EXHIBIT 10.5
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SALE AND SERVICING AGREEMENT
by and among
ANRC AUTO OWNER TRUST 2000-A,
as Issuer,
AUTONATION RECEIVABLES CORPORATION,
as Seller,
AUTONATION FINANCIAL SERVICES CORP.,
as Servicer and Custodian
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of August 10, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................................1
Section 1.01. Definitions......................................................................1
Section 1.02. Usage of Terms..................................................................20
Section 1.03. Section References..............................................................20
Section 1.04. Calculations....................................................................20
Section 1.05. Accounting Terms................................................................20
ARTICLE II CONVEYANCE OF CONTRACTS; REPRESENTATIONS AND WARRANTIES OF THE SELLER............21
Section 2.01. Conveyance of Contracts.........................................................21
Section 2.02. Representations and Warranties of the Seller....................................23
Section 2.03. Repurchase of Certain Contracts.................................................33
Section 2.04. Custody of Contract Files.......................................................33
Section 2.05. Duties of Servicer Relating to the Contracts....................................37
Section 2.06. Instructions; Authority to Act..................................................39
Section 2.07. Indemnification.................................................................39
Section 2.08. Effective Period and Termination................................................39
Section 2.09. Nonpetition Covenant............................................................40
Section 2.10. Collecting Title Documents Not Delivered at the Closing Date....................40
ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS........................................41
Section 3.01. Duties of Servicer..............................................................41
Section 3.02. Collection of Contract Payments.................................................43
Section 3.03. Realization upon Defaulted Contracts............................................44
Section 3.04. Maintenance of Security Interests in Financed Vehicles..........................44
Section 3.05. Covenants, Representations and Warranties of Servicer...........................45
Section 3.06. Purchase of Contracts upon Breach by Servicer; Third Party Claims...............47
Section 3.07. Servicing Compensation..........................................................48
Section 3.08. Reporting by the Servicer.......................................................48
Section 3.09. Annual Statement as to Compliance...............................................50
Section 3.10. Annual Independent Certified Public Accountant's Report.........................51
Section 3.11. Access to Certain Documentation and Information Regarding Contracts.............51
Section 3.12. Indemnification.................................................................52
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 3.13. Reports to Noteholders and the Rating Agencies..................................52
ARTICLE IV DISTRIBUTIONS; SPREAD ACCOUNT; STATEMENTS TO NOTEHOLDERS.........................53
Section 4.01. Establishment of Trust Accounts.................................................53
Section 4.02. Collections; Realization upon Insurance Policy; Net Deposits; Transfers to Payment
Account.........................................................................55
Section 4.03. Distributions...................................................................56
Section 4.04. Spread Account..................................................................58
Section 4.05. Statements to Noteholders.......................................................61
Section 4.06. Effect of Payments by the Insurer; Subrogation..................................63
ARTICLE V THE SELLER.......................................................................64
Section 5.01. Liability of Seller; Indemnities................................................64
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of Seller; Certain
Limitations.....................................................................65
Section 5.03. Limitation on Liability of Seller and Others....................................65
Section 5.04. Seller Not to Resign............................................................66
Section 5.05. Seller May Own Notes............................................................66
ARTICLE VI THE SERVICER.....................................................................67
Section 6.01. Liability of Servicer; Indemnities..............................................67
Section 6.02. Corporate Existence; Status as Servicer; Merger.................................67
Section 6.03. Performance of Obligations......................................................68
Section 6.04. Servicer Not to Resign; Assignment..............................................68
Section 6.05. Limitation on Liability of Servicer and Others..................................69
ARTICLE VII SERVICER DEFAULTS................................................................71
Section 7.01. Servicer Defaults...............................................................71
Section 7.02. Trustee to Act; Appointment of Successor........................................73
Section 7.03. Notification to Noteholders.....................................................74
Section 7.04. Waiver of Past Defaults.........................................................74
Section 7.05. Insurer Direction of Insolvency Proceedings.....................................75
ARTICLE VIII TERMINATION......................................................................76
Section 8.01. Optional Purchase of All Contracts; Satisfaction and Discharge of The Indenture.76
Section 8.02. Termination of this Agreement...................................................76
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IX MISCELLANEOUS....................................................................77
Section 9.01. Amendment.......................................................................77
Section 9.02. Protection of Title to Trust....................................................78
Section 9.03. Governing Law...................................................................80
Section 9.04. Notices.........................................................................80
Section 9.05. Severability of Provisions......................................................81
Section 9.06. Assignment......................................................................81
Section 9.07. Third Party Beneficiaries.......................................................82
Section 9.08. Certain Matters Relating to the Insurer.........................................82
Section 9.09. Headings........................................................................82
Section 9.10. Assignment by Issuer............................................................83
Section 9.11. Limitation of Liability of Owner Trustee........................................83
EXHIBITS
Exhibit A -- List of Contracts
Exhibit B -- Location and Account Numbers of Trust Accounts
Exhibit C -- Distribution Date Statement
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This SALE AND SERVICING AGREEMENT, dated as of August 10, 2000
(as amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), is between ANRC AUTO OWNER TRUST 2000-A, a Delaware business
trust (the "Issuer" or the "Trust"), AUTONATION RECEIVABLES CORPORATION, a
Delaware corporation (together with its permitted successors and assigns, the
"Seller"), AUTONATION FINANCIAL SERVICES CORP., a Delaware corporation, as
Servicer (together with its permitted successors and assigns, the "Servicer")
and as Custodian (together with its permitted successors and assigns, the
"Custodian") and THE CHASE MANHATTAN BANK, a New York banking corporation, as
the Indenture Trustee on behalf of the Noteholders (together with its permitted
successors and assigns in such capacity, the "Indenture Trustee").
In consideration of the premises and the mutual covenants
herein contained, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
"Additional Servicing Fee" shall mean the excess, if any, of
(i) the servicing fee of any Successor Servicer (other than the Indenture
Trustee, in its capacity as Successor Servicer), which has been approved in
writing by the Insurer over (ii) the Servicing Fee.
"Administrator" shall have the meaning set forth in the
Indenture.
"Affiliate" of any specified Person shall mean any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person shall mean the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" or
"controlled" have meanings correlative to the foregoing.
"Amount Financed" shall mean, with respect to a Contract, the
aggregate amount advanced by the Originator under such Contract toward the
purchase price of the related Financed Vehicle and related costs, including
amounts advanced in respect of accessories, extended service or warranty
contracts and other items customarily financed as part of retail automobile
installment sales contracts, excluding any collision and/or comprehensive
insurance premiums.
"APR" of a Contract shall mean the annual percentage rate used
to determine the total interest expected to be charged over the term of a
Contract as of its inception, as shown on such Contract.
"AutoNation Financial Services" shall mean AutoNation
Financial Services Corp. and its successors and assigns.
"Available Funds" shall mean, with respect to any Distribution
Date and the related Collection Period, the sum of (i) all payments of Monthly
Scheduled Payments, all partial prepayments, all Full Prepayments (pursuant to
clause (a) in the definition thereof), Net Liquidation Proceeds and Net
Insurance Proceeds in each case, collected with respect to the Contracts during
such Collection Period; (ii) the aggregate Purchase Amount for Purchased
Contracts deposited in or credited to the Collection Account pursuant to Section
4.02(a) on the Business Day preceding the Servicer Report Date next preceding
such Distribution Date; and (iii) income from Eligible Investments of funds on
deposit in the Trust Accounts.
"Basic Documents" shall have the meaning specified in the
Indenture.
