Exhibit 10.1
FORM OF SALE AND SERVICING AGREEMENT
among
___________________ VEHICLE RECEIVABLES OWNER TRUST 200_-_,
Issuer,
---------------------------
Transferor,
--------------------------,
Seller and Servicer,
ML ASSET BACKED CORPORATION,
Depositor
and
---------------------------
as Indenture Trustee and Backup Servicer
Dated as of ___________ [ 1 ], 200_
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.1. Definitions....................................................1
SECTION 1.2. Other Definitional Provisions.................................20
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Initial Receivables.............................21
SECTION 2.2. Conveyance of Subsequent Receivables..........................22
SECTION 2.3. Conveyance from Transferor to Depositor.......................25
SECTION 2.4. Conveyance from Depositor to Trust............................25
SECTION 2.5. Closing.......................................................26
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties................................26
SECTION 3.2. Repurchase upon Breach........................................31
SECTION 3.3. Custody of Receivables Files..................................31
SECTION 3.4. Duties of Custodian...........................................32
SECTION 3.5. Retention and Termination of Servicer.........................32
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Appointment and Duties of Servicer............................32
SECTION 4.2. Collection and Allocation of Receivable Payments..............34
SECTION 4.3. Realization upon Receivables..................................35
SECTION 4.4. [RESERVED]....................................................35
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles........35
SECTION 4.6. Covenants of Servicer.........................................36
SECTION 4.7. Purchase of Receivables upon Breach...........................36
SECTION 4.8. Servicing Fee.................................................37
SECTION 4.9. Servicer's Certificate........................................37
SECTION 4.10. Annual Statement as to Compliance; Notice of Default..........38
SECTION 4.11. Financial Statements..........................................38
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables.........................................39
SECTION 4.13. Servicer Expenses.............................................39
SECTION 4.14. Appointment of Subservicer....................................39
SECTION 4.15. Obligations under Basic Documents.............................40
SECTION 4.16. Reports to the Commission.....................................40
SECTION 4.17. Autodebit Account Power of Attorney...........................40
ARTICLE V
Distributions; Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts...............................40
SECTION 5.2. Collections...................................................43
SECTION 5.3. Application of Collections....................................44
SECTION 5.4. Deficiency Notice.............................................44
SECTION 5.5. Additional Deposits...........................................44
SECTION 5.6. Distributions.................................................45
SECTION 5.7. Pre-Funding Account...........................................46
SECTION 5.8. Statements to Certificateholders and Noteholders..............47
SECTION 5.9. Net Deposits..................................................48
SECTION 5.10. Optional Deposits by the Insurer..............................48
ARTICLE V-A
The Policy
SECTION 5A.1. Claims Under Policy...........................................49
SECTION 5A.2. Preference Claims; Direction of Proceedings...................50
SECTION 5A.3. Surrender of Policy...........................................51
ARTICLE VI
The Seller
SECTION 6.1. Representations of the Seller.................................51
SECTION 6.2. Existence.....................................................53
SECTION 6.3. Liability of Seller; Indemnities..............................53
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller........................................54
SECTION 6.5. Limitation on Liability of Seller and Others..................55
SECTION 6.6. Seller May Own Certificates or Notes..........................55
ARTICLE VII
The Servicer
SECTION 7.1. Representations of Servicer...................................56
SECTION 7.2. Indemnities of Servicer.......................................57
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer......................................58
SECTION 7.4. Limitation on Liability of Servicer and Other.................59
SECTION 7.5. Servicer Not To Resign........................................59
ARTICLE VII -A
The Transferor
SECTION 7A.1. Representations of the Transferor.............................60
SECTION 7A.2. Existence.....................................................62
SECTION 7A.3. Liability of Transferor; Indemnities..........................63
SECTION 7A.4. Limitation on Liability of Transferor and Others..............63
SECTION 7A.5. Transferor May Own Certificates or Notes......................64
ARTICLE VII -B
The Depositor
SECTION 7B.1. Representations of the Depositor..............................64
SECTION 7B.2. Existence.....................................................66
SECTION 7B.3. Liability of Depositor; Indemnities...........................67
SECTION 7B.4. Limitation on Liability of Depositor and Others...............67
SECTION 7B.5. Depositor May Own Certificates or Notes.......................67
ARTICLE VIII
Default
SECTION 8.1. Servicer Default..............................................68
SECTION 8.2. Appointment of Successor......................................69
SECTION 8.3. Notification to Noteholders, Certificateholders and
Backup Servicer...............................................70
SECTION 8.4. Waiver of Past Defaults.......................................71
ARTICLE VIII-A
The Backup Servicer
SECTION 8A.1. Appointment of Backup Servicer................................71
SECTION 8A.2. Duties of Backup Servicer.....................................71
SECTION 8A.3. Backup Servicing Standard.....................................72
SECTION 8A.4. Limitation on Resignation of the Backup Servicer..............72
SECTION 8A.5. Rights in Respect of the Backup Servicer......................72
SECTION 8A.6. Termination...................................................73
SECTION 8A.7. Resignation or Termination of Backup Servicer.................73
SECTION 8A.8. Backup Servicing Fee..........................................74
SECTION 8A.9. Indemnity.....................................................74
SECTION 8A.10. Limitation of Liability.......................................74
ARTICLE IX
Termination
SECTION 9.1. Optional Purchase of All Receivables..........................75
ARTICLE X
Administrative Duties of the Servicer
SECTION 10.1. Duties with respect to the Indenture, the Trust
Agreement and Depository Agreement............................76
SECTION 10.2. Records.......................................................78
SECTION 10.3. Additional Information to be Furnished to the Issuer..........78
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1. Amendment.....................................................78
SECTION 11.2. Protection of Title to the Trust..............................79
SECTION 11.3. Notices.......................................................82
SECTION 11.4. Assignment....................................................82
SECTION 11.5. Limitations on Rights of Others...............................82
SECTION 11.6. Severability..................................................83
SECTION 11.7. Separate Counterparts.........................................83
SECTION 11.8. Headings......................................................83
SECTION 11.9. Governing Law.................................................83
SECTION 11.10. Assignment to Indenture Trustee...............................83
SECTION 11.11. Nonpetition Covenants.........................................83
SECTION 11.12. Limitation of Liability of Owner Trustee and
Indenture Trustee.............................................84
SECTION 11.13. Independence of the Servicer..................................85
SECTION 11.14. No Joint Venture..............................................85
SECTION 11.15. Third-Party Beneficiaries.....................................85
SECTION 11.16. Disclaimer by Insurer.........................................85
SECTION 11.17. Insurer as Controlling Party..................................85
SECTION 11.18. Limited Recourse..............................................86
Exhibit A - [Reserved]
Exhibit B - Form of Monthly Certificateholder Statement
Exhibit C - Form of Monthly Noteholder Statement
Exhibit D - Form of Servicer's Certificate
Exhibit E - Form of Policy
Exhibit F - Form of Stamp
Schedule A - Schedule of Receivables
Schedule B - Location of Receivables
SALE AND SERVICING AGREEMENT dated as of ____________ [1], 200_,
among __________________ VEHICLE RECEIVABLES OWNER TRUST 200_-_, a Delaware
business trust (the "Issuer"), ________________, a
____________________________, as transferor (the "Transferor"),
_____________________, a _________________ limited liability company, as
seller and servicer (the "Seller" and the "Servicer"), ML ASSET BACKED
CORPORATION, a Delaware corporation, as depositor (the "Depositor) and
______________________________________ , a national banking association, as
Indenture Trustee and Backup Servicer.
WHEREAS the Transferor desires to purchase a portfolio of receivables
arising in connection with motor vehicle loans originated by the Seller;
WHEREAS the Seller is willing to sell such receivables to the
Transferor;
WHEREAS the Transferor desires to purchase additional receivables
during the Pre-Funding Period (as defined herein) arising in connection with
motor vehicle loans originated by the Seller;
WHEREAS the Depositor desires to obtain a transfer of such
receivables from the Transferor and the Transferor is willing to assign its
interest in such receivables to the Depositor;
WHEREAS the Issuer desires to obtain a transfer of the Depositor's
interest in such receivables and the Depositor desires to transfer its
interest in such receivables to the Issuer;
WHEREAS the Servicer is willing to service all such receivables;
WHEREAS the Backup Servicer is willing to act as backup servicer
pursuant to the terms hereof;
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.
Whenever used in this Agreement, the following words and phrases
shall have the following meanings:
"Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Transferor pursuant to Section 2.2 of this Agreement,
notice of the Seller's election to transfer Subsequent Receivables to the
Transferor, such notice to designate the related Subsequent Transfer Date and
the approximate principal amount of Subsequent Receivables to be transferred
on such Subsequent Transfer Date.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing. A Person shall
not be deemed to be an Affiliate of any person solely because such other
Person has the contractual right or obligation to manage such Person unless
such other Person controls such Person through equity ownership or otherwise.
"Aggregate Principal Balance" means, with respect to any date of
determination, the sum of the Principal Balances for all Receivables (other
than (i) any Receivable (other than a Purchased Receivable) that became a
Liquidated Receivable during the related Collection Period and (ii) any
Receivable (other than a Liquidated Receivable) that was purchased or
repurchased by any Person pursuant to this Agreement during the related
Collection Period) as of the date of determination.
"Agreement" means this Sale and Servicing Agreement, as the same may
be amended and supplemented from time to time.
"Amount Financed" means, with respect to a Receivable, the amount
advanced under such Receivable toward the purchase price or refinancing of the
Financed Vehicle and any related costs, including amounts advanced in respect
of accessories, insurance premiums, service, car club and warranty contracts,
and other items customarily financed as part of motor vehicle loans.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
percentage rate of finance charges or service charges, as stated in the
related Contract.
"Available Funds" means, with respect to any Determination Date, the
sum of (i) the Collected Funds for the related Collection Period, (ii) all
Purchase Amounts deposited in the Collection Account during the related
Collection Period, (iii) the Monthly Capitalized Interest Amount for the
related Payment Date, (iv) following the acceleration of the Notes pursuant to
Section 5.2 of the Indenture, the amount of money or property collected
pursuant to Section 5.4 of the Indenture since the preceding Determination
Date by the Indenture Trustee for distribution pursuant to Section 5.6 of the
Indenture.
"Average Principal Balance" means, with respect to any Collection
Period, the sum of the Principal Balance of the Receivables as of the close of
business on the last day of the immediately preceding Collection Period and
the Principal Balance of the Receivables as of the close of business on the
last day of such Collection Period, divided by two.
"Backup Servicer" means, as the Backup Servicer, and each successor
Backup Servicer pursuant to Section 8A.1 of the Agreement.
"Backup Servicer Duties" has the meaning assigned to such term in
Section 8A.2.
"Backup Servicing Fee" means the monthly fee payable to the Backup
Servicer, in an amount equal to the greater of (A) the product of one-twelfth
of 0.__% per annum multiplied by the Outstanding Amount on the preceding
Payment Date after giving effect to distributions on such date or (B) $500.
"Backup Servicing Standard" has the meaning assigned to that term in
Section 8A.3.
"Backup Servicing Tape" has the meaning assigned to such term in
Section 8A.1 hereof.
"Base Servicing Fee" means, with respect to any Collection Period,
the fee payable to the Servicer for services rendered during such Collection
Period, which shall be equal to one-twelfth of the Servicing Fee Rate
multiplied by the Pool Balance as of the first day of such Collection Period.
"Basic Documents" means the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, each Subsequent Transfer
Agreement, the Indenture, the Insurance Agreement, the Reserve Account
Agreement, the Custodial Agreement, the Depository Agreement, the Policy, the
Premium Letter, the ___________ Indemnification Agreement, the Depositor
Indemnification Agreement, the Notes, the Certificates and the Pledge
Agreement and other documents and certificates delivered in connection
therewith.
"Business Day" means any day other than a Saturday, a Sunday or other
day on which commercial banks located in ___________, Wilmington, Delaware, or
New York, New York are authorized or obligated by law, executive order or
governmental decree to be closed or the principal place of business of any
successor Servicer, successor Indenture Trustee or successor Owner Trustee.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.1 hereof.
"Capitalized Interest Account Initial Deposit" means $[___________],
deposited into the Capitalized Interest Account on the Closing Date.
"Certificate" means a Trust Certificate (as defined in the Trust
Agreement).
"Certificate Balance" means, (i) with respect to the Class A
Certificates, initially, $[_______________] and thereafter equals the initial
Certificate Balance reduced by all amounts allocable to principal previously
distributed to Certificateholders, and (ii) with respect to the Class R
Certificateholders, zero.
"Certificate Distribution Account" has the meaning assigned to such
term in Section 5.1(a) of the Trust Agreement.
"Certificate Pool Factor" as of the close of business on a Payment
Date means a seven digit decimal figure equal to the Certificate Balance as of
such Payment Date after giving effect to principal distributions on such date
divided by the initial Certificate Balance.
"Certificate Majority" means the Holders of over 50% of the
Outstanding Amount of the Class A Certificates and over 50% of Holders of the
Class R Certificates.
"Certificateholder" has the meaning assigned to such term in the
Trust Agreement.
"Certificateholders' Distributable Amount" means with respect to any
Payment Date, the sum of the Certificateholders' Principal Distributable
Amount and the Class R Certificateholders' Distributable Amount.
"Certificateholders' Percentage" means (i) for each Payment Date
prior to the Payment Date on which the Class A-4 Notes are paid in full, 2%,
(ii) on the Payment Date on which the Class A-4 Notes are paid in full, the
percentage equivalent of a fraction, the numerator of which is the excess, if
any, of (x) the Principal Distributable Amount for such Payment Date over (y)
the outstanding principal amount of the Class A-4 Notes immediately prior to
such Payment Date, and the denominator of which is the Principal Distributable
Amount for such Payment Date, and (iii) for each Payment Date thereafter to
and including the Payment Date on which the Certificate Balance is reduced to
zero, 100%.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Payment Date, the Certificateholders' Percentage of the
Principal Distributable Amount.
"Class" means any of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class A Certificates or the Class R
Certificates, as the context requires.
"Class A Certificate" has the meaning assigned to such term in the
Trust Agreement.
"Class A-1 Note" has the meaning assigned to such term in the
Indenture.
"Class A-2 Note" has the meaning assigned to such term in the
Indenture.
"Class A-3 Note" has the meaning assigned to such term in the
Indenture.
"Class A-4 Note" has the meaning assigned to such term in the
Indenture.
"Class R Certificate" has the meaning assigned to such term in the
Trust Agreement.
"Class R Certificateholders' Distributable Amount" means the amount
available for distribution to the Class R Certificateholders pursuant to
Section 5.6(a)(vii) hereof.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means _____________ [_], 200 .
"Collateral" has the meaning assigned to such term in the Indenture.
"Collected Funds" means, with respect to any Determination Date, the
amount of funds in the Collection Account representing collections on the
Receivables during the related Collection Period, including all Net
Liquidation Proceeds collected during the related Collection Period.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.1(a) hereof.
"Collection Period" means the calendar month preceding the month in
which each Payment Date occurs (or in the case of the initial Payment Date,
from the Initial Cutoff Date to and including December [_________], 200 ).
"Computer Tape" means the computer tape or other electronic media
furnished by the Seller to the Transferor and its assigns describing certain
characteristics of the Initial Receivables as of the Initial Cutoff Date and
of Subsequent Receivables as of the related Subsequent Cutoff Date.
"Contract" means a motor vehicle loan evidenced by a note and
security agreement.
"Controlling Party" means, if no Insurer Default has occurred and is
continuing, the Insurer, otherwise if Notes remain Outstanding, the Indenture
Trustee for the benefit of the Noteholders, or, after all unpaid principal and
interest on the Notes and all amounts owing to the Insurer have been paid in
full, the Owner Trustee for the benefit of the Certificateholders.
"Corporate Trust Office" means (i) with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee, which at the time
of execution of this Agreement is ______________________, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trust Administration and (ii) with respect to the
Indenture Trustee and the Indenture Collateral Agent, the principal corporate
trust office of the Indenture Trustee, which at the time of execution of this
Agreement is located at ______________________, Attention: Corporate Trust
Services/Asset Backed Administration.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an
order reducing the amount owed on such Receivable or otherwise modifying or
restructuring the Scheduled Payments to be made on such Receivable, an amount
equal to (i) the excess of the principal balance of such Receivable
immediately prior to such order over the principal balance of such Receivable
as so reduced and/or (ii) if such court shall have issued an order reducing
the effective rate of interest on such Receivable, the excess of the net
present value of the remaining Scheduled Payments with respect to the
Receivable before such court order (using as the discount rate the APR on such
remaining Scheduled Payments with respect to such Receivable) over the net
present value of the remaining Scheduled Payments with respect to such
Receivable after such court order (using as the discount rate the higher of
the APR on such Receivable and the rate of interest, if any, specified by the
court in such order) of the scheduled payments as so modified or restructured.
A "Cram Down Loss" shall be deemed to have occurred on the date of issuance of
such order.
"Custodial Agreement" means the agreement dated as of ___________
[1], 200_ among the Seller, the Servicer, the Issuer, the Indenture Trustee
and the Custodian, as amended, modified and supplemented from time to time.
"Custodian" means ______________________, its successors in interest
and any successor Custodian under the Custodial Agreement.
"Custodian Fee" shall have the meaning assigned to such term in the
Custodial Agreement.
"Default Rate" means, for any Determination Date, the product
(expressed as a percentage) of (a) twelve and (b) a fraction, (i) the
numerator of which is the sum of (x) the aggregate Principal Balance of all
Receivables that became Defaulted Receivables during the related Collection
Period and (y) the aggregate Principal Balance of all Receivables that became
Purchased Receivables during the Collection Period and that were 31 or more
days delinquent at the time of repurchase, and (ii) the denominator of which
is the Average Principal Balance for the related Collection Period.
"Defaulted Receivable" means a Receivable with respect to which: (i)
all or a portion of any Scheduled Payment is 90 or more days delinquent, (ii)
the Servicer has repossessed the related Financed Vehicle (and any applicable
redemption period has expired) or (iii) such Receivable is in default and the
Servicer has determined in good faith that payments thereunder are not likely
to be resumed.
"Deficiency Claim Amount" shall have the meaning set forth in Section
5.4 of this Agreement.
"Deficiency Claim Date" means, with respect to any Payment Date, the
fourth Business Day immediately preceding such Payment Date.
"Deficiency Notice" shall have the meaning set forth in Section 5.4
of this Agreement.
"Delinquency Ratio" means, with respect to any Collection Period, the
quotient, expressed as a percentage, of (i) the Aggregate Principal Balance of
all Receivables with respect to which one or more payments are 31 or more days
past due at the last day of such Collection Period and (ii) the Pool Balance
as of the close of business on the last day of such Collection Period.
"Delivery" or "Deliver" when used with respect to Trust Account
Property means the following 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 the Indenture
Collateral Agent, as applicable, free and clear of any adverse claims,
consistent with changes in applicable law or regulations or the interpretation
thereof:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
instruments and are susceptible of physical delivery ("Physical Property"):
(i) transfer of possession thereof to the Indenture Trustee,
indorsed to, or registered in the name of, the Indenture Trustee, or
its nominee or indorsed in blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the Indenture
Trustee; or
(ii) delivery thereof in registered form to the Indenture
Trustee; and
(A) the certificate is indorsed to the Indenture
Trustee or in blank by effective endorsement; or
(B) the certificate is registered in the name of the
Indenture Trustee, upon original issue or registration of
transfer by the issuer thereof;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the
Indenture Trustee; or
(ii) the issuer thereof has agreed that it will comply
with instructions originated by the Indenture Trustee without
further consent by the registered owner;
(d) with respect to any security issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations;
(i) a Federal Reserve Bank by book entry credits the
book-try security to the securities account (as defined in 31 CFR
Part 357) of a participant (as defined in 31 CFR Part 357) which is
also a securities intermediary; and
(ii) the participant indicates by book entry that the
book-entry security has been credited to the Indenture Trustee's
securities account;
(e) with respect to a security entitlement:
(i) the Indenture Trustee, becomes the entitlement
holder; or
(ii) the securities intermediary has agreed that it will
comply with entitlement orders originated by the Indenture Trustee
without further consent by the entitlement holder;
(f) for the purpose of clauses (b) and (c) hereof "delivery"
means:
(i) with respect to a certificated security:
(A) the Indenture Trustee acquires possession
thereof;
(B) another person (other than a securities
intermediary) either acquires possession thereof on behalf
of the Indenture Trustee or, having previously acquired
possession thereof, acknowledges that it holds for the
Indenture Trustee; or
(C) a securities intermediary acting on behalf
of the Indenture Trustee acquires possession of thereof,
only if the certificate is in registered form and has been
specially indorsed to the Indenture Trustee by an
effective endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture Trustee
as the registered owner, upon original issue or
registration of transfer; or
(B) another person (other than a securities
intermediary) either becomes the registered owner thereof
on behalf of the Indenture Trustee or, having previously
become the registered owner, acknowledges that it holds
for the Indenture Trustee;
(g) for purposes of this definition, except as otherwise
indicated, the following terms shall have the meaning assigned to each such
term in the UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "security entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture
Trustee shall make appropriate notations on its records, and shall cause the
same to be made on the records of its nominees, indicating that securities are
held in trust pursuant to and as provided in this Agreement.
"Depositor" means ML Asset Backed Corporation, and its successors in
interest.
"Depositor Indemnification Agreement" has the meaning assigned to
such term in the Underwriting Agreement.
"Depositor Property" has the meaning assigned to such term in Section
2.3 hereof.
"Depository Agreement" means a Note Depository Agreement.
"Determination Date" means, with respect to any Payment Date, the
___________Business Day prior to the related Payment Date.
"Distribution Amount" means, with respect to a Payment Date, the sum
of (i) the Available Funds for the immediately preceding Determination Date,
plus (ii) any amounts received with respect to the Deficiency Claim Amount
from the Reserve Account, an Insurer Optional Deposit or otherwise, other than
from draws under the Policy, received by the Indenture Trustee from the
Insurer with respect to such Payment Date.
"Draw Date" has the meaning assigned to such term in the Insurance
Agreement.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of
the Indenture Trustee or any other entity specified in this Agreement or (b) a
depository institution organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), which (i) has either (A) a long-term
unsecured debt rating of AAA or better by Standard & Poor's and Aaa or better
by Moody's or (B) a certificate of deposit rating of A-1+ by Standard & Poor's
and P-1 or better by Moody's or any other short-term or certificate of deposit
rating acceptable to the Rating Agencies and the Insurer and (ii) whose
deposits are insured by the FDIC. If so qualified under clause (b) above, the
Owner Trustee or the Indenture Trustee may be considered an Eligible
Institution.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) certain obligations of, or obligations guaranteed as to
principal and interest by, the U.S. government or any agency or
instrumentality of the U.S. government, when such obligations are backed by
the full faith and credit of the U.S., provided however, such obligation (i)
must be limited to those instruments that have a predetermined fixed-dollar
amount of principal due at maturity that cannot vary or change, (ii) if the
obligation is rated, it should not have an `r' highlighter affixed to its
rating, (iii) if the investments may be liquidated before their maturity or
are being relied on to meet a certain yield, subject to the applicable Rating
Agency restrictions are necessary, and (iv) has an interest rate tied to a
single interest rate index plus a single fixed spread, if any, and which
changes proportionately with such index;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of the
United States of America or any state thereof or 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
portion of such obligation for the benefit of the holders of such depository
receipts); provided, however, 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 having, at the time of the investment or
contractual commitment to invest therein, a rating from Standard & Poor's of
A-l+ and from Moody's of P-1;
(d) investments in money market funds (including funds for which
the Indenture Trustee or the Owner Trustee or any of their respective
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 and having been approved by
the Insurer;
(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) rated A1+ by S&P and P1 by Moody's; and
(g) any other investment which would satisfy the Rating Agency
Condition and is consistent with the ratings of the Notes and which, so long
as no Insurer Default shall have occurred and be continuing, has been approved
by the Insurer.
Any of the foregoing Eligible Investments may be purchased by or
through the Owner Trustee or the Indenture Trustee or any of its Affiliates.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Payment Date" means with respect to (i) the Class
A-1 Notes, [_________ __, 200-], (ii) the Class A-2 Notes, [_________ __,
200-], (iii) the Class A-3 Notes, [_________ __, 200-], and the Class A-4
Notes, [_________ __, 200-].
"Financed Vehicle" means a new or used automobile, light-duty truck,
van or motorcycle, securing an Obligor's indebtedness under the respective
Receivable.
"Indemnification Agreement" has the meaning assigned to the term
"Indemnification Agreement" in the Insurance Agreement.
"Indenture" means the Indenture dated as of ___________ [1], 200_,
among the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Collateral Agent" means the Person appointed pursuant to
the terms of the Reserve Account Agreement and acting as Collateral Agent
under the Reserve Account Agreement, its successors in interest and any
successor Collateral Agent under the Reserve Account Agreement.
"Indenture Trustee" means the Person acting as Indenture Trustee
under the Indenture and the other Basic Documents, its successors in interest
and any successor trustee under the Indenture.
"Indenture Trustee Fee" means the monthly fee payable to the
Indenture Trustee in an amount equal to the product of (i) 1/12 and (ii) .005
percent per annum and (iii) the Outstanding Amount on the preceding Payment
Date after giving effect to distributions on such date.
"Initial Cutoff Date" means the beginning of business on ___________
[1], 200_.
"Initial Receivables" means any Receivable conveyed to the
Transferor, its successors in interest and assigns on the Closing Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a petition against such Person or the entry of a decree or order for
relief by a court or supervisory authority 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,
conservator, 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 or such Person's affairs, and such
petition, 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, conservator, 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 such Person admitting its inability to pay its
debts when due or the taking of action by such Person in furtherance of any of
the foregoing.
"Insurance Agreement" means the Insurance and Indemnity Agreement,
dated as of ___________ [1], 200_, among the Insurer, the Issuer, the
Transferor, the Seller and the Servicer.
"Insurance Agreement Event of Default" means an "Event of Default",
as defined in the Insurance Agreement.
