Accounts" is defined in Section 5.1 of the Sale and Servicing
Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Agreement" means the Trust Agreement dated as of August 30,
2001, between Depositor and Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the Lien and security interest of
the Indenture for the benefit of the Noteholders (including all property and
interests Granted to Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
and the rules and regulations promulgated thereunder, as in force on the date
hereof, unless otherwise specifically provided.
"Trust Property" shall have the meaning set forth in Section 2.1 of the
Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
Appendix X, Page 22