"Business Day" shall mean any day other than (i) a Saturday or
a Sunday, (ii) a day on which the Insurer is closed or (iii) a day on which
commercial banking institutions or savings associations located in New York, New
York or in the city in which the Owner Trustee Corporate Trust Office or the
Corporate Trust Office is located are authorized or obligated by law,
regulation, executive order or governmental decree to be closed.
"Class" shall mean a class of Notes whose form is identical
except for variation in denomination, principal amount or owner.
"Class A-1 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in August 2001.
"Class A-1 Note" shall mean any Class A-1 Note substantially
in the form attached to the Indenture as Exhibit B.
"Class A-1 Rate" shall mean 6.72462% per annum.
"Class A-2 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in March 2003.
"Class A-2 Note" shall mean any Class A-2 Note substantially
in the form attached to the Indenture as Exhibit C.
"Class A-2 Rate" shall mean 7.00% per annum.
"Class A-3 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in May 2004.
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"Class A-3 Note" shall mean any Class A-3 Note substantially
in the form attached to the Indenture as Exhibit D.
"Class A-3 Rate" shall mean 7.06% per annum.
"Class A-4 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in February 2007.
"Class A-4 Note" shall mean any Class A-4 Note substantially
in the form attached to the Indenture as Exhibit E.
"Class A-4 Rate" shall mean 7.15% per annum.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" shall mean August 10, 2000.
"Collection Account" shall mean the account established and
maintained as such pursuant to Section 4.01.
"Collection Period" shall mean, with respect to any
Distribution Date, the calendar month immediately preceding the calendar month
in which such Distribution Date occurs (or, in the case of the first Collection
Period, the period of time from but excluding the Cut-Off Date through the last
day of the calendar month immediately preceding the month in which the first
Distribution Date occurs).
"Collection Policy" shall mean the collection policy of the
Issuer and the Servicer, which shall be (i) the practices and procedures
employed by the Servicer in its servicing of motor vehicle retail installment
contracts as of the Closing Date, which servicing procedures have been certified
by a Servicing Officer and delivered to the Insurer on the Closing Date, as such
Collection Policy may be amended in accordance with Section 3.05 hereof, and
(ii) the practices and procedures of any Successor Servicer which are acceptable
to the Insurer.
"Contract" shall mean each motor vehicle retail installment
sales contract and all proceeds thereof and payments thereunder conveyed by the
Seller to the Issuer pursuant to this Agreement, which contract or agreement has
been executed by an Obligor and pursuant to which such Obligor purchased or
financed the Financed Vehicle described therein, agreed to pay the deferred
purchase price (i.e., the purchase price net of any down payment) or amount
borrowed, together with interest, as therein provided in connection with such
purchase or loan, granted a security interest in such Financed Vehicle, and
undertook to perform certain other obligations as specified in such contract or
agreement. Each Contract shall have been originated by the Originator from
application referrals received from a Dealer and subsequently conveyed by the
Originator to the Seller pursuant to the Receivables Purchase Agreement.
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"Contract Documents" shall mean, with respect to each
Contract, (a) the original Contract and the original credit application fully
executed by the Obligor thereunder; (b) either (i) the original Title Document
for the related Financed Vehicle or a duplicate copy thereof issued or certified
by the Registrar of Titles which issued the original thereof, together with
evidence of perfection of the security interest in the related Financed Vehicle
granted by such Contract, as reasonably determined by the Servicer to be
permitted or required to perfect such security interest under the laws of the
applicable jurisdiction, or (ii) written evidence that the Title Document for
such Financed Vehicle showing AutoNation Financial Services as first lienholder
has been applied for; (c) any agreement(s) modifying the Contract (including,
without limitation, any extension agreement(s)); (d) a signed agreement by an
Obligor to provide insurance with AutoNation Financial Services listed as loss
payee; (e) a copy of the contract for any supplemental warranty purchased with
respect to the Financed Vehicle; (f) acceptable vehicle valuation documentation
consisting of the dealer invoice or sticker for new cars and reference to the
most recently published National Automobile Dealers Association Used Car Price
Guide or Xxxxx Blue Book, based on year, make and model of the related Financed
Vehicle for used cars and (g) any documents specifically relating to the Obligor
or the Financed Vehicle. The documents referred to above, other than the
Contracts and the Title Documents may be maintained in microfiche or electronic
form.
"Contract Files" shall mean all papers and computerized
records customarily kept by the Servicer or its agents in servicing contracts
and loans comparable to the Contracts.
"Contract Number" shall mean, with respect to any Contract
included in the Trust, the number assigned to such Contract by the Servicer,
which number is set forth in the related Schedule of Contracts.
"Controlling Party" shall have the meaning set forth in the
Indenture.
"Conveyed Property" shall have the meaning assigned to such
term in Section 2.01(a).
"Corporate Trust Office" shall mean the principal office of
the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution of
this Agreement is located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Capital Markets Fiduciary Services: ANRC Auto Owner Trust
2000-A; or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders, the Insurer, the Servicer and the
Seller.
"Cumulative Net Loss Ratio" shall have the meaning set forth
in the Insurance Agreement.
"Custodial Agreement" shall mean the Custodial Agreement,
dated as of August 10, 2000, by and among the Originator, the Servicer, the
Custodian, the Issuer, World Omni Financial Corp. and the Indenture Trustee, as
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the same may be amended, supplemented or otherwise modified and in effect from
time to time.
"Custodian" shall mean AutoNation Financial Services until
such time, if any, as a Successor Custodian is appointed and thereafter shall
mean such Successor Custodian.
"Cut-Off Date" shall mean June 30, 2000.
"Default" shall mean any occurrence that is, or with the
giving of notice or the lapse of time or both, would become a Servicer Default.
"Dealer" shall mean each automotive dealership which sold a
Financed Vehicle, and referred the application in respect of the related
Contract to AutoNation Financial Services.
"Defaulted Contract" shall mean, with respect to any
Collection Period, a Contract (i) which, at the end of such Collection Period,
is deemed uncollectible by the Servicer in accordance with its customary
procedures, (ii) in respect of which all amounts more than one hundred and
twenty (120) days past due represent in the aggregate $40 or more, (iii) in
respect of which the related Financed Vehicle has been repossessed and
liquidated, or (iv) in respect of which the Servicer has repossessed and held
the related Financed Vehicle in its repossession inventory for 91 days or more,
whichever occurs first.
"Deficiency Amount" shall mean, with regard to any
Distribution Date, the sum of (i) the excess, if any, of (a) the Note Interest
Distributable Amount with respect to all Classes of Notes for such Distribution
Date over (b) the sum of (x) the Available Funds for such Distribution Date
(after giving effect to distributions pursuant to clauses (i) through (iii) of
Section 4.03(a) for such Distribution Date) and (y) the amount to be on deposit
in the Spread Account for such Distribution Date (after giving effect to any
withdrawals to pay amounts pursuant to clauses (i) through (iii) of Section
4.03(a) for such Distribution Date) and (ii) the Guaranteed Note Principal
Amount for such Distribution Date.
"Deficiency Notice" shall mean, with respect to any
Distribution Date, the notice delivered pursuant to Section 4.02(c) by the
Servicer to the Indenture Trustee, with a copy to the Insurer.
"Definitive Notes" shall mean Notes issued in fully
registered, certificated form to Noteholders.
