EXHIBIT 10.3
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SALE AND SERVICING AGREEMENT
by and among
CAPITAL ONE PRIME AUTO RECEIVABLES TRUST 2003-2,
as Issuer
CAPITAL ONE AUTO RECEIVABLES, LLC,
as Seller
CAPITAL ONE AUTO FINANCE, INC.,
as Servicer
and
JPMORGAN CHASE BANK,
as Indenture Trustee
Dated as of September 23, 2003
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND USAGE........................................1
SECTION 1.1 Definitions...............................................1
SECTION 1.2 Other Interpretive Provisions.............................1
ARTICLE II CONVEYANCE OF TRANSFERRED ASSETS.............................2
SECTION 2.1 Conveyance of Transferred Assets..........................2
SECTION 2.2 Representations and Warranties of the Seller as to each
Receivable.............................................2
SECTION 2.3 Repurchase upon Breach....................................2
SECTION 2.4 Custody of Receivable Files...............................3
SECTION 2.5 Funding Events............................................5
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST
PROPERTY..................................................6
SECTION 3.1 Duties of Servicer........................................6
SECTION 3.2 Collection of Receivable Payments.........................7
SECTION 3.3 Repossession of Financed Vehicles.........................7
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles....7
SECTION 3.5 Covenants of Servicer.....................................7
SECTION 3.6 Purchase of Receivables Upon Breach.......................8
SECTION 3.7 Servicing Fee.............................................8
SECTION 3.8 Servicer's Certificate....................................8
SECTION 3.9 Annual Officer's Certificate; Notice of Servicer
Termination Event......................................8
SECTION 3.10 Annual Independent Public Accountants' Report.............9
SECTION 3.11 Servicer Expenses.........................................9
ARTICLE IV DISTRIBUTIONS; ACCOUNTS STATEMENTS TO THE RESIDUAL
INTERESTHOLDERS AND THE NOTEHOLDERS.......................9
SECTION 4.1 Establishment of Accounts.................................9
SECTION 4.2 Remittances..............................................11
SECTION 4.3 Additional Deposits and Payments.........................12
SECTION 4.4 Distributions............................................12
SECTION 4.5 Net Deposits.............................................14
SECTION 4.6 Statements to Residual Interestholders and Noteholders...14
SECTION 4.7 No Duty to Confirm.......................................15
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TABLE OF CONTENTS
(continued)
SECTION 4.8 Interest Rate Swap Agreement.............................15
ARTICLE V THE SELLER..................................................17
SECTION 5.1 Representations and Warranties of Seller.................17
SECTION 5.2 Liability of Seller; Indemnities.........................18
SECTION 5.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller................................19
SECTION 5.4 Limitation on Liability of Seller and Others.............19
SECTION 5.5 Seller May Own Notes.....................................20
SECTION 5.6 Xxxxxxxx-Xxxxx Act Requirements..........................20
SECTION 5.7 Compliance with Organizational Documents.................20
ARTICLE VI THE SERVICER................................................20
SECTION 6.1 Representations of Servicer..............................20
SECTION 6.2 Indemnities of Servicer..................................21
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer..............................23
SECTION 6.4 Limitation on Liability of Servicer and Others...........23
SECTION 6.5 Delegation of Duties.....................................24
SECTION 6.6 COAF Not to Resign as Servicer...........................24
SECTION 6.7 Servicer May Own Securities..............................24
ARTICLE VII TERMINATION OF SERVICER.....................................24
SECTION 7.1 Termination of Servicer..................................24
SECTION 7.2 Notification to Noteholders..............................26
ARTICLE VIII OPTIONAL PURCHASE...........................................26
SECTION 8.1 Optional Purchase of Trust Estate........................26
ARTICLE IX MISCELLANEOUS PROVISIONS....................................26
SECTION 9.1 Amendment................................................26
SECTION 9.2 Protection of Title......................................27
SECTION 9.3 Other Liens or Interests.................................29
SECTION 9.4 Transfers Intended as Sale; Security Interest............29
SECTION 9.5 Notices, Etc.............................................30
SECTION 9.6 Choice of Law............................................30
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TABLE OF CONTENTS
(continued)
SECTION 9.7 Headings.................................................30
SECTION 9.8 Counterparts.............................................30
SECTION 9.9 Waivers..................................................30
SECTION 9.10 Entire Agreement.........................................30
SECTION 9.11 Severability of Provisions...............................31
SECTION 9.12 Binding Effect...........................................31
SECTION 9.13 Acknowledgment and Agreement.............................31
SECTION 9.14 No Waiver; Cumulative Remedies...........................31
SECTION 9.15 Nonpetition Covenant.....................................31
SECTION 9.16 Submission to Jurisdiction...............................31
SECTION 9.17 Limitation of Liability..................................32
SECTION 9.18 Third-Party Beneficiaries................................33
SECTION 9.19 Limitation of Rights.....................................33
Schedule I Representations and Warranties
Schedule II Notice Addresses
Exhibit A Form of Notice of Funding Date
Exhibit B Form of Joint Officer's Certificate
Exhibit C Form of Assignment pursuant to Sale and Servicing Agreement
Appendix A Definitions
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SALE AND SERVICING AGREEMENT, dated as of September 23, 2003 (as from time
to time amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), by and among CAPITAL ONE PRIME AUTO RECEIVABLES TRUST
2003-2, a Delaware statutory trust (the "Issuer"), CAPITAL ONE AUTO RECEIVABLES,
LLC, a Delaware limited liability company, as seller (the "Seller"), CAPITAL ONE
AUTO FINANCE, INC., a Texas corporation ("COAF"), as servicer (in such capacity,
the "Servicer"), and JPMORGAN CHASE BANK, a New York banking corporation, as
indenture trustee (the "Indenture Trustee").
WHEREAS, the Issuer desires to purchase from the Seller a portfolio of
motor vehicle receivables, including motor vehicle retail installment loans that
are secured by new and used automobiles, light-duty trucks and motorcycles;
WHEREAS, the Seller is willing to sell such portfolio of motor vehicle
receivables and related property to the Issuer; and
WHEREAS, COAF is willing to service such motor vehicle receivables and
related property on behalf of the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1.1 Definitions. Except as otherwise specified herein or as the
context may otherwise require, capitalized terms used but not otherwise defined
herein are defined in Appendix A hereto, which also contains rules as to usage
that are applicable herein.
SECTION 1.2 Other Interpretive Provisions. For purposes of this Agreement,
unless the context otherwise requires: (a) accounting terms not otherwise
defined in this Agreement, and accounting terms partly defined in this Agreement
to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles; (b) terms defined in Article 9
of the UCC as in effect in the relevant jurisdiction and not otherwise defined
in this Agreement are used as defined in that Article; (c) the words "hereof,"
"herein" and "hereunder" and words of similar import refer to this Agreement as
a whole and not to any particular provision of this Agreement; (d) references to
any Article, Section, Schedule, Appendix or Exhibit are references to Articles,
Sections, Schedules, Appendices and Exhibits in or to this Agreement and
references to any paragraph, subsection, clause or other subdivision within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (e) the term "including" means
"including without limitation"; (f) except as otherwise expressly provided
herein, references to any law or regulation refer to that law or regulation as
amended from time to time and include any successor law or regulation; (g)
references to any Person include that Person's successors and assigns; and (h)
headings are for
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
ARTICLE II
CONVEYANCE OF TRANSFERRED ASSETS
SECTION 2.1 Conveyance of Transferred Assets. (a) In consideration of the
Issuer's sale and delivery to, or upon the order of, the Seller of all of the
Notes and the Certificate on the Closing Date, the Seller does hereby
irrevocably sell, transfer, assign and otherwise convey to the Issuer without
recourse (subject to the obligations herein) all right, title and interest of
the Seller, whether now owned or hereafter acquired, in, to and under the
Initial Transferred Assets, described in an Assignment in the form of Exhibit C
delivered on the Closing Date. The sale, transfer, assignment and conveyance
made hereunder does not constitute and is not intended to result in an
assumption by the Issuer of any obligation of the Seller or the Originators to
the Obligors, the Dealers or any other Person in connection with the Receivables
or the other assets and properties conveyed hereunder or any agreement, document
or instrument related thereto.
(b) In consideration of the payment of the purchase price from the
Pre-Funding Account, on each Funding Date the Seller does hereby sell, transfer,
assign, and otherwise convey to the Issuer without recourse (subject to the
obligations herein) all right, title and interest of the Seller, whether now
owned or hereafter acquired, in, to and under the Subsequent Transferred Assets,
described in an Assignment in the form of Exhibit C delivered on such Funding
Date. The purchase of the Subsequent Transferred Assets on each Funding Date
shall be made in accordance with the Purchase Agreement and this Agreement. The
sale, transfer, assignment and conveyance made hereunder does not constitute and
is not intended to result in an assumption by the Issuer of any obligation of
the Seller or the Originators to the Obligors, the Dealers or any other Person
in connection with the Receivables or the other assets and properties conveyed
hereunder or any agreement, document or instrument related thereto.
SECTION 2.2 Representations and Warranties of the Seller as to each
Receivable. On the date hereof or on each Funding Date, as the case may be, the
Seller hereby makes the representations and warranties set forth on Schedule I
as to the Receivables sold, transferred, assigned, and otherwise conveyed to the
Issuer under this Agreement on which such representations and warranties the
Issuer relies in acquiring the Receivables. Such representations and warranties
as to each Receivable relate to the characteristics of such Receivable as of the
applicable Cut-Off Date for such Receivable (unless Schedule I specifically
identifies a different date as applying to a particular representation or
warranty), but shall survive the Grant of the Receivables by the Issuer to the
Indenture Trustee pursuant to the Indenture. Notwithstanding any statement to
the contrary contained herein or in any other Transaction Document, the Seller
shall not be required to notify any insurer with respect to any Insurance Policy
obtained by an Obligor or to notify any Dealer about any aspect of the
transaction contemplated by the Transaction Documents.
SECTION 2.3 Repurchase upon Breach. Upon discovery by any party hereto of a
breach of any of the representations and warranties set forth in Section 2.2 at
the time such representations and warranties were made which materially and
adversely affects the interests of
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the Issuer or the Noteholders, the party discovering such breach shall give
prompt written notice thereof to the other parties hereto; provided, that the
failure to give such notice shall not affect any obligation of the Seller
hereunder. If the Seller does not correct or cure such breach prior to the end
of the Collection Period which includes the 60th day (or, if the Seller elects,
an earlier date) after the date that the Seller became aware or was notified of
such breach, then the Seller shall purchase any Receivable affected by such
breach which materially and adversely affects the interests of the Issuer and
the Noteholders from the Issuer on the Payment Date following the end of such
Collection Period. Any such breach or failure will not be deemed to have a
material and adverse effect if such breach or failure does not affect the
ability of the Issuer to receive and retain timely payment in full on such
Receivable. Any such purchase by the Seller shall be at a price equal to the
Repurchase Price. In consideration for such repurchase, the Seller shall make
(or shall cause to be made) a payment to the Issuer equal to the Repurchase
Price by depositing such amount into the Collection Account prior to noon, New
York City time on such Payment Date. Upon payment of such Repurchase Price by
the Seller, the Issuer and the Indenture Trustee shall release and shall execute
and deliver such instruments of release, transfer or assignment, in each case
without recourse or representation, as shall be reasonably necessary to vest in
the Seller or its designee any Receivable repurchased pursuant hereto. It is
understood and agreed that the right to cause the Seller to purchase (or to
enforce the obligations of COAF under the Purchase Agreement to purchase) any
Receivable as described above shall constitute the sole remedy respecting such
breach available to the Issuer and the Indenture Trustee. Neither the Owner
Trustee nor the Indenture Trustee will have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section 2.3.
SECTION 2.4 Custody of Receivable Files.
(a) Custody. The Issuer, upon the execution and delivery of this Agreement,
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as the agent of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments, which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer pursuant to the Indenture with respect to each Receivable (but only to
the extent applicable to such Receivable and only to the extent held in tangible
paper form) (the "Receivable Files"):
(i) the fully executed original Contract related to such Receivable,
including any written amendments or extensions thereto;
(ii) the original credit application or a photocopy thereof to the
extent held in paper form;
(iii) the original Certificate of Title or, if not yet received,
evidence that an application therefore has been submitted with
the appropriate authority, a guaranty of title from a Dealer or
such other document (electronic or otherwise, as used in the
applicable jurisdiction) that the Servicer keeps on file, in
accordance with its Customary Servicing Practices, evidencing the
security interest of the related Originator in the Financed
Vehicle; provided, however, that in lieu of being held in the
Receivable File, the
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Certificate of Title may be held by a third party service
provider engaged by the Servicer to obtain and/or hold
Certificates of Title; and
(iv) any and all other documents that the Servicer or the Seller keeps
on file, in accordance with its Customary Servicing Practices,
relating to a Receivable, an Obligor or a Financed Vehicle.