"Insurer" means ___________, a monoline insurance company
incorporated under the laws of the State of ___________, its successors and
assigns.
"Insurer Default" means the occurrence and continuance of any of the
following events:
(a) the Insurer shall have failed to make a payment required
under the Policy in accordance with its terms; or
(b) the Insurer shall have (i) filed a petition or commenced
any case or proceeding under any provision or chapter of the United States
Bankruptcy Code or any other similar federal or state any law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii)
made a general assignment for the benefit of its creditors, or (iii) had an
order for relief entered against it under the United States Bankruptcy Code or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and
nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a custodian,
trustee, agent or receiver for the Insurer or for all or any material portion
of its property or (ii) authorizing the taking of possession by a custodian,
trustee, agent or receiver of the Insurer (or the taking of possession of all
or any material portion of the property of the Insurer).
"Insurer Optional Deposit" means, with respect to any Payment Date,
an amount delivered by the Insurer pursuant to Section 5.10 hereof, at its
sole option, to the Indenture Trustee for deposit into the Collection Account.
"Interest Period" means, with respect to (i) the initial Payment
Date, the period from and including ___________ [____], 2000 to but excluding
such initial Payment Date and (ii) with respect to any subsequent Payment
Date, from and including the most recent Payment Date on which interest has
been paid to but excluding such Payment Date.
"Interest Rate" means (i) with respect to the Class A-1 Notes,
[______]% per annum, (ii) the Class A-2 Notes, [_____]% per annum, (iii) the
Class A-3 Notes, [_____]% per annum and (iv) the Class A-4 Notes, [_____]% per
annum. The Interest Rate for the Class A-1 Notes shall be computed on the
basis of the actual number of days elapsed in a 360 day year. The Interest
Rate for each of the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes
shall be computed on the basis of a 360 day year consisting of twelve 30 day
months.
"Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts and the Certificate Distribution Account.
"Issuer" means ___________ Vehicle Receivables Owner Trust 200_-_.
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.
"Lien Certificate" means, with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification
issued by the Registrar of Titles of the applicable state to a secured party
which indicates that the lien of the secured party on the Financed Vehicle is
recorded on the original certificate of title. In any jurisdiction in which
the original certificate of title is required to be given to the Obligor, the
term "Lien Certificate" shall mean only a certificate or notification issued
to a secured party.
"Liquidated Receivable" means, with respect to any Determination
Date, a Receivable as to which, as of the last day of the related Collection
Period, (i) 60 days have elapsed since the Servicer repossessed the Financed
Vehicle, (ii) the Servicer has determined in good faith that all amounts it
expects to recover have been received, (iii) all or a portion part of a
Scheduled Payment is 120 days or more delinquent or (iv) the Financed Vehicle
has been sold and the proceeds received.
"Mandatory Redemption Date" means the Payment Date on or immediately
following the last day of the Pre-Funding Period.
"Monthly Capitalized Interest Amount" means in the case of the
Payment Dates occurring on or prior to the Mandatory Redemption Date, an
amount equal to the product of (A) the product of (x) 1/12 and (y) the
Weighted Average Rate and (B) the difference between (x) the aggregate
Outstanding Amount of the Notes immediately prior to the applicable Payment
Date and (y) the Pool Balance as of the last day of the second preceding
Collection Period, or in the case of the January 2001 Payment Date, as of the
Closing Date.
"Moody's" means Xxxxx'x Investors Services, Inc., or its successors.
"Net Liquidation Losses" means, with respect to any Collection
Period, (a) the sum of the Principal Balances (plus accrued interest through
the end of such Collection Period) of all Receivables that became Liquidated
Receivables since the Cutoff Date, minus (b) any Net Liquidation Proceeds
received during such Collection Period.
"Net Liquidation Proceeds" means as to any Liquidated Receivable, all
amounts (including insurance proceeds) realized with respect to such
Receivable (other than amounts withdrawn from the Reserve Account, amounts
paid pursuant to Section 5.10 of this Agreement and drawings under the Policy)
net of (i) reasonable expenses incurred by the Servicer in connection with the
collection of such Receivable and the repossession and disposition of the
Financed Vehicle and (ii) amounts that are required to be refunded to the
Obligor on such Receivable; provided, however, that the Net Liquidation
Proceeds with respect to any Receivable shall in no event be less than zero.
"Net Loss Rate" means, for any Determination Date, the quotient
(expressed as a percentage) of (a) the product of (i) twelve and (ii) Net
Liquidation Losses, divided by (b) the Average Principal Balance for the
related Collection Period.
"Note" means any of the Notes issued pursuant to the terms of the
Indenture.
"Noteholder" has the meaning assigned to such term in the Indenture.
"Note Depository Agreement" means the agreement, if any, among the
Issuer, the Indenture Trustee and The Depository Trust Company, as initial
Clearing Agency.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1(a) hereof.
"Note Majority" means the Holders of a majority in outstanding
principal amount of the Notes.
"Noteholders' Distributable Amount" means, with respect to any
Payment Date, the sum of the Noteholders' Principal Distributable Amount and
the Noteholders' Interest Distributable Amount.
"Noteholders' Interest Carryover Shortfall" means, with respect to
any Payment Date, the excess of the Noteholders' Interest Distributable Amount
for the preceding Payment Date, over the amount in respect of interest that
was actually deposited in the Note Distribution Account on such preceding
Payment Date, plus interest on the amount of interest due but not paid to
Noteholders on the preceding Payment Date, to the extent permitted by law, at
the respective Interest Rate borne by each such Class of Notes from such
preceding Payment Date to but excluding the current Payment Date.
"Noteholders' Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Payment Date and the Noteholders' Interest Carryover Shortfall
for such Payment Date.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Payment Date, (x) for the Class A-1 Notes, the product of (i)
the applicable Interest Rate for the Class A-1 Notes (ii) the actual number of
days elapsed during the applicable period divided by 360 and (iii) the
Outstanding Amount of the Class A-1 Notes immediately preceding such Payment
Date and (y) for the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes, the sum of the amount for each Class of Notes equal to the product of
(i) the Interest Rate for each Class of Notes, (ii) 1/12 and (iii) the
Outstanding Amount of the Notes of each such Class immediately preceding such
Payment Date
"Noteholders' Percentage" means with respect to any Determination
Date (i) relating to a Payment Date prior to the Payment Date on which the
principal amount of the Class A-4 Notes is reduced to zero, 98%; (ii) relating
to the Payment Date on which the principal amount of the Class A-4 Notes is
reduced to zero, the percentage equivalent of a fraction, the numerator of
which is the principal amount of the Class A-4 Notes immediately prior to such
Payment Date, and the denominator of which is the Principal Distributable
Amount; and (iii) relating to any other Payment Date, 0%.
"Noteholders' Principal Distributable Amount" means, with respect to
any Payment Date, (other than the Final Scheduled Payment Date for any Class
of Notes), the Noteholders' Percentage of the Principal Distributable Amount.
The Noteholders' Principal Distributable Amount on the Final Scheduled Payment
Date for any Class of Notes will equal the greater of (x) the Noteholders'
Percentage of the Principal Distributable Amount or (y) the Outstanding Amount
of such Class of Notes on such Payment Date.
"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 amount of such Class of Notes as of such Payment Date
after giving effect to principal distributions on such date divided by the
original Outstanding Amount of such Class of Notes.
"Notice of Claim" has the meaning assigned to such term in Section
5A.1(b) hereof.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by the (a)
chairman of the board, the president, any executive vice president or any vice
president and (b) any treasurer, assistant treasurer, secretary or assistant
secretary of the Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel
who may be an employee of or counsel to the Seller or the Servicer, which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee, the
Insurer or the Rating Agencies, as applicable.
"Original Pool Balance" means the sum, as of any date, of the Pool
Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance of
the Subsequent Receivables, if any, sold to the Trust, as of their respective
Subsequent Cutoff Dates.
"Outstanding" has the meaning assigned to such term in the Indenture.
"Outstanding Amount" means the aggregate principal amount of all
Notes or Class of Notes or the Class of Certificates, as applicable,
outstanding at the date of determination.
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means [ ______________________________ ], not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, its
successors in interest or any successor Owner Trustee under the Trust
Agreement.
"Payment Date" means the ___________day of each calendar month and if
such day is not a Business Day, the next succeeding Business Day, commencing
on ___________, 200_.
"Person" means any individual, corporation, limited liability
company, estate, partnership, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Policy" means the financial guaranty insurance policy issued by the
Insurer in accordance with the terms of the Insurance Agreement.
"Policy Claim Amount" has the meaning assigned to such term in
Section 5A.1(a) hereof.
"Pool Balance" means, as of any date of determination, the sum of the
Principal Balances of the Receivables (excluding Purchased Receivables and
Liquidated Receivables provided, however, that the Principal Balance of the
Receivables that were required to be purchased by the Servicer or the Seller
but were not purchased shall only be excluded at the option of the Insurer).
"Pre-Funded Amount" means, with respect to any Payment Date, the
amount on deposit in the Pre-Funding Account (exclusive of Pre-Funding
Earnings), which initially shall be $[_______________] .
"Pre-Funding Account" has the meaning specified in Section
5.1(a)(iii).
"Pre-Funding Earnings" means any investment earnings (net of losses)
on amounts on deposit in the Pre Funding Account.
"Pre-Funding Period" shall mean the period from and including the
Closing Date and ending on the earliest of: (a) the last day of the Collection
Period on which the Pre-Funded Amount (after giving effect to any transfers
therefrom in connection with the transfer of Subsequent Receivables to the
Trust on or before such date) is less than $100,000, (b) the date on which an
Event of Default occurs and (c) the close of business on [_________ __, 200_].
"Preference Claim" has the meaning assigned to such term in Section
5A.2(b) hereof.
"Premium Letter" has the meaning assigned to such term in the
Insurance Agreement.
"Pledge Agreement" has the meaning assigned to such term in the
Insurance Agreement.
"Principal Balance" means, with respect to any Receivable, as of any
date, the Amount Financed minus (i) that portion of all amounts received on or
prior to such date and allocable to principal in accordance with the terms of
the Receivable and the Simple Interest Method, and (ii) any Cram Down Loss in
respect of such Receivable.
"Principal Distributable Amount" means, with respect to any Payment
Date, an amount equal to the sum of the following amounts (i) the principal
portion (allocable on the basis of the simple interest method) of all
Collected Funds received during the immediately preceding calendar month
(other than Liquidated Receivables and Purchased Receivables) including the
principal portion of all prepayments, (ii) the Principal Balance of all
Receivables that became Liquidated Receivables during the related calendar
month (other than Purchased Receivables), (iii) the principal portion of the
Purchase Amounts received with respect to all Receivables that became
Purchased Receivables during the related calendar month, (iv) at the option of
the Insurer, the Principal Balance of the Receivables that were required to be
purchased by the Transferor and the Servicer during the related calendar month
but were not purchased, (v) the aggregate amount of Cram Down Losses that have
occurred during the related calendar month and (vi) any unpaid portion of the
amounts included in (i) through (v) for a prior Payment Date that were not
paid to Noteholders because of insufficient Available Funds.
"Purchase Amount" means with respect to a Receivable, the Principal
Balance and all accrued and unpaid interest on the Principal Balance of such
Receivable (including one month's interest thereon, in the month of payment,
at the APR less, so long as [____________] is the Servicer, the Servicing
Fee), after giving effect to the receipt of any moneys collected (from
whatever source) on such Receivable, if any.
"Purchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by the Servicer pursuant to
Section 4.7 of this Agreement or repurchased by the Seller pursuant to Section
3.2 of the Agreement.
"Rating Agency" means each of [Standard & Poor's and Moody's], and
together, the "Ratings Agencies." If no such organization or successor
maintains a rating on the Notes, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person
designated by the Seller and acceptable to the Insurer (so long as an Insurer
Default shall not have occurred and be continuing), notice of which
designation shall be given to the Indenture Trustee, Owner Trustee and the
Servicer.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that the
Rating Agencies shall have notified the Seller, the Servicer, the Owner
Trustee, Insurer, the Depositor, the Issuer and the Indenture Trustee in
writing that such action will not result in a reduction, qualification or
withdrawal of the then current rating of any Class of Notes.
"Realized Losses" means, with respect to any Receivable that becomes
a liquidated Receivable, the excess of the Principal Balance of such
Liquidated Receivable over Net Liquidation Proceeds to the extent allocable to
principal.
"Receivable" means any Contract listed on Schedule A, as such
Schedule shall be amended to reflect the transfer of Subsequent Receivables to
the Trust (which Schedule may be in the form of microfiche).
"Receivable Files" means the documents specified in Section 3 of the
Custodial Agreement.
"Record Date" means, with respect to each Payment Date, the close of
business on the Business Day preceding such Payment Date, unless otherwise
specified in this Agreement.
"Registrar of Titles" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens
thereon.
"Remaining Pre-Funding Amount" means, if the Pre-Funded Amount has
not been reduced to zero on the Mandatory Redemption Date, after giving effect
to any reductions in the Pre-Funded Amount on such date pursuant to Section
5.6(a)(ii), the amount remaining in the Pre-Funding Account at such time,
exclusive of the Pre-Funding Earnings, if any, for the related Collection
Period.
"Reserve Account" means the account designated as such, established
and maintained pursuant to the Reserve Account Agreement.
"Reserve Account Agreement" means the Master Reserve Account
Agreement dated as of ___________ 1, ___________as supplemented by the Series
200_-_ Supplement to Reserve Account Agreement dated as of ___________ [1],
200_, each among the Transferor, the Insurer and the Indenture Collateral
Agent, as the same may be amended, supplemented or otherwise modified from
time to time.
"Reserve Account Balance" means, for any Payment Date, the amount on
deposit in the Reserve Account. Unless specifically stated to the contrary,
the Reserve Account Balance shall be calculated after giving effect to all
deposits and withdrawals therefrom on the prior Payment Date (or, in the case
of the first Payment Date, the Closing Date) and all interest and other income
(net of losses and investment expenses) on such amounts during the related
Collection Period.
"Reserve Account Initial Deposit" means $[_________________].
"Scheduled Payment" on a Receivable means that portion of the payment
required to be made by the Obligor during the respective Collection Period
sufficient to amortize the Principle Balance thereof under the Simple Interest
Method over the term of the Receivable and to provide interest at the APR.
"Seller" means ___________, a ___________, as Seller under this
Agreement and its successors in interest to the extent permitted hereunder.
"Service Contract" means, with respect to a Financed Vehicle, the
agreement, if any, financed under the related Receivable that provides for the
repair of such Financed Vehicle, including any extended warranties.
"Servicer" means ___________, as the servicer of the Receivables, and
each successor Servicer pursuant to Section 7.3 or 8.2 of the Agreement.
"Servicer Default" means an event specified in Section 8.1 of this
Agreement.
"Servicer's Certificate" means an Officer's Certificate of the
Servicer delivered pursuant to Section 4.9 of this Agreement, substantially in
the form of Exhibit D hereto.
"Servicing Fee" has the meaning specified in Section 4.8 of this
Agreement.
"Servicing Fee Rate" means ___% per annum.
"Servicing Standard" shall have the meaning assigned to such term in
Section 4.1 hereof.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made (in
some states assuming 30 day months), divided by the actual number of days in a
year (360 days in states which assume 30 day months) 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 Group, a
division of The XxXxxx-Xxxx Companies, Inc., or its successors.]
"Subsequent Cutoff Date" means, with respect to a Subsequent
Receivable, the opening of business on the first day of the month in which
such Subsequent Receivable is conveyed to the Trust pursuant to this
Agreement.
"Subsequent Receivables" means the Receivables transferred to the
Transferor and its assigns pursuant to Sections 2.2, 2.3 and 2.4 of this
Agreement and each Subsequent Transfer Agreement, which Subsequent Receivables
shall be listed on Schedule A to the related Subsequent Transfer Agreement.
"Subsequent Reserve Account Deposit" shall mean, with respect to any
Subsequent Transfer Date, cash or Permitted Investments having a value equal
to 2.0% of the aggregate Principal Balances as of the related Subsequent
Cutoff Date of the Subsequent Receivables conveyed to the Trust on such
Subsequent Transfer Date.
"Subsequent Transfer Agreement" means an agreement among the Issuer,
the Transferor, the Seller, the Servicer, the Depositor, the Indenture
Trustee, the Backup Servicer and the Custodian, pursuant to which the
Transferor will acquire Subsequent Receivables from the Seller and transfer
such Subsequent Receivables to the Depositor, which will transfer such
Subsequent Receivables to the Issuer.
"Subsequent Transfer Date" means, with respect to the Subsequent
Receivables, any date, occurring not more frequently than once a month, during
the Pre-Funding Period on which Subsequent Receivables are to be transferred
from the Seller to the Transferor, the Transferor to the Depositor and the
Depositor to the Issuer, pursuant to this Agreement, and a Subsequent Transfer
Agreement is executed and delivered.
"Transferor" means ______________, and its successors in interest
"Transferor Property" has the meaning assigned to such term in
Section 2.1 hereof.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.1 of
the Agreement.
"Trust Agreement" means the Trust Agreement dated as of ____________
[1], 200 , between the Depositor and the Owner Trustee, as the same may be
amended and supplemented from time to time.
"Trust Officer" means, (i) in the case of the Indenture Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller and any assistant
controller or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject, and (ii) in the case
of the Owner Trustee, any officer in the corporate trust office of the Owner
Trustee with direct responsibility for the administration of this Agreement or
any of the Basic Documents on behalf of the Owner Trustee.
"Trust Property" has the meaning assigned to such term in Section 2.4
hereof.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York on the date of the Agreement.
"Underwriting Agreement" means the agreement dated ___________ [__],
200_, among the Depositor, the Transferor, and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, as the same may be amended and supplemented from time to
time.
"Weighted Average Rate" means, with respect to any date of
determination, a per annum rate equal to (A) the sum of (i) the product of (x)
the Outstanding Amount of the Class A-1 Notes on such date and (y) the Class
A-1 Interest Rate, plus (ii) the product of (x) the Outstanding Amount of the
Class A-2 Notes on such date and (y) the Class A-2 Interest Rate, plus (iii)
the product of (x) the Outstanding Amount of the Class A-3 Notes on such date
and (y) the Class A 3 Interest Rate plus (iv) the product of (x) the
Outstanding Amount of the Class A-4 Notes on such date and (y) the Class A-4
Interest Rate divided by (B) the Outstanding Amount of the Notes on such date;
provided that if the date of determination is a Payment Date, then the
Outstanding Amount of any class of Notes shall be determined after giving
effect to all payments made on such date.
SECTION 1.2. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture, or, if not defined
therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed hereby and
in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as
applicable. To the extent that the definitions of accounting terms in this
Agreement or in any such instrument, certificate or other document are
inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in any
such instrument, certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section, Schedule and
Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Initial Receivables.
In consideration of the Transferor's delivery to or upon the order of
the Seller on the Closing Date of the net proceeds from the sale of the Notes
and the Certificates and the other amounts to be distributed from time to time
to the Seller in accordance with the terms of this Agreement, the Seller does
hereby sell, transfer, assign, set over and otherwise convey to Transferor,
without recourse (subject to the obligations set forth herein), all right,
title and interest of the Seller in and to:
(a) the Initial Receivables, and all moneys received thereon after
the Initial Cutoff Date and all Net Liquidation Proceeds with respect to such
Receivables;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Receivables and any other interest of the
Seller in such Financed Vehicles;
(c) any proceeds with respect to the Initial Receivables from claims
on any theft, physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors and any proceeds from the liquidation
of the Initial Receivables;
(d) all rights under any Service Contracts on the related Financed
Vehicles;
(e) the related Receivables Files; and
(f) the proceeds of any and all of the foregoing (the items specified
in clauses (a) through (e) are referred to herein as the "Transferor
Property").
In connection with such sale, the Seller agrees to record and file,
at its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Receivables for the sale of accounts and chattel paper meeting the
requirements of applicable state law in such manner and in such jurisdictions
as are necessary to perfect the sale and assignment of the Receivables to the
Issuer.
It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other Transferor Property from the Seller to the Transferor and the beneficial
interest in and title to the Receivables and the other Transferor Property
shall not be part of the Seller's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. In the
event that, notwithstanding the intent of the Seller, the transfer and
assignment contemplated hereby is held not to be a sale, this Agreement shall
constitute a security agreement and the Seller does hereby grant a security
interest in the property referred to in this Section 2.1 for the benefit of
the Transferor.
SECTION 2.2. Conveyance of Subsequent Receivables.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Transferor's delivery on each related Subsequent Transfer
Date to or upon the order of the Seller of the amount described in Section
5.7(a) to be delivered to the Seller, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Transferor without recourse
(subject to the obligations set forth herein), all right, title and interest
of the Seller in and to:
(i) the Subsequent Receivables listed on Schedule A to the
related Subsequent Transfer Agreement and all monies received
thereon after the related Subsequent Transfer Date and all Net
Liquidation Proceeds with respect to such Receivables;
(ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to such Subsequent Receivables and any
other interest of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to such Subsequent
Receivables from claims on any theft, physical damage, credit life
or disability insurance policies covering the related Financed
Vehicles or Obligors and any proceeds from the liquidation of such
Subsequent Receivables;
(iv) all rights under any Service Contracts on the related
Financed Vehicles:
(v) the related Receivables Files; and
(vi) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Transferor the Subsequent
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have provided the Indenture Trustee,
the Owner Trustee, the Insurer and the Rating Agencies with an
Addition Notice not later than five (5) Business Days prior to such
Subsequent Transfer Date and shall have provided any information
reasonably requested by any of the foregoing with respect to the
Subsequent Receivables;
(ii) the Seller shall have executed and delivered to the
Transferor, which shall have delivered to the Depositor, which shall
have delivered to the Issuer a duly executed Subsequent Transfer
Agreement which shall include supplements to Schedule A, listing the
Subsequent Receivables;
(iii) the Seller shall, to the extent required by Section
5.2, have deposited in the Collection Account all collections in
respect of the Subsequent Receivables since the related Subsequent
Cutoff Date;
(iv) as of each Subsequent Transfer Date, (A) the Seller
shall not be insolvent and shall not become insolvent as a result of
the transfer of Subsequent Receivables on such Subsequent Transfer
Date, (B) the Seller shall not intend to incur or believe that it
shall incur debts that would be beyond its ability to pay as such
debts mature, (C) such transfer shall not have been made with actual
intent to hinder, delay or defraud any Person and (D) the assets of
the Seller shall not constitute unreasonably small capital to carry
out its business as conducted;
(v) the Pre-Funding Period shall not have terminated;
(vi) after giving effect to any transfer of Subsequent
Receivables on a Subsequent Transfer Date, the Receivables
transferred to the Trust pursuant to this Agreement shall meet the
following criteria (based on the characteristics of the Initial
Receivables on the Initial Cutoff Date and the Subsequent
Receivables on the related Subsequent Cutoff Dates): not more than
__% of the Pool Balance based on aggregate Principal Balance shall
have Obligors whose mailing addresses are in any one state other
than [California] unless an Opinion of Counsel acceptable to the
Rating Agencies and the Insurer with respect to the security
interest in the related Financed Vehicles is furnished by the Seller
on or prior to such Subsequent Transfer Date;
(vii) each Subsequent Receivable shall have an APR of
[______]% or higher and a remaining term to stated maturity of not
more than [___] months;
(viii) each of the representations and warranties made by
the Seller pursuant to Section 3.1 with respect to the Subsequent
Receivables to be transferred on such Subsequent Transfer Date and
pursuant to Section 6.1 on such Subsequent Transfer Date shall be
true and correct as of the related Subsequent Transfer Date, and the
Seller shall have performed all obligations to be performed by it
hereunder on or prior to such Subsequent Transfer Date;
(ix) the Seller shall, at its own expense, on or prior to
the Subsequent Transfer Date indicate in its computer files that the
Subsequent Receivables identified in the Subsequent Transfer
Agreement have been sold by the Seller to the Transferor, assigned
by the Transferor to the Depositor and assigned by the Depositor to
the Issuer pursuant to this Agreement and pledged to the Indenture
Trustee pursuant to the Indenture;
(x) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Trust in the
Owner Trust Estate and the first perfected security interest of the
Indenture Trustee in the Collateral;
(xi) no selection procedures adverse to the interests of
the Noteholders, the Certificateholders or the Insurer shall have
been utilized in selecting the Subsequent Receivables;
(xii) the addition of any such Subsequent Receivables
shall not result in a material adverse tax consequence to the Trust,
the Noteholders or the Certificateholders;
(xiii) the Seller shall have delivered to the Rating
Agencies, the Indenture Trustee and the Insurer an Opinion of
Counsel with respect to the transfer of such Subsequent Receivables
substantially in the form of the Opinion of Counsel delivered to the
Rating Agencies, the Indenture Trustee and the Insurer on the
Closing Date;
(xiv) each Rating Agency shall have confirmed that the
rating on the Notes shall not be withdrawn or reduced as a result of
the transfer of such Subsequent Receivables to the Trust;
(xv) the Insurer (so long as no Insurer Default shall have
occurred and be continuing), in its absolute and sole discretion,
shall have approved the transfer of such Subsequent Receivables to
the Trust;
(xvi) the applicable Subsequent Reserve Account Deposit
shall have been made;
(xvii) the Seller shall have delivered to the Insurer and
the Indenture Trustee an Officers' Certificate confirming the
satisfaction of each condition precedent specified in this paragraph
(b); and
(xviii) no Event of Default has occurred and is
continuing.
The Seller covenants that in the event any of the foregoing
conditions precedent are not satisfied with respect to any Subsequent
Receivable on the date required as specified above, the Seller will
immediately repurchase each such Subsequent Receivable from the Transferor, at
a price equal to the Purchase Amount thereof, in the manner specified in
Section 4.7.
Upon each conveyance pursuant to the terms of this Sections 2.2, 2.3
and 2.4 hereof and a Subsequent Transfer Agreement, such Subsequent
Receivables shall be deemed to be Transferor Property.