"Delivery" when used with respect to Trust Account Property
shall mean:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Indenture Trustee by
physical delivery to the Indenture Trustee endorsed to, or registered in the
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name of, the Indenture Trustee or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the UCC) transfer thereof
(i) by delivery of such certificated security endorsed to, or registered in the
name of the Indenture Trustee or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102 of the UCC) and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the appropriate
securities account of the Indenture Trustee by the amount of such certificated
security and the identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the Indenture Trustee (all of
the foregoing, "Physical Property"), and, in any event, any such Physical
Property in registered form shall be in the name of the Indenture Trustee; and
such additional or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Trust Account Property to
the Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a securities intermediary that is also a "depository" pursuant to
applicable federal regulations; the making by such securities intermediary of
entries in its books and records crediting such Trust Account Property to the
Indenture Trustee's security account at the securities intermediary and
identifying such book-entry security held through the Federal Reserve System
pursuant to federal book-entry regulations as belonging to the Indenture
Trustee; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee, consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any uncertificated security under Article
8 of the UCC and that is not governed by clause (b) above, registration on the
books and records of the issuer thereof in the name of the Indenture Trustee or
its nominee or custodian who either (i) becomes the registered owner on behalf
of the Indenture Trustee or (ii) having previously become the registered owner,
acknowledges that it holds such uncertificated security for the Indenture
Trustee.
"Depositor" shall mean the Seller in its capacity as Depositor
under the Owner Trust Agreement, and its successors.
"Distribution Account" means the Note Distribution Account.
"Distribution Date" shall mean the 15th day of each month or
if such date shall not be a Business Day, the following Business Day, commencing
on September 15, 2000.
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"Distribution Date Statement" shall have the meaning specified
in Section 3.08(a).
"Due Date" shall mean, as to any Contract, the date upon which
a Monthly Scheduled Payment is due.
"Eligible Account" shall mean (i) a segregated trust account
that is either (a) maintained by the Indenture Trustee, (b) maintained with a
depository institution or trust company organized under the laws of the United
States of America or any state thereof the commercial paper or other short-term
debt obligations of which have credit ratings from Standard & Poor's at least
equal to "A-1+" and from Moody's equal to "P-1," which account is fully insured
up to applicable limits by the Federal Deposit Insurance Corporation or (c)
maintained with a depository institution organized under the laws of the United
States of America or any state thereof acceptable to the Insurer, as evidenced
by a letter from the Insurer to that effect or (ii) a general ledger account or
deposit account at a federal or state chartered depository institution
acceptable to the Insurer, as evidenced by a letter from the Insurer to that
effect.
"Eligible Investments" shall mean any one or more of the
following obligations or securities, all of which shall be denominated in United
States dollars:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of America or
any agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America
and, to the extent, at the time of investment, acceptable to the Insurer and
each Rating Agency for securities having a rating equivalent to the rating of
the Notes at the Closing Date, the direct obligations of, or obligations fully
guaranteed by, the Federal Home Loan Mortgage Corporation and the Federal
National Mortgage Association;
(b) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or the Owner
Trustee) incorporated under the laws of the United States of America or any
State and subject to supervision and examination by Federal and/or State banking
authorities, so long as at the time of such investment or contractual commitment
providing for such investment, the short-term, unsecured debt obligations of
such depository institution or trust company have credit ratings from Standard &
Poor's at least equal to "A-1+" and from Moody's at least equal to "P-1";
provided that any such demand and time deposits shall be fully insured by the
Federal Deposit Insurance Corporation and any such certificates of deposit must
be secured at all times by collateral described in clause (a) above, such
collateral must be held by a third party and the Indenture Trustee must have a
perfected first priority security interest in such collateral.
(c) repurchase obligations with a term not to exceed 30 days
and with respect to (i) any security described in clause (a) above or (ii) any
other security issued or guaranteed as to timely payment of principal and
interest by an agency or instrumentality of the United States of America, in
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either case entered into with any depository institution or trust company
(including the Indenture Trustee and the Owner Trustee), acting as principal,
described in clause (b) above; provided, however, that collateral transferred
pursuant to such repurchase obligation must be of the type described in clause
(a) above and must (x) be marked-to-market weekly at current market price plus
accrued interest, (y) pursuant to such valuation, be equal at all times to 105%
of the cash transferred by the Indenture Trustee in exchange for such collateral
and (z) be delivered to the Indenture Trustee or, if the Indenture Trustee is
supplying the collateral, an agent for the Indenture Trustee, in such a manner
as to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(d) commercial paper having the highest rating by Standard &
Poor's and Moody's at the time of such investment;
(e) investments in money market funds or money market mutual
funds registered under the Investment Company Act of 1940, as amended, whose
shares are registered under the Securities Act of 1933, having a rating from
Standard & Poor's and Moody's in the highest investment category granted
thereby, including funds for which the Indenture Trustee, the Owner Trustee or
any of their respective Affiliates is investment manager or advisor; and
(f) such other obligations or securities acceptable to the
Insurer, as evidenced by a letter from the Insurer to the Indenture Trustee
(which acceptability may be revoked at any time by the Insurer).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fee Letter" shall mean the Fee Letter, dated as of August 10,
2000, between AutoNation, Inc. and the Indenture Trustee, as such agreement may
be amended, supplemented or otherwise modified and in effect from time to time.
"Final Scheduled Distribution Date" shall mean with respect to
the Notes, the Class A-1 Final Scheduled Distribution Date, the Class A-2 Final
Scheduled Distribution Date, the Class A-3 Final Scheduled Distribution Date or
the Class A-4 Final Scheduled Distribution Date, as the case may be.
"Financed Vehicle" shall mean, as to any Contract, a new or
used automobile and/or light-duty truck, together with all accessions thereto,
securing the related Obligor's indebtedness under such Contract.
"Fiscal Agent" shall have the meaning set forth in the
Insurance Policy.
"Full Prepayment" shall mean, with respect to any Contract,
any of the following: (a) payment by or on behalf of the Obligor of the total
amount required by the terms of such Contract to be paid thereunder, which
amount shall be at least equal to the sum of (i) 100% of the Principal Balance
of such Contract, (ii) unpaid interest accrued thereon to the date of such
payment at the APR and (iii) any overdue amounts; or (b) payment by the Seller
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to the Indenture Trustee of the Purchase Amount of such Contract in connection
with the purchase of such Contract pursuant to Section 2.03, or payment by the
Servicer of the Purchase Amount of such Contract in connection with the purchase
of such Contract pursuant to Section 3.06 or the purchase of all Contracts
pursuant to Section 8.01.
"Guaranteed Note Principal Amount" shall mean with regard to
any Distribution Date, the lesser of (a) the excess, if any, of (i) the Note
Principal Distributable Amount for such Distribution Date over (ii) the sum of
(x) the Available Funds for such Distribution Date (after giving effect to
distributions pursuant to clauses (i) through (iv) of Section 4.03(a) for such
Distribution Date) and (y) the amount to be on deposit in the Spread Account for
such Distribution Date (after giving effect to any withdrawals to pay amounts
pursuant to clauses (i) through (iv) of Section 4.03(a) for such Distribution
Date) and (b) the excess, if any, of (i) the Outstanding Principal Amount of the
Notes for such Distribution Date (after giving effect to all payments of
principal of the Notes on such Distribution Date, other than from an Insured
Payment) over (ii) the sum of (x) the Pool Balance as of the last day of the
preceding Collection Period and (y) the amount to be on deposit in the Spread
Account (after giving effect to any withdrawals to pay amounts pursuant to
clauses (i) through (vi) of Section 4.03(a) for such Distribution Date);
provided, however, on the Final Scheduled Distribution Date for such Class of
Notes, the Guaranteed Note Principal Amount shall be at least equal to the
Outstanding Principal Amount of such Class of Notes on such Final Scheduled
Distribution Date (after giving effect to all payments of principal of the Notes
on such Final Scheduled Distribution Date other than from an Insured Payment).
"Indenture" shall mean the Indenture, dated as of August 10,
2000, between the Issuer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Indenture Trustee" shall mean The Chase Manhattan Bank, a New
York banking corporation, as the Indenture Trustee under the Indenture, its
successors in interest and any successor Indenture Trustee under the Indenture.