(b) Safekeeping. The Servicer, in its capacity as custodian, shall hold the
Receivable Files for the benefit of the Issuer and the Indenture Trustee. In
performing its duties as custodian, the Servicer shall act in accordance with
its Customary Servicing Practices. In accordance with its Customary Servicing
Practices, the Servicer will conduct, or cause to be conducted, periodic audits
of the Receivable Files held by it under this Agreement, and of the related
accounts, records, and computer systems, in such a manner as would enable the
Issuer or the Indenture Trustee to verify the accuracy of the Servicer's record
keeping. The Servicer will promptly report to the Issuer and the Indenture
Trustee any failure on its part to hold a material portion of the Receivable
Files and maintain its accounts, records, and computer systems as herein
provided and promptly take appropriate action to remedy any such failure.
Nothing herein will be deemed to require an initial review or any periodic
review by the Issuer or the Indenture Trustee of the Receivable Files.
(c) Maintenance of and Access to Records. The Servicer will maintain each
Receivable File at one of its offices in the United States, or at such other
location as specified to the Issuer and the Indenture Trustee by written notice
not later than ninety (90) days after any change in location (it being
understood that the Receivable Files, or any part thereof, may be maintained at
the offices of any Person to whom the Servicer has delegated responsibilities in
accordance with Section 6.5). The Servicer will make available to the Issuer and
the Indenture Trustee or their duly authorized representatives, attorneys or
auditors a list of locations of the Receivable Files upon request. The Servicer
will provide access to the Receivable Files, and the related accounts records,
and computer systems maintained by the Servicer at such times as the Issuer or
the Indenture Trustee direct, but only upon reasonable notice and during the
normal business hours at the respective offices of the Servicer.
(d) Release of Documents. Upon written instructions from the Indenture
Trustee, the Servicer will release or cause to be released any document in the
Receivable Files to the Indenture Trustee, the Indenture Trustee's agent or the
Indenture Trustee's designee, as the case may be, at such place or places as the
Indenture Trustee may designate, as soon thereafter as is practicable. Any
document so released will be handled by the Indenture Trustee with due care and
returned to the Servicer for safekeeping as soon as the Indenture Trustee or its
agent or designee, as the case may be, has no further need therefor.
(e) Instructions; Authority to Act. All instructions from the Indenture
Trustee will be in writing and signed by an Authorized Officer of the Indenture
Trustee, and the Servicer will be deemed to have received proper instructions
with respect to the Receivable Files upon its receipt of such written
instructions.
(f) Custodian's Indemnification. Subject to Section 6.2, the Servicer as
custodian will indemnify the Issuer and the Indenture Trustee for any and all
liabilities, obligations, losses,
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compensatory damages, payments, costs, or expenses of any kind whatsoever that
may be imposed on, incurred, or asserted against the Issuer or the Indenture
Trustee as the result of any improper act or omission in any way relating to the
maintenance and custody by the Servicer as custodian of the Receivable Files;
provided, however, that the Servicer will not be liable (i) to the Issuer for
any portion of any such amount resulting from the willful misconduct, bad faith
or negligence of the Indenture Trustee or the Issuer and (ii) to the Indenture
Trustee for any portion of any such amount resulting from the willful
misconduct, bad faith or negligence of the Indenture Trustee or the Issuer.
(g) Effective Period and Termination. The Servicer's appointment as
custodian will become effective as of the Cut-Off Date and will continue in full
force and effect until terminated pursuant to this Section. If COAF resigns as
Servicer in accordance with the provisions of this Agreement or if all of the
rights and obligations of the Servicer have been terminated under Section 7.1,
the appointment of the Servicer as custodian hereunder may be terminated by the
Indenture Trustee, or by the Noteholders of Notes evidencing not less than a
majority of the aggregate outstanding principal amount of the Controlling Class,
in the same manner as the Indenture Trustee or such Noteholders may terminate
the rights and obligations of the Servicer under Section 7.1. As soon as
practicable after any termination of such appointment, the Servicer will deliver
to the Indenture Trustee or the Indenture Trustee's agent the Receivable Files
and the related accounts and records maintained by the Servicer at such place or
places as the Indenture Trustee may reasonably designate.
SECTION 2.5 Funding Events.
(a) A funding event (each, a "Funding Event") shall occur upon a Funding
Date and in accordance with the requirements of this Section.
(b) During the Pre-Funding Period, the Issuer shall, on the Funding Dates,
(i) acquire Subsequent Transferred Assets from the Seller pursuant to Section
2.1(b) (and the Seller shall have acquired the related Subsequent Purchased
Assets from COAF pursuant to the Purchase Agreement) and (ii) Grant all of the
Issuer's right, title and interest in, to and under such Subsequent Transferred
Assets to the Indenture Trustee for the benefit of the Holders of the Notes and
the Swap Counterparty. Such Subsequent Transferred Assets shall be acquired at
the option of the Issuer upon instruction from the Servicer; provided that such
Subsequent Transferred Assets may not be acquired through the Pre-Funding
Account if the effect of such acquisition would be to (i) reduce the weighted
average contract rate of the Receivables included in the Transferred Assets to
less than 5.00%, (ii) increase the weighted average remaining term to maturity
of the Receivables included in the Transferred Assets to greater than 58 months
or (iii) increase the portion of the Receivables included in the Transferred
Assets due from Obligors having a billing address in any given state to a level
greater than 10% of the aggregate Principal Balance of the Receivables (except
with respect to California).
(c) The following procedures shall be followed to effect a Funding Event:
(i) COAF will package and forward or cause to be packaged and
forwarded to the Servicer the Receivables File with respect to each
Subsequent Receivable.
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(ii) By the Funding Date, the Issuer shall deliver, or cause to be
delivered, to the Indenture Trustee and the Servicer the following:
(1) a Notice of Funding Date (in the form of Exhibit A hereto) with
the related Schedule of Receivables delivered by the Seller with
respect thereto; and
(2) a Joint Officer's Certificate of COAF, the Seller and the Issuer
(in the form of Exhibit B hereto).
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer.
(a) The Servicer is hereby appointed by the Issuer and authorized to act as
agent for the Issuer and in such capacity shall manage, service, administer and
make collections on the Receivables in accordance with its Customary Servicing
Practices, using the degree of skill and attention that the Servicer exercises
with respect to all comparable motor vehicle receivables that it services for
itself or others. The Servicer's duties will include collection and posting of
all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending invoices or payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections and furnishing
monthly and annual statements to the Indenture Trustee with respect to
distributions. The Servicer hereby accepts such appointment and authorization
and agrees to perform the duties of Servicer with respect to the Receivables set
forth herein.
(b) Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the Residual
Interestholders, or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer commences a legal proceeding to
enforce a Receivable, the Issuer will 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 is held that the Servicer may
not enforce a Receivable on the ground that it is not a real party in interest
or a holder entitled to enforce the Receivable, the Issuer will, at the
Servicer's expense and direction, take steps to enforce the Receivable,
including bringing suit in its name or the names of the Indenture Trustee. The
Issuer will furnish the Servicer with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer, at its expense,
will obtain on behalf of the Issuer all licenses, if any, required by the laws
of any jurisdiction to be held by the Issuer in connection with ownership of the
Receivables, and will make all filings and pay all fees as may be required in
connection therewith during the term hereof.
(c) The Servicer hereby agrees that upon its resignation and the
appointment of a successor Servicer hereunder, the Servicer will terminate its
activities as Servicer hereunder in
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accordance with Section 7.1, 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, and the Servicer shall cooperate
with and assist such successor Servicer.
SECTION 3.2 Collection of Receivable Payments. The Servicer will make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same becomes due in accordance
with its Customary Servicing Practices. Subject to Section 3.5, the Servicer may
grant extensions, rebates, deferrals, amendments, modifications or adjustments
on a Receivable in accordance with its Customary Servicing Practices; provided,
however, that if the Servicer extends the date for final payment by the Obligor
of any Receivable beyond the last day of the Collection Period prior to the
Class B Final Scheduled Payment Date, it will promptly purchase such Receivable
in the manner provided in Section 3.6. 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. 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 such refinancing shall not be property of the Issuer.
SECTION 3.3 Repossession of Financed Vehicles. On behalf of the Issuer, the
Servicer will use reasonable efforts, consistent with its Customary Servicing
Practices, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer had determined eventual
payment in full is unlikely unless it determines in its sole discretion that
repossession will not increase the Liquidation Proceeds by an amount greater
than the expense of such repossession. The Servicer will follow such Customary
Servicing Practices as it deems necessary or advisable, which may include
reasonable efforts to realize upon any recourse to any Dealer and selling the
Financed Vehicle at public or private sale. The foregoing will be subject to the
provision that, in any case in which the Financed Vehicle has suffered damage,
the Servicer shall not be required to expend funds in connection with the repair
or the repossession of such Financed Vehicle unless it determines in its sole
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses.
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles. The
Servicer will, in accordance with its Customary Servicing Practices, take such
steps as are necessary to maintain perfection of the security interest created
by each Receivable in the related Financed Vehicle. The Issuer hereby authorizes
the Servicer 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.
SECTION 3.5 Covenants of Servicer. The Servicer will not (i) release the
Financed Vehicle securing each such Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by or on behalf of the Obligor thereunder or payment in full less a
deficiency which the Servicer would not attempt to collect in accordance with
its Customary Servicing Practices or in connection with repossession or except
as may be required by an insurer in order to receive proceeds from any Insurance
Policy covering
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such Financed Vehicle or (ii) reduce the Contract Rate or Principal Balance with
respect to any Receivable other than as required by applicable law.
SECTION 3.6 Purchase of Receivables Upon Breach. Upon discovery by any
party hereto of a breach of any of the covenants set forth in Section 3.2, 3.3,
3.4 or 3.5 which materially and adversely affects the interests of the Issuer or
the Noteholders, the party discovering such breach shall give prompt written
notice thereof to the other parties hereto; provided, that the failure to give
such notice shall not affect any obligation of the Servicer hereunder. If the
Servicer does not correct or cure such breach prior to the end of the Collection
Period which includes the 60th day (or, if the Servicer elects, an earlier date)
after the date that the Servicer became aware or was notified of such breach,
then the Servicer shall purchase any Receivable affected by such breach which
materially and adversely affects the interests of the Issuer and the Noteholders
from the Issuer on the Payment Date following the end of such Collection Period.
Any such breach or failure will not be deemed to have a material and adverse
effect if such breach or failure does not affect the ability of the Issuer to
receive and retain timely payment in full on such Receivable. Any such purchase
by the Servicer shall be at a price equal to the Repurchase Price. In
consideration for such repurchase, the Servicer shall make (or shall cause to be
made) a payment to the Issuer equal to the Repurchase Price by depositing such
amount into the Collection Account prior to noon, New York City time on such
Payment Date. Upon payment of such Repurchase Price by the Servicer, the Issuer
and the Indenture Trustee shall release and shall execute and deliver such
instruments of release, transfer or assignment, in each case without recourse or
representation, as shall be reasonably necessary to vest in the Servicer or its
designee any Receivable repurchased pursuant hereto. It is understood and agreed
that the obligation of the Servicer to purchase any Receivable as described
above shall constitute the sole remedy respecting such breach available to the
Issuer and the Indenture Trustee.
SECTION 3.7 Servicing Fee. On each Payment Date, the Issuer shall pay to
the Servicer the Servicing Fee in accordance with Section 4.4 for the
immediately preceding Collection Period as compensation for its services. In
addition, the Servicer will be entitled to retain all Supplemental Servicing
Fees.
SECTION 3.8 Servicer's Certificate. On the Determination Date preceding
each Payment Date, the Servicer shall deliver to the Indenture Trustee and each
Paying Agent, with a copy to each of the Rating Agencies, a Servicer's
Certificate containing all information necessary to make the payments, transfers
and distributions pursuant to Sections 4.3 and 4.4 on such Payment Date,
together with the written statements to be furnished by the Indenture Trustee to
the Noteholders pursuant to Section 4.6 hereof and Section 6.6 of the Indenture.