The Seller agrees to transfer to the Transferor pursuant to Section
2.2(a), Subsequent Receivables with an Aggregate Principal Balance as of the
related Subsequent Cutoff Dates of approximately [__________________], subject
only to the availability thereof.
SECTION 2.3. Conveyance from Transferor to Depositor.
For valuable consideration, the transfer of which is hereby
acknowledged, the Transferor does hereby transfer, assign, set over and
otherwise convey to the Depositor, all right, title and interest of the
Transferor (but none of its obligations) in the Transferor Property, this
Agreement, each Subsequent Transfer Agreement, each Subsequent Receivable and
the Custodial Agreement, including all of the duties and obligations of each
party hereto and thereto (collectively, the "Depositor Property").
It is the intention of the Transferor that the transfer and
assignment contemplated by this Section 2.3 shall constitute a sale of the
Receivables and other Depositor Property from the Transferor to the Depositor
and the beneficial interest in and title to the Receivables and the other
Depositor Property shall not be part of the Transferor's estate in the event
of the filing of a bankruptcy petition by or against the Transferor under any
bankruptcy law. In the event that, notwithstanding the intent of the
Transferor, the transfer and assignment contemplated hereby is held not to be
a sale, this Agreement shall constitute a security agreement and the
Transferor does hereby grant a security interest in the property referred to
in this Section 2.3 for the benefit of the Depositor.
SECTION 2.4. Conveyance from Depositor to Trust.
For valuable consideration, the transfer of which is hereby
acknowledged, the Depositor does hereby transfer, assign, set over and
otherwise convey to the Trust, all right, title and interest of the Depositor
(but none of its obligations) in the Depositor Property, this Agreement, each
Subsequent Transfer Agreement, each Subsequent Receivable and the Custodial
Agreement, including all of the duties and obligations of each party hereto
and thereto collectively, the "Trust Property").
It is the intention of the Depositor that the transfer and assignment
contemplated by this Section 2.4 shall constitute a sale of the Receivables
and other Trust Property from the Depositor to the Trust and the beneficial
interest in and title to the Receivables and the other Trust Property shall
not be part of the Depositor's estate in the event of the filing of a
bankruptcy petition by or against the Depositor under any bankruptcy law. In
the event that, notwithstanding the intent of the Depositor, the transfer and
assignment contemplated hereby is held not to be a sale, this Agreement shall
constitute a security agreement and the Depositor does hereby grant a security
interest in the property referred to in this Section 2.4 for the benefit of
the Noteholders, Certificateholders and the Insurer.
The Seller covenants that in the event that after any Subsequent
Transfer Date it receives notice or becomes aware that any of the conditions
precedent set forth in Section 2.2(b) were not satisfied with respect to any
Subsequent Receivable on the date required as specified above, the Seller will
immediately repurchase such Subsequent Receivable, at a price equal to the
Purchase Amount thereof, in the manner specified in Section 4.7.
SECTION 2.5. Closing.
The conveyance of the Receivables shall take place at the offices of
______________________ on the Closing Date, simultaneously with the closing of
the transactions related to the Notes and the Certificates. Upon the
acceptance by the Depositor of the net proceeds from the sale of the Notes,
the ownership of each Receivable and the contents of the related Receivable
File will be vested in the Issuer, subject to the lien of the Indenture.
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties.
The Seller makes the following representations and warranties to the
Transferor, on which the Transferor, is deemed to have relied in acquiring the
Receivables and (ii) Transferor makes the following representations and
warranties upon which each of the Depositor and the Issuer is deemed to have
relied in acquiring the Receivables and upon which the Insurer shall be deemed
to rely in issuing the Policy. Such representations and warranties speak as of
the execution and delivery of this Agreement and as of the Closing Date in the
case of Initial Receivables, as of the related Subsequent Transfer Date in the
case of Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Receivables to the Transferor, the Depositor and the Trust
and the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Title. It is the intention of (i) the Seller that the transfer
and assignment herein contemplated constitute a sale of the Receivables from
the Seller to the Transferor and that the beneficial interest in and title to
such Receivables not be part of the debtor's estate in the event of the filing
of a petition for receivership by or against the Seller under any bankruptcy
law, (ii) the Transferor that the transfer and assignment herein contemplated
constitute an assignment of the Receivables from the Transferor to the
Depositor and that the beneficial interest in and title to such Receivables
not be part of the debtor's estate in the event of the filing of a petition
for receivership by or against the Transferor under any bankruptcy law and
(iii) the Depositor that the transfer and assignment herein contemplated
constitute an assignment of the Receivables from the Depositor to the Trust
and that the beneficial interest in and title to such Receivables not be part
of the debtor's estate in the event of the filing of a petition for
receivership by or against the Depositor under any bankruptcy law. Immediately
prior to the transfer and assignment herein contemplated, (i) the Seller had
good and marketable title to each Receivable, free and clear of all Liens and,
immediately upon the transfer thereof, (ii) the Transferor shall have good and
marketable title to each such Receivable, free and clear of all Liens, and
(iii) the Depositor shall have good and marketable title to each such
Receivable, free and clear of all Liens; and the transfer of the Receivables
to the Transferor, the Depositor and the Issuer has been perfected under the
UCC. No Dealer or any other Person has any right to receive proceeds of any
Receivables.
(b) All Filings Made. All filings (including, without limitation, UCC
filings) necessary in any jurisdiction to give the Transferor, Depositor, the
Issuer and Indenture Trustee, a first priority perfected ownership interest in
the Receivables, and to give the Transferor, Depositor and Indenture Trustee a
first priority perfected security interest therein, shall have been made.
(c) Characteristics of Receivables. Each Receivable (i) shall have
been originated in the United States of America by the Seller in the ordinary
course of the Seller's business in accordance with its underwriting guidelines
and shall have been fully and properly executed by the parties thereto, (ii)
shall have created or shall create a valid, subsisting and enforceable first
priority security interest in favor of the Seller in the Financed Vehicle,
which security interest has been assigned by the Seller to the Transferor
which security interest has been assigned from the Transferor to the Depositor
and from the Depositor to the Issuer, which has assigned such security
interest to the Indenture Trustee, (iii) shall contain customary and
enforceable provisions such that the rights and remedies of the holder thereof
shall be adequate for realization against the collateral of the benefits of
the security, (iv) shall be Simple Interest Receivables and shall provide for
level monthly payments (provided that the payment in the first or last month
in the life of the Receivable may be minimally different from the level
payment) that fully amortize the Amount Financed over the original term and
yield interest at the rate per annum specified on Schedule A hereto, and has
not been amended or collections with respect to which have been waived and (v)
shall be denominated in U.S. dollars.
(d) Not more than [ ] of Obligors with respect to the Receivables
shall have a minimum FICO score of less than [ ].
(e) As of the Cutoff Date, at least 90% of Obligors make their
Scheduled Payments by means of ACH withdrawal by or on behalf of the Servicer.
(f) Schedule of Receivables. The information set forth in Schedule A
to this Agreement is true and correct in all material respects as of the close
of business on the Initial Cutoff Date or, with respect to any Subsequent
Receivables, as of the close of business on the related Subsequent Cutoff Date
and no selection procedures believed by the Seller to be adverse to the
Noteholders, the Certificateholders or the Insurer were utilized in selecting
the Receivables. The Computer Tape regarding the Receivables is true and
correct in all material respects as of the Initial Cutoff Date and will be
true and correct as of each Subsequent Cutoff Date.
(g) Compliance With Law. Each Receivable complied at the time it was
originated or made and at the execution of this Agreement complies (or the
applicable Subsequent Transfer Agreement will comply) in all material respects
with all requirements of applicable Federal, state and local laws and
regulations thereunder, including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Xxxx-Xxxxxxxx Act, the
Federal Reserve Board's Regulations B and Z, the Soldiers' and Sailors' Civil
Relief Act of 1940, state adaptations of the National Consumer Act, the
Uniform Consumer Credit Code and other consumer credit laws and equal credit
opportunity and disclosure laws.
(h) Binding Obligation. Each Receivable represents the legal, valid
and binding payment obligation in writing of the Obligor thereunder,
enforceable by the holder thereof in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws now or
hereafter in effect related to or affecting creditors' rights generally and
subject to general principles of equity (whether applied in a proceeding at
law or in equity); and all parties to each Receivable had full legal capacity
to execute and deliver such Receivable and all other documents related thereto
and to grant the security interest purported to be granted thereby.
(i) No Government Obligor. None of the Receivables are due from the
United States of America or any State or from any agency, department,
instrumentality or political subdivision of the United States of America or
any state.
(j) Security Interest in Financed Vehicle. Immediately prior to the
assignment and transfer thereof to the Trust, each Receivable is secured by a
validly perfected first priority security interest in the Financed Vehicle in
favor of ___________ as secured party or all necessary and appropriate actions
have been commenced that will result in the valid perfection of a first
priority security interest in the Financed Vehicle in favor of ___________ as
secured party within 120 days of the origination of each such Receivable.
Immediately after the assignment and transfer thereof to the Trust, although
the Lien Certificate (or such other document kept by the Servicer consistent
with its customary servicing procedures) will not indicate the Trust or the
Owner Trustee as secured party, each Receivable will be secured by an
enforceable and perfected security interest in the Financed Vehicle in favor
of the Trust as secured party, which security interest is prior to all other
Liens in such Financed Vehicle.
(k) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from the
Lien granted by the related Receivable in whole or in part unless another
vehicle has been substituted as collateral securing the Receivable without any
other modification to such Receivable.
(l) No Waiver or Amendment. No provision of a Receivable has been
waived or amended except as permitted pursuant to Section 4.2 hereof. Such
Receivable has not been modified as a result of application of the Soldiers'
and Sailors' Civil Relief Act of 1940, as amended.
(m) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Receivable.
(n) No Liens. There are no Liens or claims, including Liens for work,
labor, storage, materials or unpaid state or federal taxes relating to any
Financed Vehicle securing the related Receivable, that are or may be prior to
or equal to the Lien granted by such Receivable.
(o) No Default. No Initial Receivable has a payment that is more than
30 days delinquent as of the Initial Cutoff Date or, with respect to any
Subsequent Receivables, of not more than 30 days delinquent as of the related
Subsequent Cutoff Date and, except as permitted in this paragraph, no default,
breach, violation or event (in any such case) permitting acceleration under
the terms of any Receivable has occurred; and no continuing condition that
with notice or the lapse of time would constitute a default, breach, violation
or event (in any such case) permitting acceleration under the terms of any
Receivable shall have arisen as of the Initial Cutoff Date with respect to the
Initial Receivables or the Subsequent Cutoff Date with respect to the
Subsequent Receivables; and the Seller has not waived and shall not waive any
of the foregoing.
(p) No Bankruptcies. No Obligor on any Receivable was the subject of
a bankruptcy proceeding commenced following the execution of the related
Contract.
(q) No Repossessions. As of the Initial Cutoff Date, no Financed
Vehicle securing any Receivable is in repossession status and, as of the
related Subsequent Cutoff Date, no Financed Vehicle securing any Subsequent
Receivable will be in repossession status.
(r) Adverse Selection. No selection procedures adverse to the
Noteholders, the Certificateholders or the Insurer were utilized in selecting
the Receivables from those owned by the Seller which met the selection
criteria contained in this Agreement.
(s) Chattel Paper. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(t) Insurance. The Obligor with respect to each Receivable agreed in
the related Contract to obtain insurance covering the Financed Vehicle
insuring against loss and damage due to fire, theft, transportation, collision
and other risks generally covered by comprehensive and collision insurance
coverage (i) in an amount at least equal to the lesser of (x) its maximum
insurable value or (y) the Principal Balance due from the Obligor under such
Receivable and (ii) naming ___________ as loss payee.
(u) Lawful Assignment. No Receivable was originated as of the Initial
Cutoff Date or, with respect to any Subsequent Receivables, as of the related
Subsequent Cutoff Date, or, is subject to the laws of, any jurisdiction under
which the sale, transfer and assignment of such Receivable under this
Agreement is unlawful, void or voidable. The Seller has not entered into any
agreement with any Obligor or other Person that prohibits, restricts or
conditions the assignment of any portion of the Receivables.
(v) One Original. There is only one original executed copy of each
Receivable.
(w) Location of Receivable Files. The Receivable Files shall be kept
at one or more of the locations listed in Schedule B and each item required to
be in a Receivable File is in such Receivable File.
(x) Computer Records. As of the Closing Date, the accounting and
computer records relating to the Initial Receivables of the Seller have been
marked to show the absolute ownership by the Owner Trustee on behalf of the
Trust of the Initial Receivables, and, as of any Subsequent Transfer Date the
accounting and computer records relating to the Subsequent Receivables will be
marked to show the absolute ownership by the Owner Trustee on behalf of the
Trust of the Subsequent Receivables.
(y) Taxes. There are no state or local taxing jurisdictions which
have asserted that nonresident holders of certificates in, or notes issued by,
an entity which holds assets similar to the assets to be held by the Trust are
subject to the jurisdiction's income or other taxes solely by reason of the
location in the jurisdiction of the Owner Trustee, the Seller, the Servicer or
the Obligors or the assets securing the Receivables held by the Trust, or the
issuer of a financial guaranty insurance policy.
(z) Maturity of Receivables. Each Receivable has a final maturity
date not later than six (6) months before [_________ __, 2000]; each
Receivable has an original term to stated maturity of not more than [72]
months; the weighted average original term of the Initial Receivables is
approximately [__________]months; the weighted average remaining term of the
Initial Receivables is approximately [_________] months as of the Initial
Cutoff Date.
(aa) Financing. Approximately [_______]% of the aggregate Principal
Balance of the Initial Receivables, constituting approximately [_______] of
the Initial Receivables as of the Initial Cutoff Date, represent new vehicles;
approximately [______]% of the aggregate Principal Balance of the Initial
Receivables, constituting approximately [______] Receivables as of the Initial
Cutoff Date, represent used vehicles; approximately [______]% of the aggregate
Principal Balance of the Initial Receivables, constituting approximately
[_______] of the Initial Receivables as of the Initial Cutoff Date, represent
refinances of existing loans; and approximately [_____]% of the aggregate
Principal Balance of the Initial Receivables, constituting approximately
[______] of the Initial Receivables as of the Initial Cutoff Date, represent
lease buyouts; all of the aggregate Principal Balance of the Initial
Receivables as of the Cutoff Date represent Simple Interest Receivables. The
aggregate Principal Balance of the Initial Receivables, as of the Initial
Cutoff Date, is $[________________].
(bb) APR. The weighted average Annual Percentage Rate of the Initial
Receivables as of the Initial Cutoff Date is approximately [_____]%. Each
Receivable has an APR equal to or greater than [______]%.
(cc) Number. As of the Initial Cutoff Date, there are [______]
Receivables.
(dd) Balance. Each Initial Receivable has a remaining principal
balance of not less than $[_________]and not more than $[_________]; as of the
Initial Cutoff Date, the average Principal Balance of the Receivables is
$[__________].
(ee) Security. Each Receivable is secured by a new or used
automobile, light-duty truck, van or motorcycle.
(ff) Advance Payments. Each Receivable had not been paid more than
three months in advance as of the close of business on the Cutoff Date.
(gg) No Force Placed Insurance. As of the close of business on the
Initial Cutoff Date with respect to Initial Receivables and each Subsequent
Cutoff Date with respect to Subsequent Receivables, each Receivable was
secured by a Financed Vehicle that was not insured by a force placed insurance
policy or any vendor's single interest and non-filing insurance policy.
SECTION 3.2. Repurchase upon Breach.
(a) The Seller, the Servicer, the Insurer or the Indenture Trustee,
as the case may be, shall inform the other parties to this Agreement and the
Insurer promptly, in writing, upon the discovery of any breach of the Seller's
representations and warranties made pursuant to Section 3.1 hereof. As of the
last day of the second (or, if the Seller so elects, the first) month
following the discovery by the Seller or receipt by the Seller of notice from
any of the Servicer, the Insurer or the Indenture Trustee of such breach,
unless such breach is cured by such date, the Seller shall repurchase from the
Trust any Receivable in which the interests of the Noteholders, the
Certificateholders or the Insurer are materially and adversely affected by any
such breach as of such date. The "second month" shall mean the month following
the month in which discovery occurs or notice is given, and the "first month"
shall mean the month in which discovery occurs or notice is given. In
consideration of and simultaneously with the repurchase of a such Receivable,
the Seller shall remit to the Indenture Trustee for deposit to the Collection
Account the Purchase Amount in the manner specified in Section 5.5 and the
Issuer shall execute such assignments and other documents reasonably requested
by such person in order to effect such repurchase. The sole remedy of the
Owner Trustee, the Indenture Trustee, the Noteholders, the Certificateholders
or the Insurer with respect to a breach of representations and warranties made
pursuant to Section 3.1 hereof shall be the repurchase of Receivables pursuant
to this Section. Subject to the conditions contained herein, neither the Owner
Trustee, the Issuer nor the Indenture Trustee shall have a duty to conduct any
affirmative investigation as to the occurrence of any conditions requiring the
repurchase of any Receivable pursuant to this Section.
(b) Pursuant to (i) Section 2.3 hereof, the Transferor conveyed to
the Depositor and (ii) Section 2.4 hereof, the Depositor conveyed to the
Trust, all of the such party's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under this Agreement
including the Seller's and the Transferor's representations and warranties and
the cure or repurchase obligations of the Seller hereunder. Each of the Seller
and the Transferor hereby represents and warrants to the Trust that such
assignment is valid, enforceable and effective to permit the Trust to enforce
such obligations of the Seller hereunder.
SECTION 3.3. Custody of Receivables Files.
To assure uniform quality in servicing the Receivables and to reduce
administrative costs, a custodian shall be appointed pursuant to the terms of
the Custodial Agreement, to act exclusively as the agent for the Indenture
Trustee, on behalf of the Noteholders, and the Insurer until the Notes are
paid in full and thereafter, on behalf of the Owner Trustee, on behalf of the
Certificateholders as custodian of certain documents or instruments which
shall be delivered to the Custodian, as of the Initial Cutoff Date (in the
case of Initial Receivables) and as of each Subsequent Transfer Date (in case
of Subsequent Receivables transferred on such Subsequent Transfer Date) in
accordance with the terms of the Custodial Agreement.
SECTION 3.4. Duties of Custodian.
The duties and obligations of the Custodian are set forth in full in
the Custodial Agreement.
SECTION 3.5. Retention and Termination of Servicer.
The Servicer hereby covenants and agrees to act as such under this
Agreement for an initial term, commencing on the Closing Date and ending on
March 31, 200__, which term shall be extendible by the Insurer (provided no
Insurer Default has occurred and is continuing) for successive quarterly terms
ending on each successive June 30, September 30, December 31 and March 31 (or,
pursuant to revocable written standing instructions from time to time to the
Servicer and the Indenture Trustee for any specific number of terms greater
than one), until the Notes are paid in full. Each such notice (including each
notice pursuant to standing instructions, which shall be deemed delivered at
the end of successive quarterly terms for so long as such instructions are in
effect) (a "Servicer Extension Notice") shall be delivered by the Insurer to
the Indenture Trustee and the Servicer. The Servicer hereby agrees that, as of
the date hereof and upon its receipt of any such Servicer Extension Notice,
the Servicer shall become bound, for the initial term beginning on the Closing
Date and for the duration of the term covered by Servicer Extension Notice, to
continue as Servicer subject to and in accordance with the other provisions of
this Agreement. Until such time as an Insurer Default shall have occurred and
be continuing, the Indenture Trustee agrees that if as of the fifteenth day
prior to the last day of any term of the Servicer, the Indenture Trustee shall
not have received any Servicer Extension Notice from the Insurer, the
Indenture Trustee shall, within five (5) days after, give written notice of
such non-receipt to the Insurer and the Servicer and the Servicer's term shall
not be extended unless a Servicer Extension Notice is received on or before
the last day of such term. Notwithstanding the foregoing, in the event an
Insurer Default has occurred and is continuing, the Servicer Extension Notice
shall be deemed to have been delivered as of the last day of the current term
of the Servicer and extended until the next quarterly period.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Appointment and Duties of Servicer.
(a) The managing, servicing, administering and making collections on
the Contracts shall be conducted by the Person so designated from time to time
as Servicer in accordance with this Agreement. ___________ is hereby initially
designated as, and hereby agrees to perform, the duties and obligations of the
Servicer pursuant to the terms hereof and the other Basic Documents. Subject
to the resignation of ___________ as Servicer pursuant to Section 7.5 or the
termination of ___________ as Servicer pursuant to Section 8.1 and, in either
case, the assumption by the Backup Servicer, or the designation of a successor
Servicer hereunder as the case may be, of the Servicer's duties and
responsibilities in accordance with Section 8A.7, ___________ shall continue
to manage, service, administer and collect on the Receivables pursuant to this
Agreement, unless and until expressly agreed otherwise by the Seller, the
Issuer and the Controlling Party. The Servicer, as agent for the Issuer and
the Insurer (to the extent provided herein), shall manage, service, administer
and make collections on the Receivables (other than Purchased Receivables) in
accordance with all applicable federal, state or local laws and regulations
and with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to all comparable automotive receivables that
it services for itself or others, and in any event with no less degree of
skill and care than would be exercised by a prudent servicer of motor vehicle
loans (the "Servicing Standard"), except that the Servicer shall not be
obligated, and does not currently intend, to (i) obtain force-placed insurance
concerning any Financed Vehicle or (ii) monitor any Obligor's maintenance of
such insurance. The Servicer's duties shall include collection and posting of
all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment statements to Obligors,
accounting for collections and furnishing monthly and annual statements to the
Owner Trustee, Indenture Trustee and the Insurer with respect to
distributions, reporting tax information, if any, to Obligors and delivering
Receivable Files to the Custodian. Subject to the provisions of Section 4.2,
the Servicer shall follow its customary standards, policies and procedures in
performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is authorized and empowered to execute and deliver, on
behalf of itself, the Issuer, the Owner Trustee, the Indenture Trustee, the
Insurer, the Certificateholders and the Noteholders or any of them, any and
all instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments without recourse to the Trust,
with respect to such Receivables or to the Financed Vehicles securing such
Receivables. If the Servicer shall commence a legal proceeding to enforce a
Receivable, the Trust (in the case of a Receivable other than a Purchased
Receivable) shall thereupon be deemed to have automatically assigned, solely
for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may
not enforce a Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce such Receivable, the Owner Trustee or
the Indenture Trustee shall, at the Servicer's expense and direction, take
steps to enforce such Receivable, including bringing suit in its name or the
name of the Trust, the Owner Trustee, the Certificateholders, Indenture
Trustee or the Noteholders. The Owner Trustee and the Insurer shall upon the
written request of the Servicer furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate (as certified
to the Owner Trustee and/or the Insurer by the Servicer) to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(b) ___________ hereby agrees that upon the designation of a
successor Servicer hereunder or the assumption by the Backup Servicer of the
Servicer's duties and responsibilities in accordance with Section 8A.7,
___________ will terminate its activities as Servicer hereunder in accordance
with Section 8.1 and, in any case, in a manner which the Indenture Trustee
reasonably determines will facilitate the transition of the performance of
such activities to such successor Servicer or the Backup Servicer, as the case
may be, and ___________ shall cooperate with and assist such successor Servicer
or the Backup Servicer, as the case may be.
SECTION 4.2. Collection and Allocation of Receivable Payments.
(a) The Servicer shall collect all payments called for under the
terms and provisions of the Receivables as and when the same shall become due
and shall follow such collection procedures as is consistent with the
Servicing Standard. The Servicer shall allocate collections between principal
and interest in accordance with its customary servicing procedures.
(b) The Servicer may at any time agree to a modification, amendment
or extension of a Receivable in order to (i) change the Obligor's regular due
date to a date within the Collection Period in which such due date occurs,
(ii) reamortize the scheduled payments on the Receivable following a partial
prepayment of principal and (iii) grant extensions of a Receivable, provided
that the Servicer shall not be permitted to extend the monthly payments on a
Receivable more than two times in any twelve-month period, and provided
further that the aggregate period of all extensions on a Receivable shall not
exceed six months. The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the ordinary course of
servicing a Receivable.
(c) The Servicer may grant payment extensions or deferrals on, or
other modifications or amendments to, a Receivable (in addition to those
modifications permitted by Section 4.2(b)) in accordance with its customary
procedures if the Servicer believes in good faith that such extension,
deferral, modification or amendment is necessary to avoid a default on such
Receivable, will maximize the amount to be received by the Trust with respect
to such Receivable, and is otherwise in the best interests of the Trust;
provided, however, that:
(i) In no event may a Receivable be extended beyond the
Collection Period immediately preceding the Final Scheduled Payment
Date for the Class [A-4] Notes;
(ii) So long as an Insurer Default shall not have occurred
and be continuing, the Servicer shall not amend or modify a
Receivable (except as provided in Section 4.2(b)) without the
consent of the Insurer;
(iii) So long as an Insurer Default shall not have
occurred and be continuing, the Aggregate Principal Balance of
Receivables which have been extended during any Collection Period
(A) shall not exceed 1.0% of the Aggregate Principal Balance of
Receivables during such Collection Period (computed as of the
Accounting Date immediately prior to the first date of the related
Collection Period) and (B) shall not exceed 1.0% of the average of
the Aggregate Principal Balance of Receivables for such Collection
Period and the three prior Collection Periods (computed as of the
Determination Date immediately prior to the first day of the related
Collection Period);
(iv) So long as an Insurer Default shall not have occurred
and be continuing, the Aggregate Principal Balance of Receivables
for which payment deferrals have been granted during any Collection
Period (A) shall not exceed 1.0% of the Aggregate Principal Balance
of Receivables during such Collection Period (computed as of the
Accounting Date immediately prior to the first day of the related
Collection Period) and (B) shall not exceed 1.0% of the average of
the Aggregate Principal Balance of Receivables for such Collection
Period and the three prior Collection Periods (computed as of the
Determination Date immediately prior to the first day of the related
Collection Period);
(v) No such extension, modification or amendment shall be
granted if such action, when aggregated with all previous
extensions, modifications and amendments of Receivables, would have
the effect of causing any Notes to be deemed to have been exchanged
for other Notes within the meaning of Section 1001 of the Internal
Revenue Code of 1986, as amended, or any proposed, temporary or
final Treasury Regulations issued thereunder; and
(vi) If an Insurer Default shall have occurred and be
continuing, the Servicer may not extend or modify any Receivable
(other than as permitted by Section 4.2(b)).