"Indenture Trustee Fee" shall equal the amount specified in
the Fee Letter.
"Insolvency Proceeding" shall have the meaning specified in
Section 7.05.
"Insurance Agreement" shall mean the Insurance Agreement,
dated as of August 10, 2000, by and among the Insurer, the Administrator, the
Seller, the Servicer, the Custodian, the Originator, the Indenture Trustee, the
Owner Trustee and the Issuer, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"Insurance Policy" shall mean the note guaranty insurance
policy for the Notes, number 32866, dated August 10, 2000, and issued by the
Insurer in favor of the Indenture Trustee, guaranteeing payment of any Insured
Payment, as the same may be amended, supplemented or otherwise modified and in
effect from time to time.
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"Insurance Premium" shall have the meaning specified in the
Insurance Agreement.
"Insured Payment" shall mean (i) as of any Distribution Date,
any Deficiency Amount and (ii) any Preference Amount.
"Insurer" shall mean MBIA Insurance Corporation, a New York
stock insurance company, and its permitted successors and assigns.
"Insurer Default" shall mean the occurrence and continuance of
any of the following:
(i) the Insurer shall have failed to make a payment required
to be made under the Insurance Policy in accordance with its terms;
(ii) the Insurer shall have (a) filed a petition or commenced
any case or proceeding in respect of the Insurer under any provision or
chapter of the United States Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (b) made a general
assignment for the benefit of its creditors or (c) had an order for
relief entered against it under the United States Bankruptcy Code or
any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation or reorganization which is
final and nonappealable; or
(iii) a court of competent jurisdiction, the New York
Department of Insurance or other competent regulatory authority shall
have entered a final and nonappealable order, judgment or decree (a)
appointing a custodian, trustee, agent or receiver for the Insurer or
for all or any material portion of its property or (b) authorizing the
taking of possession by a custodian, trustee, agent or receiver of the
Insurer (or the taking of possession of all or any material portion of
the property of the Insurer).
"Interest Accrual Period" shall mean, with respect to any
Distribution Date, the period from and including the Distribution Date
immediately preceding such Distribution Date (or, in the case of the first
Distribution Date, from and including the Closing Date) to but excluding such
Distribution Date.
"Issuer" shall mean ANRC Auto Owner Trust 2000-A, a Delaware
business trust, and its permitted successors and assigns.
"Lien" shall mean a security interest, lien, charge, pledge,
equity or encumbrance of any kind, other than tax liens, mechanics' liens and
any liens that attach to the respective Contract by operation of law.
"Liquidation Expenses" shall mean reasonable out-of-pocket
expenses, other than any overhead expenses, incurred by the Servicer in
connection with the collection and realization of the full amounts due under any
Defaulted Contract (including the attempted liquidation of a Contract which is
brought current and is no longer in default during such attempted liquidation)
10
and the repossession and sale of any property acquired in respect thereof which
are not recoverable as proceeds paid by any insurer under any type of motor
vehicle insurance policy related to the Contract. Liquidation Expenses shall not
include any late fees or other administrative fees and expenses or similar
charges collected with respect to a Contract.
"Maturity Date" shall mean, with respect to any Contract, the
date on which the last scheduled payment of such Contract shall be due and
payable as such date may be extended pursuant to Section 3.02.
"Monthly Scheduled Payment" shall mean, with respect to any
Contract, in any given month, the amount of the scheduled payment of principal
and interest payable by the Obligor of such Contract for such month in
accordance with the terms thereof, exclusive of any charges which represent late
payment charges or extension fees.
"Moody's" shall mean Xxxxx'x Investors Service, and its
permitted successors and assigns.
"Net Insurance Proceeds" shall mean proceeds paid by any
insurer under a comprehensive and collision insurance policy related to a
Contract (other than funds used for the repair of the related Financed Vehicle
or proceeds released to the Obligor in excess of the Principal Balance of the
Contract, and all accrued interest thereon and all other amounts due
thereunder), after reimbursement to the Servicer of expenses recoverable under
such policy.
"Net Liquidation Proceeds" shall mean, at any time, with
respect to any Contract that becomes a Defaulted Contract, the amount received
by the Servicer in respect of such Contract during or after the Collection
Period in which such Contract becomes a Defaulted Contract (after deduction of
Liquidation Expenses with respect to such Contract).
"Non-Servicer Default" shall mean the occurrence and
continuation of any one of the following events:
(a) failure on the part of the Custodian, any Subcustodian or
any Subservicer duly to observe or to perform any other covenants or agreements
of the Custodian, any Subcustodian or the Subservicer set forth in this
Agreement, the Sub-Servicing Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of the Noteholders,
the Insurer, the Issuer, the Owner Trustee or the Indenture Trustee and (ii)
continue unremedied for a period of 30 days after the date on which the
Custodian, any Subcustodian or the Subservicer shall have knowledge of such
failure or written notice of such failure, requiring the same to be remedied,
shall have been given to the Custodian, any Subcustodian or any Subservicer, as
the case may be, by the Insurer, the Issuer, the Owner Trustee or the Indenture
Trustee;
(b) the entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Custodian, any
Subcustodian or the Subservicer in an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or future,
federal or state, bankruptcy, insolvency or similar law, or appointing a
11
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Custodian, any Subcustodian or the Subservicer or of any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Custodian, any Subcustodian or the Subservicer and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days or the commencement of an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar laws and such case is not
dismissed within 60 days;
(c) the commencement by the Custodian, any Subcustodian or the
Subservicer of a voluntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future, federal or state,
bankruptcy, insolvency or similar law, or the consent by the Custodian, any
Subcustodian or the Subservicer to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Custodian, any Subcustodian or the Subservicer or of any
substantial part of its property or the making by the Custodian, any
Subcustodian or the Subservicer of an assignment for the benefit of creditors or
the failure by the Custodian, any Subcustodian or the Subservicer generally to
pay its debts as such debts become due or the taking of corporate action by the
Custodian, any Subcustodian or the Subservicer in furtherance of any of the
foregoing;
(d) any representation, warranty or statement of the
Custodian, any Subcustodian or the Subservicer made in this Agreement, the
Sub-Servicing Agreement or the other Basic Documents or any certificate, report
or other writing delivered pursuant hereto or thereto shall prove to be
incorrect in any material respect as of the time when the same shall have been
made, and the incorrectness of such representation, warranty or statement has a
material adverse effect on the Noteholders or the Insurer and, within 30 days
after written notice thereof shall have been given to the Custodian, any
Subcustodian or the Subservicer, as applicable, by the Indenture Trustee or the
Issuer, or so long as no Insurer Default has occurred and is continuing, by the
Insurer, the circumstance or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated or otherwise
cured; or
(e) a Servicer Default.
"Note" shall mean a Class A-1 Note, a Class A-2 Note, a Class
A-3 Note or a Class A-4 Note.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes, collectively.
"Note Distributable Amount" shall mean, with respect to any
Distribution Date, the sum of the Note Principal Distributable Amount and the
Note Interest Distributable Amount for such Distribution Date.
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"Note Distribution Account" shall mean the account established
and maintained as such pursuant to Section 4.01.
"Noteholder" shall have the meaning specified in the
Indenture.
"Note Interest Carryover Shortfall" shall mean, with respect
to any Distribution Date and a Class of Notes, the sum of (i) the excess, if
any, of the Note Interest Distributable Amount for such Class for the
immediately preceding Distribution Date over the amount in respect of interest
that is actually deposited in the Note Distribution Account with respect to such
Class on such preceding Distribution Date, and, (ii) to the extent permitted by
applicable law, interest on the amount of interest due but not paid to
Noteholders of such Class on the preceding Distribution Date at the related Note
Rate for the related Interest Accrual Period; provided that the Note Interest
Carryover Shortfall for the first Distribution Date shall be zero.