At the sole option of the Servicer, each Servicer's Certificate may be delivered
in electronic or hard copy format.
SECTION 3.9 Annual Officer's Certificate; Notice of Servicer Termination
Event. (a) The Servicer will deliver to the Rating Agencies, the Issuer, the
Indenture Trustee and the Swap Counterparty, on or before March 15 of each year,
beginning on March 15, 2004, an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that (i) a review of the
activities of the Servicer during the prior calendar year and of performance
under this Agreement has been made under such Authorized Officer's supervision;
and (ii) to the best of such Authorized Officer's knowledge, based on such
review, the Servicer has performed
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in all material respects its obligations under this Agreement throughout such
year, or, if there has been a material default in the performance of any such
obligation, specifying each such default known to such Authorized Officer and
the nature and status thereof.
(b) The Servicer will deliver to the Issuer, the Indenture Trustee and each
Rating Agency promptly after having obtained knowledge thereof written notice in
an Officer's Certificate of any event which with the giving of notice or lapse
of time, or both, would become a Servicer Termination Event.
SECTION 3.10 Annual Independent Public Accountants' Report. The Servicer
shall cause a firm of independent certified public accountants, who may also
render other services to the Servicer or to its Affiliates, to deliver to the
Rating Agencies, the Issuer, the Indenture Trustee and the Swap Counterparty on
or before March 15 of each year, beginning March 15, 2004, a report addressed to
the board of directors of the Servicer, to the effect that such firm has
examined the accompanying annual Officer's Certificate delivered by the Servicer
pursuant to Section 3.9 and that: (a) such examination was made in accordance
with attestation standards established by the American Institute of Certified
Public Accountants and, accordingly, included examining, on a test basis,
evidence about the Servicer's compliance with those requirements and performing
such other procedures as such accountants considered necessary in the
circumstances and (b) except as described in such report, the Servicer's annual
statement of compliance for such year delivered pursuant to Section 3.9 is
fairly stated in all material respects.
SECTION 3.11 Servicer Expenses. The Servicer will be required to pay all
expenses (other than expenses described in the definition of Liquidation
Proceeds) incurred by it in connection with its activities hereunder, including
fees and disbursements of the Indenture Trustee, Owner Trustee (in accordance
with Section 8.1 of the Trust Agreement), independent accountants, taxes imposed
on the Servicer and expenses incurred in connection with distributions and
reports to the Noteholders and the Residual Interestholders.
ARTICLE IV
DISTRIBUTIONS; ACCOUNTS
STATEMENTS TO THE RESIDUAL INTERESTHOLDERS
AND THE NOTEHOLDERS
SECTION 4.1 Establishment of Accounts. (a) The Servicer shall cause to be
established:
(i) For the benefit of the Noteholders and the Swap Counterparty, in
the name of the Indenture Trustee, an Eligible Account (the
"Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Noteholders, which Eligible Account shall be established by and
maintained with the Indenture Trustee or its designee.
(ii) For the benefit of the Noteholders and the Swap Counterparty, in
the name of the Indenture Trustee, an Eligible Account (the
"Principal Distribution
9
Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the
Noteholders, which Eligible Account shall be established by and
maintained with the Indenture Trustee or its designee.
(iii) For the benefit of the Noteholders and the Swap Counterparty, in
the name of the Indenture Trustee, an Eligible Account (the
"Reserve Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the
Noteholders, which Eligible Account shall be established by and
maintained with the Indenture Trustee or its designee.
(iv) For the benefit of the Noteholders and the Swap Counterparty, in
the name of the Indenture Trustee, an Eligible Account (the
"Pre-Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Noteholders, which Eligible Account shall be established by and
maintained with the Indenture Trustee or its designee.
(b) Funds on deposit in the Collection Account, the Pre-Funding Account,
the Reserve Account and the Principal Distribution Account (collectively, the
"Trust Accounts") shall be invested by the Indenture Trustee in Eligible
Investments selected in writing by the Servicer and of which the Servicer
provides notification (pursuant to standing instructions or otherwise); provided
that it is understood and agreed that neither the Servicer, the Indenture
Trustee nor the Issuer shall be liable for any loss arising from such investment
in Eligible Investments. All such Eligible Investments shall be held by or on
behalf of Indenture Trustee as secured party for the benefit of the Noteholders.
Except to the extent the Rating Agency Condition is satisfied, all investments
of funds on deposit in the Trust Accounts shall mature so that such funds will
be available on the next Payment Date. No Eligible Investment shall be sold or
otherwise disposed of prior to its scheduled maturity unless a default occurs
with respect to such Eligible Investment and the Servicer directs the Indenture
Trustee in writing to dispose of such Eligible Investment.
(c) 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 and all such funds, investments and proceeds shall be part of the Trust
Estate. Except as otherwise provided herein, the Trust Accounts shall be under
the sole dominion and control of Indenture Trustee for the benefit of the
Noteholders. If, at any time, any Trust Account ceases to be an Eligible
Account, the Servicer shall promptly notify the Indenture Trustee in writing
(unless such Trust Account is an account with the Indenture Trustee) and within
10 Business Days (or such longer period as to which each Rating Agency may
consent) after becoming aware of the fact, establish a new Trust Account as an
Eligible Account and shall direct the Indenture Trustee to transfer any cash
and/or any investments to such new Trust Account.
(d) With respect to the Trust Account Property, the parties hereto agree
that:
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(i) any Trust Account Property that is held in deposit accounts shall
be held solely in Eligible Accounts and, except as otherwise
provided herein, each such Eligible Account shall be subject to
the exclusive custody and control of the Indenture Trustee, and,
except as otherwise provided in the Transaction Documents, the
Indenture Trustee or its designee shall have sole signature
authority with respect thereto;
(ii) any Trust Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee or its designee, in
accordance with paragraph (a) of the definition of "Delivery" and
shall be held, pending maturity or disposition, solely by the
Indenture Trustee or any such designee;
(iii) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause
(ii) above shall be delivered to the Indenture Trustee or its
designee in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee or
such designee, pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its designee's)
ownership of such security; and
(iv) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b)
of the definition of "Delivery" and shall be maintained by the
Indenture Trustee or its designee or a financial intermediary (as
such term is defined in Section 8-313(4) of the UCC) acting
solely for the Indenture Trustee or such designee, pending
maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph.
SECTION 4.2 Remittances. The Servicer shall deposit an amount equal to all
Collections into the Collection Account within two Business Days after receipt;
provided, however, that if the Monthly Remittance Condition is satisfied, then
the Servicer shall not be required to deposit into the Collection Account an
amount equal to the Collections received during any Collection Period until 9:30
a.m., New York City time, on the following Payment Date. The "Monthly Remittance
Condition" shall be deemed to be satisfied if (i) COAF or one of its Affiliates
is the Servicer, (ii) no Servicer Termination Event has occurred and is
continuing and (iii) Capital One Financial Corporation has a short-term debt
rating of at least "Prime-1" from Xxxxx'x, "A-1" from Standard & Poor's and
"F-1" from Fitch. Notwithstanding the foregoing, the Servicer may remit
Collections to the Collection Account on any other alternate remittance schedule
(but not later than the related Payment Date) if the Rating Agency Condition is
satisfied with respect to such alternate remittance schedule. Pending deposit
into the Collection Account, Collections may be commingled and used by the
Servicer at its own risk and are not required to be segregated from its own
funds.
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SECTION 4.3 Additional Deposits and Payments. (a) On each Payment Date, the
Servicer and the Seller will deposit into the Collection Account the aggregate
Repurchase Price with respect to Repurchased Receivables purchased by the
Servicer or the Seller on such Payment Date and the Servicer will deposit into
the Collection Account all amounts to be paid under Section 8.1. All such
deposits with respect to a Payment Date will be made, in immediately available
funds by noon, New York City time, on such Payment Date related to such
Collection Period.
(b) The Indenture Trustee will, on the Payment Date relating to each
Collection Period, withdraw from the Reserve Account the Reserve Account Draw
Amount and the investment income accrued during such Collection Period from the
investment of funds in the Reserve Account and deposit such amounts in the
Collection Account.
(c) The Indenture Trustee will, on the Payment Date relating to each
Collection Period, withdraw from the Pre-Funding Account the investment income
accrued during such Collection Period from the investment of funds in the
Pre-Funding Account and deposit such amount in the Collection Account.
(d) The Indenture Trustee will, on each Payment Date, withdraw from the
Reserve Account the Reserve Account Excess Amount, if any, for such Payment Date
and deposit such amount in the Collection Account.
(e) On the Closing Date the Seller will deposit, or cause to be deposited
from proceeds of the sale of the Notes, into the Reserve Account an amount equal
to the Initial Reserve Account Deposit Amount.
SECTION 4.4 Distributions.
(a) Prior to any acceleration of the Notes pursuant to Section 5.2 of the
Indenture, on each Payment Date, the Indenture Trustee (based on information
contained in the Servicer's Certificate delivered on or before the related
Determination Date pursuant to Section 3.8) shall make the following deposits
and distributions, to the extent of Available Funds and the Reserve Account Draw
Amount, on deposit in the Collection Account for such Payment Date, in the
following order of priority:
(1) first, to the Indenture Trustee and the Owner Trustee, any
accrued and unpaid fees (including unpaid Indenture Trustee or
Owner Trustee fees with respect to prior periods) and any
reasonable expenses (including indemnification amounts) not
previously paid by the Servicer; provided, however, that expenses
and indemnification amounts payable to the Indenture Trustee and
the Owner Trustee pursuant to this clause first and clause first
of Section 5.4(b)(i) of the Indenture shall be limited to
$150,000 per annum in the aggregate;
(2) second, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees with respect to prior periods;
(3) third, to the Swap Counterparty, the Net Swap Payments;
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(4) fourth, on a pro rata basis, (a) to the Noteholders of Class A
Notes, the Accrued Class A Note Interest due and accrued for the
related Interest Period; provided, that if there are not
sufficient funds available to pay the entire amount of the
Accrued Class A Note Interest, the amounts available will be
applied to the payment of such interest on the Class A Notes on a
pro rata basis and (b) to the Swap Counterparty, any Senior Swap
Termination Payments payable to the Swap Counterparty;
(5) fifth, to the Principal Distribution Account for distribution to
the Noteholders pursuant to Section 8.2 of the Indenture, the
First Allocation of Principal, if any;
(6) sixth, to the Noteholders of the Class B Notes, the Accrued Class
B Note Interest due and accrued for the related Interest Period;
(7) seventh, to the Principal Distribution Account for distribution
to the Noteholders in accordance with Section 8.2 of the
Indenture, the Total Class A Allocation of Principal, if any;
(8) eighth, to the Reserve Account, any additional amounts required
to increase the amount in the Reserve Account up to the Specified
Reserve Account Balance;
(9) ninth, to the Principal Distribution Account for distribution to
the Noteholders in accordance with Section 8.2 of the Indenture,
the Total Class B Allocation of Principal, if any;
(10) tenth, to the Swap Counterparty, any Subordinate Swap Termination
Payments payable to the Swap Counterparty and any other amounts
payable by the Issuer to the Swap Counterparty and not previously
paid;
(11) eleventh, to the Owner Trustee and the Indenture Trustee,
expenses (including indemnification amounts) permitted under the
Trust Agreement and the Indenture, as applicable, which have not
been previously paid; and
(12) twelfth, to or at the direction of the Residual Interestholder,
any funds remaining.
Notwithstanding any other provision of this Section 4.4, following the
occurrence and during the continuation of an Event of Default which has resulted
in an acceleration of the Notes, the Indenture Trustee shall apply all amounts
on deposit in the Collection Account pursuant to Section 5.4(b) of the
Indenture.
(b) After the payment in full of the Notes, all amounts payable to the Swap
Counterparty and all other amounts payable under Section 4.4(a), all Collections
shall be paid to or in accordance with the instructions provided from time to
time by the Residual Interestholder.
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SECTION 4.5 Net Deposits. If the Monthly Remittance Condition is satisfied,
the Servicer shall be permitted to deposit into the Collection Account only the
net amount distributable to Persons other than the Servicer and its Affiliates
on the Payment Date. The Servicer shall, however, account as if all of the
deposits and distributions described herein were made individually.