(d) Notwithstanding anything in this Agreement to the contrary, the
Servicer may refinance any Receivable by accepting a new promissory note from
the related Obligor and depositing the full outstanding Principal Balance of
such Receivable into the Collection Account. The receivable created by the
refinancing shall not be property of the Issuer.
SECTION 4.3. Realization upon Receivables.
The Servicer shall, in accordance with the Servicing Standard and in
a manner consistent with its customary servicing procedures, repossess or
otherwise convert the ownership of the Financed Vehicle securing any
Receivable as to which the Servicer shall have determined eventual payment in
full is unlikely. From time to time, as appropriate for servicing or
foreclosing upon any Receivable, the Owner Trustee shall, upon written request
of the Servicer, execute or shall cause to be executed such documents as shall
be reasonably necessary to prosecute any such proceedings. The Servicer shall
follow such customary and usual practices and procedures as it shall deem
necessary or advisable, consistent with the Servicing Standard, which
practices and procedures may include the sale of the related Financed Vehicles
at a public or private sale, the submission of claims under an insurance
policy and other actions by the Servicer to realize upon a Receivable. The
foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its reasonable discretion that such
repair and/or repossession will increase the Net Liquidation Proceeds by an
amount greater than the amount of such expenses.
SECTION 4.4. [RESERVED]
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.
(a) The Servicer shall, in accordance with the Servicing Standard and
its customary procedures, take such steps as are necessary to maintain
perfection of the first priority security interest created by each Receivable
in the related Financed Vehicle in favor of the Seller. The Servicer is hereby
authorized to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer and the Indenture Trustee in the event of the
relocation of a Financed Vehicle or for any other reason.
(b) Upon the occurrence of an Insurance Agreement Event of Default,
and subject to the other provisions of this Agreement, the Controlling Party
may instruct the Indenture Trustee and the Servicer to take or cause to be
taken, upon the occurrence of a Servicer Default, the Owner Trustee and the
Servicer shall take or cause to be taken such action as may, in the opinion of
counsel to the Controlling Party, be necessary to perfect or reperfect the
security interests in the Financed Vehicles securing the Receivables in the
name of the Indenture Trustee by amending the title documents of such Financed
Vehicles or by such other reasonable means as may, in the opinion of counsel
to the Controlling Party, be necessary or prudent. The Servicer hereby agrees
to pay all expenses related to such perfection or reperfection and to take all
action necessary therefor.
SECTION 4.6. Covenants of Servicer.
The Servicer shall not release the Financed Vehicle securing any
Receivable from the security interest granted by such Receivable in whole or
in part except in the event of payment in full by the Obligor thereunder or
payment in full less a deficiency which the Servicer would not attempt to
collect in accordance with the Servicing Standard and its customary procedures
or in connection with repossession or except as may be required by an insurer
in order to receive proceeds from insurance covering such Financed Vehicle,
nor shall the Servicer impair the rights of the Issuer, the Indenture Trustee,
the Owner Trustee, the Certificateholders, the Insurer or the Noteholders in
such Receivables, nor shall the Servicer amend or otherwise modify a
Receivable (including the grant of any extension thereunder), except as
provided in Section 4.2 hereof.
SECTION 4.7. Purchase of Receivables upon Breach.
The Seller, the Servicer, the Owner Trustee, or the Insurer, as the
case may be, shall inform the other parties and the Indenture Trustee
promptly, in writing, upon the discovery of any breach of the Servicer's
covenants pursuant to Section 4.2(b), 4.5 or 4.6, or of any breach of the
Servicer's representations and warranties made pursuant to Section 7.1;
provided, however, that the failure to give any such notice shall not affect
the obligation of the Servicer under this Section 4.7. As of the last day of
the first month following the discovery by the Servicer or receipt by the
Servicer of notice from any of the Seller, the Servicer, the Owner Trustee,
Insurer or the Indenture Trustee of such breach, unless such breach is cured
by such date, the Servicer shall (i) purchase any Receivable in which the
interests of the Insurer, the Noteholders or the Certificateholders are
materially and adversely affected by such breach as of such date. The "first
month" shall mean the calendar month following the month in which discovery
occurs or notice is given. In consideration of the purchase of any such
Receivable pursuant to the preceding sentence, the Servicer shall remit the
Purchase Amount in the manner specified in Section 5.5. The sole remedy of the
Issuer, the Indenture Trustee, the Insurer, the Noteholders or the
Certificateholders with respect to a breach pursuant to Section 4.2(b), 4.5 or
4.6, or to a breach of representations and warranties pursuant to Section 7.1,
shall be limited to the purchase of Receivables in accordance with this
Section 4.7. The Indenture Trustee and the Owner Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the purchase of any Receivable pursuant to this Section 4.7.
SECTION 4.8. Servicing Fee.
The Servicing Fee for a Payment Date shall equal the sum of the Base
Servicing Fee, all Investment Earnings on the Collection Account plus any
reimbursement pursuant to Section 5.2. The Servicer also shall be entitled to
retain from collections the Base Servicing Fee as provided herein. The
Servicer, in its discretion at its election, may defer receipt of all or any
portion of the Servicing Fee for any Collection Period to and until a later
Collection Period for any reason, including in order to avoid a shortfall in
any payments due on any Notes or Certificates. Any such deferred amount shall
be payable to (or may be retained from subsequent collections by) the Servicer
on demand.
SECTION 4.9. Servicer's Certificate.
No later than 12:00 noon New York City time on each Determination
Date, the Servicer shall deliver to the Owner Trustee, the Indenture Trustee,
the Insurer, the Backup Servicer, the Indenture Collateral Agent and each
Rating Agency, a Servicer's Certificate containing, among other things, (i)
all information necessary to enable the Indenture Trustee to make any
withdrawal and deposit required by Section 5.6, to give any notice required by
Section 5.4 and make the distributions required by Section 5.6 and 5.7; (ii)
all information necessary to enable the Indenture Trustee to send the
statements required by Section 5.8 to the Owner Trustee, the Noteholders, each
Rating Agency and the Insurer; (iii) a listing of all Purchased Receivables
for the related Collection Period; (iv) all information necessary to enable
the Indenture Trustee to reconcile all deposits to, and withdrawals from, the
Collection Account for the related Collection Period and Payment Date,
including the accounting required by Section 5.9; (v) the Delinquency Ratio,
the Cumulative Default Rate and the Cumulative Net Loss Rate for such
Determination Date; (vi) whether any Insurance Agreement Event of Default has
occurred as of such Determination Date; (vii) whether any Insurance Agreement
Event of Default that may have occurred as of a prior Determination Date is
cured as of such Determination Date; (viii) whether to the knowledge of the
Servicer an Insurer Default has occurred; (ix) if the Servicer has granted
payment extensions on, or other modifications or amendments to, any
Receivables during the related Collection Period, the number of such
Receivables extended, modified or amended, the Aggregate Principal Balance of
such Receivables and the Principal Balance of such Receivables expressed as a
percentage of the outstanding Aggregate Principal Balance as of the related
Determination Date and (x) the amount of any unpaid fees and expenses of the
Owner Trustee. Receivables purchased by the Servicer, the Seller and each
receivable which became a Liquidated Receivable or which was paid in full
during the related Collection Period shall be identified by account number (as
set forth in the Schedule of Receivables on Schedule A hereof). A copy of such
certificate may be obtained by any Noteholder or by any Certificateholder by a
request in writing to the Indenture Trustee or the Owner Trustee,
respectively, addressed to the applicable Corporate Trust Office. The
Indenture Trustee shall not be under any obligation to confirm or reconcile
the information provided pursuant to this Section 4.9.
If a Servicer's Certificate contains a manifest error, the Insurer's
written notice to the Servicer, the Owner Trustee, and the Indenture Trustee,
containing the corrected information shall be deemed to amend such Servicer's
Certificate.
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Indenture Trustee, the Owner
Trustee, the Backup Servicer, and the Insurer, on or before April 30 of each
year beginning April 30, 2002, an Officer's Certificate, dated as of the
preceding December 31, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period and of its performance under
this Agreement has been made under such officer's supervision and (ii) based
on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The Indenture Trustee shall send a
copy of such certificate and the report referred to in Section 4.11 to the
Rating Agencies. A copy of such certificate and the report referred to in
Section 4.11 may be obtained by any Certificateholder by a request in writing
to the Owner Trustee addressed to the Corporate Trust Office or by any
Noteholder by a request in writing to the Indenture Trustee addressed to the
Corporate Trust Office.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer, the Indenture Collateral Agent, the Insurer and
the Rating Agencies, promptly after having obtained knowledge thereof, but in
no event later than five (5) Business Days thereafter, an Officer's
Certificate specifying any event which with the giving of notice or lapse of
time, or both, would become a Servicer Default under Section 8.1.
SECTION 4.11. Financial Statements.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants, which may also render other services
to the Servicer or the Seller, to deliver to the Seller, the Backup Servicer,
the Indenture Trustee, the Owner Trustee and the Insurer on or before April 30
of each year beginning April 30, 200_, an agreed-upon procedures report
addressed to the Servicer, the Seller, the Owner Trustee, the Indenture
Trustee, the Insurer and each Rating Agency, expressing a summary of findings
(based on certain procedures performed on the documents, records and
accounting records that such accountants considered appropriate under the
circumstances) relating to the servicing of the Receivables, or the
administration of the Receivables and of the Trust, as the case may be, during
the preceding calendar year and that, on the basis of the accounting and
auditing procedures considered appropriate under the circumstances, such firm
is of the opinion that such servicing or administration was conducted in
compliance with the terms of this Agreement, except for (i) such exceptions as
such firm shall believe to be immaterial and (ii) such other exceptions as
shall be set forth in such report. In the event such accounting firm requires
the Backup Servicer to agree to the procedures to be reported on by such
accounting firm in any report delivered pursuant to this Section 4.11, the
Servicer shall direct the Backup Servicer in writing to so agree. It is
understood and agreed that the Backup Servicer will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and that
the Backup Servicer will not make any independent inquiry or investigation as
to, and shall have no obligation or liability with respect to, the
sufficiency, validity or correctness of such procedures.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
(b) The Servicer shall deliver to the Owner Trustee, the Backup
Servicer, the Indenture Trustee and the Insurer on or before the 45th day
following the end of each calendar quarter the unaudited balance sheet of the
Servicer as of the end of the most recent calendar quarter and the related
unaudited statements of income and retained earnings of the Servicer for such
calendar quarter and for the period equal to the portion of the calendar year
ending with such calendar quarter.
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables.
The Servicer shall provide to representatives of the Indenture
Trustee, the Owner Trustee, the Insurer, and the Backup Servicer reasonable
access to the Receivable Files and if there is a single Holder of the Notes or
if there is a single Holder of the Certificates, each such Holder. The
Servicer shall provide to the Certificateholders and Noteholders access to the
Receivable Files in such cases where the Certificateholders or Noteholders
shall be required by applicable statutes or regulations to review such
documentation as demonstrated by evidence satisfactory to the 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 the Servicer. Nothing in this Section shall affect the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
SECTION 4.13. Servicer Expenses.
The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and under any of the Basic Documents,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to Certificateholders and Noteholders.
SECTION 4.14. Appointment of Subservicer.
The Servicer may at any time, with the consent of the Insurer (unless
an Insurer Default shall have occurred and be continuing), appoint a
subservicer to perform all or any portion of its obligations as Servicer
hereunder; provided, however, that the Rating Agency Condition shall have been
satisfied in connection therewith; provided further, that the Servicer shall
remain obligated and be liable to the Transferor, the Depositor, the Issuer,
the Indenture Trustee, the Owner Trustee, the Certificateholders, the Insurer
and the Noteholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation
and liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Receivables. The Insurer's consent shall not
be required for appointment of subservicers or agents in connection with
repossession of any Financed Vehicle. The fees and expenses of the subservicer
shall be as agreed between the Servicer and its subservicer from time to time
and none of the Transferor, the Depositor, the Issuer, the Indenture Trustee,
the Owner Trustee, the Certificateholders, the Insurer or the Noteholders
shall have any responsibility therefor. Any such subservicer shall perform its
duties with the same standard of care applicable to the Servicer pursuant to
Section 4.1 of this Agreement.
SECTION 4.15. Obligations under Basic Documents.
The Servicer shall perform all of its obligations under the Basic
Documents.
SECTION 4.16. Reports to the Commission.
The Servicer shall, on behalf of the Trust, cooperate with Depositor
in connection with the filing with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act, and the rules
and the regulations of the Commission thereunder.
SECTION 4.17. Autodebit Account Power of Attorney.
On the Closing Date, the Servicer shall execute and deliver an
express power of attorney (stating therein that such power is irrevocable and
coupled with an interest) granting the Controlling Party, upon the occurrence
of an event that constitutes a Servicer Default (or that constitutes a
servicer default, as defined in the prior and any future securitization series
for which the Servicer and Controlling Party are also parties thereto (a
"Related Transaction")), the power to control and direct any autodebit account
payments on the Receivables and all receivables under all Related
Transactions.
ARTICLE V
Distributions; Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts.
(a) (i) On or prior to the Closing Date, the Servicer, for the
benefit of the Indenture Trustee on behalf of the Noteholders, the
Owner Trustee on behalf of the Certificateholders, and the Insurer,
shall establish and maintain in the name of the Indenture Trustee an
Eligible Deposit Account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Indenture Trustee on behalf of the
Noteholders, the Owner Trustee on behalf of the Certificateholders
and the Insurer. Investment Earnings on funds in the Collection
Account shall be paid to the Servicer. The Collection Account shall
initially be established with the Indenture Trustee.
(ii) On or prior to the Closing Date, the Reserve Account
shall be established in accordance with the terms of the Reserve
Account Agreement. On the Closing Date, the Transferor will deposit
the Reserve Account Initial Deposit into the Reserve Account from
the net proceeds of the sale of the Receivables. On each Subsequent
Transfer Date, the Servicer shall instruct the Indenture Trustee to
withdraw from the Pre-Funding Account and deposit to the Reserve
Account an amount equal to the applicable Subsequent Reserve Account
Deposit as provided in Section 5.6(a) hereof.
(iii) On or prior to the Closing Date, the Servicer, for
the benefit of the Indenture Trustee on behalf of the Noteholders,
shall establish and maintain in the name of the Indenture Trustee an
Eligible Deposit Account (the "Note Distribution Account"), bearing
a designation clearly indicating that the funds deposited therein
are held for the benefit of the Indenture Trustee on behalf of the
Noteholders and the Insurer. The Note Distribution Account shall
initially be established with the Indenture Trustee.
(iv) On or prior to the Closing Date, the Servicer, for
the benefit of the Indenture Trustee on behalf of the Noteholders,
the Owner Trustee on behalf of the Certificateholders, and the
Insurer, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Pre-Funding Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Indenture Trustee on behalf
of the Noteholders, the Owner Trustee on behalf of the
Certificateholders and the Insurer. Investment earnings in the
Pre-Funding Account shall be paid to the Seller in accordance with
Section 5.6(a)(ii) hereof.
(v) With respect to amounts on deposit in the Pre-Funding
Account, in order to assure that sufficient amounts to make required
distributions of interest to Noteholders will be available during
the Pre-Funding Period, the Issuer shall instruct the Servicer to
establish and maintain an Eligible Deposit Account (the "Capitalized
Interest Account") with the Indenture Trustee, bearing a designation
clearly indicating that the funds deposited therein are held in
trust for the benefit of the Noteholders and the Insurer. On or
prior to the Closing Date, the Transferor shall deposit an amount
equal to the Capitalized Interest Account Initial Deposit into the
Capitalized Interest Account. On the Payment Dates occurring prior
to the Mandatory Redemption Date, the Indenture Trustee shall
withdraw from the Capitalized Interest Account the Monthly
Capitalized Interest Amount for such Payment Date as further
provided in Section 5.6. Any amounts remaining in the Capitalized
Interest Account on the Mandatory Redemption Date after taking into
account such transfer shall be distributed by the Indenture Trustee
to the Transferor. Upon any such distributions to the Transferor,
the Noteholders, the Certificateholders and the Insurer will have no
further rights in, or claims to, such amounts.
(b) Funds on deposit in the Collection Account, the Pre-Funding
Account and the Note Distribution Account (the "Trust Accounts") and the
Certificate Distribution Account shall be invested by the Indenture Trustee
(or any custodian with respect to funds on deposit in any such account) in
Eligible Investments selected in writing by the Servicer (pursuant to standing
instructions or otherwise); provided, however, it is understood and agreed
that the Indenture Trustee shall not be liable for any loss arising from such
investment in Eligible Investments. If the Servicer does not provide the
Indenture Trustee, with written direction as to the Eligible Investments, the
funds in the Trust Accounts and Certificate Distribution Account shall be
invested in the investments specified in clause (1) of the definition of
Eligible Investments. All such Eligible Investments shall be held by or on
behalf of the Indenture Trustee, for the benefit of the Noteholders and/or the
Certificateholders, as applicable. Other than as permitted by the Rating
Agencies and the Insurer, funds on deposit in the Collection Account, the
Pre-Funding Account, the Capitalized Interest Account, the Note Distribution
Account and the Certificate Distribution Account shall be invested in Eligible
Investments that will mature so that such funds will be available at the close
of business on the Business Day immediately preceding the following Payment
Date. Funds deposited in a Trust Account or the Certificate Distribution
Account on the day immediately preceding a Payment Date upon the maturity of
any Eligible Investments are not required to be invested overnight.
(c) (i) The Indenture Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Trust
Accounts and in all proceeds thereof (excluding all Investment
Earnings on the Collection Account) and all such funds, investments,
proceeds and income 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 the Indenture Trustee. If, at any time,
any of the Trust Accounts or the Certificate Distribution Account
ceases to be an Eligible Deposit Account, the Indenture Trustee (or
the Servicer on its behalf) shall within ten (10) Business Days (or
such longer period as to which each Rating Agency and the Insurer
may consent) establish a new Trust Account or a new 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 a new Certificate Distribution Account, as applicable. In
connection with the foregoing, the Servicer agrees that, in the
event that any of the Trust Accounts are not accounts with the
Indenture Trustee, the Servicer shall notify the Indenture Trustee
in writing promptly upon any of such Trust Accounts ceasing to be an
Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee, and with respect to the Certificate Distribution
Account, the Owner Trustee agrees, by its respective acceptance
hereof, that:
(A) any Trust Account Property or any property
in the Certificate Distribution Account that is held in
deposit accounts shall be held solely in the Eligible
Deposit Accounts subject to the penultimate sentence of
Section 5.1(c)(i); and, except as otherwise provided
herein, each such Eligible Deposit Account shall be
subject to the exclusive custody and control of the
Indenture Trustee with respect to the Trust Accounts and
the Owner Trustee (and Certificate Paying Agent) with
respect to the Certificate Distribution Account, and the
Indenture Trustee or the Owner Trustee (and Certificate
Paying Agent), as applicable, shall have sole signature
authority with respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be delivered to the Indenture
Trustee in accordance with paragraph (a) of the definition
of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a
securities intermediary (as such term is defined in
Section 8-102(a)(14) of the UCC) acting for the Indenture
Trustee;
(C) any Trust Account Property that is a
"certificated security" under Article 8 of the UCC shall
be delivered to the Indenture Trustee in accordance with
paragraph (b) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by the
Indenture Trustee or a securities intermediary (as such
term is defined in Section 8-102(a)(14) of the UCC) acting
for the Indenture Trustee;
(D) 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 (d) of the
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition,
through continued book-entry registration of such Trust
Account Property in the name of the Indenture Trustee or a
securities intermediary (as such term is defined in
Section 8-102(a)(14) of the UCC) acting for the Indenture
Trustee's;
(E) any Trust Account Property that is an
"uncertificated security" under Article 8 of the UCC and
that is not governed by clause (D) above shall be
delivered to the Indenture Trustee in accordance with
paragraph (c) of the definition of "Delivery" and shall be
maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the
Indenture Trustee's (or its nominee's) ownership of such
security, and
(F) any Trust Account Property held through a
securities intermediary (as such term is defined in
Section 8-102(a)(14) of the UCC) shall be held in a
securities account (as such term is defined in Section
8-501(a) of the UCC) that is established by such
securities intermediary in the name of the Indenture
Trustee for which the Indenture Trustee is the sole
entitlement holder (as defined in Section 8-102(a)(7) of
the UCC).
SECTION 5.2. Collections.
(a) The Servicer shall remit within two (2) Business Days of receipt
thereof to the Collection Account all payments by or on behalf of the Obligors
with respect to the Receivables (other than Purchased Receivables) and all
Liquidation Proceeds, both as collected during the Collection Period less any
payments owed thereon to the Servicer. For purposes of this Article V, the
phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer or the Seller.
(b) The Servicer will be entitled to be reimbursed from amounts on
deposit in the Collection Account with respect to a Collection Period for
amounts previously deposited in the Collection Account but later determined by
the Servicer to have resulted from mistaken deposits or postings or checks
returned for insufficient funds. The amount to be reimbursed hereunder shall
be paid to the Servicer on the related Payment Date pursuant to Section 5.6(a)
upon certification by the Servicer of such amounts and the provision of such
information to the Indenture Trustee and the Insurer as may be necessary in
the opinion of the Insurer to verify the accuracy of such certification. In
the event that the Insurer has not received evidence satisfactory to it of the
Servicer's entitlement to reimbursement pursuant to Section 5.2(b), the
Insurer (unless an Insurer Default shall have occurred and be continuing)
shall give the Indenture Trustee notice to such effect following receipt of
which the Indenture Trustee shall not make a distribution to the Servicer in
respect of such amount pursuant to Section 5.6, or if the Servicer prior
thereto has been reimbursed pursuant to Section 5.6 or Section 5.9, the
Indenture Trustee shall withhold such amounts from amounts otherwise
distributable to the Servicer on the next succeeding Payment Date.
(c) If at any time the percentage of Obligors using the automated
payment option, which percentage shall be the equivalent of a fraction, the
numerator of which is the aggregate Principal Balance of such Obligors'
Receivables calculated as of the last day of the immediately preceding
Collection Period and the denominator of which is the Aggregate Principal
Balance calculated as of the last day of the immediately preceding Collection
Period, is below 75%, then the Servicer shall cause all payments by or on
behalf of the Obligors that are not using the automated payment option to be
deposited into a lockbox account established at a depository institution
acceptable to Insurer.
SECTION 5.3. Application of Collections.
All collections for the Collection Period shall be applied by the
Servicer as follows:
With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor shall be applied first to interest and
then to principal in accordance with the Simple Interest Method.
SECTION 5.4. Deficiency Notice.
(a) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the amount of the Available Funds with
respect to such Determination Date is less than the sum of the amounts payable
on the related Payment Date pursuant to clauses (i) through (v) of Section
5.6(a) (such deficiency being a "Deficiency Claim Amount"), then on the
Deficiency Claim Date immediately preceding such Payment Date, the Indenture
Trustee shall deliver to the Indenture Collateral Agent, the Insurer, the
Owner Trustee, the Servicer and the Backup Servicer, by hand delivery, telex
or facsimile transmission, a written notice (a "Deficiency Notice"),
specifying the Deficiency Claim Amount for such Payment Date.
(b) Any Deficiency Notice shall be delivered by 10:00 am, New York
City time, on the related Deficiency Claim Date.
SECTION 5.5. Additional Deposits.
The Servicer and the Seller, as applicable, shall deposit or cause to
be deposited in the Collection Account on the Determination Date following the
date on which such obligations are due the aggregate Purchase Amount with
respect to Purchased Receivables. The Indenture Trustee shall remit to the
Collection Account any amounts delivered to the Indenture Trustee pursuant to
Section 5.10 hereof. All such deposits with respect to a Collection Period
shall be made in immediately available funds no later than 10:00 a.m. New York
City time, on the Business Day immediately preceding the Payment Date related
to such Collection Period.
SECTION 5.6. Distributions.
(a) No later than 12:00 noon New York City time on each Payment Date,
the Indenture Trustee shall (based solely on the information contained in the
Servicer's Certificate delivered on the related Determination Date) cause to
be made the following transfers and distributions in the amounts set forth in
the Servicer's Certificate for such Payment Date:
(i) during the Pre Funding Period, from the Capitalized
Interest Account (a) to the Collection Account, in immediately
available funds, the Monthly Capitalized Interest Amount for such
Payment Date and (b) to the Seller, in immediately available funds,
all Investment Earnings on funds in the Capitalized Interest Account
with respect to the Collection Period related to such Payment Date
or, if such Payment Date is the Mandatory Redemption Date, all
remaining funds in the Capitalized Interest Account after
distribution of interest on the Notes on such date;
(ii) during the Pre-Funding Period from the Pre-Funding
Account (a) if such Payment Date is the Mandatory Redemption Date,
to the Note Distribution Account, in immediately available funds,
the Pre-Funded Amount (exclusive of Pre-Funding Earnings) after
giving effect to the purchase of Subsequent Receivables, if any, on
the Mandatory Redemption Date, and (b) to the Seller, in immediately
available funds, all Pre-Funding Earnings with respect to the
Collection Period related to such Payment Date or, if such Payment
Date if the Mandatory Redemption Date, all remaining funds in the
Pre-Funding Account after giving effect to the purchase of
Subsequent Receivables, if any, on the Mandatory Redemption Date;
[intentionally omitted]
(iii) if, the transfers pursuant to subsection (ii) above
is insufficient for distributions pursuant to subsections 5.6(b)(i)
through 5.6(b)(v), pursuant to the Reserve Account Agreement, to the
Collection Account, the Deficiency Claim Amount, in accordance with
Section 5.4 hereof;
(b) On each Payment Date, the Indenture Trustee shall (based solely
on the information contained in the Servicer's Certificate delivered with
respect to the related Determination Date) distribute the following amounts
and in the following order of priority:
(i) from the Distribution Amount, to the Servicer, the
Base Servicing Fee for the related Collection Period, and any
amounts specified in Section 5.2(b), to the extent the Servicer has
not reimbursed itself in respect of such amounts pursuant to Section
5.9 and to the extent not retained by the Servicer;
(ii) from the Distribution Amount, pro rata, to the
Indenture Trustee, the Indenture Trustee Fee, to the Backup
Servicer, the Backup Servicer Fee and expenses (provided that all
expenses incurred by the Backup Servicer in connection with its
assumption of the role of Servicer shall not exceed $35,000 in the
aggregate, at any time when the Notes are Outstanding);
(iii) from the Distribution Amount, to the Note
Distribution Account, the Noteholders' Interest Distributable
Amount;
(iv) from the Distribution Amount, to the Note
Distribution Account, the Noteholders' Principal Distributable
Amount;
(v) from the Distribution Amount, to the Insurer, to the
extent of any amounts owing to the Insurer under the Insurance
Agreement and not paid;
(vi) from the Available Funds, to the Reserve Account, all
Available Funds remaining after distributions pursuant to clauses
(i) through (v) above;
(vii) from amounts, if any, released from the Reserve
Account on such Payment Date pursuant to the terms of the Reserve
Account Agreement for deposit in the Certificate Distribution
Account.
provided, however, that, (A) following an acceleration of the Notes or, (B) if
an Insurer Default shall have occurred and be continuing, following the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii),
5.1(iii), 5.1(v) or 5.1(vi) of the Indenture, amounts deposited in the Note
Distribution Account and the Certificate Distribution Account shall be paid to
the Noteholders and the Certificateholders in accordance with the provisions
of Section 5.6 of the Indenture.