"Note Interest Distributable Amount" shall mean, with respect
to any Distribution Date and a Class of Notes, the sum of (i) an amount equal to
the interest accrued during the related Interest Accrual Period at the related
Note Rate for such Class of Notes on the Outstanding Principal Amount of such
Class of Notes on the immediately preceding Distribution Date (or, in the case
of the first Distribution Date, on the original Outstanding Principal Amount of
such Class of Notes) and (ii) the Note Interest Carryover Shortfall for such
Class of Notes for such Distribution Date.
"Note Principal Carryover Shortfall" shall mean, as of the
close of business on any Distribution Date, the excess of the Note Principal
Distributable Amount for such Distribution Date over the amount in respect of
principal that is actually paid from the Note Distribution Account on such
Distribution Date.
"Note Principal Distributable Amount" shall mean, with respect
to any Distribution Date, the sum of (i) the Principal Distributable Amount for
such Distribution Date and (ii) any outstanding Note Principal Carryover
Shortfall for the immediately preceding Distribution Date; provided that the
Note Principal Distributable Amount shall not exceed the aggregate Outstanding
Principal Amount of the Notes. Notwithstanding the foregoing, the Note Principal
Distributable Amount on the Final Scheduled Distribution Date for each Class
shall not be less than the amount that is necessary to reduce the Outstanding
Principal Amount of the related Class of Notes to zero.
"Note Rate" shall mean the Class A-1 Rate, the Class A-2 Rate,
the Class A-3 Rate or the Class A-4 Rate, as the case may be.
"Note Register" shall have the meaning specified in the
Indenture.
"Obligee" shall mean, with respect to any Contract, the Person
to whom an Obligor is indebted under such Contract.
"Obligor" shall mean, with respect to any Contract, the
purchaser or co-purchasers of the Financed Vehicle and any other Person who owes
payments under such Contract.
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"Officers' Certificate" shall mean a certificate signed by the
Chairman, the President, a Vice President, the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of any Person delivering such certificate and delivered to
the Person to whom such certificate is required to be delivered. In the case of
an Officers' Certificate of the Servicer, the signing officer must be a
Servicing Officer. Unless otherwise specified, any reference herein to an
Officers' Certificate shall be to an Officers' Certificate of the Servicer.
"Opinion of Counsel" shall mean a written opinion of counsel
(who may be an employee of or counsel to the Seller or the Servicer) acceptable
to the Indenture Trustee or the Owner Trustee, as the case may be, and the
Insurer, which opinion shall be acceptable in form and substance to the
Indenture Trustee and the Insurer and shall be addressed to the Indenture
Trustee or Owner Trustee, as the case may be, and the Insurer.
"Optional Purchase" shall have the meaning specified in
Section 8.01
"Original Pool Balance" shall mean $698,718,463.75, which is
the aggregate principal balance.
"Originator" shall mean AutoNation Financial Services Corp.,
and its permitted successors and assigns.
"Outstanding" shall mean with respect to a Contract and as of
the time of reference thereto, a Contract that has not reached its Maturity
Date, has not been fully prepaid, has not become a Defaulted Contract and has
not otherwise been repurchased pursuant to Section 2.03, 3.06 or 8.01.
"Outstanding Principal Amount" shall mean, with respect to any
Distribution Date, the aggregate outstanding principal amount of the Notes after
giving effect to any payments of principal made on the Notes on such
Distribution Date.
"Outstanding Principal Balance" shall mean, as of the Cut-Off
Date, the amount set forth as the Outstanding Principal Balance of such Contract
on the Schedule of Contracts, such amount being the total of all principal
payments due after the Cut-Off Date.
"Overcollateralization Amount" shall mean approximately 1.0%
of the initial Pool Balance.
"Owner Trust Agreement" shall mean the Amended and Restated
Owner Trust Agreement, dated as of August 10, 2000, between the Depositor and
the Owner Trustee, as the same may be further amended, supplemented or otherwise
modified and in effect from time to time.
"Owner Trustee" shall mean The Bank of New York (Delaware), a
Delaware banking corporation, not in its individual capacity but solely as the
Owner Trustee under the Owner Trust Agreement acting on behalf of the Issuer,
its successors in interest and any successor Owner Trustee under the Owner Trust
Agreement.
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"Owner Trustee Corporate Trust Office" shall mean the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be principally administered, which office at the
date of the execution of this Agreement is located at Xxxxx Xxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration, with a
copy to The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Trust Administration; or at such other address
as the Owner Trustee may designate from time to time by notice to the
Noteholders, the Insurer, the Servicer and the Seller.
"Owner Trustee Fee" shall equal the amount specified in the
Owner Trust Agreement.
"Paying Agent" shall mean with respect to the Notes, the
Person acting as the "Paying Agent" under the Indenture or any other Person that
meets the eligibility standards for the Indenture Trustee specified in the
Indenture and is authorized by the Issuer to make the distributions from the
Note Distribution Account, including payment of principal of or interest on the
Notes on behalf of the Issuer.
"Payment Account" shall mean the account established and
maintained as such pursuant to Section 4.01.
"Percentage Interest" shall have the meaning set forth in the
Owner Trust Agreement.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, limited liability company or limited liability
partnership, joint venture, association, joint stock company, business trust,
trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Pool Balance" as of the time of determination shall mean the
aggregate of the Principal Balances of the Contracts, exclusive of the Principal
Balances of all Contracts that are not Outstanding at the end of the Collection
Period ending immediately prior to such time of determination.
"Pool Factor" shall mean, a six-digit decimal computed each
month indicating the Pool Balance at the end of the month, divided by the
Original Pool Balance. The Pool Factor will be 1.000000 as of the Closing Date;
thereafter, the Pool Factor will decline to reflect reductions in the Pool
Balance.
"Potential Preference Parties" shall have the meaning
specified in Section 4.04(e).
"Preference Amount" shall mean, any amount previously
distributed to a Noteholder that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a
final nonappealable order of a court having competent jurisdiction.
15
"Preference Claim" shall have the meaning specified in Section
7.05.
"Principal Balance" shall mean, with respect to a Contract, as
of any date of determination, the Amount Financed under the terms of such
Contract minus (i) that portion of all Monthly Scheduled Payments and any full
or partial prepayments in respect of such Contract received on or prior to the
end of the most recently ended Collection Period and allocable to principal as
determined by the Servicer. For purposes of this definition, allocations between
interest and principal of the Monthly Scheduled Payment on each Contract by the
Servicer shall be made in accordance with the terms of such Contract.
"Principal Distributable Amount" shall mean, with respect to
any Distribution Date, the amount equal to the sum of the following amounts with
respect to the Collection Period: (i) collections received on Contracts (other
than Defaulted Contracts and Purchased Contracts) allocable to principal as
determined by the Servicer, including full and partial principal prepayments;
(ii) the Principal Balance of all Contracts (other than Purchased Contracts)
that become Defaulted Contracts during the related Collection Period; and (iii)
the Principal Balance as of the date of purchase of all Contracts that became
Purchased Contracts as of the immediately preceding Servicer Report Date.
"Purchase Amount" shall mean, with respect to a Purchased
Contract, the Principal Balance of such Contract as of the date of purchase or
repurchase of such Contract plus accrued interest thereon to the date of
purchase at the applicable APR to the extent not previously collected.