SECTION 4.6 Statements to Residual Interestholders and Noteholders. On or
before each Determination Date, the Servicer shall provide to the Residual
Interestholders and to the Indenture Trustee (with a copy to each Rating Agency,
the Swap Counterparty and the Issuer) for the Indenture Trustee to forward to
each Noteholder of record as of the most recent Record Date, a statement setting
forth for the Collection Period and Payment Date relating to such Determination
Date the following information (to the extent applicable):
(a) the aggregate amount being paid on such Payment Date in respect of
interest on and principal of each Class of Notes;
(b) the Class A-1 Note Balance, the Class A-2 Note Balance, the Class A-3
Note Balance, the Class A-4 Note Balance and the Class B Note Balance, in each
case after giving effect to payments on such Payment Date;
(c) (i) the amount on deposit in the Reserve Account and the Specified
Reserve Account Balance, each as of the beginning and end of the related
Collection Period, (ii) the amount deposited in the Reserve Account in respect
of such Payment Date, if any, (iii) the Reserve Account Draw Amount and the
Reserve Account Excess Amount, if any, to be withdrawn from the Reserve Account
on such Payment Date, (iv) the balance on deposit in the Reserve Account on such
Payment Date after giving effect to withdrawals therefrom and deposits thereto
in respect of such Payment Date and (v) the change in such balance from the
immediately preceding Payment Date;
(d) the First Allocation of Principal, the Regular Allocation of Principal,
the Total Class A Allocation of Principal, the Total Class B Allocation of
Principal, the Class A Allocation of Principal and the Class A-1 Allocation of
Principal for such Payment Date;
(e) the Pool Balance and the Pool Factor as of the close of business on the
last day of the preceding Collection Period;
(f) the amount of the Servicing Fee to be paid to the Servicer with respect
to the related Collection Period and the amount of any unpaid Servicing Fees and
the change in such amount from that of the prior Payment Date;
(g) the amounts of the Class A Noteholders' Interest Carryover Shortfall
and the Class B Noteholders' Interest Carryover Shortfall, if any, on such
Payment Date and the change in such amounts from the preceding Payment Date;
(h) the aggregate Repurchase Price with respect to Repurchased Receivables
paid by (i) the Servicer and (ii) the Seller with respect to the related
Collection Period;
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(i) the amount on deposit in the Pre-Funding Account (until the termination
of the Pre-Funding Period); and
(j) the Net Swap Receipts, if any.
Each amount set forth pursuant to paragraph (a) or (g) above relating to the
Notes shall be expressed as a dollar amount per $1,000 of the initial principal
balance of the Notes (or Class thereof).
The Indenture Trustee may make available via the Indenture Trustee's
internet website all reports or notices required to be provided by the Indenture
Trustee under this Section 4.6. Any information that is disseminated in
accordance with the provisions of this Section 4.6 shall not be required to be
disseminated in any other form or manner. The Indenture Trustee will make no
representation or warranties as to the accuracy or completeness of such
documents and will assume no responsibility therefor.
The Indenture Trustee's internet website shall be initially located at
"xxx.xxxxxxxx.xxx/xxx" or at such other address as shall be specified by the
Indenture Trustee from time to time writing to the Noteholders, the Servicer,
the Issuer or any Paying Agent. In connection with providing access to the
Indenture Trustee's internet website, the Indenture Trustee may require
registration and the acceptance of a disclaimer. The Indenture Trustee shall not
be liable for the dissemination of information in accordance with this
Agreement.
SECTION 4.7 No Duty to Confirm. The Indenture Trustee shall have no duty or
obligation to verify or confirm the accuracy of any of the information or
numbers set forth in the Servicer's Certificate delivered by the Servicer to the
Indenture Trustee, and the Indenture Trustee shall be fully protected in relying
upon such Servicer's Certificate.
SECTION 4.8 Interest Rate Swap Agreement.
(a) The Issuer shall enter into the Initial Interest Rate Swap Agreement
with the Initial Swap Counterparty. Subject to the requirements of this Section
4.8, the Issuer may from time to time enter into one or more Replacement
Interest Rate Swap Agreements in the event that the Initial Interest Rate Swap
Agreement is terminated due to any "Termination Event" or "Event of Default"
(each as defined in the Initial Interest Rate Swap Agreement) prior to its
scheduled expiration and in accordance with the terms of such Interest Rate Swap
Agreement. Other than any Replacement Interest Rate Swap Agreement entered into
pursuant to this Section 4.8(a), the Issuer may not enter into any additional
interest rate swap agreements.
(b) In the event of any early termination of the Initial Interest Rate Swap
Agreement, (i) the Indenture Trustee shall establish the Swap Termination
Payment Account, (ii) any Swap Termination Payments received from the Initial
Swap Counterparty will be remitted to the Swap Termination Payment Account and
(iii) any Swap Replacement Proceeds received from a Replacement Swap
Counterparty will be remitted directly to the Initial Swap Counterparty;
provided, that any such remittance to the Initial Swap Counterparty shall not
exceed the amounts, if any, owed to the Swap Counterparty under the Initial
Interest Rate Swap Agreement; provided, further that the Initial Swap
Counterparty shall only receive Swap Replacement Proceeds if all Swap
Termination Payments due from the Swap Counterparty to the Issuer have been paid
in full
15
and if such amounts have not been paid in full then the amount of Swap
Replacement Proceeds necessary to make up any deficiency shall be remitted to
the Swap Termination Payment Account.
(c) The Issuer shall promptly, following the early termination of any
Initial Interest Rate Swap Agreement due to an "Event of Default" or
"Termination Event" (each as defined in the Initial Interest Rate Swap
Agreement) and in accordance with the terms of such Interest Rate Swap
Agreement, enter into a Replacement Interest Rate Swap Agreement to the extent
possible and practicable through application of funds available in the Swap
Termination Payment Account unless entering into such Replacement Interest Rate
Swap Agreement will cause the Rating Agency Condition not to be satisfied.
(d) To the extent that (i) the funds available in the Swap Termination
Payment Account exceed the costs of entering into a Replacement Interest Rate
Swap Agreement or (ii) the Issuer determines not to replace the Initial Interest
Rate Swap Agreement and the Rating Agency Condition is met with respect to such
determination, the amounts in the Swap Termination Payment Account shall be
included in Available Funds and allocated and applied in accordance with the
order of priority specified in Section 4.4(a) on the next following Payment
Date.
(e) If the Swap Counterparty is required to post collateral under the terms
of the Interest Rate Swap Agreement, the Indenture Trustee shall establish the
Swap Collateral Account over which the Indenture Trustee shall have exclusive
control and the sole right of withdrawal, and in which no Person other than the
Indenture Trustee and the Noteholders shall have any legal or beneficial
interest. The Indenture Trustee shall deposit all collateral received from the
Swap Counterparty under the Interest Rate Swap Agreement into the Swap
Collateral Account. Any and all funds at any time on deposit in, or otherwise to
the credit of, the Swap Collateral Account shall be held in trust by the
Indenture Trustee for the benefit of the Noteholders. The only permitted
withdrawal from or application of funds on deposit in, or otherwise to the
credit of, the Swap Collateral Account shall be (i) for application to
obligations of the Initial Swap Counterparty to the Issuer under the Initial
Interest Rate Swap Agreement in accordance with the terms of the Initial
Interest Rate Swap Agreement or (ii) to return collateral to the Swap
Counterparty when and as required by the Initial Interest Rate Swap Agreement.
(f) If at any time the Interest Rate Swap Agreement becomes subject to
early termination due to the occurrence of an "Event of Default" or "Termination
Event" (as defined in the Interest Rate Swap Agreement), the Issuer and the
Indenture Trustee shall use reasonable efforts (following the expiration of any
applicable grace period) to enforce the rights of the Issuer thereunder as may
be permitted by the terms of the Interest Rate Swap Agreement and consistent
with the terms hereof. To the extent not fully paid from Swap Replacement
Proceeds, any Swap Termination Payment owed by the Issuer to the Swap
Counterparty under the Interest Rate Swap Agreement shall be payable to the Swap
Counterparty in installments made on each following Payment Date until paid in
full in accordance with the order of priority specified in Section 4.4(a). To
the extent that the Swap Replacement Proceeds exceed any such Swap Termination
Payments (or if there are no Swap Termination Payments due to the Swap
Counterparty), the Swap Replacement Proceeds shall be included in Available
Funds and
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allocated and applied in accordance with the order of priority specified in
Section 4.4(a) on the next following Payment Date.
ARTICLE V
THE SELLER
SECTION 5.1 Representations and Warranties of Seller. The Seller makes the
following representations and warranties as of the Closing Date and as of each
Funding Date on which the Issuer will be deemed to have relied in acquiring the
Transferred Assets. The representations and warranties speak as of the execution
and delivery of this Agreement and will survive the conveyance of the
Transferred Assets to the Issuer and the pledge thereof by the Issuer to the
Indenture Trustee pursuant to the Indenture.
(a) Existence and Power. The Seller is a Delaware limited liability company
validly existing and in good standing under the laws of its state of
organization and has, in all material respects, full power and authority to own
its assets and operate its business as presently owned or operated, and to
execute, deliver and perform its obligations under the Transaction Documents to
which it is a party or affect the enforceability or collectibility of the
Receivables or any other part of the Transferred Assets. The Seller has obtained
all necessary licenses and approvals in each jurisdiction where the failure to
do so would materially and adversely affect the ability of the Seller to perform
its obligations under the Transaction Documents or affect the enforceability or
collectibility of the Receivables or any other part of the Transferred Assets.
(b) Authorization and No Contravention. The execution, delivery and
performance by the Seller of the Transaction Documents to which it is a party
have been duly authorized by all necessary action on the part of the Seller and
do not contravene or constitute a default under (i) any applicable law, rule or
regulation, (ii) its organizational documents or (iii) any indenture or
agreement or instrument to which the Seller is a party or by which its
properties are bound (other than violations of such laws, rules, regulations,
indentures or agreements which do not affect the legality, validity or
enforceability of any of such agreements and which, individually or in the
aggregate, would not materially and adversely affect the transactions
contemplated by, or the Seller's ability to perform its obligations under, the
Transaction Documents).
(c) No Consent Required. No approval or authorization by, or filing with,
any Governmental Authority is required in connection with the execution,
delivery and performance by the Seller of any Transaction Document other than
(i) UCC filings, (ii) approvals and authorizations that have previously been
obtained and filings that have previously been made and (iii) approval,
authorizations or filings which, if not obtained or made, would not have a
material adverse effect on the enforceability or collectibility of the
Receivables or any other part of the Transferred Assets or would materially and
adversely affect the ability of the Seller to perform its obligations under the
Transaction Documents.
(d) Binding Effect. Each Transaction Document to which the Seller is a
party constitutes the 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, receivership, conservatorship or other
17
similar laws affecting creditors' rights generally and, if applicable, the
rights of creditors of limited liability companies from time to time in effect
or by general principles of equity.
(e) Lien Filings. The Seller is not aware of any material judgment, ERISA
or tax lien filings against the Seller.
(f) No Proceedings. There are no actions, suits or proceedings pending or,
to the knowledge of the Seller, threatened against the Seller before or by any
Governmental Authority that (i) assert the invalidity or unenforceability of
this Agreement or any of the other Transaction Documents, (ii) seek to prevent
the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the other Transaction Documents, (iii)
seek any determination or ruling that would materially and adversely affect the
performance by the Seller of its obligations under this Agreement or any of the
other Transaction Documents or the collectibility or enforceability of the
Receivables or have a material adverse effect on the Noteholders, or (iv) relate
to the Seller that would materially and adversely affect the federal or
Applicable Tax State income, excise, franchise or similar tax attributes of the
Notes.
SECTION 5.2 Liability of Seller; Indemnities. The Seller shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement, and hereby agrees to the
following:
(a) The Seller shall indemnify, defend, and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders and the Residual
Interestholder from and against any loss, liability or expense incurred by
reason of the Seller's violation of federal or State securities laws in
connection with the registration or the sale of the Notes.
(b) The Seller will pay any and all taxes levied or assessed upon the
Issuer or upon all or any part of the Trust Estate.
(c) Indemnification under this Section 5.2 will survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and will include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation. If the Seller has made any
indemnity payments pursuant to this Section 5.2 and the Person to or on behalf
of whom such payments are made thereafter collects any of such amounts from
others, such Person will promptly repay such amounts to the Seller, without
interest.