(c) In the event that the Collection Account is maintained with an
institution other than the Indenture Trustee, the Servicer shall instruct and
cause such institution to make all deposits and distributions pursuant to
Section 5.6(b) on the related Payment Date.
SECTION 5.7. Pre-Funding Account.
(a) On the Closing Date, the Transferor will deposit, on behalf of
the Seller, in the Pre-Funding Account $[ ] from the proceeds of the sale of
the Receivables. On each Subsequent Transfer Date, the Servicer shall instruct
the Indenture Trustee to withdraw from the Pre-Funding Account an amount equal
to 98% of the Principal Balance of the Subsequent Receivables transferred to
the Issuer on such Subsequent Transfer Date and to distribute such amount to
or upon the order of the Seller upon satisfaction of the conditions set forth
in this Agreement with respect to such transfer and the Servicer shall
instruct the Indenture Trustee to deposit to the Reserve Account, the
Subsequent Reserve Account Deposit.
(b) If the Pre-Funded Amount has not been reduced to zero on the date
on which the Pre-Funding Period ends after giving effect to any reductions in
the Pre-Funded Amount on such date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account on the Mandatory Redemption
Date, the Pre-Funded Amount and deposit such amount in the Note Distribution
Account in accordance with Section 5.6(a)(ii).
SECTION 5.8. Statements to Certificateholders and Noteholders.
On or prior to each Determination Date, the Servicer shall provide to
the Indenture Trustee (with a copy to the Insurer and the Rating Agencies) for
the Indenture Trustee to forward to each Noteholder of record, and to the
Owner Trustee (or Certificate Paying Agent) for the Owner Trustee to forward
to each Certificateholder of record, statements substantially in the form of
Exhibit B and Exhibit C, respectively, setting forth at least the following
information with respect to distributions on the related Payment Date as to
the Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
of each Class of Notes and to the Certificate Balance of the Class A
Certificates;
(ii) the amount of such distribution allocable to interest
on or with respect to each Class of Notes;
(iii) the amount of such distribution payable pursuant to
a Deficiency Notice;
(iv) the amount of such distribution payable pursuant to a
Notice of Claim, specifying, in addition to the foregoing, any
remaining amount available to be draw under the Policy;
(v) the Pool Balance as of the close of business on the
last day of the preceding Collection Period;
(vi) the aggregate outstanding principal amount of each
Class of the Notes, the Note Pool Factor for each such Class, the
Certificate Balance and the Certificate Pool Factor after giving
effect to payments allocated to principal reported under (i) above;
(vii) the amount of the Servicing Fee paid to the Servicer
with respect to the related Collection Period and/or due but unpaid
with respect to such Collection Period or prior Collection Periods,
as the case may be;
(viii) the Noteholders' Interest Carryover Shortfall;
(ix) the amount of the aggregate Realized Losses, if any,
for the second preceding Collection Period;
(x) the aggregate Purchase Amounts for Receivables, if
any, that were repurchased in such period;
(xi) for Payment Dates during the Pre-Funding Period (if
any the remaining Pre-Funded Amount and the amount remaining in the
Capitalized Interest Account;
(xii) for the final Subsequent Transfer Date, the amount
of any remaining Pre-Funded Amount that has not been used to fund
the purchase of Subsequent Receivables and is passed through as
principal to Noteholders;
(xiii) the amounts which were collected by the Servicer;
(xiv) the aggregate amount which was received by the Trust
from the Servicer;
(xv) any reimbursements to the Insurer; and
(xvi) delinquency information relating to Receivables
which are 30, 60 or 90 days delinquent.
Each amount set forth pursuant to paragraph (i), (ii), (iii), (iv)
and (viii) above shall be expressed as a dollar amount per $1,000 of the
initial principal balance of the Notes (or Class thereof) or the initial
Certificate Balance, as applicable.
SECTION 5.9. Net Deposits.
As an administrative convenience, unless a Servicer Default has
occurred and is continuing, the Servicer is required to remit collections
within two (2) Business Days of receipt thereof. The Servicer will be
permitted to make the deposit of collections on the Receivables and Purchase
Amounts for or with respect to each Collection Period net of distributions to
be made to the Servicer with respect to such Collection Period; provided,
however, that if an error is made by the Servicer in calculating the amount to
be deposited or retained by it, with the result that an amount less than
required is deposited into the Collection Account, the Servicer shall make a
payment of the deficiency to the Collection Account immediately upon becoming
aware or receiving notice from the Indenture Trustee, the Servicer, the
Insurer or any Noteholders of such error. The Servicer, however, will account
to the Owner Trustee, the Indenture Trustee, the Indenture Collateral Agent,
the Noteholders and the Certificateholders as if all deposits, distributions
and transfers were made individually.
SECTION 5.10. Optional Deposits by the Insurer.
The Insurer shall at any time, and from time to time, with respect to
a Payment Date, have the option (but shall not be required, except in
accordance with the terms of the Policy) to deliver amounts from its own funds
to the Indenture Trustee for deposit into the Collection Account for any of
the following purposes: (i) to provide funds in respect of the payment of fees
or expenses of any provider of services to the Issuer with respect to such
Payment Date, or (ii) to include such amount to the extent that without such
amount a draw would be required to be made on the Policy.
ARTICLE V-A
The Policy
SECTION 5A.1. Claims Under Policy.
(a) the event that the Indenture Trustee has delivered a Deficiency
Notice with respect to any Determination Date, if the Policy Claim Amount for
the related Payment Date is greater than zero, the Indenture Trustee shall
furnish to the Insurer (with a copy to the Servicer) no later than 12:00 noon
New York City time on the related Deficiency Claim Date a completed Notice of
Claim in the amount of the Policy Claim Amount. Amounts paid by the Insurer
under the Policy shall be deposited by the Indenture Trustee into the Note
Distribution Account on the Business Day immediately preceding the Payment
Date for payment to Noteholders on the related Payment Date. The "Policy Claim
Amount" for any Payment Date shall equal the lesser of (i) the sum of the
Noteholders' Interest Distributable Amount and the Noteholders' Principal
Distributable Amount for such Payment Date and (ii) the excess, if any, of the
amount required to be distributed pursuant to clauses (i) through (iv) of
Section 5.6(b) over the Distribution Amount for such Payment Date.
(b) Any notice delivered by the Indenture Trustee to the Insurer
pursuant to subsection 5A.1(a) shall specify the Policy Claim Amount claimed
under the Policy and shall constitute a "Notice of Claim" under the Policy. In
accordance with the provisions of the Policy, the Insurer is required to pay
to the Indenture Trustee the Policy Claim Amount properly claimed thereunder
by 12:00 noon, New York City time, on the later of (i) the third Business Day
following receipt on a Business Day of the Notice of Claim, and (ii) the
Business Day preceding the applicable Payment Date. Any payment made by the
Insurer under the Policy shall be applied solely to the payment of the Notes,
and for no other purpose.
(c) The Indenture Trustee shall (i) receive as attorney-in-fact of
each Noteholder any Policy Claim Amount from the Insurer and (ii) deposit the
same in the Collection Account for disbursement to the Noteholders as set
forth in the Indenture. Any and all Policy Claim Amounts disbursed by the
Indenture Trustee from claims made under the Policy shall not be considered
payment by the Issuer with respect to such Notes, and shall not discharge the
obligations of the Issuer with respect thereto. The Insurer shall, to the
extent it makes any payment with respect to the Notes, become subrogated to
the rights of the recipients of such payments to the extent of such payments.
Subject to and conditioned upon any payment with respect to the Notes by or on
behalf of the Insurer, the Indenture Trustee shall assign to the Insurer all
rights to the payment of interest or principal with respect to the Notes which
are then due for payment to the extent of all payments made by the Insurer and
the Insurer may exercise any option, vote, right, power or the like with
respect to the Notes to the extent that it has made payment pursuant to the
Policy. To evidence such subrogation, the Note Registrar shall note the
Insurer's rights as subrogee upon the register of Noteholders upon receipt
from the Insurer of proof of payment by the Insurer of any Noteholders'
Interest Distributable Amount or Noteholders' Principal Distributable Amount.
(d) The Indenture Trustee shall be entitled to enforce on behalf of
the Noteholders the obligations of the Insurer under the Policy.
Notwithstanding any other provision of this Agreement or any Basic Document,
the Noteholders are not entitled to make a claim directly under the Policy or
institute proceedings directly against the Insurer.
(e) The Indenture Trustee shall keep a complete and accurate record of
all funds on deposit in the Collection Account and the Note Distribution
Account and the allocation of such funds to payments of interest on and
principal paid in respect of any Note. The Insurer shall have the right to
inspect such records at reasonable times upon one (1) Business Day's prior
notice to the Indenture Trustee.
SECTION 5A.2. Preference Claims; Direction of Proceedings.
(a) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any Noteholders' Interest
Distributable Amount or Noteholders' Principal Distributable Amount paid on a
Note has been avoided in whole or in part as a preference payment under
applicable bankruptcy law, the Indenture Trustee shall so notify the Insurer,
shall comply with the provisions of the Policy to obtain payment by the
Insurer of such avoided payment, and shall, at the time it provides notice to
the Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Policy. Pursuant to the terms of the
Policy, the Insurer will make such payment on behalf of the Noteholder to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order (as defined in the Policy) and not to the Indenture Trustee or any
Noteholder directly (unless a Noteholder has previously paid such payment to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy, in
which case the Insurer will make such payment to the Indenture Trustee for
distribution to such Noteholder upon proof of such payment satisfactory to the
Insurer).
(b) The Indenture Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which a responsible officer of
the Indenture Trustee has actual knowledge) seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any distribution made
with respect to the Notes. Each Holder, by its purchase of Notes, and the
Indenture Trustee hereby agree that so long as an Insurer Default shall not
have occurred and be continuing, the Insurer may at any time during the
continuation of any proceeding relating to a Preference Claim direct all
matters relating to such Preference Claim including, without limitation, (i)
the direction of any appeal of any order relating to any Preference Claim and
(ii) the posting of any surety, supercede as or performance bond pending any
such appeal at the expense of the Insurer, but subject to reimbursement as
provided in the Insurance Agreement. In addition, and without limitation of
the foregoing, as set forth in Section 5A.1(c), the Insurer shall be
subrogated to, and each Noteholder and the Indenture Trustee hereby delegate
and assign, to the fullest extent permitted by law, the rights of the
Indenture Trustee and each Noteholder in the conduct of any proceeding with
respect to a Preference Claim, including, without limitation, all rights of
any party to an adversary proceeding action with respect to any court order
issued in connection with any such Preference Claim.
SECTION 5A.3. Surrender of Policy.
The Indenture Trustee shall surrender the Policy to the Insurer for
cancellation upon the expiration of such Policy in accordance with the terms
thereof.
ARTICLE VI
The Seller
SECTION 6.1. Representations of the Seller.
The Seller makes the following representations on which each of the
Transferor, the Depositor and the Issuer are deemed to have relied in
acquiring its interest in the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the
case of Initial Receivables, and as of the applicable Subsequent Transfer Date
in the case of Subsequent Receivables and shall survive the sale of the
Receivables to the Transferor, the transfer thereof to the Depositor, the
transfer by the Depositor to the Issuer and pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly organized and
validly existing as a in good standing under the laws of the State of
___________ with the corporate power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has, the
power, authority and legal right to acquire and own the Receivables.
(b) Due Qualification. The Seller is duly qualified to do business as
a foreign company in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of
property, including the Receivables, or the conduct of its business shall
require such qualifications.
(c) Power and Authority of the Seller. The Seller has the power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement and each of the Basic Documents to which the Seller is a
party; the Seller has full power and authority to sell and assign the property
to be sold and assigned to and deposited with the Transferor, and the Seller
has duly authorized such sale and assignment to the Transferor by all
necessary limited liability company action, and the execution, delivery and
performance of each of the Basic Documents to which the Seller is a party and
each Subsequent Transfer Agreement has been duly authorized by the Seller by
all necessary limited liability company action.
(d) Binding Obligation; Valid Sale. This Agreement effects a valid
sale, transfer, and assignment of the Receivables, enforceable against
creditors of and purchasers from the Seller. This Agreement, each Subsequent
Transfer Agreement and each of the Basic Documents to which the Seller is a
party constitute legal, valid and binding obligations of the Seller,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and similar laws
now or hereafter in effect relating to creditors' rights generally and subject
to general principles of equity (whether applied in a proceeding at law or in
equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and each of the Basic Documents and by each Subsequent
Transfer Agreement to which the Seller is a party and the fulfillment of the
terms hereof and thereof do not result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time or
both) a default under, the operating agreement of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or by
which it is bound; nor result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, agreement
or other instrument (other than pursuant to the Basic Documents); nor violate
any law or, to the best of its knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending against the Seller or, to its best knowledge, threatened against the
Seller, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents to which the Seller is a party, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement or any
of the Basic Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Basic Documents to which the Seller is
a party, or the Notes or the Certificates or (iv) that might adversely affect
the federal, state and local income tax attributes of the Issuer, the Notes or
the Certificates or seeking to impose any excise, franchise, transfer or
similar tax upon the Notes, the Certificates or the sale and assignment of the
Receivables and the other Transferor Property hereunder.
(g) All Consents. All authorizations, consents, orders or approvals
of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution and
delivery by the Seller of this Agreement, any Subsequent Transfer Agreement or
any of the Basic Documents to which it is a party and the performance by the
Seller of the transactions contemplated by this Agreement, any Subsequent
Transfer Agreement or any of the Basic Documents to which it is a party, have
been duly obtained, effected or given and are in full force and effect, except
where failure to obtain the same would not have a material and adverse effect
upon the rights of the Issuer, or the Noteholders.
(h) Chief Executive Office. The chief executive office of the Seller
is at _________________ .
(i) Upon the transfer of each Receivable to the Transferor and other
items of Transferor Property delivered by the Seller to the Transferor under
this Agreement or any Subsequent Transfer Agreement, the Transferor will have
good title to such Receivable and such other items of Transferor Property,
free and clear of any lien, charge, mortgage, encumbrance or rights of others
(other than liens that will be simultaneously released).
SECTION 6.2. Existence.
(a) During the term of this Agreement, the Seller will keep in full
force and effect its existence, rights and franchises as a limited liability
company under the laws of the jurisdiction of its organization 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, any Subsequent Transfer 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.
(b) During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Transferor as a legal
entity separate and apart from the Seller and its other Affiliates, including
as follows:
(i) the Transferor shall maintain corporate records and
books of account separate from those of the Seller and its other
Affiliates;
(ii) except as otherwise provided in this Agreement, the
Transferor shall not commingle its assets and funds with those of
the Seller or its other Affiliates;
(iii) the Transferor shall hold such appropriate meetings
of its Board of Directors as are necessary to authorize all the
Transferor's limited liability company actions required by law to be
authorized by the Board of Directors, shall keep minutes of such
meetings and of meetings of its members and observe all other
customary limited liability company formalities (and any successor
Transferor not a corporation shall observe similar procedures in
accordance with its governing documents and applicable law);
(iv) the Transferor shall at all times hold itself out to
the public under its own name as a legal entity separate and distinct
from the Seller and its other Affiliates; and
(v) all transactions and dealings between the Transferor
and the Seller and its other Affiliates will be conducted on an
arm's-length basis.
SECTION 6.3. Liability of Seller; Indemnities.
(a) The Seller shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Seller under this
Agreement.
(b) The Seller shall indemnify, defend and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Insurer, the Owner
Trustee, the Issuer, the Indenture Trustee and the Indenture Collateral Agent
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 and any
of the Basic Documents (except any income taxes arising out of fees paid to
the Owner Trustee or the Indenture Trustee and except any taxes to which the
Owner Trustee or the Indenture Trustee may otherwise be subject to), including
any sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Issuer, not including any
taxes asserted with respect to, federal or other income taxes arising out of
distributions on the Certificates and the Notes) and costs and expenses in
defending against the same.
(c) The Seller shall indemnify, defend and hold harmless the
Depositor, the Backup Servicer, the Transferor, the Issuer, the Indenture
Trustee, the Owner Trustee, the Indenture Collateral Agent, the Insurer, the
Certificateholders and the Noteholders from and against any loss, liability or
expense incurred by reason of (i) the Seller's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this
Agreement or (ii) the Seller's, the Transferor's or the Issuer's violation of
Federal or state securities laws in connection with the offering and sale of
the Notes and the Certificates or (iii) the failure of any Receivable conveyed
to the Transferor hereunder to comply with all requirements of applicable law
and for breach of its representations and warranties contained herein or
failure to perform in all material respects its obligations and duties
contained herein.
(d) The Seller shall indemnify, defend and hold harmless the Owner
Trustee, the Indenture Trustee, the Insurer and the Indenture Collateral Agent
and their respective officers, directors, employees and agents from and
against any and all costs, expenses, losses, claims, damages and liabilities
arising out of, or incurred in connection with the acceptance or performance
of the trusts and duties set forth herein and in the Basic Documents except to
the extent that such cost, expense, loss, claim, damage or liability shall be
due to the misfeasance, bad faith or negligence (except for errors in
judgment) of the Insurer or the Indenture Trustee or the Indenture Collateral
Agent, as the case may be or, in the case of the Owner Trustee, if such cost,
expense, loss, claim, damage or liability arises or results from any of the
matters described in the third sentence of Section 7.1 of the Trust Agreement.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee, the Backup Servicer or
the Indenture Collateral Agent and the termination of this Agreement, the
Indenture or the Trust Agreement, as applicable and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If the Seller
shall have made any indemnity payments pursuant to this Section and the Person
to or on behalf of whom such payments are made thereafter shall collect any of
such amounts from others, such Person shall promptly repay such amounts to the
Seller, without interest.
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller.
Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller
shall be a party or (c) which may succeed to the properties and assets of the
Seller substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without
the execution or filing of any document or any further act by any of the
parties to this Agreement; provided, however, that (i) the Seller shall have
received the written consent of the Controlling Party prior to entering into
any such transaction, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.1 shall
have been breached and no Servicer Default or an Insurance Agreement Event of
Default, and no event which, after notice or lapse of time, or both, would
become a Servicer Default or Insurance Agreement Event of Default shall have
occurred and be continuing, (iii) the Seller shall have delivered to the Owner
Trustee, the Indenture Trustee, the Rating Agencies and the Insurer 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, (iv) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee and the Insurer an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Transferor, the
Depositor, the Issuer, the Owner Trustee and the Indenture Trustee,
respectively, in the Receivables and reciting the details of such filings or
(B) no such action shall be necessary to preserve and protect such interest.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii), (iv) and (v) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 6.5. Limitation on Liability of Seller and Others.
The Seller and any director or officer or employee or agent of the
Seller 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. The Seller 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. Seller May Own Certificates or Notes.
The Seller 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 the Seller or an Affiliate
thereof, except as expressly provided herein or in any Basic Document. Notes
or Certificates so owned by the Seller or such Affiliate shall have an equal
and proportionate benefit under the provisions of the Basic Documents, without
preference, priority, or distinction as among all of the Notes or
Certificates, provided, however, that any Notes or Certificates owned by the
Seller or any Affiliate thereof, during the time such Notes or Certificates
are owned by them, shall be without voting rights for any purpose set forth in
the Basic Documents and will not be entitled to the benefits of the Policy.
The Seller shall notify the Owner Trustee, the Indenture Trustee and the
Insurer promptly after it or any of its Affiliates become the owner of a
Certificate or a Note.
ARTICLE VII
The Servicer
SECTION 7.1. Representations of Servicer.
The Servicer makes the following representations on which the Insurer
shall be deemed to have relied in executing and delivering the Policy and on
which each of the Transferor, the Depositor and the Issuer is deemed to have
relied in acquiring the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the
case of the Initial Receivables, and as of the applicable Subsequent Transfer
Date, in the case of the Subsequent Receivables, and shall survive the sale of
the Receivables from the Seller to the Transferor, the Transferor to the
Depositor and the Depositor to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly organized
and validly existing as a limited liability company in good standing under the
laws of the state of its formation, with the limited liability company power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted, and
had at all relevant times, and has, the power, authority and legal right to
acquire, own, sell and service the Receivables.
(b) Due Qualification. The Servicer is duly qualified to do business
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, and was duly qualified and had all licenses
in all relevant jurisdictions required for the origination of the Receivables.
(c) Power and Authority of the Servicer. The Servicer has the power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery and performance of this
Agreement have been duly authorized by the Servicer by all necessary action.
All authorizations, consents, orders or approvals of or registrations or
declarations with any court, regulatory body, administrative agency or other
government instrumentality required to be obtained, effected or given by the
Servicer in connection with the execution and delivery by the Servicer of this
Agreement or any of the Basic Documents to which it is a party and the
performance by the Servicer of the transactions contemplated by this Agreement
or any of the Basic Documents to which it is a party, have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material adverse effect upon the rights of
the Issuer, the Insurer, the Noteholders or the Certificateholders.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect
relating to creditors' rights generally, and subject to general principles of
equity (whether applied in a proceeding at law or in equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the Basic Documents and the fulfillment of the terms
hereof and thereof do not result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under the organizational documents of the Servicer, or any indenture,
agreement or other instrument to which the Servicer is a party or by which it
shall be bound; or result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); or violate any
law or, to the best of the Servicer's knowledge, any order, rule or regulation
applicable to the Servicer of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending against the Servicer, or, to its best knowledge, threatened against
the Servicer, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Servicer or
its properties: (i) asserting the invalidity of this Agreement or any of the
Basic Documents to which the Servicer is a party or the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
of the Basic Documents to which the Servicer is a party, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of this Agreement or any of the Basic Documents to which the
Servicer is a party or the Notes or the Certificates or (iv) relating to the
Servicer and which might adversely affect the federal income tax or ERISA
attributes of the Issuer or the Notes or the Certificates or seeking to impose
any excise, franchise, transfer or similar tax upon the Notes or the
Certificates or the sale and assignment of the Receivables hereunder.
(g) Fidelity Bond. The Servicer maintains a fidelity bond in such
form and amount as is customary for finance companies acting as custodian of
funds and documents in respect of motor vehicle loans.
(h) The Servicer shall not re-direct autodebit payments nor revoke
the automated payment option with respect to any Obligors using such option,
without prior written consent of the Controlling Party.
SECTION 7.2. Indemnities of Servicer.
(a) The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Servicer under this
Agreement and the representations made by the Servicer herein.
(b) The Servicer shall defend, indemnify and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Owner Trustee, the
Indenture Trustee, the Issuer, the Indenture Collateral Agent, the Insurer,
the Noteholders, the Certificateholders and the Seller from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle.
(c) The Servicer shall indemnify, defend and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Owner Trustee, the
Indenture Trustee, the Seller, the Issuer, the Indenture Collateral Agent, the
Insurer, their respective officers, directors, agents and employees and the
Noteholders and the Certificate holders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such
cost, expense, loss, claim, damage, or liability arose out of, or was imposed
upon any such Person through, (i) the negligence, misfeasance or bad faith of
the Servicer in the performance of its duties under this Agreement or (ii) by
reason of disregard of its obligations and duties under this Agreement.
(d) The Servicer shall indemnify, defend and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Owner Trustee, the
Indenture Trustee, the Insurer and the Indenture Collateral Agent and their
respective officers, directors, employees and agents from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties herein contained and in the Trust Agreement, except to the extent that
such costs, expense, loss, claim, damage or liability shall be due to the
willful misfeasance, bad faith or negligence (except for errors in judgment)
of the Transferor, the Depositor, the Backup Servicer, or in the case of the
Owner Trustee, if such cost, expense, loss, claim, damage or liability arises
or results from any of the matters described in the third sentence of Section
7.1 of the Trust Agreement, the Indenture Trustee, the Insurer or the
Indenture Collateral Agent, as the case may be.
For purposes of this Section, in the event of the termination of the
rights and obligations of [_________] (or any successor thereto pursuant to
Section 7.3) as Servicer pursuant to Section 8.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee)pursuant to Section 8.2.
Indemnification under this Section shall survive the resignation or
removal of the Backup Servicer, Owner Trustee, the Indenture Trustee or the
Indenture Collateral Agent, and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and expenses of litigation. If the Servicer shall
have made any indemnity payments pursuant to this Section and the recipient
thereafter collects any of such amounts from others, such Person shall
promptly repay such amounts to the Servicer, without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer.