"Purchased Contract" shall mean a Contract that (i) has been
purchased or repurchased by the Originator the Servicer or the Seller because of
certain material defects in documents related to such Contract, (ii) has been
repurchased by the Seller or the Originator because of certain breaches of
representations and warranties regarding such Contract made by the Seller in
this Agreement or by the Originator in the Receivables Purchase Agreement, as
applicable, pursuant to the terms thereof, (iii) has been purchased by the
Servicer because of certain breaches by the Servicer of representations or
servicing covenants pursuant to Section 3.06 or (iv) has been purchased by the
Servicer in the event of an optional purchase of all of the Contracts pursuant
to Section 8.01.
"Rating Agencies" shall mean Moody's and Standard & Poor's,
and if either Moody's or Standard & Poor's no longer maintains a rating on any
Class of Notes, such other nationally recognized statistical rating organization
designated by the Depositor and acceptable to the Insurer.
"Receivables Purchase Agreement" shall mean the Receivables
Purchase Agreement, dated as of August 10, 2000, between AutoNation Financial
Services, as seller, and the Seller, as purchaser, as such agreement may be
amended, supplemented or otherwise modified and in effect from time to time.
16
"Record Date" shall mean, with respect to a Class of Notes, on
each Distribution Date and the Final Scheduled Distribution Date, the Business
Day immediately prior to such Distribution Date or Final Scheduled Distribution
Date or, if Definitive Securities are issued, the last day of the immediately
preceding calendar month.
"Registrar of Titles" shall mean the agency, department or
office having the responsibility for maintaining records of titles to motor
vehicles and issuing documents evidencing such titles in the jurisdiction in
which a particular Financed Vehicle is registered.
"Reimbursement Amount" shall mean the sum of (i) any
unreimbursed payments made by the Insurer under the Insurance Policy or pursuant
to Section 5.02(c) of the Indenture, (ii) any expense paid by the Insurer
pursuant to Section 3.04(b) and not reimbursed by the Servicer pursuant to such
Section 3.04(b), (iii) any unpaid Insurance Premium and (iv) all other amounts
due to the Insurer under the Insurance Agreement, in each case, together with
interest on such amounts at the Late Payment Rate (as defined in the Insurance
Agreement).
"Re-Xxxxxxx Expenses" shall mean reasonable out-of-pocket
expenses, acceptable to the Insurer and incurred in connection with the
retitling of the Title Documents to name the Indenture Trustee as secured party
with respect to the Financed Vehicles pursuant to Section 3.04(b).
"Request for Release of Documents" shall have the meaning set
forth in the Custodial Agreement.
"Residual Interest Certificate" shall have the meaning
specified in the Owner Trust Agreement.
"Responsible Officer" shall mean any officer of the Indenture
Trustee or the Owner Trustee within the Corporate Trust Office or the Owner
Trustee Corporate Office, as applicable, including any vice president, assistant
vice president, assistant treasurer, assistant secretary or any other officer of
the Indenture Trustee or Owner Trustee customarily performing functions similar
to those performed by any of the above designated officers with direct
responsibility for the administration of this Agreement.
"Schedule of Contracts" shall mean the list or lists of
Contracts attached as Exhibit A hereto. In addition, the information contained
in Exhibit A shall also be contained on a computer disk or tape (the "Disk")
that shall be delivered by the Servicer to the Indenture Trustee and the Insurer
on or prior to the Closing Date.
"Securities Account Control Agreement" shall have the meaning
set forth in the Indenture.
"Seller" shall mean AutoNation Receivables Corporation, a
Delaware corporation, in its capacity as the Seller of the Contracts under this
Agreement, and each successor thereto (in the same capacity) pursuant to Section
5.02.
17
"Servicer" shall mean AutoNation Financial Services Corp., a
Delaware corporation, in its capacity as the servicer of the Contracts under
Section 3.01, and, in each case upon succession in accordance herewith, each
successor servicer in the same capacity pursuant to Section 3.01 and each
successor servicer pursuant to Section 7.02.
"Servicer Default" shall mean an event specified in Section
7.01.
"Servicer Report Date" shall mean, with respect to any
Distribution Date, the third Business Day prior to such Distribution Date.
"Servicing Fee" shall mean, as to any Distribution Date, the
fee payable to the Servicer for services rendered during the Collection Period
ending immediately prior to such Distribution Date, which shall be an amount
equal to the product of the Servicing Fee Percentage multiplied by the Pool
Balance as of the end of the Collection Period preceding the related Collection
Period or in the case of the first Distribution Date, the Pool Balance as of the
Cut-Off Date.
"Servicing Fee Percentage" shall mean a percentage equal to
the product of one-twelfth of 1.0% per annum.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Contracts whose name appears on a list of servicing officers furnished to the
Indenture Trustee and the Insurer by the Servicer pursuant to Section 3.01, as
such list may be amended or supplemented from time to time.
"Servicing Standards" shall mean, at any time, the quality of
the Servicer's performance with respect to (i) compliance with the terms of this
Agreement and the Collection Policy and (ii) adequacy, measured in accordance
with industry standards and current and historical standards of the Servicer, in
respect of the servicing of all Contracts serviced by the Servicer, regardless
of whether any such Contract is owned by the Servicer or otherwise.
"Simple Interest Contract" shall mean a Contract as to which
the portion of payments allocable to earned interest and principal thereunder is
determined according to the Simple Interest Method.
"Simple Interest Method" shall mean the method for calculating
interest on a Contract whereby interest due is calculated each day based on the
actual principal balance of the Contract on that day.
"Spread Account" shall mean the account established and
maintained as such pursuant to Section 4.01.
"Spread Account Initial Deposit" shall equal the amount set
forth in the Insurance Agreement.
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"Spread Account Property" shall mean the Spread Account, all
amounts and investments held from time to time in the Spread Account (whether in
the form of deposit accounts, physical property, book-entry securities,
uncertificated securities or otherwise) and all proceeds of the foregoing.
"Spread Account Required Amount" shall have the meaning set
forth in the Insurance Agreement.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., and its permitted
successors and assigns.
"Subcustodian" shall mean World Omni Financial Corp., a
Florida corporation and any successor.
"Subservicer" shall mean World Omni Financial Corp., a Florida
corporation, in its capacity as the subservicer of the Contracts under Section
3.01, and, upon succession in accordance herewith, each successor subservicer in
the same capacity pursuant to Section 3.01.
"Sub-Servicing Agreement" shall mean the Amended and Restated
Servicing Agreement, dated as of May 12, 2000, between AutoNation Financial
Services and the Subservicer, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"Successor Custodian" shall have the meaning set forth in
Section 2.04(b).
"Successor Servicer" shall have the meaning set forth in
Section 7.02.
"Title Document" shall mean, with respect to any Financed
Vehicle, the certificate of title for, or other evidence of ownership of, such
Financed Vehicle issued by the Registrar of Titles in the jurisdiction in which
such Financed Vehicle is registered.
"Transition Costs" shall mean reasonable costs and expenses
incurred by or payable to the Successor Servicer in connection with the transfer
of servicing (whether due to termination, resignation or otherwise) from the
Servicer to such Successor Servicer, which shall be approved in writing by the
Insurer.
"Trust" shall mean the Issuer.
"Trust Account Property" shall mean the Trust Accounts, all
amounts and investments held from time to time in any Trust Account (whether in
the form of deposit accounts, physical property, book-entry securities,
uncertificated securities or otherwise) and all proceeds of the foregoing.
"Trust Accounts" shall have the meaning specified in Section
4.01(a).
"Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights pledged to the Indenture Trustee
pursuant to the Indenture.
19
"Trust Property" shall have the meaning set forth in Section
2.01(a).
"UCC" shall mean the Uniform Commercial Code as in effect in
the applicable jurisdiction.