(d) The Seller's obligations under this Section 5.2 are obligations solely
of the Seller and will not constitute a claim against the Seller to the extent
that the Seller does not have funds sufficient to make payment of such
obligations. In furtherance of and not in derogation of the foregoing, the
Issuer, the Servicer, the Indenture Trustee and the Owner Trustee, by entering
into or accepting this Agreement, acknowledge and agree that they have no right,
title or interest in or to the Other Assets of the Seller. To the extent that,
notwithstanding the agreements and provisions contained in the preceding
sentence, the Issuer, the Servicer, the Indenture Trustee or the Owner Trustee
either (i) asserts an interest or claim to, or benefit from, Other Assets, or
(ii) is deemed to have any such interest, claim to, or benefit in or from Other
Assets, whether by operation of law, legal process, pursuant to applicable
provisions of insolvency laws or otherwise (including by virtue of Section
1111(b) of the Bankruptcy Code or any successor provision
18
having similar effect under the Bankruptcy Code), then the Issuer, the Servicer,
the Indenture Trustee or the Owner Trustee further acknowledges and agrees that
any such interest, claim or benefit in or from Other Assets is and will be
expressly subordinated to the indefeasible payment in full, which, under the
terms of the relevant documents relating to the securitization or conveyance of
such Other Assets, are entitled to be paid from, entitled to the benefits of, or
otherwise secured by such Other Assets (whether or not any such entitlement or
security interest is legally perfected or otherwise entitled to a priority of
distributions or application under applicable law, including insolvency laws,
and whether or not asserted against the Seller), including the payment of
post-petition interest on such other obligations and liabilities. This
subordination agreement will be deemed a subordination agreement within the
meaning of Section 510(a) of the Bankruptcy Code. The Issuer, the Servicer, the
Indenture Trustee and the Owner Trustee each further acknowledges and agrees
that no adequate remedy at law exists for a breach of this Section 5.2(d) and
the terms of this Section 5.2(d) may be enforced by an action for specific
performance. The provisions of this Section 5.2(d) will be for the third party
benefit of those entitled to rely thereon and will survive the termination of
this Agreement.
SECTION 5.3 Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (i) into which the Seller may be merged or consolidated,
(ii) resulting from any merger, conversion, or consolidation to which the Seller
is a party, (iii) succeeding to the business of the Seller, or (iv) more than
50% of the voting stock or voting power and 50% or more of the economic equity
of which is owned directly or indirectly by Capital One Financial Corporation,
which Person in any of the foregoing cases executes an agreement of assumption
to perform every obligation of the Seller under this Agreement, will be the
successor to the Seller under this Agreement without the execution or filing of
any document or any further act on the part of any of the parties to this
Agreement. Notwithstanding the foregoing, if the Seller enters into any of the
foregoing transactions and is not the surviving entity, (x) the Seller shall
deliver to the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such merger, conversion, consolidation or succession
and such agreement of assumption comply with this Section 5.3 and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with and (y) the Seller will deliver to the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer and the Indenture Trustee,
respectively, in the Receivables, and reciting the details of such filings, or
(B) stating that, in the opinion of such counsel, no such action is necessary to
preserve and protect such interest. The Seller will provide notice of any
merger, conversion, consolidation, or succession pursuant to this Section 5.3 to
the Rating Agencies. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(x) and (y) of this Section 5.3 will be conditions to the consummation of any of
the transactions referred to in clauses (i), (ii) or (iii) of this Section 5.3
in which the Seller is not the surviving entity.
SECTION 5.4 Limitation on Liability of Seller and Others. The Seller and
any 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 hereunder. The Seller
will not be under any obligation to appear
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in, prosecute, or defend any legal action that is not incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 5.5 Seller May Own Notes. The Seller, and any Affiliate of the
Seller, may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Seller or an
Affiliate thereof, except as otherwise expressly provided herein or in the other
Transaction Documents. Except as set forth herein or in the other Transaction
Documents, Notes so owned by the Seller or any such Affiliate will have an equal
and proportionate benefit under the provisions of this Agreement and the other
Transaction Documents, without preference, priority, or distinction as among all
of the Notes. Notes owned by the Issuer, Seller, Servicer, Administrator or any
of their respective Affiliates shall be disregarded with respect to the
determination of any request, demand, authorization, direction, notice, consent,
vote or waiver hereunder or under any other Transaction Document.
SECTION 5.6 Xxxxxxxx-Xxxxx Act Requirements. To the extent any documents
are required to be filed or any certification is required to be made with
respect to the Issuer or the Notes pursuant to the Xxxxxxxx-Xxxxx Act , the
Seller shall prepare and execute any such document or certification and is
authorized to file such document or certification on behalf of the Issuer.
SECTION 5.7 Compliance with Organizational Documents. The Seller shall
comply with its limited liability company agreement and other organizational
documents.
ARTICLE VI
THE SERVICER
SECTION 6.1 Representations of Servicer. The Servicer makes the following
representations and warranties as of the Closing Date and as of each Funding
Date on which the Issuer will be deemed to have relied in acquiring the
Transferred Assets. The representations and warranties speak as of the execution
and delivery of this Agreement and will survive the conveyance of the
Transferred Assets to the Issuer and the pledge thereof by the Issuer to the
Indenture Trustee pursuant to the Indenture:
(a) Existence and Power. The Servicer is a Texas corporation validly
existing and in good standing under the laws of its state of organization and
has, in all material respects, full power and authority to own its assets and
operate its business as presently owned or operated, and to execute, deliver and
perform its obligations under the Transaction Documents to which it is a party
or affect the enforceability or collectibility of the Receivables or any other
part of the Transferred Assets. The Servicer has obtained all necessary licenses
and approvals in each jurisdiction where the failure to do so would materially
and adversely affect the ability of the Servicer to perform its obligations
under the Transaction Documents or affect the enforceability or collectibility
of the Receivables or any other part of the Transferred Assets.
(b) Authorization and No Contravention. The execution, delivery and
performance by the Servicer of the Transaction Documents to which it is a party
have been duly authorized by all necessary action on the part of the Servicer
and do not contravene or constitute a default
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under (i) any applicable law, rule or regulation, (ii) its organizational
documents or (iii) any material indenture or material agreement or instrument to
which the Servicer is a party or by which its properties are bound (other than
violations of such laws, rules, regulations, indentures or agreements which do
not affect the legality, validity or enforceability of any of such agreements
and which, individually or if the aggregate, would not materially and adversely
affect the transactions contemplated by, or the Servicer's ability to perform
its obligations under, the Transaction Documents).
(c) No Consent Required. No approval or authorization by, or filing with,
any Governmental Authority is required in connection with the execution,
delivery and performance by the Servicer of any Transaction Document other than
(i) UCC filings, (ii) approvals and authorizations that have previously been
obtained and filings that have previously been made and (iii) approval,
authorizations or filings which, if not obtained or made, would not have a
material adverse effect on the enforceability or collectibility of the
Receivables or would materially and adversely affect the ability of the Servicer
to perform its obligations under the Transaction Documents.
(d) Binding Effect. Each Transaction Document to which the Servicer is a
party constitutes the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship or other similar laws
affecting creditors' rights generally and, if applicable, the rights of
creditors of limited liability companies from time to time in effect or by
general principles of equity.
(e) No Proceedings. There are no actions, suits or proceedings pending or,
to the knowledge of the Servicer, threatened against the Servicer before or by
any Governmental Authority that (i) assert the invalidity or unenforceability of
this Agreement or any of the other Transaction Documents, (ii) seek to prevent
the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the other Transaction Documents, (iii)
seek any determination or ruling that would materially and adversely affect the
performance by the Servicer of its obligations under this Agreement or any of
the other Transaction Documents or have a material adverse effect on the
Noteholders, or (iv) relate to the Servicer that would materially and adversely
affect the federal or Applicable Tax State income, excise, franchise or similar
tax attributes of the Notes.
SECTION 6.2 Indemnities of Servicer. The Servicer will be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement, and hereby agrees to the
following:
(a) The Servicer will defend, indemnify and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders, the Residual
Interestholders 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.
(b) The Servicer will indemnify, defend and hold harmless the Issuer, the
Owner Trustee and the Indenture Trustee from and against any taxes that may at
any time be asserted
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against any such Person with respect to the transactions contemplated herein or
in the other Transaction Documents, if any, including, without limitation, any
sales, gross receipts, general corporation, tangible personal property,
privilege, or license taxes (but, in the case of the Issuer, not including any
taxes asserted with respect to, and as of the date of, the conveyance of the
Receivables to the Issuer or the issuance and original sales of the Notes, or
asserted with respect to ownership of the Receivables, or federal or other
Applicable Tax State income taxes arising out of the transactions contemplated
by this Agreement and the other Transaction Documents) and costs and expenses in
defending against the same. For the avoidance of doubt, the Servicer will not
indemnify for any costs, expenses, losses, claims, damages or liabilities due to
the credit risk of the Obligor and for which reimbursement would constitute
recourse for uncollectible Receivables.
(c) The Servicer will indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders, the Residual
Interestholders and the Seller from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out of, or was imposed upon any such
Person through, the negligence, willful misfeasance, or bad faith (other than
errors in judgment) of the Servicer in the performance of its duties under this
Agreement or any other Transaction Document to which it is a party, or by reason
of its failure to perform its obligations or of reckless disregard of its
obligations and duties under this Agreement or any other Transaction Document to
which it is a party; provided, however, that the Servicer will not indemnify for
any costs, expenses, losses, claims, damages or liabilities arising from its
breach of any covenant for which the repurchase of the affected Receivables is
specified as the sole remedy pursuant to Section 3.6.
(d) The Servicer will indemnify Wilmington Trust Company in its individual
capacity and as trustee and its successors, assigns, directors, officers,
employees and agents (the "Indemnified Parties") from and against, any and all
loss, liability, expense, tax, penalty or claim (including reasonable legal fees
and expenses) of any kind and nature whatsoever which may at any time be imposed
on, incurred by, or asserted against Wilmington Trust Company in its individual
capacity and as trustee or any Indemnified Party in any way relating to or
arising out of the Trust Agreement, the other Transaction Documents, the Trust
Estate, the administration of the Trust Estate or the action or inaction of
Wilmington Trust Company under the Trust Agreement; provided, however, that the
Servicer shall not be liable for or required to indemnify Wilmington Trust
Company from and against any of the foregoing expenses arising or resulting from
(i) its own willful misconduct, bad faith or gross negligence, (ii) the
inaccuracy of any representation or warranty contained in Section 7.3 of the
Trust Agreement expressly made by Wilmington Trust Company in its individual
capacity, (iii) liabilities arising from the failure of Wilmington Trust Company
to perform obligations expressly undertaken by it in the last sentence of
Section 6.4 of the Trust Agreement or (iv) taxes, fees or other charges on,
based on or measured by, any fees, commissions or compensation received by the
Owner Trustee. To the extent not paid by the Servicer, such indemnification
shall be paid in accordance with Section 4.4 of this Agreement or Section 5.4(b)
of the Indenture. The Servicer will compensate the Indenture Trustee and
indemnify the Indenture Trustee to the extent and subject to the conditions set
forth in Section 6.7 of the Indenture, except to the extent that any cost,
expense, loss, claim, damage or liability arises out of or is incurred in
connection with the performance by the Indenture Trustee of the duties of a
Successor Servicer hereunder.
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(e) Indemnification under this Section 6.2 by COAF (or any successor
thereto pursuant to Section 7.1) as Servicer, with respect to the period such
Person was the Servicer, will survive the termination of such Person as Servicer
or a resignation by such Person as Servicer as well as the termination of this
Agreement or the resignation or removal of the Owner Trustee or the Indenture
Trustee and will include reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer has made any indemnity payments pursuant to this
Section 6.2 and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person will promptly
repay such amounts to the Servicer, without interest.
SECTION 6.3 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Servicer is a party, (iii) succeeding to the business of the Servicer,
or (iv) any company or other business entity of which Capital One Financial
Corporation owns, directly or indirectly, more than 50% of the voting stock or
voting power and 50% or more of the economic equity, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Servicer under this Agreement, will be the successor to the Servicer
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement. Notwithstanding the
foregoing, if the Servicer enters into any of the foregoing transactions and is
not the surviving entity, (x) the Servicer shall deliver to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such merger, conversion, consolidation, or succession and such agreement of
assumption comply with this Section 6.3 and that all conditions precedent
provided for in this Agreement relating to such transaction have been complied
with and (y) the Servicer will deliver to the Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee, respectively, in the Receivables, and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action is necessary to preserve and protect such interests. The
Servicer will provide notice of any merger, conversion, consolidation or
succession pursuant to this Section 6.3 to the Rating Agencies. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses (x) and (y) of this Section 6.3 will be
conditions to the consummation of any of the transactions referred to in clauses
(i), (ii), or (iii) of this Section 6.3 in which the Servicer is not the
surviving entity.