Any Person (a) into which the Servicer may be merged or consolidated,
(b) which may result from any merger, conversion or consolidation to which the
Servicer shall be a party or (c) which may succeed to the properties and
assets of the Servicer, substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a corporation or limited liability
company 50% or more of the voting interest of which is owned, directly or
indirectly, by [_______], which Person executed an agreement of assumption to
perform every obligation of the Servicer hereunder shall be the successor to
the Servicer under the Agreement without further act on the part of any of the
parties to the Agreement; provided, however, that (i) the Servicer shall have
received the written consent of the Controlling Party prior to entering into
any such transaction; (ii) immediately after giving effect to such
transaction, no Servicer Default or Insurance Agreement Event of Default and
no event which, after notice or lapse of time, or both, would become a
Servicer Default or Insurance Agreement Event of Default shall have occurred
and be continuing, (iii) the Servicer shall have delivered to the Owner
Trustee, the Indenture Trustee, the Rating Agencies and the Insurer 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 provided for in this
Agreement relating to such transaction have been complied with, (iv) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Servicer shall have delivered to the Owner Trustee,
the Indenture Trustee, the Rating Agencies and the Insurer an Opinion of
Counsel stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been
executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and, the Indenture Trustee in the Receivables
and reciting the details of such filings or (B) no such action shall be
necessary to preserve and protect such interest. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (i), (ii),(iii), (iv) and (v) above shall be
conditions to the consummation of the transactions referred to in clauses (a),
(b), (c) or (d) above. Notwithstanding anything herein to the contrary,
compliance with clause (i) shall not apply if the Backup Servicer becomes the
Servicer.
SECTION 7.4. Limitation on Liability of Servicer and Other.
Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Noteholders or the
Certificateholders except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement. The Servicer 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, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer, may (but shall not be
required to) undertake any reasonable action that it may deem necessary or
desirable to protect the interests the Certificateholders under the Trust
Agreement of the Noteholders under the Indenture.
SECTION 7.5. Servicer Not To Resign.
Subject to the provisions of Section 7.3, the Servicer may not resign
from the obligations and duties hereby imposed on it as Servicer under this
Agreement except upon determination that by reason of a change in legal
requirements the performance of its duties under this Agreement would cause it
to be in violation of such legal requirements in a manner which would result
in a material adverse effect on the Servicer and the Controlling Party does
not elect to waive the obligations of the Servicer to perform the duties which
render it legally unable to act or does not elect to delegate those duties to
another Person. Notice of any such determination permitting the resignation of
the Servicer shall be communicated to the Issuer, the Indenture Trustee and
the Controlling Party 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 and satisfactory to the Owner Trustee,
the Indenture Trustee and the Insurer concurrently with or promptly after such
notice. No such resignation of the Servicer shall become effective until a
successor servicer shall have assumed the responsibilities and obligations of
the resigning servicer in accordance with Section 8.2 of this Agreement.
ARTICLE VII-A
The Transferor
SECTION 7A.1. Representations of the Transferor.
The Transferor makes the following representations to the Depositor
and the Issuer on which the Depositor and the Issuer are deemed to have relied
in acquiring the Receivables and the Insurer is deemed to have relied in
issuing the Policy. The representations speak as of the execution and delivery
of this Agreement and as of the Closing Date, in case of Initial Receivables,
and as of the applicable Subsequent Transfer Date in the case of Subsequent
Receivables, and shall survive the sale of the Receivables to the Depositor
and the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. The Transferor is duly organized
and validly existing as a limited liability company in good standing under the
laws of the State of with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business
is presently conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire and own the Receivables.
(b) Due Qualification. The Transferor is duly qualified to do
business as a foreign company in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property, including the Receivables, or the conduct of its business shall
require such qualifications.
(c) Power and Authority of the Transferor. The Transferor has the
power and authority to execute and deliver this Agreement and each Subsequent
Transfer Agreement and to perform its obligations under this Agreement, each
Subsequent Transfer Agreement and each of the Basic Documents to which the
Transferor is a party; the Transferor has full power and authority to sell and
assign the property to be sold and assigned to the Depositor and deposited
with the Issuer, and the Transferor has duly authorized such sale and
assignment to the Issuer by all necessary limited liability company action,
and the execution, delivery and performance of each of the Basic Documents to
which the Transferor is a party has been duly authorized by the Transferor by
all necessary limited liability company action.
(d) Binding Obligation; Valid Transfer. This Agreement effects a
valid transfer, and assignment of the Receivables, enforceable against
creditors of and purchasers from the Transferor. This Agreement, each
Subsequent Transfer Agreement and each of the Basic Documents to which the
Transferor is a party constitute legal, valid and binding obligations of the
Transferor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws now or hereafter in effect relating to creditors' rights
generally and subject to general principles of equity (whether applied in a
proceeding at law or in equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and each of the Basic Documents and each Subsequent Transfer
Agreement to which the Transferor is a party and the fulfillment of the terms
hereof and thereof do not result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time or
both) a default under, the operating agreement of the Transferor, or any
indenture, agreement or other instrument to which the Transferor is a party or
by which it is bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents);
nor violate any law or, to the best of its knowledge, any order, rule or
regulation applicable to the Transferor of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending against the Transferor or, to its best knowledge, threatened against
the Transferor, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Transferor or
its properties: (i) asserting the invalidity of this Agreement or any of the
Basic Documents to which the Transferor is a party, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by
this Agreement or any of the Basic Documents to which the Transferor is a
party, (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the
Transferor of its obligations under, or the validity or enforceability of,
this Agreement, the Basic Documents to which the Transferor is a party, or the
Notes or the Certificates or (iv) that might adversely affect the federal,
state or local income tax attributes of the Issuer, the Notes or the
Certificates or seeking to impose any excise, franchise, transfer or similar
tax upon the Notes, the Certificates or the sale and assignment of the
Receivables and other Depositor Property hereunder.
(g) All Consents. All authorizations, consents, orders or approvals
of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Transferor in connection with the execution
and delivery by the Transferor of this Agreement, any Subsequent Transfer
Agreement or any of the Basic Documents to which it is a party and the
performance by the Transferor of the transactions contemplated by this
Agreement, any Subsequent Transfer Agreement or any of the Basic Documents to
which it is a party, have been duly obtained, effected or given and are in
full force and effect, except where failure to obtain the same would not have
a material and adverse effect upon the rights of the Issuer, or the
Noteholders.
(h) Chief Executive Office. The chief executive office of the
Transferor is at ________________.
(i) Upon the transfer of each Receivable to the Depositor and
other items of Depositor Property delivered by the Transferor to the Depositor
under this Agreement or any Subsequent Transfer Agreement, the Depositor will
have good title to such Receivable and such other items of Depositor Property,
free and clear of any lien, charge, mortgage, encumbrance or rights of others
(other than liens that will be simultaneously released).
SECTION 7A.2. Existence.
(a) During the term of this Agreement, the Transferor will keep in
full force and effect its existence, rights and franchises as a limited
liability company under the laws of the jurisdiction of its organization 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, any Subsequent Transfer 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.
(b) During the term of this Agreement, the Transferor shall observe
the applicable legal requirements for the recognition of the Transferor as a
legal entity separate and apart from its Affiliates, including as follows:
(i) the Transferor shall maintain limited liability
company records and books of account separate from those of its
Affiliates;
(ii) except as otherwise provided in this Agreement, the
Transferor shall not commingle its assets and funds with those of
its Affiliates;
(iii) the Transferor shall hold such appropriate meetings
of its Board of Directors as are necessary to authorize all the
Transferor's limited liability company actions required by law to be
authorized by the Board of Directors, shall keep minutes of such
meetings and of meetings of its members and observe all other
customary limited liability company formalities (and any successor
Transferor not a corporation shall observe similar procedures in
accordance with its governing documents and applicable law);
(iv) the Transferor shall at all times hold itself out to
the public under the Transferor's own name as a legal entity
separate and distinct from its Affiliates; and
(v) all transactions and dealings between the Transferor
and its Affiliates will be conducted on an arm's-length basis.
SECTION 7A.3. Liability of Transferor; Indemnities.
(a) The Transferor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Transferor under this
Agreement.
(b) The Transferor shall indemnify, defend and hold harmless the
Depositor, the Backup Servicer, the Issuer, the Insurer, the Owner Trustee,
the Indenture Trustee, the Indenture Collateral Agent, the Certificateholders
and the Noteholders 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 and any of the Basic Documents (except any income taxes
arising out of fees paid to the Owner Trustee or the Indenture Trustee and
except any taxes to which the Owner Trustee or the Indenture Trustee may
otherwise be subject to), including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in
the case of the Issuer, not including any taxes asserted with respect to,
federal or other income taxes arising out of distributions on the Certificates
and the Notes) and costs and expenses in defending against the same.
(c) The Transferor shall indemnify, defend and hold harmless the
Depositor, the Backup Servicer, the Issuer, the Insurer, the Owner Trustee,
the Indenture Trustee, the Indenture Collateral Agent, the Certificateholders
and the Noteholders from and against any loss, liability or expense incurred
by reason of (i) the Transferor's willful misfeasance, bad faith or negligence
in the performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement or (ii)
the failure of any Receivable conveyed to the Depositor hereunder to comply
with all requirements of applicable law and for breach of its representations
and warranties contained herein or failure to perform in all material respects
its obligations and duties contained herein.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee, the Backup Servicer or
the Indenture Collateral Agent and the termination of this Agreement, the
Indenture or the Trust Agreement, as applicable and shall include reasonable
fees and expenses of counsel and other expenses of litigation provided
however, that the liability of the Transferor for payments under this Section
7A.3 shall be subject to the availability of funds therefor. If the Transferor
shall have made any indemnity payments pursuant to this Section and the Person
to or on behalf of whom such payments are made thereafter shall collect any of
such amounts from others, such Person shall promptly repay such amounts to the
Transferor, without interest.
SECTION 7A.4. Limitation on Liability of Transferor and Others.
The Transferor and any director or officer or employee or agent of
the Transferor may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any
Person respecting any matters arising under any Basic Document. The Transferor
shall not be under any obligation to appear in, prosecute or defend any legal
action that shall not be incidental to its obligations under this Agreement,
and that in its opinion may involve it in any expense or liability.
SECTION 7A.5. Transferor May Own Certificates or Notes.
The Transferor 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 the Transferor or an Affiliate
thereof, except as expressly provided herein or in any Basic Document. Notes
or Certificates so owned by the Transferor or such Affiliate shall have an
equal and proportionate benefit under the provisions of the Basic Documents,
without preference, priority, or distinction as among all of the Notes or
Certificates, provided, however, that any Notes or Certificates owned by the
Transferor or any Affiliate thereof, during the time such Notes or
Certificates are owned by them, shall be without voting rights for any purpose
set forth in the Basic Documents and will not be entitled to the benefits of
the Policy. The Transferor shall notify the Owner Trustee, the Indenture
Trustee and the Insurer promptly after it or any of its Affiliates become the
owner of a Certificate or a Note.
ARTICLE VII -B
The Depositor
SECTION 7B.1. Representations of the Depositor.
The Depositor makes the following representations on which the Issuer
is deemed to have relied in acquiring the Receivables and on which the Insurer
is deemed to have relied in issued in the Policy. The representations speak as
of the execution and delivery of this Agreement and as of the Closing Date, in
the case of Initial Receivables, and as of the applicable Subsequent Transfer
Date in the case of Subsequent Receivables and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor is duly organized
and validly existing as a corporation in good standing under the laws of the
State of Delaware with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business
is presently conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire and own the Receivables.
(b) Due Qualification. The Depositor is duly qualified to do business
as a foreign company in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of
property, including the Receivables, or the conduct of its business shall
require such qualifications.
(c) Power and Authority of the Depositor. The Depositor has the power
and authority to execute and deliver this Agreement and each Subsequent
Transfer Agreement and to perform its obligations under this Agreement, each
Subsequent Transfer Agreement and each of the Basic Documents to which the
Depositor is a party; the Depositor has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the Issuer,
and the Depositor has duly authorized such sale and assignment to the Issuer
by all necessary corporate action, and the execution, delivery and performance
of each of the Basic Documents to which the Depositor is a party has been duly
authorized by the Depositor by all necessary corporate action.
(d) Binding Obligation; Valid Transfer. This Agreement effects a
valid transfer, and assignment of the Receivables, enforceable against
creditors of and purchasers from the Depositor. This Agreement, each
Subsequent Transfer Agreement and each of the Basic Documents to which the
Depositor is a party constitute legal, valid and binding obligations of the
Depositor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws now or hereafter in effect relating to creditors' rights
generally and subject to general principles of equity (whether applied in a
proceeding at law or in equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and each of the Basic Documents and each Subsequent Transfer
Agreement to which the Depositor is a party and the fulfillment of the terms
hereof and thereof do not result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time or
both) a default under, the certificate of incorporation or by-laws of the
Depositor, or any indenture, agreement or other instrument to which the
Depositor is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to the
Basic Documents); nor violate any law or, to the best of its knowledge, any
order, rule or regulation applicable to the Depositor of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending against the Depositor or, to its best knowledge, threatened against
the Depositor, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor or
its properties: (i) asserting the invalidity of this Agreement or any of the
Basic Documents, the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement or any of the Basic Documents,
(iii) seeking any determination or ruling that could reasonably be expected to
have a material and adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement, the
Basic Documents, or the Notes or the Certificates or (iv) that might adversely
affect the federal, state or local income tax attributes of the Issuer, the
Notes or the Certificates or seeking to impose any excise, franchise, transfer
or similar tax upon the Notes, the Certificates or the sale and assignment of
the Receivables and other Trust Properly hereunder.
(g) All Consents. All authorizations, consents, orders or approvals
of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Depositor in connection with the execution
and delivery by the Depositor of this Agreement, any Subsequent Transfer
Agreement or any of the Basic Documents to which it is a party and the
performance by the Depositor of the transactions contemplated by this
Agreement or any of the Basic Documents to which it is a party, have been duly
obtained, effected or given and are in full force and effect, except where
failure to obtain the same would not have a material and adverse effect upon
the rights of the Issuer, or the Noteholders.
(h) Chief Executive Office. The chief executive office of the
Depositor is at (250 Xxxxx St., World Financial Center 10282-1310), Xxx Xxxx,
Xxx Xxxx 00000.
(i) Upon the transfer of each Receivable or interests therein to the
Issuer and other items of Trust Property delivered by the Depositor to the
Issuer under this Agreement or any Subsequent Transfer Agreement the Issuer
will have good title to such Receivable or interests therein and such other
items of Trust Property, free and clear of any lien, charge, mortgage,
encumbrance or rights of others (other than liens that will be simultaneously
released) granted by the Depositor.
SECTION 7B.2. Existence.
(a) During the term of this Agreement, the Depositor will keep in
full force and effect its existence, rights and franchises as a corporation
under the laws of the jurisdiction of its organization 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, any Subsequent Transfer 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.
(b) During the term of this Agreement, the Depositor shall observe
the applicable legal requirements for the recognition of the Depositor as a
legal entity separate and apart from its Affiliates, including as follows:
(i) the Depositor shall maintain corporate records and
books of account separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement and
except as expressly permitted by any other agreement to which it is
a party, the Depositor shall not commingle its assets and funds with
those of its Affiliates;
(iii) the Depositor shall hold such appropriate meetings
of its Board of Directors as are necessary to authorize all the
Depositor's corporate actions required by law to be authorized by
the Board of Directors, shall keep minutes of such meetings and of
meetings of its stockholder(s) and observe all other customary
corporate formalities (and any successor Depositor not a corporation
shall observe similar procedures in accordance with its governing
documents and applicable law);
(iv) the Depositor shall at all times hold itself out to
the public under the Depositor's own name as a legal entity separate
and distinct from its Affiliates; and
(v) all transactions and dealings between the Depositor
and its Affiliates will be conducted on an arm's-length basis.
SECTION 7B.3. Liability of Depositor; Indemnities.
(a) The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Depositor under this
Agreement.
(b) The Depositor shall indemnify, defend and hold harmless the
Backup Servicer, the Servicer, the Insurer, the Owner Trustee, the Issuer, the
Indenture Trustee, the Indenture Collateral Agent, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Depositor's willful misfeasance, bad faith or negligence in
the performance of its duties under this Agreement, or (ii) by reason of
reckless disregard of its obligations and duties under this Agreement or (iii)
for breach of its representations and warranties contained herein or failure
to perform in all material respects its obligations and duties contained
herein.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee or the Indenture
Collateral Agent and the termination of this Agreement, the Indenture or the
Trust Agreement, as applicable and shall include reasonable fees and expenses
of counsel and other expenses of litigation. If the Depositor shall have made
any indemnity payments pursuant to this Section and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts to the Depositor,
without interest.
SECTION 7B.4. Limitation on Liability of Depositor and Others.
The Depositor and any director or officer or employee or agent of the
Depositor may rely in good faith on the advice of counsel or on any document
of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising under any Basic Document. The Depositor shall
not be under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its obligations under this Agreement, and that
in its opinion may involve it in any expense or liability.
SECTION 7B.5. Depositor May Own Certificates or Notes.
The Depositor and any Affiliate thereof may in its individual or any
other capacity become the owner or pledgee of Certificates or Notes with the
same rights as it would have if it were not the Depositor or an Affiliate
thereof, except as expressly provided herein or in any Basic Document. Notes
or Certificates so owned by the Depositor or such Affiliate shall have an
equal and proportionate benefit under the provisions of the Basic Documents,
without preference, priority, or distinction as among all of the Notes or
Certificates, provided, however, that any Notes or Certificates owned by the
Depositor or any Affiliate thereof, during the time such Notes or Certificates
are owned by them, shall be without voting rights for any purpose set forth in
the Basic Documents and will not be entitled to the benefits of the Policy.
The Depositor shall notify the Owner Trustee, the Indenture Trustee and the
Insurer promptly after it or any of its Affiliates become the owner of a
Certificate or a Note.
ARTICLE VIII
Default
SECTION 8.1. Servicer Default.
If any one of the following events (a "Servicer Default") shall occur
and be continuing:
(a) Any failure by the Servicer to deliver to the Owner Trustee or
the Indenture Trustee any deposit or payment proceeds or payment required to
be so made, which failure continues unremedied for a period of one Business
Day after the written notice of such failure is received by the Servicer from
the Insurer, the Owner Trustee or the Indenture Trustee or after discovery of
such failure by the Servicer; or
(b) The breach of any representation or warranty or covenant of the
Servicer or failure by the Servicer duly to observe or to perform in any
material respect any covenants or agreements of the Servicer or the Seller (as
the case may be) set forth in the Notes, the Certificates, this Agreement or
any other Basic Document, which breach or failure shall (i) materially and
adversely affect the rights of the Insurer, Certificateholders or the
Noteholders and (ii) continue unremedied for a period of 30 days after the
date on which written notice of such breach or failure, requiring the same to
be remedied, shall have been given (A) to the Servicer by the Indenture
Trustee or the Controlling Party or (B) to the Servicer, the Insurer, the
Owner Trustee and the Indenture Trustee by the Holders of Notes evidencing not
less than 25% of the outstanding principal amount of the Notes or Holders of
Certificates evidencing not less than 25% of the outstanding Certificate
Balance, as applicable (or for such longer period, not in excess of 60 days,
as may be reasonably necessary to remedy such default; provided that such
default is capable of remedy within 60 days and the Servicer delivers an
Officers' Certificate to the Insurer, the Owner Trustee and the Indenture
Trustee to such effect and to the effect that the Servicer has commenced or
will promptly commence, and will diligently pursue, all reasonable efforts to
remedy such default); or
(c) An Insolvency Event occurs with respect to the Servicer or any
successor;
(d) Failure to deliver a Servicer's Certificate within 3 days of the
related Determination Date;
(e) Failure to deliver the annual statement of compliance required to
be delivered pursuant to Section 4.10 hereof within 30 days of the date on
which such statement is required to be delivered;
(f) Unless an Insurer Default shall have occurred and be continuing,
an Insurance Agreement Event of Default described in Section 5.1 of the
Insurance Agreement shall have occurred;
(g) Unless an Insurer Default shall have occurred and be continuing
failure of the Insurer to deliver a Servicer Extension Notice pursuant to
Section 3.5 hereof;
then, and in each and every case, the Controlling Party or holders of Notes
representing not less than 25% of the voting rights thereof (or, if the Notes
have been paid in full and the Indenture has been discharged in accordance
with its terms, by holders of Certificates evidencing not less than 25% of the
voting interest thereof) in any case by notice given in writing to the
Servicer (and to the Indenture Trustee if given by the Insurer or, as
applicable, the Noteholders or the Certificateholders) may terminate all of
the rights and obligations of the Servicer under this Agreement. For purposes
of Section 8.1(b), any determination of an adverse effect on the interest of
the Certificateholders or the Noteholders pursuant to Section 8.1(b) shall be
made without consideration of the availability of funds under the Policy. On
or after the receipt by the Servicer of such written notice, all authority,
power, obligations and responsibilities of the Servicer under this Agreement,
whether with respect to the Notes, the Certificates, the Receivables, the
autodebit account payments, the other Trust Property or otherwise,
automatically shall pass to, be vested in and become obligations and
responsibilities of the Backup Servicer (or such other successor Servicer
appointed by the Controlling Party); provided, however, that the successor
Servicer shall have no liability with respect to any obligation which was
required to be performed by the prior Servicer prior to the date that the
successor Servicer becomes the Servicer or any claim of a third party based on
any alleged action or inaction of the prior Servicer. The successor Servicer
is authorized and empowered by this Agreement, as successor Servicer to
execute and deliver, on behalf of the prior 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 the other Trust Property and related documents, to show
the Issuer or Indenture Trustee as lienholder or secured party on the related
Lien Certificates, or otherwise. The prior Servicer agrees to cooperate with
the successor Servicer in effecting the termination of the responsibilities
and rights of the prior Servicer under this Agreement, including, without
limitation, the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the prior Servicer for
deposit, or have been deposited by the prior Servicer, in the Collection
Account or thereafter received with respect to the Receivables and the
delivery to the successor Servicer of all Receivables Files, records and a
computer tape in readable form containing all information necessary to enable
the successor Servicer to service the Receivables and the other Trust
Property. The terminated Servicer shall grant the successor Servicer, the
Indenture Trustee, the Insurer (so long as no Insurer Default shall have
occurred and be continuing) and the Owner Trustee reasonable access to the
terminated Servicer's premises at the terminated Servicer's expense.
SECTION 8.2.Appointment of Successor.
(a) Upon the Servicer's receipt of notice of termination pursuant to
Section 8.1 or the Servicer's resignation in accordance with the terms of this
Agreement, the predecessor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the date 45 days from the delivery to the
Owner Trustee, the Controlling Party, the Backup Servicer and the Indenture
Trustee of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of this Agreement and (y) the date upon
which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Servicer's termination hereunder, the Backup Servicer shall
assume the obligations of Servicer hereunder and shall accept its appointment
by a written assumption in form acceptable to the Controlling Party.
Notwithstanding the above, the Indenture Trustee with the prior written
consent of the Controlling Party, or the Controlling Party shall, if the
Indenture Trustee shall be unwilling or legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established
institution having a net worth of not less than $50,000,000 and whose regular
business shall include the servicing of automotive receivables as the
successor to the Servicer under the Agreement.
(b) Upon appointment, the successor Servicer (including the Backup
Servicer 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. In addition, the successor Servicer shall have (i) no obligation to
perform any repurchase or advancing obligations, if any, of the Servicer, (ii)
no obligation to pay any taxes required to be paid by the Servicer, (iii) no
obligation to pay any of the fees and expenses of any other party involved in
this transaction and (iv) no liability or obligation with respect to any
Servicer indemnification obligations of any prior Servicer including the
original Servicer. The terminated Servicer shall also grant an express power
of attorney to the successor Servicer so that the successor Servicer as
Servicer shall have control over and the right to direct any autodebit account
payments. Furthermore, notwithstanding anything contained in this Agreement to
the contrary, the successor Servicer as Servicer is authorized to accept and
rely on all of the accounting, records and work of the prior Servicer relating
to the Receivables (collectively, "Predecessor Servicer Work Product") without
any audit or other examination thereof, and the successor Servicer as Servicer
shall have no duty, responsibility, obligation or liability for the acts and
omissions of any prior Servicer. If any error, inaccuracy or omission
(collectively, "Errors") exist in any Predecessor Servicer Work Product
received by the successor Servicer from the prior Servicer and such Errors
should cause or materially contribute to the successor Servicer as Servicer
making or continuing any Errors (collectively, "Continued Errors"), the
successor Servicer as Servicer shall have no duty, responsibility, obligation
or liability for such Continued Errors; provided, however, that the successor
Servicer agrees to perform its duties as successor Servicer in accordance with
the standard of care set forth in Section 4.1. In the event that the successor
Servicer as Servicer becomes aware of Errors or Continued Errors, the
successor Servicer shall use its best efforts to reconstruct and reconcile
such data as is commercially reasonable to correct such Errors and Continued
Errors and to prevent future Continued Errors. The successor Servicer as
Servicer shall be entitled to recover from the Trust its costs thereby
expended.
SECTION 8.3. Notification to Noteholders, Certificateholders and
Backup Servicer.
Upon any Servicer Default or arty termination of, or appointment of a
successor to, the Servicer pursuant to this Article VIII the Owner Trustee
shall give prompt written notice thereof to Certificateholders and the
Indenture Trustee shall give prompt written notice thereof to Noteholders, the
Insurer and to the Rating Agencies.
SECTION 8.4. Waiver of Past Defaults.
So long as no Insurer Default shall have occurred and be continuing,
the Insurer (or, if an Insurer Default shall have occurred and be continuing,
the Controlling Party) may, on behalf of all Noteholders and
Certificateholders, waive any default by the Servicer in the performance of
its obligations hereunder and its consequences, except a default in making any
required deposits to or payments from any of the Trust Accounts in accordance
with this Agreement. Upon any such waiver of a past default, such default
shall cease to exist, and any Servicer Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE VIII-A
The Backup Servicer
SECTION 8A.1. Appointment of Backup Servicer.