"Underwriting Guidelines" shall have the meaning set forth in
the Insurance Agreement.
Section 1.02. Usage of Terms.
With respect to all terms in this Agreement, the singular
includes the plural and the plural the singular; words importing any gender
include the other genders; references to "writing" include printing, typing,
lithography and other means of reproducing words in a visible form; references
to agreements and other contractual instruments include all amendments,
modifications and supplements thereto or any changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
term "including" means "including without limitation."
Section 1.03. Section References.
All section references, unless otherwise indicated, shall be
to Sections in this Agreement.
Section 1.04. Calculations.
Interest on the Class A-1 Notes will be calculated on the
basis of the actual number of days in the related Interest Accrual Period and a
360-day year. Interest on the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes will be calculated on the basis of a 360-day year consisting of twelve
30-day months. Collections of interest on Simple Interest Contracts will be
calculated in accordance with the terms thereof.
Section 1.05. Accounting Terms.
All accounting terms used but not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
in the United States of America.
20
ARTICLE II
CONVEYANCE OF CONTRACTS;
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Section 2.01. Conveyance of Contracts.
(a) In consideration of the Issuer's delivery of the
authenticated Notes to or upon the order of the Seller, effective upon the
Closing Date, the Seller hereby sells, grants, transfers, conveys and assigns to
the Issuer, without recourse (except as expressly provided in Section 2.03
hereof), all of the right, title and interest of the Seller in, to and under:
(i) the Contracts listed in the Schedule of Contracts;
(ii) all monies received with respect to all Contracts after
the Cut-Off Date, including any Purchase Amounts;
(iii) all Net Liquidation Proceeds and Net Insurance Proceeds
with respect to any Financed Vehicle to which a Contract relates
received after the Cut-Off Date;
(iv) all documents relating to the Contracts, the Contract
Documents and Contract Files relating to the Contracts, including all
servicing records in hard and electronic form;
(v) all rights of the Seller (but not its obligations) under
the Receivables Purchase Agreement;
(vi) any and all security interests in the Financed Vehicles
and the rights to receive proceeds from claims on any insurance
policies covering the Financed Vehicles or the individual Obligors
under each related Contract; and
(vii) all proceeds in any way delivered with respect to the
foregoing, all rights to payments with respect to the foregoing and all
rights to enforce the foregoing.
The foregoing items of property listed in this Section 2.01(a)
(the "Conveyed Property"), together with the Trust Account Property, are
collectively referred to herein as the "Trust Property". In addition, the Issuer
shall cause the Insurer to issue the Insurance Policy.
It is the intention of the Seller and the Issuer that the
assignment and transfer contemplated herein constitute (and shall be construed
and treated for all purposes as) a true and complete sale of the Conveyed
Property, conveying good title thereto free and clear of any liens and
encumbrances, from the Seller to the Issuer. However, in the event that such
conveyance is deemed to be a pledge to secure a loan (in spite of the express
intent of the parties hereto that this conveyance constitutes, and shall be
21
construed and treated for all purposes as a true and complete sale), the Seller
hereby grants to the Issuer, for the benefit of the Noteholders and the Insurer,
a security interest which security interest shall be a first priority perfected
security interest in all of the Seller's right, title and interest in, to and
under the Trust Property whether now existing or hereafter created and all
proceeds of the foregoing to secure the loan deemed to be made in connection
with such pledge and, in such event, this Agreement shall constitute a security
agreement under applicable law.
(b) As of the Closing Date, the Issuer acknowledges the
conveyance to it of the Conveyed Property from the Seller, including all right,
title and interest of the Seller in, to and under the Conveyed Property, receipt
of which is hereby acknowledged by the Issuer. Concurrently with such conveyance
and in exchange therefor, the Issuer has pledged to the Indenture Trustee, for
the benefit of the Noteholders and the Insurer, the Trust Property, and the
Indenture Trustee, pursuant to the written instructions of the Issuer, has
executed and caused to be authenticated and delivered the Notes to the Seller or
its designee, upon the order of the Issuer. In addition, concurrently with such
delivery and in exchange therefor, the Owner Trustee, pursuant to the
instructions of the Seller, has executed (not in its individual capacity, but
solely as Owner Trustee on behalf of the Issuer) and caused to be authenticated
and delivered, the Residual Interest Certificate to the Seller, upon the order
of the Seller.
(c) In connection with the sale of the Contracts pursuant to
the Receivables Purchase Agreement, AutoNation Financial Services has filed with
the office of the Secretary of State of the State of Florida a UCC-1 financing
statement naming AutoNation Financial Services as debtor, naming the Seller as
secured party and the Indenture Trustee as assignee and including the Contracts
in the description of the collateral. In connection with the sale of the
Contracts pursuant to this Agreement, the Seller has filed or caused to be filed
with the Secretary of State of the State of Florida a UCC-1 financing statement
naming the Seller as debtor, naming the Issuer as secured party and naming the
Indenture Trustee, on behalf of the Noteholders and the Insurer, as assignee,
and including the Contracts in the description of the collateral. In connection
with the pledge of the Contracts pursuant to the Indenture, the Trust has filed
or caused to be filed with the offices of the Secretary of State of the State of
Delaware UCC-1 financing statements naming the Trust as debtor and the Indenture
Trustee, on behalf of the Noteholders and the Insurer, as secured party. The
grant of a security interest to the Indenture Trustee and the rights of the
Indenture Trustee in the Contracts shall be governed by the Indenture.
The Seller shall have caused UCC-2 termination statements to
have been filed with the office of Secretary of State of the State of Florida
terminating any effective UCC-1 financing statements with respect to any
outstanding security interests in the Contracts.
(d) From time to time, the Servicer shall cause to be taken
such actions as are necessary to continue the perfection of the respective
interests of the Trust and the Indenture Trustee in the Contracts and to
continue the first priority security interest of the Originator in the Financed
Vehicles and their proceeds and the effectiveness of the assignment of the
22
security interest in the Financed Vehicles and their proceeds to the Indenture
Trustee (other than, as to such priority, any statutory lien arising by
operation of law after the Closing Date which is prior to such interest),
including, without limitation, the filing of financing statements, amendments
thereto or continuation statements and the making of notations on records or
documents of title; provided, however, the Servicer will not be required to
submit the Title Documents for retitling in the name of the Indenture Trustee
except as provided in Section 3.04(b).
(e) The Owner Trustee, on behalf of the Issuer and the
Indenture Trustee, hereby authorizes the Servicer, and the Servicer hereby
agrees, to take such steps as are necessary to re-perfect such security interest
in the event of the relocation of a Financed Vehicle or for any other reason, in
either case, when the Servicer has knowledge of the need for such re-perfection.
In the event that the assignment of a security interest in a Contract by the
Servicer, as Originator, to the Seller pursuant to the Receivables Purchase
Agreement, by the Seller to the Issuer pursuant to the terms of this Agreement
and by the Issuer to the Indenture Trustee pursuant to the Indenture is
insufficient without a notation on the related Financed Vehicle's certificate of
title, or without fulfilling any additional administrative requirements under
the laws of the State in which the Financed Vehicle is located, to assign to the
Indenture Trustee a perfected security interest in the related Financed Vehicle,
the Seller and the Servicer hereby agree that the Originator's listing as the
secured party on the certificate of title is deemed to be in its capacity as
agent of the Indenture Trustee and the Servicer further agrees to hold or cause
to be held such certificate of title as the Indenture Trustee's agent and
custodian; provided, however, that the Servicer shall not, nor shall the Owner
Trustee, the Indenture Trustee or the Noteholders have the right to require that
the Servicer make any such notation on the related Financed Vehicle's
certificate of title or fulfill any such additional administrative requirements
of the laws of the State in which a Financed Vehicle is located, except as
otherwise provided in Section 3.04.