SECTION 6.4 Limitation on Liability of Servicer and Others. (a) Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer will be under any liability to the Issuer, the Indenture Trustee, the
Owner Trustee, the Noteholders, the Swap Counterparty or the Residual
Interestholders, 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 will not protect
the Servicer or any such Person against any liability that would otherwise be
imposed by reason of willful misfeasance or bad faith in the performance of
duties or by reason of its failure to perform its obligations or of reckless
disregard of obligations and duties under this Agreement, or by reason of
negligence in the performance of its duties under this Agreement (except for
errors in judgment). The Servicer and any director, officer or employee or agent
of the Servicer may rely in good faith on any Opinion of Counsel or on any
Officer's Certificate of the Seller or
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certificate of auditors believed to be genuine and to have been signed by the
proper party in respect of any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer will not be under
any obligation to appear in, prosecute, or defend any legal action that is not
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties to this Agreement and the interests of the Noteholders and
the Residual Interestholders under this Agreement. In such event, the legal
expenses and costs of such action and any liability resulting therefrom will be
expenses, costs and liabilities of the Servicer.
SECTION 6.5 Delegation of Duties. The Servicer may, at any time without
notice or consent, delegate (a) any or all of its duties (including, without
limitation, its duties as custodian) under the Transaction Documents to any of
its Affiliates or (b) specific duties to sub-contractors who are in the business
of performing such duties; provided, that no such delegation shall relieve the
Servicer of its responsibility with respect to such duties and the Servicer
shall remain obligated and liable to the Issuer and the Indenture Trustee for
its duties hereunder as if the Servicer alone were performing such duties.
SECTION 6.6 COAF Not to Resign as Servicer. Subject to the provisions of
Sections 6.3 and 6.5, (a) COAF will not resign from the obligations and duties
hereby imposed on it as Servicer under this Agreement except upon determination
that the performance of its duties under this Agreement by reason of a change in
applicable legal requirements is no longer permissible under applicable law and
(b) COAF will not assign this Agreement or any of its rights, powers, duties or
obligations hereunder. Notice of any such determination permitting the
resignation of COAF will be communicated to the Issuer and the Indenture Trustee
at the earliest practicable time (and, if such communication is not in writing,
will be confirmed in writing at the earliest practicable time) and any such
determination will be evidenced by an Opinion of Counsel to such effect
delivered to the Issuer and the Indenture Trustee concurrently with or promptly
after such notice. No such resignation will become effective until a successor
Servicer has assumed the responsibilities and obligations of COAF as Servicer.
SECTION 6.7 Servicer May Own Securities. The Servicer, and any Affiliate of
the Servicer, may, in its individual or any other capacity, become the owner or
pledgee of Notes with the same rights as it would have if it were not the
Servicer or an Affiliate thereof, except as otherwise expressly provided herein
or in the other Transaction Documents. Except as set forth herein or in the
other Transaction Documents, Securities so owned by or pledged to the Notes or
such Affiliate will have an equal and proportionate benefit under the provisions
of this Agreement, without preference, priority or distinction as among all of
the Notes.
ARTICLE VII
TERMINATION OF SERVICER
SECTION 7.1 Termination of Servicer.
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(a) If a Servicer Termination Event shall have occurred and be continuing,
the Indenture Trustee may, at the direction of a majority of the aggregate
outstanding principal amount of the Controlling Class, by notice given to the
Servicer, the Owner Trustee, the Issuer, the Administrator, the Noteholders, the
Swap Counterparty and each Rating Agency, terminate the rights and obligations
of the Servicer under this Agreement with respect to the Receivables. In the
event the Servicer is removed or resigns as Servicer with respect to servicing
the Receivables, the Indenture Trustee shall appoint a successor Servicer. Upon
the Servicer's receipt of notice of termination the predecessor Servicer will
continue to perform its functions as Servicer under this Agreement only until
the date specified in such termination notice or, if no such date is specified
in such termination notice, until receipt of such notice. If a successor
Servicer has not been appointed at the time when the predecessor Servicer ceases
to act as Servicer in accordance with this Section, the Indenture Trustee
without further action will automatically be appointed the successor Servicer.
Notwithstanding the above, the Indenture Trustee, if it is legally unable or is
unwilling to so act, will appoint, or petition a court of competent jurisdiction
to appoint a successor Servicer. Any successor Servicer shall be an established
institution having a net worth of not less than $100,000,000 and whose regular
business includes the servicing of comparable motor vehicle receivables having
an aggregate outstanding principal amount of not less than $50,000,000.
(b) Noteholders holding not less than a majority of the aggregate
outstanding principal amount of the Controlling Class may waive any Servicer
Termination Event.
(c) If replaced, the Servicer agrees that it will use commercially
reasonable efforts to effect the orderly and efficient transfer of the servicing
of the Receivables to a successor Servicer.
(d) Upon the effectiveness of the assumption by the successor Servicer of
its duties pursuant to this Section 7.1, the successor Servicer shall be the
successor in all respects to the Servicer in its capacity as Servicer under this
Agreement with respect to the Receivables, and shall be subject to all the
responsibilities, duties and liabilities relating thereto, except with respect
to the obligations of the predecessor Servicer that survive its termination as
Servicer, including indemnification obligations as set forth in Section 6.2(e).
In such event, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such termination and replacement of the Servicer, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise. No Servicer shall resign or be relieved of its duties under this
Agreement, as Servicer of the Receivables, until a newly appointed Servicer for
the Receivables shall have assumed the responsibilities and obligations of the
resigning or terminated Servicer under this Agreement.
(e) In connection with such appointment, the Indenture Trustee may make
such arrangements for the compensation of the successor Servicer out of
Available Funds as it and such successor Servicer will agree; provided, however,
that no such compensation will be in excess of the amount paid to the
predecessor Servicer under this Agreement.
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SECTION 7.2 Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VII, the
Indenture Trustee will give prompt written notice thereof to the Owner Trustee,
the Issuer, the Administrator, each Rating Agency and to the Noteholders at
their respective addresses of record.
ARTICLE VIII
OPTIONAL PURCHASE
SECTION 8.1 Optional Purchase of Trust Estate. The Servicer shall have the
right at its option (the "Optional Purchase") to purchase the Trust Estate from
the Issuer on any Payment Date if, either before or after giving effect to any
payment of principal required to be made on such Payment Date, the aggregate
Pool Balance is less than or equal to 10% of the sum of the initial Pool Balance
plus the Initial Pre-Funding Account Deposit Amount. The purchase price for the
Trust Estate shall equal the Redemption Price (the "Optional Purchase Price"),
which amount shall be deposited by the Servicer into the Collection Account on
the Redemption Date. If the Servicer exercises the Optional Purchase, the Notes
shall be redeemed and in each case in whole but not in part on the related
Payment Date for the Redemption Price.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment.
(a) Any term or provision of this Agreement may be amended by the Seller
and the Servicer without the consent of the Indenture Trustee, any Noteholder,
the Swap Counterparty, the Issuer or the Owner Trustee; provided that such
amendment shall not, as evidenced by an Opinion of Counsel delivered to the
Indenture Trustee and the Owner Trustee materially and adversely affect the
interests of the Noteholders, the Indenture Trustee or the Owner Trustee;
provided, further, that such amendment shall not materially and adversely affect
the rights or obligations of the Swap Counterparty or the Issuer under the
Interest Rate Swap Agreement unless the Swap Counterparty shall have consented
in writing to such amendment (and such consent shall be deemed to have been
given if the Swap Counterparty does not object in writing within ten (10)
Business Days after receipt of a written request for such consent); provided,
further, that any amendment requiring the Swap Counterparty's consent hereunder
must also satisfy the Rating Agency Condition to be effective.
(b) Any term or provision of this Agreement may be amended by the Seller
and the Servicer but without the consent of the Indenture Trustee, any
Noteholder, the Swap Counterparty, the Issuer, the Owner Trustee or any other
Person to add, modify or eliminate any provisions as may be necessary or
advisable in order to enable the Seller, the Servicer or any of their Affiliates
to comply with or obtain more favorable treatment under any law or regulation or
any accounting rule or principle, it being a condition to any such amendment
that the Rating Agency Condition shall have been satisfied.
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(c) This Agreement (including Appendix A) may also be amended from time to
time by Seller, Servicer and the Indenture Trustee, with the consent of the
Noteholders evidencing not less than a majority of the aggregate outstanding
principal amount of the Outstanding Notes, voting as a single class, 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; provided that no such amendment shall (i) reduce the interest
rate or principal amount of any Note, change the timing of distributions on any
Note or delay the Final Scheduled Payment Date of any Note without the consent
of the Holder of such Note or (ii) reduce the percentage of the aggregate
outstanding principal amount of the Outstanding Notes, the Holders of which are
required to consent to any matter without the consent of the Holders of at least
the percentage of the aggregate outstanding principal amount of the Outstanding
Notes which were required to consent to such matter before giving effect to such
amendment; provided, further, that such amendment shall not materially and
adversely affect the rights or obligations of the Swap Counterparty or the
Issuer under the Interest Rate Swap Agreement unless the Swap Counterparty shall
have consented in writing to such amendment (and such consent shall be deemed to
have been given if the Swap Counterparty does not object in writing within ten
(10) Business Days after receipt of a written request for such consent);
provided, further, that any amendment requiring the Swap Counterparty's consent
hereunder must also satisfy the Rating Agency Condition to be effective;
provided, further, that the Indenture Trustee may not agree to any amendment to
this Agreement if such amendment failed to comply with the requirements of
Section 9.2 of the Indenture. It will not be necessary for the consent of
Noteholders to approve the particular form of any proposed amendment or consent,
but it will be sufficient if such consent approves the substance thereof. The
manner of obtaining such consents (and any other consents of Noteholders
provided for in this Agreement) and of evidencing the authorization of the
execution thereof by Noteholders will be subject to such reasonable requirements
as the Indenture Trustee may prescribe, including the establishment of record
dates pursuant to the Note Depository Agreement.
(d) Prior to the execution of any such amendment, the Servicer shall
provide written notification of the substance of such amendment to each Rating
Agency; and promptly after the execution of any such amendment or consent, the
Servicer shall furnish a copy of such amendment or consent to each Rating Agency
and the Indenture Trustee.
(e) Prior to the execution of any amendment to this Agreement, the Seller,
the Owner Trustee and the Indenture Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
The Owner Trustee and the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which adversely affects the Owner Trustee's or the
Indenture Trustee's, as applicable, own rights, duties or immunities under this
Agreement. Furthermore, notwithstanding anything to the contrary herein, this
Agreement may not be amended in any way that would adversely affect the Owner
Trustee's rights, privileges, indemnities, duties or obligations under this
Agreement, the Transaction Documents or otherwise without the prior written
consent of the Owner Trustee.
SECTION 9.2 Protection of Title.
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(a) The Seller shall authorize and file such financing statements and cause
to be authorized and filed such continuation and other 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 Indenture Trustee under this
Agreement in the Receivables. The Seller shall deliver (or cause to be
delivered) to the Issuer file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity,
organizational structure or jurisdiction of organization in any manner that
would make any financing statement or continuation statement filed by the Seller
in accordance with paragraph (a) above "seriously misleading" within the meaning
of Sections 9-506, 9-507 or 9-508 of the UCC, unless it shall have given the
Issuer and the Indenture Trustee at least five days' prior written notice
thereof and, to the extent necessary, has promptly filed amendments to
previously filed financing statements or continuation statements described in
paragraph (a) above.
(c) The Seller shall give the Issuer and the Indenture Trustee at least
five days' prior written notice of any change of location of the Seller for
purposes of Section 9-307 of the UCC and shall have taken all action prior to
making such change (or shall have made arrangements to take such action
substantially simultaneously with such change, if it is not possible to take
such action in advance) reasonably necessary or advisable to amend all
previously filed financing statements or continuation statements described in
paragraph (a) above.
(d) The Servicer shall maintain (or shall cause its Sub-Servicer to
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 (or shall cause its Sub-Servicer to
maintain) its computer systems so that, from time to time after the conveyance
under this Agreement of the Receivables, the master computer records (including
any backup archives) that refer to a Receivable shall indicate clearly the
interest of the Issuer in such Receivable and that such Receivable is owned by
the Issuer and has been pledged to the Indenture Trustee pursuant to the
Indenture. Indication of the Issuer's interest in a Receivable shall not be
deleted from or modified on such computer systems until, and only until, the
related Receivable shall have been paid in full or repurchased.