On or before each Determination Date, the Servicer shall deliver to
the Indenture Trustee and the Backup Servicer a computer tape in a format
acceptable to the Indenture Trustee and the Backup Servicer containing the
information with respect to the Receivables for the preceding Collection
Period necessary for the preparation of the Servicer's Certificate and the
verification required under Section 8A.2 relating to such Collection Period
(the "Backup Servicer Tape"). The duties of the Backup Servicer set forth in
Section 8A.2 (the "Backup Servicer Duties") shall be conducted by the Person
so designated from time to time as Backup Servicer in accordance with this
Agreement. ___________ is hereby initially designated as, and hereby agrees to
perform, the duties and obligations of the Backup Servicer pursuant to the
terms hereof and each other Basic Document to which the Backup Servicer is a
party. Subject to the resignation of _____________________________ as Backup
Servicer pursuant to Section 8A.4 or the termination of ___________ as Backup
Servicer pursuant to Section 8A.6 and, in either case, the designation of a
successor Backup Servicer hereunder, ___________ shall continue to perform the
Backup Servicer Duties, unless and until expressly agreed otherwise by the
Issuer, the Servicer, the Indenture Trustee and the Insurer.
SECTION 8A.2. Duties of Backup Servicer.
The Backup Servicer, for the benefit of the Issuer, the Insurer and
the Noteholders, shall perform the following duties:
(a) use the Backup Servicer Tape to verify the following information:
(w) the aggregate Principal Balance of each Receivable, (x) a list of
Receivables that are (I) 1--30; (II) 31--60, (III) 61--90, (IV) 91--120 days
or (V) 121+ delinquent in any scheduled payment, (y) the amount of principal
and interest payments on the Receivables received during the Collection
Period, and (z) the Default Rate and the Delinquency Ratio for the Collection
Period;
(b) in the event that the Backup Servicer discovers a discrepancy or
discrepancies, with respect to such independent reconciliation described
above, the Backup Servicer shall (x) notify the Issuer, the Seller, the
Depositor, the Insurer, the Servicer and the Indenture Trustee of such
discrepancy or discrepancies, and (y) attempt to reconcile such discrepancy or
discrepancies with the Servicer; and
(c) such other duties as may be agreed to in writing by the Issuer,
the Seller, the Depositor, the Backup Servicer and the Insurer from time to
time.
SECTION 8A.3.Backup Servicing Standard.
The Backup Servicer, for the benefit of the Issuer, the Indenture
Trustee, the Insurer, the Noteholders and the Certificateholders, shall
perform the Backup Servicer Duties in accordance with all applicable federal,
state or local laws and regulations and with the degree of skill, care and
diligence of prudent lenders in the industry for the servicing of comparable
assets, but in no event, with less skill, care and diligence that the Backup
Servicer exercises with respect to all comparable assets that it services for
itself or others (such standards, the "Backup Servicing Standard"). Other than
the duties specifically set forth in this Agreement, the Backup Servicer shall
have no obligations hereunder, including, without limitation to supervise,
verify, monitor, or administer the performance of the Servicer. The duties and
obligations of the Backup Servicer shall be determined solely by the express
provisions of this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Backup Servicer.
SECTION 8A.4. Limitation on Resignation of the Backup Servicer.
The Backup Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) by mutual agreement among the Backup Servicer,
the Issuer, the Indenture Trustee and the Insurer or (b) upon determination
that its duties hereunder are no longer permissible under applicable law. Any
determination under clause (b) above permitting the resignation of the Backup
Servicer shall be evidenced by an opinion of counsel (which counsel shall be
acceptable to the Issuer, the Indenture Trustee and the Insurer) to such
effect delivered to the Issuer, the Depositor, the Indenture Trustee and the
Insurer. No such resignation shall become effective until a successor backup
servicer shall have assumed the Backup Servicer's responsibilities, duties,
liabilities and obligations hereunder. Any such successor backup servicer must
be an established servicer of consumer motor vehicle loans and must be
approved in writing by the Issuer, the Depositor, the Indenture Trustee and
the Insurer.
SECTION 8A.5. Rights in Respect of the Backup Servicer.
The Backup Servicer shall afford the Indenture Trustee, the Issuer,
the Depositor, and the Insurer, upon two (2) Business Days prior notice,
during normal business hours access to all records maintained by the Backup
Servicer in respect of its rights and obligations hereunder and access to
officers of the Backup Servicer responsible for such obligations. Upon
request, the Backup Servicer shall furnish the Indenture Trustee, the Issuer,
the Depositor, and the Insurer such information as the Backup Servicer
possesses regarding the transactions contemplated hereby and any circumstance
that could reasonably be expected to affect the Backup Servicer's ability to
perform its obligations hereunder. The Indenture Trustee, the Issuer and the
Insurer shall not have any responsibility or liability for any action or
failure to act by the Backup Servicer, and are not obligated to supervise the
performance of the Backup Servicer under this Agreement or otherwise.
SECTION 8A.6. Termination.
(a) Upon 30 days' written notice, the Controlling Party may terminate
all the rights and obligations of the Backup Servicer under this Agreement as
to any or all of the Receivables or Backup Servicer Duties.
(b) In the event that (a) notice of termination of this Agreement, or
of termination of the rights and obligations of the Backup Servicer hereunder,
is given, or (b) the Backup Servicer resigns in accordance with Section 8A.4,
the Backup Servicer covenants that all funds and any item comprising a
Receivable File in its possession relating to the affected Receivables
(collectively, the "Backup Contract Records") shall, at the option of the
Controlling Party, immediately upon receipt of notice of termination or the
resignation of the Backup Servicer, be submitted to the control of the
Indenture Trustee.
(c) Notwithstanding any termination of this Agreement, or of all or a
portion of the rights and obligations of the Backup Servicer hereunder, the
Backup Servicer shall not be relieved of liability for all amounts due, or
responsibilities owed the Issuer, the Indenture Trustee, the Insurer, the
Noteholders or the Certificateholders in respect of its obligations hereunder
while it served as the Backup Servicer. The Backup Servicer forthwith upon
such termination or resignation shall (a) use its best efforts to effect the
orderly and efficient transfer of Backup Servicer Duties to a new backup
servicer or other designee selected by the Controlling Party, and (b) arrange
for the physical transfer and delivery to the Controlling Party or to a new
backup servicer or other designee selected by the Controlling Party of all
Contract Receivable Records and copies thereof in its possession. Any
successor servicer hereunder shall meet the requirements and be selected in
accordance with the procedures specified in Section 8A.4. Notwithstanding any
termination of this Agreement, or any termination of all the rights and
obligations of the Backup Servicer hereunder as to all or any number of
Receivables, or any resignation of the Backup Servicer, in any case pursuant
to any provision of this Agreement, the Backup Servicer shall be entitled to
receive all amounts accrued and owing to it under this Agreement from the
Borrower in accordance with Section 8A.8 hereof.
SECTION 8A.7. Resignation or Termination of Backup Servicer.
Upon the termination of the Servicer in accordance with Article VIII
or the resignation of the Servicer in accordance with Section 7.5, the Backup
Servicer shall either (i) assume all of the responsibilities, duties,
liabilities and obligations the Servicer hereunder, without further action by
any Person, or (ii) designate a successor Servicer who shall (x) assume all of
the responsibilities, duties, liabilities and obligations the Servicer
hereunder, without further action by any Person, and (y) be acceptable to the
Controlling Party in its sole discretion. Any such assumption or appointment
by the Backup Servicer pursuant to this Section 8A.7 shall occur as soon as
reasonably practical (but, in any event, no later than 30 days) after the
Indenture Trustee provides notice to the Backup Servicer of any such
resignation or termination of the Servicer. Neither the Backup Servicer nor
any successor Backup Servicer shall have (i) any liability with respect to any
obligation which was required to be performed by the terminated Backup
Servicer prior to the date that the successor Backup Servicer or the Backup
Servicer became the Servicer or any claim of a third party based on any
alleged action or inaction of the terminated Backup Servicer and (ii) any
obligation to pay any of the fees and expense of any other party involved in
this transaction.
SECTION 8A.8. Backup Servicing Fee.
At any time the Backup Servicer or one of its Affiliates is not the
Servicer hereunder, the Backup Servicer shall be paid the Backup Servicer Fee
for the performance of its obligations as Backup Servicer hereunder and under
the Basic Documents.
SECTION 8A.9. Indemnity.
The Backup Servicer, its officers, directors, agents and employees
shall be indemnified and held harmless in accordance with the terms of the
separate agreement between the Servicer and the Backup Servicer, against any
and all claims, losses, liabilities, damages or expenses (including, but not
limited to, attorney's fees, court costs and costs of investigation) of any
kind or nature whatsoever arising out of or in connection with this Agreement
that may be imposed upon, incurred by or asserted against the Backup Servicer,
except in each case to the extent arising from the Backup Servicer's
misfeasance, bad faith or negligence. The provisions of this Section 8A.9
shall survive the resignation or removal of the Backup Servicer and the
termination of this Agreement.
SECTION 8A.10. Limitation of Liability.
(a) In the absence of bad faith, negligence or misconduct on the part
of the Backup Servicer, the Backup Servicer shall not be liable to the Issuer,
the Indenture Trustee, the Seller, the Indenture Collateral Agent, the Insurer
or any other Person with respect to any action taken or not taken by it in the
performance of its obligations under this Agreement. The obligations of the
Backup Servicer shall be determined solely by the express provisions of this
Agreement. No representation, warranty, covenant, agreement, obligation or
duty of the Backup Servicer shall be implied with respect to this Agreement or
the Backup Servicer's services hereunder.
(b) The Backup Servicer may rely, and shall be protected in acting or
refraining to act, upon and need not verify the accuracy of, any written
instruction, notice, order, request, direction, certificate, opinion or other
instrument or document believed by the Backup Servicer to be genuine and to
have been signed and presented by the proper party or parties, which, with
respect to the Issuer, Indenture Trustee, Indenture Collateral Agent or
Insurer, shall mean signature and presentation by Authorized Representatives
(as such term is defined in the Custodial Agreement) whether such presentation
is by personal delivery, express delivery or facsimile.
(c) The Backup Servicer may consult with counsel selected by it with
regard to legal questions arising out of or in connection with this Agreement,
and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, omitted or
suffered by the Backup Servicer in reasonable reliance, in good faith, and in
accordance therewith.
(d) Except as expressly provided for herein, the provisions of this
Agreement shall not require the Backup Servicer to expend or risk its own
funds or otherwise incur financial liability in the performance of its duties
under this Agreement if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity is not reasonably assured to it.
(e) The Backup Servicer shall not be responsible or liable for, and
makes no representation or warranty with respect, the validity, adequacy or
perfection of any lien upon, or security interest in any Receivables or
Custodian's Receivable Files (as such term is defined in the Custodial
Agreement) purported to be granted at any time to the Indenture Trustee.
ARTICLE IX
Termination
SECTION 9.1. Optional Purchase of All Receivables.
(a) On the last day of any Collection Period as of which the Pool
Balance shall be less than or equal to __% of the Original Pool Balance, the
Transferor shall have the option to purchase the Owner Trust Estate, other
than the Trust Accounts and the Certificate Distribution Account (with the
consent of the Insurer if such purchase would result in a claim on either
Policy or would result in any amount owing to the Insurer under the Insurance
Agreement remaining unpaid); provided however, that the amount to be paid for
such purchase (as set forth in the following sentence) shall be sufficient to
pay the full amount of principal, premium, if any, and interest then due and
payable on the Notes and the Certificates. To exercise such option, the
Servicer shall deposit pursuant to Section 5.5 in the Collection Account an
amount equal to the amount set forth in the preceding sentence.
(b) Notice of any termination of the Trust pursuant to subsection (a)
of this Section 9.1 shall be given by the Servicer to the Owner Trustee,
Issuer and the Indenture Trustee, the Insurer and the Rating Agencies as soon
as practicable after the Servicer has received notice thereof.
FOLLOWING THE SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE
PAYMENT IN FULL OF THE PRINCIPAL OF AND INTEREST ON THE NOTES AND ALL AMOUNTS
DUE TO THE INSURER UNDER THE INSURANCE AGREEMENT, THE CERTIFICATEHOLDERS WILL
SUCCEED TO THE RIGHTS OF THE NOTEHOLDERS AND THE INSURER HEREUNDER AND THE
OWNER TRUSTEE WILL SUCCEED TO THE RIGHTS OF, AND ASSUME THE OBLIGATIONS (OTHER
THAN ANY SERVICING OBLIGATION) OF, THE INDENTURE TRUSTEE PURSUANT TO THIS
AGREEMENT.
ARTICLE X
Administrative Duties of the Servicer
SECTION 10.1. Duties with respect to the Indenture, the Trust
Agreement and Depository Agreement.
(a) The Servicer shall perform all its duties and the duties of the
Issuer under the Indenture, the Trust Agreement and the Depository Agreement.
In addition, the Servicer shall consult with the Owner Trustee as the Servicer
deems appropriate regarding the duties of the Issuer under the Indenture, the
Trust Agreement and the Depository Agreement. The Servicer shall monitor the
performance of the Issuer and shall advise Owner Trustee when action is
necessary to comply with the Issuer's duties under the Indenture, the Trust
Agreement and the Depository Agreement. The Servicer shall prepare for
execution by the Issuer or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Indenture, the Trust Agreement and the Depository Agreement.
In furtherance of the foregoing, the Servicer shall take all necessary action
that is the duty of the Issuer to take pursuant to the Indenture, the Trust
Agreement and the Depository Agreement, including, without limitation,
pursuant to Sections 2.7, 3.5, 3.6, 3.7, 3.9, 7.2, 7.3, 11.1 and 11.15 of the
Indenture.
(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Servicer set forth in
this Agreement or any of the Basic Documents, the Servicer shall
perform such calculations and shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of
the Issuer or the Owner Trustee to prepare, file or deliver pursuant
to this Agreement or any of the Basic Documents, and at the request
of the Owner Trustee, shall take all appropriate action that it is
the duty of the Issuer to take pursuant to this Agreement or any of
the Basic Documents, including, without limitation, pursuant to
Sections 2.6 and 2.11 of the Trust Agreement. In accordance with the
directions of the Issuer or the Owner Trustee, the Servicer shall
administer, perform or supervise the performance of such other
activities in connection with the Collateral (including the Basic
Documents) as are not covered by any of the foregoing provisions and
as are expressly requested by the Issuer or the Owner Trustee and
are reasonably within the capability of the Servicer.
(ii) Notwithstanding anything in this Agreement or any of
the Basic Documents to the contrary, the Servicer shall be
responsible for promptly notifying the Owner Trustee in the event
that any withholding tax is imposed on the Issuer's payments (or
allocations of income) to a Certificateholder as contemplated in
Section 5.2(f) of the Trust Agreement. Any such notice shall be in
writing and specify the amount of any withholding tax required to be
withheld by the Owner Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the
Basic Documents to the contrary, the Servicer shall be responsible
for performance of the duties of the Issuer or the Owner Trustee and
the Depositor set forth in Section 5.6(a), (b), (c) and (d) of the
Trust Agreement with respect to, among other things, accounting and
reports to Holders (as defined in the Trust Agreement); provided,
however, that once prepared by the Servicer the Owner Trustee shall
retain responsibility for the distribution of the Schedule K-1s
necessary to enable each Certificateholder to prepare its federal
and state income tax returns.
(iv) The Servicer shall perform the duties of the Servicer
specified in Section 10.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by
the Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
provided, however, that the terms of any such transactions or
dealings shall be in accordance with any directions received from
the Issuer and shall be, in the Servicer's opinion, no less
favorable to the Issuer in any material respect.
(c) Tax Matters. The Servicer shall prepare and the Owner Trustee
shall file, on behalf of the Depositor, all tax returns, tax elections,
financial statements and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in Article V of the Trust
Agreement, including without limitation Forms 1099 and 1066. All tax returns
will be signed by the Transferor.
(d) Non-Ministerial Matters. With respect to matters that in the
reasonable judgment of the Servicer are non-ministerial, the Servicer shall
not take any action pursuant to this Article X unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Indenture Trustee of the proposed action and the Owner Trustee
and, with respect to items (A), (B), (C) and (D) below, the Indenture Trustee
shall not have withheld consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by
the Issuer and the compromise of any action, claim or
lawsuit brought by or against the Issuer (other than in
connection with the collection of the Receivables);
(C) the amendment, change or modification of
this Agreement or any of the Basic Documents;
(D) the appointment of successor Note
Registrars, successor Paying Agents and successor
Indenture Trustees pursuant to the Indenture or the
appointment of successor Servicers or the consent to the
assignment by the Note Registrar, Paying Agent or
Indenture Trustee of its obligations under the Indenture;
and
(E) the removal of the Indenture Trustee.
(e) Exceptions. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic
Documents, the Servicer, in its capacity hereunder, shall not be obligated to,
and shall not, (1) make any payments to the Noteholders or Certificateholders
under the Basic Documents, (2) sell the Owner Trust Estate pursuant to Section
5.5 of the Indenture, (3) take any other action that the Issuer directs the
Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.
SECTION 10.2. Records.
The Servicer shall maintain appropriate books of account and records
relating to services performed under this Agreement, which books of account
and records shall be accessible for inspection by the Issuer and the Insurer
at any time during normal business hours.
SECTION 10.3. Additional Information to be Furnished to the Issuer.
The Servicer shall furnish to the Issuer from time to time such
additional information regarding the Collateral as the Issuer shall reasonably
request.
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1. Amendment.
This Agreement may not be amended except that this Agreement may be
amended from time to time by the Seller, the Transferor, the Depositor, the
Servicer, the Backup Servicer, the Issuer and the Indenture Trustee, with the
prior written consent of the Insurer (so long as no Insurer Default has
occurred and is continuing), but without the consent of any of the Noteholders
or Certificateholders to cure any ambiguity, to correct or supplement any
provisions in this Agreement, to comply with any changes in the Code, or to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement or the Insurance Agreement; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Depositor,
the Owner Trustee, the Insurer, the Rating Agencies and the Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.
This Agreement may also be amended from time to time by the Seller,
the Transferor, the Depositor, the Servicer, the Backup Servicer and the
Indenture Trustee, with (i) the consent of the Insurer, if the Insurer is the
Controlling Party, but without the consent of any Noteholders or
Certificateholders, or (ii) if the Insurer is no longer the Controlling Party,
with the consent of a Note Majority and the consent of the holders of
Certificates evidencing not less than a majority of the aggregate outstanding
principal amount of the Certificates, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the outstanding
principal amount of the Notes and the Certificate Balance, the Holders of
which are required to consent to any such amendment, without the consent of
the Holders of all the outstanding Notes and the Holders (as defined in the
Trust Agreement) of all the outstanding Certificates, of each class affected
thereby provided further, that if an Insurer Default has occurred and is
continuing, such action shall not materially adversely affect the interest of
the Insurer.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Rating Agencies. It
shall not be necessary for the consent of Noteholders or Certificateholders
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. The manner of obtaining such consents (and any other
consents of Noteholders or Certificateholders provided for in this Agreement)
and of evidencing the authorization of any action by Noteholders or
Certificateholders shall be subject to such reasonable requirements as the
Indenture Trustee or the Owner Trustee, as may prescribe.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 11.2(b) has been delivered. The Owner Trustee and the Indenture
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Issuer's, the Owner Trustee's or the Indenture Trustee's, as
applicable, own rights, duties or immunities under this Agreement or
otherwise.
SECTION 11.2. Protection of Title to the Trust.
(a) The Seller, the Transferor and the Depositor shall execute and
file such financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Indenture Trustee in the Receivables and in
the proceeds thereof. The Seller, the Transferor and the Depositor shall
deliver (or cause to be delivered) to the Insurer, the Owner Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) None of the Seller, the Transferor and the Depositor or the
Servicer shall change its name, identity or organizational structure in any
manner that would, could or might make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-402(7) of the UCC, unless it shall have given
the Insurer, Owner Trustee and the Indenture Trustee at least five (5) days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements. Promptly upon such filing, the Seller or the Servicer, the
Transferor and the Depositor, as the case may be, shall deliver an Opinion of
Counsel to the Insurer and the Indenture Trustee, in form and substance
reasonably satisfactory to the Insurer, stating either (A) all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Transferor, the
Depositor, the Issuer and the Indenture Trustee, as the case may be, in the
Receivables and the other Transferor Property, other Depositor Property and
other Trust Property, as the case may be, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and protect such
interest.
(c) Each of the Seller, the Servicer, the Transferor and the
Depositor shall have an obligation to give the Insurer, the Owner Trustee, the
Backup Servicer and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement
or of any new financing statement and shall promptly file any such amendment.
The Servicer shall at all times maintain each office from which it shall
service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including any backup archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer
and the Indenture Trustee in such Receivable and that such Receivable is owned
by the Issuer and has been pledged to the Indenture Trustee. Indication of the
Issuer's and the Indenture Trustee's interest in a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee, the Backup
Servicer, and the Insurer and their respective agents at any time during
normal business hours to inspect, audit and make copies of and abstracts from
the Servicer's records regarding any Receivable or any other portion of the
Trust Property. The preceding sentence shall not create any duty or obligation
on the part of the Indenture Trustee to perform any such acts.
(h) Upon request, the Servicer shall furnish to the Insurer, the
Owner Trustee, the Backup Servicer, the Depositor, or to the Indenture
Trustee, within five (5) Business Days, a list of all Receivables (by contract
number and name of Obligor) then held as part of the Trust Property, together
with a reconciliation of such list to the Schedule of Receivables and to each
of the Servicer's Certificates furnished before such request indicating
removal of Receivables from the Trust Property.
(i) The Servicer shall deliver to the Insurer, the Depositor, the
Owner Trustee and the Indenture Trustee:
(1) promptly after the execution and delivery of the
Agreement and, if required pursuant to Section 11.1, of each
amendment, an Opinion of Counsel stating that, in the opinion of
such counsel, in form and substance reasonably satisfactory to the
Indenture Trustee, either (A) all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Trust
and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar
year beginning with the first calendar year beginning more than
three months after the Cutoff Date, an Opinion of Counsel, dated as
of a date during such 90-day period, stating that, in the opinion of
such counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Trust and the Indenture
Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and
protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in
the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
SECTION 11.3. Notices.
All demands, notices and communications upon or to the Seller, the
Servicer, the Owner Trustee, the Indenture Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered, or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt (a) in the case of the Seller and the Servicer, to
______________________ Attention: ___________, (b) in the case of the Issuer
or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee, (c)
in the case of ______________________, Attention: ___________, (d) in the case
of the Depositor, to ML Asset Backed Corporation, 250 Xxxxx Street, World
Financial Center, Xxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: ____________, (e) in the case of the Indenture Trustee, the
Indenture Collateral Agent or the Backup Servicer, at the Corporate Trust
Office, (f) in the case of the Insurer, to ___________________________;
Attention: Senior Vice President, Surveillance; (g) in the case of Moody's, to
Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000; and (h) in the case of Standard & Poor's, to
Standard & Poor's Structured Finance Ratings, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Asset Backed Surveillance Department.
Upon the written request of the Owner Trustee, the Indenture Trustee will
promptly furnish the Owner Trustee a list of Noteholders as of the date
specified by the Owner Trustee. Each Noteholder, by its acceptance of a Note,
shall be deemed to agree that the Indenture Trustee shall be under no
liability for providing the list of Noteholders to the Owner Trustee as
described in the immediately preceding sentence. 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 Holder as shown in
the Certificate Register or Note Register, as applicable. Any notice so mailed
within the time prescribed in the Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder or Noteholder shall
receive such notice.
SECTION 11.4. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 6.4 and 7.3 and as provided in the provisions of this
Agreement concerning the resignation of the Servicer, this Agreement may not
be assigned by the Seller or the Servicer without the prior written consent of
the Owner Trustee, the Depositor, the Indenture Trustee and the Insurer (or if
an Insurer Default shall have occurred and be continuing the Holders of Notes
evidencing not less than 66% of the principal amount of the outstanding Notes
and the Holders of Certificates evidencing not less than 66% of the
Certificate Balance).
SECTION 11.5. Limitations on Rights of Others.
The provisions of this Agreement are solely for the benefit of the
parties hereto, the Insurer and the Noteholders, as third-party beneficiaries.
Nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person, other than express third-party beneficiaries, any
legal or equitable right, remedy or claim in the Owner Trustee Estate or under
or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 11.6. Severability.
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
SECTION 11.7. 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 11.8. 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 11.9. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, INCLUDING SECTION 51401 OF THE GENERAL OBLIGATION LAW, BUT
OTHERWISE 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 11.10. Assignment to Indenture Trustee.
Each of the Seller, the Transferor and the Depositor hereby
acknowledge and consent to any mortgage, pledge, assignment and grant of a
security interest expressly as contemplated by this Agreement and by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and
under the Receivables and/or the assignment of any or all of the Issuer's
rights and obligations hereunder to the Indenture Trustee.
SECTION 11.11. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, none of
the Backup Servicer, the Servicer, the Seller, the Transferor (with respect to
the Issuer) or the Depositor shall, prior to the date which is one year and
one day after the termination of this Agreement with respect to the Transferor
or the Issuer, acquiesce, petition or otherwise invoke or cause any of the
Transferor or the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of any of the Transferor or the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, none of
the Backup Servicer, the Custodian, the Transferor, the Seller or the Servicer
shall, prior to the date that is one year and one day after the termination of
this Agreement with respect to the Depositor, acquiesce to, petition or
otherwise invoke or cause the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Depositor under any federal or state bankruptcy, insolvency or
similar law, appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official of the Depositor or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Depositor.
SECTION 11.12. Limitation of Liability of Owner Trustee and
Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by ___________not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event
shall ___________in its individual capacity or, except as expressly provided
in the Trust Agreement, as Owner Trustee have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by ___________, not in its individual capacity but
solely as Indenture Trustee and Backup Servicer and in no event shall
___________have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
(c) It is expressly understood and agreed by the parties hereto
that (a) this Sale and Servicing Agreement is executed and delivered by
___________, not individually or personally but solely as Owner Trustee of
___________Vehicle Receivables Owner Trust 200_-_, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by ___________but is made and intended for the purpose for binding
only the Trust, (c) nothing herein contained shall be construed as creating
any liability on ___________, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties hereto and (d) under no
circumstances shall ___________be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken by
the Trust under this Sale and Servicing Agreement or any other related
documents.
SECTION 11.13. Independence of the Servicer.
For all purposes of this Agreement, the Servicer shall be an
independent contractor and shall not be subject to the supervision of the
Issuer or the Owner Trustee with respect to the manner in which it
accomplishes the performance of its obligations hereunder. Unless expressly
authorized by the Issuer or the Owner Trustee, the Servicer shall have no
authority to act for or represent the Issuer in any way and shall not
otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 11.14. No Joint Venture.
Nothing contained in this Agreement (i) shall constitute the Servicer
and any of the Issuer, the Depositor, the Transferor or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
SECTION 11.15. Third-Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The
Insurer and its successors and assigns shall be a third-party beneficiary to
the provisions of this Agreement, and shall be entitled to rely upon and
directly to enforce such provisions of this Agreement so long as no Insurer
Default shall have occurred and be continuing. Except as expressly stated
otherwise herein or in the Basic Documents, any right of the Insurer to
direct, appoint, consent to, approve of, or take any action under this
Agreement, shall be a right exercised by the Insurer in its sole and absolute
discretion.
SECTION 11.16. Disclaimer by Insurer.
The Insurer may disclaim any of its rights and powers under this
Agreement (but not its duties and obligations under the Policies) upon
delivery of a written notice to the Owner Trustee and the Indenture Trustee.
SECTION 11.17. Insurer as Controlling Party.
Each Noteholder by purchase of Notes and Certificateholder by
purchase of a Certificate acknowledges that the Indenture Trustee on behalf of
the Noteholders, and the Owner Trustee on behalf of the Certificateholders, as
partial consideration for issuance of the Policy, has agreed that the Insurer
shall have certain rights hereunder for so long as no Insurer Default shall
have occurred and be continuing. Any provision giving the Insurer the right to
direct, appoint or consent to, approve of, or take any action under this
Agreement shall be inoperative during the prior of such Insurer Default and
shall instead vest in the Servicer, or in the event that Notes remain
Outstanding, the Indenture Trustee at the direction of a Note Majority or in
the event that no Notes remain Outstanding, the Owner Trustee, at the
direction of a Certificate Majority, as applicable.
SECTION 11.18. Limited Recourse.
Notwithstanding anything to the contrary contained in this Agreement,
the obligations of each of the Depositor, the Transferor and Issuer under this
Agreement are solely the limited liability company obligations of the
Transferor, corporate obligations of the Depositor or the trust obligations of
Issuer, as applicable, and shall be payable by the Depositor, Transferor or
Issuer, as applicable, solely as provided in this Section 11.18. Each of the
Depositor, Transferor and the Issuer shall only be required to pay (a) any
fees, expenses, indemnities or other liabilities that it may incur under this
Agreement to the extent it has funds available therefor on the date of such
determination and (b) any expenses, indemnities or other liabilities that it
may incur under this Agreement only to the extent it receives funds designated
for such purposes or to the extent it has funds available therefor. In
addition, no amount owing by any of the Depositor, the Transferor or Issuer
hereunder (other than principal and interest in respect of the Notes) in
excess of the liabilities that it is required to pay in accordance with the
preceding sentence shall constitute a "claim" (as defined in Section 101(5) of
the Bankruptcy Code) against it. No recourse shall be had for the payment of
any amount owing hereunder or for the payment of any fee hereunder or any
other obligation of, or claim against, the Depositor, Transferor or the Issuer
arising out of or based upon this Agreement, against any member, employee,
officer, agent, director or authorized person of the Depositor, Transferor or
affiliate thereof or any stockholder, employee, officer, director,
incorporator or Affiliate thereof; provided, however, that the foregoing shall
not relieve any such person or entity of any liability they might otherwise
have as a result of fraudulent actions or omissions taken by them. The
obligation of the parties under this Section 11.18 shall survive termination
of this Agreement.
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.
____________________ VEHICLE
RECEIVABLES OWNER TRUST 200_
By: __________________________, not in
its individual capacity but solely as
Owner Trustee on behalf of the Issuer,
By:
-------------------------------------
Name:
Title:
___________________________, Seller and
Servicer,
By:
-----------------------------------
Name:
Title:
__________________________, as
Transferor,
By:
-----------------------------------
Name:
Title:
ML ASSET BACKED CORPORATION, as
Depositor,
By:
-------------------------------------
Name:
Title:
__________________________, as Backup
Servicer,
By:
------------------------------------
Name:
Title:
_________________________, not in its
individual capacity, but solely as
Indenture Trustee,
By:
------------------------------------
Name:
Title:
EXHIBIT A
SUBSEQUENT TRANSFER AGREEMENT
TRANSFER NO. [ _____ ] OF SUBSEQUENT RECEIVABLES dated as of, [ _____
], among ___________ RECEIVABLES OWNER TRUST 200 , a Delaware business trust
(the "Issuer"), ___________, a Delaware limited liability company, as
transferor (the "Transferor"), ___________, a ___________ and as seller and
servicer (the "Seller" and the "Servicer"), ML ASSET BACKED CORPORATION, a
Delaware corporation, as depositor (the "Depositor"), and ___________, as
Indenture Trustee, Backup Servicer and Custodian.
W I T N E S S E T H:
WHEREAS the Issuer, the Transferor, the Seller, the Servicer, the
Depositor, the Indenture Trustee, the Backup Servicer and the Custodian are
parties to the Sale and Servicing Agreement, dated as ___________ [1], 200_
(as amended or supplemented, the "Sale and Servicing Agreement");
WHEREAS pursuant to the Sale and Servicing Agreement, the Seller
wishes to convey the Subsequent Receivables to the Transferor;
WHEREAS the Transferor is willing to accept such conveyance subject
to the terms and conditions hereof;
WHEREAS pursuant to the Sale and Servicing Agreement, the Transferor
wishes to convey the Receivables to the Depositor;
WHEREAS the Depositor is willing to accept such conveyance subject to
the terms and conditions hereof;
WHEREAS pursuant to the Sale and Servicing Agreement, the Depositor
wishes to convey the Receivables to the Trust; and
WHEREAS the Trust is willing to accept such conveyance subject to the
terms and conditions hereof.
NOW, THEREFORE, the Issuer, the Seller and the Servicer hereby agree
as follows:
1. Defined Terms. Capitalized terms used herein shall have the
meanings ascribed to them in the Sale and Servicing Agreement unless otherwise
defined herein.
"Subsequent Cutoff Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, __________________, ______________________.
"Subsequent Transfer Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, __________________, ______________________.
2. Schedule of Receivables. Annexed hereto is a supplement to
Schedule A to the Sale and Servicing Agreement listing the Receivables that
constitute the Subsequent Receivables to be conveyed pursuant to this
Agreement on the Subsequent Transfer Date.
3. Conveyance of Subsequent Receivables to Transferor. In
consideration of the Transferor's delivery to or upon the order of the Seller
of $ ________ , the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Transferor, without recourse (except as expressly
provided in the Sale and Servicing Agreement), all right, title and interest
of the Seller in and to:
(a) the Subsequent Receivables, and all moneys due thereon, on
or after the related Subsequent Cutoff Date and all Net
Liquidation Proceeds with respect to such Receivables;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Subsequent Receivables and any
other interest in the Seller in such Financed Vehicles;
(c) any proceeds with respect to the Subsequent Receivables
from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles
or Obligors;
(d) all rights under any Service Contracts on the related
Financed Vehicles;
(e) the related Receivables Files; and
(f) the proceeds of any and all of the foregoing.
4. Conveyance of Subsequent Receivables to Depositor. For good and
valuable consideration, the Transferor does hereby transfer, assign, set over
and otherwise convey to the Depositor, without recourse (except as expressly
provided in the Sale and Servicing Agreement), all right, title and interest
of the Transferor in and to:
(a) the Subsequent Receivables, and all moneys due thereon, on
or after the related Subsequent Cutoff Date and all Net
Liquidation Proceeds with respect to such Receivables;
(b) the security interest in the Financed Vehicles granted by
Obligors pursuant to the Subsequent Receivables and any
other interest of the Seller in such Financed Vehicles;
(c) any proceeds with respect to the Subsequent Receivables
from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles
or Obligors;
(d) all rights under any Service Contracts on the related
Financed Vehicles;
(e) the related Receivables Files;
(f) its rights and benefits, but none of its obligations or
burdens, under the Subsequent Transfer Agreement,
including the delivery requirements, representations and
warranties and the cure and repurchase obligations of the
Seller under the Sale and Servicing Agreement, on or after
the Subsequent Cutoff Date; and
(g) the proceeds of any and all of the foregoing.
5. Conveyance of Subsequent Receivables to Trust. For good and
valuable consideration, the Depositor does hereby transfer, assign, set over
and otherwise convey to the Trust, without recourse (except as expressly
provided in the Sale and Servicing Agreement), all right, title and interest
of the Depositor in and to:
(a) the Subsequent Receivables, and all moneys due thereon, on
or after the related Subsequent Cutoff Date and all Net
Liquidation Proceeds with respect to such Receivables;
(b) the security interest in the Financed Vehicles granted by
Obligors pursuant to the Subsequent Receivables and any
other interest of the Seller in such Financed Vehicles;
(c) any proceeds with respect to the Subsequent Receivables
from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles
or Obligors; all rights under any Service Contracts on the
related Financed Vehicles;
(d) the related Receivables Files;
(e) its rights and benefits, but none of its obligations or
burdens, under the Subsequent Transfer Agreement,
including the delivery requirements, representations and
warranties and the cure and repurchase obligations of the
Seller and the Transferor under the Sale and Servicing
Agreement, on or after the Subsequent Cutoff Date; and
(f) the proceeds of any and all of the foregoing.
6. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Transferor and the Depositor as of the date of
this Agreement and as of the Subsequent Transfer Date that:
(a) Legal, Valid and Binding Obligation. This Agreement
constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited
by general principles of equity (whether considered in a
suit at law or equity).
(b) Organization and Good Standing. The Seller is duly
organized and validly existing as a limited liability
company in good standing under the laws of the State of
___________, with the power and authority to own its
properties and to conduct its business as such properties
are currently owned and such business is presently
conducted, and had at all relevant times, and has, the
power, authority and legal right to acquire and own the
Receivables.
(c) Due Qualification. The Seller 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.
(d) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to
carry out its terms; the Seller has full power and
authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer and the Seller
and shall have duly authorized such sale and assignment to
the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement has
been duly authorized by the Seller by all necessary
corporate action.
(e) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable in
accordance with its terms.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the
terms hereof do not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (with
or without notice or lapse of time) a default under, the
certificate of formation or limited liability company
agreement of the Seller, or any indenture, agreement or
other instrument to which the Seller is a party or by
which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents);
nor violate any law or, to the best of the Seller's
knowledge, any order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory
body, administration agency or other governmental
instrumentality having jurisdiction over the Seller of its
properties.
(g) No Proceedings. To the Seller's best knowledge, there are
no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction
over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture or any of the
other Basic Documents, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture
or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and
adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of,
this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) which
might adversely affect the federal or state income tax
attributes of the Notes or the Certificates.
(h) Principal Balance. The aggregate Principal Balance of the
Receivables listed on the supplement to Schedule A annexed
hereto and conveyed to the Transferor pursuant to this
Agreement as of the Subsequent Cutoff Date is
$[____________].
7. Representations and Warranties of the Depositor. The Depositor
hereby represents and warrants to the Depositor as of the date of this
Agreement and as of the Subsequent Transfer Date that:
(a) Legal, Valid and Binding Obligation. This Agreement
constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance
with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of
creditors' rights in general and except as such
enforceability may be limited by general principles of
equity (whether considered in a suit at law or equity).
(b) Organization and Good Standing. The Depositor is duly
organized and validly existing as a corporation in good
standing under the laws of the State of Delaware, with the
power and authority to own its properties and to conduct
its business as such properties are currently owned and
such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal
right to acquire and own the Receivables.
(c) Due Qualification. The Depositor is duly qualified to do
business as a corporation in good standing, and has
obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property
or the conduct of its business shall require such
qualifications.
(d) Power and Authority. The Depositor has the power and
authority to execute and deliver this Agreement and to
carry out its terms; the Depositor has full power and
authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer and the Seller
and shall have duly authorized such sale and assignment to
the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement has
been duly authorized by the Seller by all necessary
corporate action.
(e) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Depositor enforceable
in accordance with its terms.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the
terms hereof do not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (with
or without notice or lapse of time) a default under, the
certificate of formation or the limited liability company
agreement of the Depositor, or any indenture, agreement or
other instrument to which the Depositor is a party or by
which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents);
nor violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any federal or state
regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Seller or its properties.
(g) No Proceedings. To the Depositor's best knowledge, there
are no proceedings or investigations pending, or
threatened, before any court, regulatory body,
administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or
its properties: (i) asserting the invalidity of this
Agreement, the Indenture or any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or
the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by
the Depositor of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of
the other Basic Documents, the Notes or the Certificates
or (iv) which might adversely affect the Federal or state
income tax attributes of the Notes or the Certificates.
(h) Principal Balance. The aggregate Principal Balance of the
Receivables listed on the supplement to Schedule A annexed
hereto and conveyed to the Depositor pursuant to this
Agreement as of the Subsequent Cutoff Date is
$[_____________].
8. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Depositor as of the date of this
Agreement and as of the Subsequent Transfer Date that:
(a) Legal, Valid and Binding Obligation. This Agreement
constitutes a legal, valid and binding obligation of the
Transferor, enforceable against the Transferor in
accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of
creditors' rights in general and except as such
enforceability may be limited by general principles of
equity (whether considered in a suit at law or equity).
(b) Organization and Good Standings. The Transferor is duly
organized and validly existing as a 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 currently owned and such business is presently
conducted, and had at all relevant times, and has, the
power, authority and legal right to acquire and own the
Receivables.
(c) Due Qualification. The Transferor 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.
(d) Power and Authority. The Transferor has the power and
authority to execute and deliver this Agreement and to
carry out its terms; the Transferor has full power and
authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer and the Seller
and shall have duly authorized such sale and assignment to
the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement has
been duly authorized by the Seller by all necessary
corporate action.
(e) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Transferor enforceable
in accordance with its terms.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the
terms hereof do not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (with
or without notice or lapse of time) a default under, the
certificate of formation or the limited liability company
agreement of the Transferor, or any indenture, agreement
or other instrument to which the Transferor is a party or
by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents);
nor violate any law or, to the best of the Transferor's
knowledge, any order, rule or regulation applicable to the
Transferor of any court or of any federal or state
regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Seller or its properties.
(g) No Proceedings. To the Transferor's best knowledge, there
are not proceedings or investigations pending, or
threatened, before any court, regulatory body,
administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or
its properties: (i) asserting the invalidity of this
Agreement, the Indenture or any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or
the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by
the Transferor of its obligations under, or the validity
or enforceability of, this Agreement, the Indenture, any
of the other Basic Documents, the Notes or the
Certificates or (iv) which might adversely affect the
Federal or state income tax attributes of the Notes or the
Certificates.
(h) Principal Balance. The aggregate Principal Balance of the
Receivables listed on the supplement to Schedule A annexed
hereto and conveyed to the Depositor pursuant to this
Agreement as of the Subsequent Cutoff Date is
$[__________].
9. Condition Precedent. The obligation of the Transferor, Depositor
and Trust to acquire the Receivables hereunder is subject to the satisfaction,
on or prior to the Subsequent Transfer Date, of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Seller, the
Transferor and Depositor in this Agreement and in the Sale
and Servicing Agreement (provided, however, that the
representations and warranties set forth in Section 3.1 of
the Sale and Servicing Agreement shall apply solely to the
applicable Subsequent Receivables) shall be true and
correct as of the date of this Agreement and as of the
Subsequent Transfer Date.
(b) Sale and Servicing Agreement Conditions. Each of the
conditions set forth in Section 2.2(b) to the Sale and
Servicing Agreement shall have been satisfied.
(c) Additional Information. The Seller shall have delivered to
the Transferor such information as was reasonably
requested by the Transferor to satisfy itself as to (i)
the accuracy of the representations and warranties set
forth in Section 4 of this Agreement and in Section 3.1 of
the Sale and Servicing Agreement and (ii) the satisfaction
of the conditions set forth in this Section 9.
10. Ratification of Agreement. As supplemented by this Agreement, the
Sale and Servicing Agreement is in ll respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be
read, taken and construed as one and the same instrument.
11. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of
which shall be an original but all of which together shall constitute one and
the same instrument.
12. It is expressly understood and agreed by the parties hereto that
(a) this Subsequent Transfer Agreement is executed and delivered by
___________, not individually or personally but solely as Owner Trustee of
___________ Receivables Owner Trust ___________, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertakings and agreements by
___________ but is made and intended for the purpose for binding only the
Trust, (c) nothing herein contained shall be construed as creating any
liability on ___________, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and (d) under no circumstances
shall ___________be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Trust under this Subsequent Transfer Agreement or any other related documents.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING TITLE 14 OF THE NEW YORK
GENERAL OBLIGATIONS LAW, 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.
EXHIBIT B
FORM OF MONTHLY CERTIFICATEHOLDER STATEMENT
___________ VEHICLE RECEIVABLES
OWNER TRUST 200_-_
CLASS A CERTIFICATES
CLASS R CERTIFICATES
Payment Date:
Collection Period:
Under the Sale and Servicing Agreement dated as of
________________________ [1], 200_ among _______________________ VEHICLE
RECEIVABLES OWNER TRUST 200_-_, a Delaware business trust (the "Issuer"),
_______________________, a Delaware limited liability company, ____ as
transferor (the "Transferor") _______________________, a
[__________________________] and as seller and servicer (the "Seller" and the
"Servicer"), ML ASSET BACKED CORPORATION, as depositor (the "Depositor") and
_______________________, as Indenture Trustee and Backup Servicer, the
Servicer is required to prepare certain information each month regarding
current distributions to Certificateholders and the performance of the Trust
during the previous month. The information that is required to be prepared
with respect to the Payment Date and Collection Period listed above is set
forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Certificate, and certain other
information is presented based upon the aggregate amounts for the Trust as a
whole.
A. Information Regarding the Current Monthly Distribution.
1. Certificates
(a) The aggregate amount of the distribution to the
Certificateholders..................................$_______
(b) The amount of the distribution set forth in paragraph A.
1.(a) above in respect of interest on the
Certificates........................................$_______
(c) The amount of the distribution set forth in paragraph A.
1.(a) above in respect of principal of the
Certificates........................................$_______
(d) The amount of the distribution set forth in paragraph A.
1.(a) above per $1,000 interest in the
Certificates........................................$_______
(e) The amount of the distribution set forth in paragraph A.
1.(b) above per $1,000 interest in the
Certificates........................................$_______
(f) The amount of the distribution set forth in paragraph A.
1.(c) above per $1,000 interest in the
Certificates........................................$_______
(g) The amount of the distribution set forth in paragraph A.
1.(d) above per $1,000 interest in the
Certificates........................................$_______
B. Information Regarding the Performance of the Trust
1. Pool Balance and Certificate Principal Balance.
(a) The Pool Balance at the close of business on the last day
of the Collection Period............................$_______
(b) The Certificate Principal Balance after giving effect to
payments Allocated to principal as set forth in Paragraph
A.1(c) .............................................$_______
(c) The Certificate Pool Factor after giving effect to the
payments set forth in paragraph A.1(c)..............$_______
(d) The amount of aggregate Realized Losses for the second
preceding Collection Period.........................$_______
(e) The aggregate Purchase Amount for all Receivables that
were repurchased in the Collection Period...........$_______
2. Servicing Fee.
(a) The Pool Balance at the close of business on the last day
of the Collection Period............................$_______
3. Transfer of Subsequent Receivables.
(a) Aggregate amount on deposit in the Pre-Funding Account on
such Payment Date after giving effect to all withdrawals
therefrom on such Payment Date......................$_______
(b) Aggregateamount on deposit in the Capitalized Interest
Account on such distribution date after giving effect to
all withdrawals therefrom on such Payment Date......$_______
(c) Aggregate amount on deposit in the Pre-Funding Account on
the final Subsequent Transfer Date after giving effect to
all withdrawals therefrom on such Payment Date......$_______
(d) The amount set forth in paragraph B.3(a) per $1,000
interest in the Certificates:.......................$_______
(e) The amount set forth in paragraph B.3(b) to be distributed
to Certificateholders per $1,000 interest in the
Certificates........................................$_______
(f) The amount set forth in paragraph B.3(c) to be distributed
to Certificateholders per $1,000 interest in the
Certificates:.......................................$_______
4. (a) The aggregate amount of collections by the Servicer during
the preceding Collection Period......................$_______
(b) The aggregate amount which was received by the Trust from
the Servicer........................................$_______
(c) The aggregate amount of reimbursements to the Security
Insurer.............................................$_______
(d) The number of Receivables that are delinquent for over:
30 days.............................................$_______
60 days.............................................$_______
90 days.............................................$_______
EXHIBIT C
FORM OF MONTHLY NOTEHOLDER STATEMENT
___________ VEHICLE RECEIVABLES
OWNER TRUST 200_-_
Class A-1 [_____]% Asset Backed Notes
Class A-2 [_____]% Asset Backed Notes
Class A-3 [_____]% Asset Backed Notes
Class A-4 [_____]% Asset Backed Notes
Payment Date:
Collection Period:
Under the Sale and Servicing Agreement dated as of
___________________ [1], 200_ among __________________________ VEHICLE
RECEIVABLES OWNER TRUST 200_-_, a Delaware business trust (the "Issuer"),
__________________________, a _____ __________________________, as transferor
(the _____ "Transferor") __________________________, a ___________limited
liability company and as seller and servicer (the "Seller" and the
"Servicer"), ML ASSET BACKED CORPORATION, as depositor (the "Depositor") and
__________________________, as Indenture Trustee and Backup Servicer, the
Servicer is required to prepare certain information each month regarding
current distributions to Noteholders and the performance of the Trust during
the previous month. The information that is required to be prepared with
respect to the Payment Date and Collection Period listed above is set forth
below. Certain of the information is presented on the basis of an original
principal amount of $1,000 per Note, and certain other information is
presented based upon the aggregate amounts for the Trust as a whole.
A. Information Regarding the Current Monthly Distribution.
1. Notes.
(a) The aggregate amount of the distribution with respect to:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(b) The amount of the distribution set forth in paragraph A.
1.(a) above in respect of interest on:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(c) The amount of the distribution set forth in paragraph A.
1.(a) above in respect of principal of:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(d) The amount of the distribution in A.1.(a) payable
pursuant to a claim on:
The Policy with respect to..........................$_______
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(e) The remaining outstanding balance available to be drawn
under the Policy..........................$_______
(f) The amount of the distribution set forth in paragraph A.
1.(a) above per $1,000 interest in:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(g) The amount of the distribution set forth in paragraph A.
1.(b) above per $1,000 interest in:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(h) The amount of the distribution set forth in paragraph
A.1.(c) above per $1,000 interest in:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(i) The amount of the distribution set forth in paragraph
A.1.(d) above per $1,000 interest in:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
B. Information Regarding the Performance of the Trust
1. Pool Balance and Note Principal Balance.
(a) The Pool Balance at the close of business on the last day
of the Collection Period.........$_______
(b) The aggregate outstanding principal amount of each Class
of Notes after giving effect to payments allocated to
principal as set forth in Paragraph A.1(c) above with
respect to:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(c) The Note Pool Factor for each Class of Notes after giving
effect to the payments set forth in paragraph A.1(c) with
respect to:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(d) The amount of aggregate Realized Losses for the second
preceding Collection
Period..............................................$_______
(e) The aggregate Purchase Amount for all Receivables that
were repurchased in the Collection
Period..............................................$_______
2. Servicing Fee.
The aggregate amount of the Servicing Fee paid to the Servicer
with respect to the preceding Collection Period.....$_______
3. Payment Shortfalls.
(a) The amount of the Noteholders' Interest Carryover
Shortfall after giving effect to the payments set forth in
paragraph A.1(b) above with respect to:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(b) The amount of the Noteholders' Interest Carryover
Shortfall set forth in paragraph B.3.(a) above per $1,000
interest with respect to:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
4. Transfer of Subsequent Receivables.
(a) Aggregate amount on deposit in the Pre-Funding Account on
such Payment Date after giving effect to all withdrawals
therefrom on such Payment
Date................................................$_______
(b) Aggregate amount on deposit in the Capitalized Interest
Account on such distribution date after giving effect to
all withdrawals therefrom on such Payment
Date................................................$_______
(c) Aggregate amount on deposit in the Pre-Funding Account on
the final Subsequent Transfer Date after giving effect to
all withdrawals therefrom on such Payment
Date................................................$_______
(d) the amount set forth in paragraph B.4(a) per $1,000
interest in:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(e) the amount set forth in paragraph B.4(b) to be distributed
to Noteholders per $1,000 interest in:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
(f) the amount set forth in paragraph B.4(c) to be distributed
to Noteholders per $1,000 interest in:
the Class A-1 Notes.................................$_______
the Class A-2 Notes.................................$_______
the Class A-3 Notes.................................$_______
the Class A-4 Notes.................................$_______
5. Other Information.
(a) The aggregate amount of collections by the Servicer during
the preceding Collection Period.....................$_______
(b) The aggregate amount which was received by the Trust from
the Servicer........................................$_______
(c) The aggregate amount of reimbursements to the
insurer.............................................$_______
(d) The number of Receivables that are delinquent for over:
30 days.............................................$_______
60 days.............................................$_______
90 days.............................................$_______
EXHIBIT D
Form of Servicer's Certificate
[Omitted]
EXHIBIT E
Form of Policy
EXHIBIT F
Form of Stamp
SCHEDULE A
Schedule of Receivables
SCHEDULE B
Location of Receivables