(f) If at any time the Servicer shall propose to sell, grant a security
interest in or otherwise transfer any interest in motor vehicle receivables to
any prospective purchaser, lender or other transferee, the Servicer shall give
to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Issuer and has been
pledged to the Indenture Trustee.
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SECTION 9.3 Other Liens or Interests. Except for the conveyances and grants
of security interests pursuant to this Agreement and the other Transaction
Documents, the Seller shall not sell, pledge, assign or transfer the Receivables
or other property transferred to the Issuer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien (other than Permitted Liens)
on any interest therein, and the Seller shall defend the right, title and
interest of the Issuer in, to and under such Receivables and other property
transferred to the Issuer against all claims of third parties claiming through
or under the Seller.
SECTION 9.4 Transfers Intended as Sale; Security Interest.
(a) Each of the parties hereto expressly intends and agrees that the
transfers contemplated and effected under this Agreement are complete and
absolute sales and transfers rather than pledges or assignments of only a
security interest and shall be given effect as such for all purposes. It is
further the intention of the parties hereto that the Receivables and related
Transferred Assets shall not be part of the Seller's estate in the event of a
bankruptcy or insolvency of the Seller. The sales and transfers by the Seller of
Receivables and related Transferred Assets hereunder are and shall be without
recourse to, or representation or warranty (express or implied) by, the Seller,
except as otherwise specifically provided herein. The limited rights of recourse
specified herein against the Seller are intended to provide a remedy for breach
of representations and warranties relating to the condition of the property
sold, rather than to the collectibility of the Receivables.
(b) Notwithstanding the foregoing, in the event that the Receivables and
other Transferred Assets are held to be property of the Seller, or if for any
reason this Agreement is held or deemed to create indebtedness or a security
interest in the Receivables and other Transferred Assets, then it is intended
that:
(i) This Agreement shall be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction;
(ii) The conveyance provided for in Section 2.1 shall be deemed to be
a grant by the Seller, and the Seller hereby grants, to the
Issuer of a security interest in all of its right (including the
power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the Receivables and other
Transferred Assets, to secure such indebtedness and the
performance of the obligations of the Seller hereunder;
(iii) The possession by the Issuer, or the Servicer as the Issuer's
agent, of the Receivables Files and any other property as
constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" or
possession by the purchaser or a person designated by such
purchaser, for purposes of perfecting the security interest
pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction; and
29
(iv) Notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed to be notifications to, or
acknowledgments, receipts or confirmations from, bailees or
agents (as applicable) of the Issuer for the purpose of
perfecting such security interest under applicable law.
SECTION 9.5 Notices, Etc. All demands, notices and communications hereunder
shall be in writing and shall be delivered or mailed by registered or certified
first-class United States mail, postage prepaid, hand delivery, prepaid courier
service, or by Electronic Transmission, and addressed in each case as set forth
on Schedule II or at such other address as shall be designated by any of the
foregoing in a written notice to the other parties hereto. Any notice required
or permitted to be mailed to a Noteholder shall be given by first class mail,
postage prepaid, at the address of such Noteholder as shown in the Note
Register. Delivery shall occur only upon receipt or reported tender of such
communication by an officer of the recipient entitled to receive such notices
located at the address of such recipient for notices hereunder; provided,
however, that any notice to a Noteholder mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Noteholder shall receive such notice.
SECTION 9.6 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 9.7 Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
SECTION 9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 9.9 Waivers. No failure or delay on the part of the Servicer, the
Seller, the Issuer or the Indenture Trustee in exercising any power or right
hereunder (to the extent such Person has any power or right hereunder) shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on any party hereto
in any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by any party hereto under this Agreement
shall, except as may otherwise be stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval under this
Agreement shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 9.10 Entire Agreement. The Transaction Documents contain a final
and complete integration of all prior expressions by the parties hereto with
respect to the subject
30
matter thereof and shall constitute the entire agreement among the parties
hereto with respect to the subject matter thereof, superseding all prior oral or
written understandings. There are no unwritten agreements among the parties.
SECTION 9.11 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 9.12 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time as the parties hereto shall agree.
SECTION 9.13 Acknowledgment and Agreement. By execution below, the Seller
expressly acknowledges and consents to the pledge, assignment and grant of a
security interest in the Receivables and the other Transferred Assets by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders. In addition, the Seller hereby acknowledges and agrees that for so
long as the Notes are outstanding, the Indenture Trustee will have the right to
exercise all powers, privileges and claims of the Issuer under this Agreement.
SECTION 9.14 No Waiver; Cumulative Remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 9.15 Nonpetition Covenant. Each party hereto agrees that, prior to
the date which is one year and one day after payment in full of all obligations
of each Bankruptcy Remote Party in respect of all securities issued by any
Bankruptcy Remote Party (i) such party shall not authorize any Bankruptcy Remote
Party to commence a voluntary winding-up or other voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
such Bankruptcy Remote Party or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect in any jurisdiction or seeking the
appointment of an administrator, a trustee, receiver, liquidator, custodian or
other similar official with respect to such Bankruptcy Remote Party or any
substantial part of its property or to consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against such Bankruptcy Remote Party, or to make a
general assignment for the benefit of, its creditors generally, any party hereto
or any other creditor of such Bankruptcy Remote Party, and (ii) none of the
parties hereto shall commence or join with any other Person in commencing any
proceeding against such Bankruptcy Remote Party under any bankruptcy,
reorganization, liquidation or insolvency law or statute now or hereafter in
effect in any jurisdiction. This Section shall survive the termination of this
Agreement.
SECTION 9.16 Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally:
31
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement or any documents executed and delivered in connection
herewith, or for recognition and enforcement of any judgment in respect thereof,
to the nonexclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New York
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address determined in accordance with Section 9.5 of this Agreement; and
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction.
SECTION 9.17 Limitation of Liability.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by Wilmington Trust Company, not in
its individual capacity but solely as Owner Trustee, and in no event shall it
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or under the Notes or any of the other
Transaction Documents or in any of the certificates, notices or agreements
delivered pursuant thereto, as to all of which recourse shall be had solely to
the assets of the Issuer. Under no circumstances shall the Owner Trust be
personally liable for the payment of any indebtedness or expense of the Issuer
or be liable for the breach or failure of any obligations, representation,
warranty or covenant made or undertaken by the Issuer under the Transaction
Documents. For the purposes of this Agreement, in the performance of its duties
or obligations hereunder, 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 executed and delivered by JPMorgan Chase Bank, not in its
individual capacity but solely as Indenture Trustee, and in no event shall it
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer under the Notes or any of the other Transaction
Documents or in any of the certificates, notices or agreements delivered
pursuant thereto, as to all of which recourse shall be had solely to the assets
of the Issuer. Under no circumstances shall the Indenture Trustee be personally
liable for the payment of any indebtedness or expense of the Issuer or be liable
for the breach or failure of any obligations, representation, warranty or
covenant made or undertaken by the Issuer under the Transaction Documents. For
the purposes of this Agreement, in the performance of its duties or obligations
hereunder, Indenture Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI of the Indenture.
32
SECTION 9.18 Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, the Noteholders and the
Residual Interestholders and their respective successors and permitted assigns
and the Owner Trustee shall be an express third party beneficiary hereof and may
enforce the provisions hereof as if it were a party hereto. Except as otherwise
provided in this Section, no other Person will have any right hereunder.
SECTION 9.19 Limitation of Rights. All of the rights of the Swap
Counterparty in, to and under this Agreement (including, but not limited to, all
of the Swap Counterparty's rights to receive notice of any action hereunder and
to give or withhold consent to any action hereunder) shall terminate upon the
termination of the Interest Rate Swap Agreement in accordance with the terms
thereof and the payment in full of all amounts owing to the Swap Counterparty.
[SIGNATURES FOLLOW]
33
IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
CAPITAL ONE AUTO RECEIVABLES, LLC,
as Seller
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
Title: Treasurer
S-1
CAPITAL ONE PRIME AUTO RECEIVABLES TRUST
2003-2, as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Financial Services Officer
S-2
CAPITAL ONE AUTO FINANCE, INC.,
as Servicer
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Financial Officer,
Treasurer and Secretary
S-3
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee
By: /s/ Wen Xxx Xxxx
------------------------------------
Name: Wen Xxx Xxxx
Title: Assistant Vice President
S-4
SCHEDULE I
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE RECEIVABLES
(a) Characteristics of Receivables. Each Receivable has the following
characteristics as of its respective Cut-Off Date (or such other date as
may be specifically set forth below):
(i) each Receivable has been fully and properly executed by
the Obligor thereto;
(ii) each Receivable has been originated directly by the
related Originator in accordance with its customary practices;
(iii) as of the Closing Date or Subsequent Funding Date, as
applicable, each Receivable is secured by a first priority validly
perfected security interest in the Financed Vehicle in favor of the
related Originator, as secured party, or all necessary actions with
respect to the Receivable has been taken or will be taken to perfect a
first priority security interest in the Financed Vehicle in favor of
the related Originator, as secured party, which security interest, in
either case, is assignable and has been so assigned by the related
Originator to COAF, by COAF to the Seller and by the Seller to the
Issuer;
(iv) each Receivable contains customary and enforceable
provisions such that the rights and remedies of the holder thereof are
adequate for realization against the collateral of the benefits of the
security;
(v) each Receivable provided, at origination, for level
monthly payments which fully amortize the initial Principal Balance
over the original term; provided, that the amount of the first or last
payment may be different but in no event more than three times the
level monthly payment;
(vi) each Receivable provides for interest at the Contract Rate
specified in the Schedule of Receivables;
(vii) each Receivable was originated in the United States;
(viii) each Receivable is secured by a new or used automobile,
light-duty truck or motorcycle;
(ix) each Receivable has a Contract Rate of no less than 3.40%
and not more than 9.50%;
(x) each Receivable had an original term to maturity of not
more than 72 months and not less than 12 months and each Receivable
has a remaining term to maturity, as of its respective Cut-Off Date,
of four months or more;
Schedule I to the
Sale and Servicing Agreement
I-1
(xi) each Receivable had an original Principal Balance less
than or equal to $100,000;
(xii) each Receivable has a Principal Balance on its respective
Cut-Off Date of greater than or equal to $500;
(xiii) the final Scheduled Payment on each Receivable is due on
or before December 31, 2009;
(xiv) no Receivable was more than 30 days past due as of its
respective Cut-Off Date;
(xv) the related Originator has not received notice that any
Obligor under a Receivable has filed for bankruptcy, and to the best
of the related Originator's knowledge without any independent
investigation, no Obligor was the subject of any pending bankruptcy or
insolvency proceeding;
(xvi) no Receivable is subject to a force-placed Insurance
Policy on the related Financed Vehicle;
(xvii) each Receivable is a Simple Interest Receivable, and
scheduled payments under each Receivable have been applied in
accordance with the method for allocating principal and interest set
forth in the Receivable;
(xviii) each of the Receivables were selected using no materially
adverse selection procedures;
(xix) no Receivable constitutes an "installment sale contract"
as defined in the Pennsylvania Motor Vehicle Sales Finance Act, 69
P.S. (S)601, et seq., and
(xx) all payments by Obligors with respect to the Receivables
are paid into an account in which no entity is a "secured party"
within the meaning of Article 9 of the UCC.
(b) Schedule of Receivables. The information with respect to a Receivable
transferred on the Closing Date or on any Funding Date set forth in the
Schedule of Receivables for such date was true and correct in all material
respects as of the Cut-Off Date for such Receivable.
(c) Compliance with Law. The Receivable complied at the time it was originated
or made, and the transfer of that Receivable to the Issuer complied at the
time of transfer, in all material respects with all requirements of
applicable federal, state and local laws, and regulations thereunder,
including, to the extent applicable, usury laws, the Federal Truth in
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting
Act, the Federal Trade Commission Act, the Fair Debt Collection Practices
Act, the Fair Credit Billing Act, the Xxxxxxxx-Xxxx Warranty Act, Federal
Reserve Board Regulations B and Z, the Soldiers' and Sailors' Civil Relief
Act of 1940, state adaptations of the
Schedule I to the
Sale and Servicing Agreement
I-2
National Consumer Act and of the Uniform Consumer Credit Code and any other
consumer credit, equal opportunity and disclosure laws applicable to that
Receivable.
(d) Binding Obligation. The Receivable constitutes the legal, valid and binding
payment obligation in writing of the Obligor, enforceable by the holder
thereof in accordance with its terms, except (i) as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, liquidation
or other similar laws and equitable principles relating to or affecting the
enforcement of creditors' rights generally and (ii) as such Receivable may
be modified by the application after the applicable Cut-Off Date of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended, to the extent
applicable to the related Obligor.
(e) Receivable in Force. The Receivable has not been satisfied, subordinated or
rescinded nor has the related Financed Vehicle been released from the lien
of such Receivable in whole or in part. As of the applicable Cut-Off Date,
the Receivable has not been modified as a result of the application of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
(f) No Default; No Waiver. Except for payment delinquencies continuing for a
period of not more than 30 days as of the applicable Cut-Off Date, the
Seller has no knowledge that a default, breach, violation or event
permitting acceleration under the terms of the Receivable existed at the
applicable Cut-Off Date or that any continuing condition that with notice
or lapse of time, or both, would constitute a default, breach, violation or
event permitting acceleration under the terms of the Receivable had arisen
as of the applicable Cut-Off Date and the Seller has not waived any of the
foregoing or any other provision of such receivable.
(g) Insurance. The Receivable requires that the Obligor thereunder obtain
comprehensive and collision insurance covering the Financed Vehicle.
(h) No Government Obligor. The Obligor on the Receivable is not the United
States of America or any state thereof or any local government, or any
agency, department, political subdivision or instrumentality of the United
States of America or any state thereof or any local government.
(i) Assignment. No Receivable has been originated in, or is subject to the laws
of, any jurisdiction under which the sale, transfer, assignment, setting
over, conveyance or pledge of such Receivable would be unlawful, void, or
voidable. The Seller has not entered into any agreement with any Obligor
that prohibits, restricts or conditions the assignment of the related
Receivable.
(j) Good Title. It is the intention of the Seller that the sale, transfer,
assignment and conveyance herein contemplated constitute an absolute sale,
transfer, assignment and conveyance of the Receivables and that the
Receivables 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.
No Receivable has been sold, transferred, assigned, conveyed or pledged to
any Person other than pursuant to the Transaction Documents. As of the
Closing Date
Schedule I to the
Sale and Servicing Agreement
I-3
or Subsequent Funding Date, as applicable, and immediately prior to the
sale and transfer herein contemplated, the Seller had good and marketable
title to and was the sole owner of each Receivable free and clear of all
Liens (except any Lien which will be released prior to assignment of such
Receivable hereunder), and, immediately upon the sale and transfer thereof,
the Issuer will have good and marketable title to each Receivable, free and
clear of all Liens.
(k) Filings. All filings (including, without limitation, UCC filings) necessary
in any jurisdiction to give the Issuer a first priority, validly perfected
ownership interest in the Receivables (other than the Related Security with
respect thereto), and to give the Indenture Trustee a first priority
perfected security interest therein, will be made within ten days of the
Closing Date. All such filings will contain a statement to the following
effect: "A purchase of or security interest in any collateral described in
this financing statement will violate the rights of the Secured Party."
(l) Priority. The Receivable is not pledged, assigned, sold, subject to a
security interest, or otherwise conveyed other than pursuant to the
Transaction Documents. The Seller has not authorized the filing of and is
not aware of any financing statements against the Originators, COAF or the
Seller that include a description of collateral covering the Receivables
other than any financing statement relating to security interests granted
under the Transaction Documents or that have been or, prior to the
assignment of such Receivable hereunder, will be terminated, amended or
released. The Sale and Servicing Agreement creates a valid and continuing
security interest in the Receivable (other than the Related Security with
respect thereto) in favor of the Issuer which security interest is prior to
all other Liens and is enforceable as such against all other creditors of
and purchasers and assignees from the Seller.
(m) Characterization of Receivables. Each Receivable constitutes either
"chattel paper", an "account", an "instrument", or a "general intangible",
each as defined in the UCC.
(n) One Original. There is only one original executed copy of each Receivable
in existence. The Servicer (or its agent) has possession of such original.
If such original has been marked, then such original does not have any
marks or notations indicating that it has been pledged, assigned or
otherwise conveyed to any Person other than to a party to the Transaction
Documents.
(o) Defenses. As of the related Cut-Off Date, there are no rights of
rescission, offset, claim, counterclaim or defense, and the Seller has no
knowledge of the same being asserted or threatened, with respect to any
Receivable.
Schedule I to the
Sale and Servicing Agreement
I-4
SCHEDULE II
NOTICE ADDRESSES
If to the Issuer:
Capital One Prime Auto Receivables Trust 2003-2
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Department
with copies to the Administrator and the Indenture Trustee
If to COAF, the Servicer or the Administrator:
Capital One Auto Finance, Inc.
0000 Xxxxxxx Xxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Manager of Securitization
with a copies to:
Capital One Auto Finance, Inc.
0000 Xxxxxxx Xxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Funding Counsel
Capital One Auto Finance, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Capital One Auto Finance, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Legal
Schedule II to the
Sale and Servicing Agreement
II-1
If to the Seller:
Capital One Auto Receivables, LLC
0000 Xxxxxxx Xxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Capital Markets
with a copy to:
Capital One Auto Finance, Inc.
0000 Xxxxxxx Xxx Xxxxx
XxXxxx, Xxxxxxxx 00000
(Facsimile No. (000) 000-0000
Attention: Funding Counsel
If to the Indenture Trustee:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Structured Finance Administration - Capital One Prime Auto
Receivables Trust 2003-2
If to the Owner Trustee:
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Department
If to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000)
Attention: ABS Monitoring Group
If to S&P:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Asset Backed Surveillance Group
Schedule II to the
Sale and Servicing Agreement
II-2
If to Fitch:
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Asset-Backed Securities Group
If to the Initial Swap Counterparty:
Barclays Bank PLC
5 The North Colonnade
Canary Wharf
Xxxxxx X00 0XX, Xxxxxxx
Facsimile: 0000-000-0000/6858
Attention: Swaps Documentation
With a copy in the case of notices or communications relating to Sections 5, 6,
7, 11 or 13 of the Initial Interest Rate Swap Agreement to:
Barclays Capital
General Counsel's Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Schedule II to the
Sale and Servicing Agreement
II-3
EXHIBIT A
NOTICE OF FUNDING DATE
In accordance with the Indenture dated as of September 23, 2003 (as amended
or supplemented from time to time, the "Indenture") by and between Capital One
Prime Auto Receivables Trust 2003-2 (the "Issuer"), and JPMorgan Chase Bank, as
indenture trustee (the "Indenture Trustee"), the undersigned hereby gives notice
of the Funding Date to occur on or before ________, 2003 for each of the
Receivables listed on the Schedule of Receivables attached hereto executed by
the undersigned and accompanying this Notice of Funding Date. Unless otherwise
defined herein, capitalized terms have the meanings set forth in Appendix A to
the Sale and Servicing Agreement dated as of September 23, 2003 among the
Issuer, the Indenture Trustee, Capital One Auto Finance, Inc. and Capital One
Auto Receivables, LLC, as Seller (the "Seller").
Such Subsequent Receivables represent the following amounts:
Aggregate Principal Balance of Subsequent Receivables
as of the Subsequent Cut-Off Date: $_________________
Amount to be wired to or at the direction of the Seller in
payment for such Subsequent Receivables: $_________________
Subsequent Cut-Off Date: __________________, 2003
The undersigned hereby certifies that, in connection with the Funding Date
specified above, the undersigned has complied with all terms and provisions
specified in Section 2.5 of the Sale and Servicing Agreement, including, but not
limited to, delivery of the Officer's Certificate, as specified therein.
Date:__________________________, 2003
CAPITAL ONE PRIME AUTO RECEIVABLES
TRUST 2003-2
By: Capital One Auto Finance, Inc., as Administrator
By: _________________________________________________
Name:
Title:
Exhibit B to the
Sale and Servicing Agreement
A-1
EXHIBIT B
OFFICER'S CERTIFICATE
re: Funding Date
CAPITAL ONE AUTO FINANCE, INC.
CAPITAL ONE AUTO RECEIVABLES, LLC
CAPITAL ONE PRIME AUTO RECEIVABLES TRUST 2003-2
[DATE]
This Officer's Certificate is being delivered in accordance with Section
2.5 of that certain Sale and Servicing Agreement dated as of September 23, 2003
(as amended, modified or supplemented from time to time, the "Sale and Servicing
Agreement") by and among Capital One Prime Auto Receivables Trust 2003-2 (the
"Issuer"), Capital One Auto Receivables, LLC (the "Seller"), Capital One Auto
Finance, Inc. (the "Servicer") and JPMorgan Chase Bank (the "Indenture
Trustee"). Terms not otherwise defined herein shall have the meanings ascribed
thereto in Appendix A to the Sale and Servicing Agreement. Reference is hereby
made to the Funding Date to occur on ____________, 2003 (the "Subject Funding
Date").
By his or her signature below, each of the undersigned officers on behalf
of the Servicer, the Seller, and the Issuer, as the case may be, certify that:
(a) the representations and warranties of the Seller contained in Section
5.1 of the Sale and Servicing Agreement are true and correct as of the date
hereof are true and correct;
(b) the representations and warranties of the Seller contained in Section
2.2 of the Sale and Servicing Agreement with respect to the Subsequent
Receivables to be acquired on the Subject Funding Date are true and correct as
of the Subject Funding Date;
(c) the representations and warranties of the Servicer set forth in Section
6.1 of the Sale and Servicing Agreement are true and correct as of the date
hereof;
(d) the documents listed in Section 2.5(c)(i) of the Sale and Servicing
Agreement will be delivered to the Servicer within two (2) Business Days
preceding the Subject Funding Date; and
(e) the requirements stated in Section 2.5 of the Sale and Servicing
Agreement regarding the Subsequent Receivables to be acquired on the Subject
Funding Date have been met. All conditions in the Purchase Agreement and the
Sale and Servicing Agreement regarding the Subsequent Receivables to be acquired
on the Subject Funding Date have been met.
Exhibit B to the
Sale and Servicing Agreement
B-1
CAPITAL ONE PRIME AUTO RECEIVABLES TRUST 2003-2
By: Capital One Auto Finance, Inc., as
Administrator
By: ___________________________________________
Name:
Title:
CAPITAL ONE AUTO FINANCE, INC.
By: ___________________________________________
Name:
Title:
CAPITAL ONE AUTO RECEIVABLES, LLC
By: ___________________________________________
Name:
Title:
Exhibit B to the
Sale and Servicing Agreement
B-2
EXHIBIT C
ASSIGNMENT PURSUANT TO SALE AND SERVICING AGREEMENT
[Date]
For value received, in accordance with the Sale and Servicing Agreement
(the "Agreement"), dated as of September 23, 2003, by and among Capital One
Prime Auto Receivables Trust 2003-2, a Delaware statutory trust (the "Issuer"),
Capital One Auto Receivables, LLC, a Delaware limited liability company (the
"Seller"), Capital One Auto Finance, Inc., a Texas corporation ("COAF"), and
JPMorgan Chase Bank (the "Indenture Trustee"), on the terms and subject to the
conditions set forth in the Agreement, the Seller does hereby irrevocably sell,
transfer, assign, and otherwise convey to the Issuer without recourse (subject
to the obligations in the Agreement) on the date hereof, all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the Receivables set forth on the schedule of Receivables delivered by the
Seller to the Issuer on the date hereof (such schedule, together with any other
Schedule of Receivables delivered by Seller to the Issuer pursuant to the
Agreement, the "Schedule of Receivables"), and the Collections after the related
Cut-Off Date and the Related Security relating thereto, together with all of
Seller's rights under the Purchase Agreement and all proceeds of the foregoing,
which sale shall be effective as of such Cut-Off Date.
The sale, transfer, assignment and conveyance made hereunder does not
constitute and is not intended to result in an assumption by the Issuer of any
obligation of the Seller or the Originator to the Obligors, the Dealers,
insurers or any other Person in connection with the Receivables or the other
assets and properties conveyed hereunder or any agreement, document or
instrument related thereto.
This assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Agreement and is governed by the Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Agreement.
IN WITNESS HEREOF, the undersigned has caused this assignment to be duly
executed as of the date first above written.
CAPITAL ONE AUTO RECEIVABLES, LLC
By: _____________________________
Name:
Title:
Exhibit C to the
Sale and Servicing Agreement
C-1