(f) During the term of this Agreement, the Seller and
AutoNation Financial Services shall each maintain its chief executive office in
one of the States of the United States.
(g) The Servicer shall pay all reasonable costs and
disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Indenture Trustee's right,
title and interest in and to the Contracts and in connection with maintaining
the first priority security interest of the Indenture Trustee in the Financed
Vehicles and the proceeds thereof; provided, however, the parties acknowledge
that the Title Documents will not be submitted for retitling in the name of the
Indenture Trustee as secured party except as provided in Section 3.04(b).
Section 2.02. Representations and Warranties of the Seller.
The Seller hereby makes the following representations and
warranties on which (i) the Issuer is deemed to have relied in acquiring the
Contracts and (ii) the Insurer is deemed to have relied in issuing the Insurance
Policy. Such representations and warranties speak as of the Closing Date, but
shall survive the sale, transfer and assignment of the Contracts to the Issuer
and the pledge thereof to the Indenture Trustee pursuant to the Indenture.
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(a) As to the Seller:
(i) The Seller is duly organized and validly existing as a
corporation organized and existing and in good standing under the laws
of the State of Delaware, with power and authority to own its
properties and to conduct its business as currently owned and conducted
and had at all relevant times, and has, power, authority, and legal
right to originate or acquire, own and sell the Contracts.
(ii) The Seller is duly qualified to do business as a foreign
corporation in good standing, and shall have obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such
qualifications.
(iii) The Seller has the power and authority to execute and
deliver this Agreement and the other Basic Documents to which it is a
party and to carry out their respective terms; the Seller has full
power, authority and legal right to sell and assign the property to be
sold and assigned to and deposited with the Issuer and has duly
authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery, and performance of this
Agreement and the other Basic Documents to which it is a party have
been duly authorized by the Seller by all necessary corporate action.
(iv) This Agreement constitutes a valid sale, transfer and
assignment of the Contracts, enforceable against creditors of and
purchasers from the Seller. This Agreement and the other Basic
Documents to which it is a party constitute legal, valid, and binding
obligations of the Seller enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting
the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability shall
be considered in a proceeding in equity or at law.
(v) The consummation of the transactions contemplated by this
Agreement and the other Basic Documents and the fulfillment of their
respective terms shall not conflict with, result in any breach of any
of the terms and provisions of, nor constitute (with or without notice
or lapse of time) a default under, the certificate of incorporation or
bylaws of the Seller, or any indenture, agreement, or other instrument
to which the Seller is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of the
properties of the Seller pursuant to the terms of any such indenture,
agreement, or other instrument (other than pursuant to the Basic
Documents to which the Seller is a party); nor violate any law or any
order, rule, or regulation applicable to the Seller of any court or of
any federal or state regulatory body, administrative agency, or other
24
governmental instrumentality having jurisdiction over the Seller or its
properties.
(vi) There are no proceedings or investigations pending, or,
to the Seller's best knowledge after due inquiry, threatened, before
any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or its
properties: (A) asserting the invalidity of this Agreement, the other
Basic Documents or the Notes, (B) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated
by this Agreement and the other Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the other Basic Documents or the
Notes, or (D) naming the Seller which might adversely affect the
federal income tax attributes of the Notes.
(vii) On the Closing Date, the chief executive office of the
Seller is located at 000 Xxxxx Xxxx 0xx Xxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000.
(viii) The legal name of the Seller is the name used by it in
this Agreement and the Seller has not changed its name since the date
of its incorporation and does not have any trade names, fictitious
names, assumed names or "doing business" names.
(ix) The transactions contemplated by this Agreement and the
other Basic Documents are being consummated by the Seller in
furtherance of its ordinary business purposes, with no contemplation of
insolvency and no intent to hinder, delay or defraud any of its present
or future creditors and the Seller has received fair consideration
having value reasonably equivalent or in excess of the value of the
Contracts and the other conveyed property and the performance of the
Seller's obligations hereunder. Both immediately before and after the
transactions contemplated by this Agreement and the other Basic
Documents, (a) the Seller is solvent and will not become insolvent and
will have adequate capital to conduct its business after giving effect
to the transactions contemplated in this Agreement and the other Basic
Documents and is paying its debts as they become due and (b) the sum of
the Seller's assets was or will be greater than the sum of its debts
and in excess of the amount that will be required to pay its probable
liabilities as they then exist and as they become absolute and matured.
(x) No consent, approval, license, authorization or order of,
or declaration, registration or filing with, any governmental authority
or other Person is required to be made by the Seller in connection with
the execution, delivery or performance of this Agreement or the Basic
Documents to which it is a party or the consummation of the
transactions contemplated hereby or thereby, except such as have been
duly made, effected or obtained.
(xi) The Seller (a) is not in violation in any material respect of any laws,
ordinances, governmental rules or regulations to which it is subject
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and (b) is not in violation in any material respect of any term of any
agreement, charter instrument, bylaw or instrument to which it is a
party or by which it may be bound which violation or failure to obtain
might materially and adversely affect the business or condition
(financial or otherwise) of the Seller or affect its ability to perform
its obligations under this Agreement and the other Basic Documents.
(b) As to each Contract:
(i) The information pertaining to such Contract set forth in
the related Schedule of Contracts, the Disk and the computer file
provided to the Insurer prior to the Closing Date describing the
characteristics of the Contracts was true and correct in all material
respects at the Closing Date and the calculations of the Principal
Balances appearing in such Schedule of Contracts for each such Contract
at the Cut-Off Date have been performed in accordance with this
Agreement and are accurate.
(ii) As of the Closing Date, such Contract creates a valid and
enforceable first priority security interest in favor of AutoNation
Financial Services in the Financed Vehicle securing such Contract, and
such security interest has been duly perfected and is prior to all
other liens upon and security interests in such Financed Vehicle which
now exist or may hereafter arise or be created (except, as to priority,
for any lien for unpaid taxes or unpaid storage or repair charges which
may arise after the Closing Date in accordance with the UCC); such
security interest has been duly assigned by AutoNation Financial
Services to the Seller pursuant to the Receivables Purchase Agreement,
and, as of the Closing Date, has been assigned by the Seller to the
Issuer pursuant to Section 2.01(a) hereof and pledged by the Issuer to
the Indenture Trustee pursuant to the Indenture.
(iii) (A) If the related Financed Vehicle was originated in a
state in which notation of a security interest on the Title Document is
required or permitted to perfect such security interest, the Title
Document or the electronic title records for such Financed Vehicle
shows, or, if a new or replacement Title Document is being applied for
with respect to such Financed Vehicle, the Title Document will be
received within 180 days of the Closing Date and will show, AutoNation
Financial Services named as the original and only secured party under
the related Contract as the holder of a first priority security
interest in such Financed Vehicle, and (B) if the related Financed
Vehicle was originated in a state in which the filing of a financing
statement under the UCC is required to perfect a security interest in
motor vehicles, such filings or recordings have been duly made and show
AutoNation Financial Services named as the original and only secured
party under the related Contract, and in either case, the Indenture
Trustee on behalf of the Noteholders and the Insurer has the same
rights as such secured party has or would have (if such secured party
were still the owner of such Contract) (x) against all parties claiming
an interest in such Financed Vehicle and (y) to repossess or recover by
legal process the Financed Vehicle in its name. With respect to each
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Contract for which the Title Document has not yet been returned from
the Registrar of Titles, AutoNation Financial Services has written
evidence that such Title Documents showing AutoNation Financial
Services as first lienholder have been applied for. AutoNation
Financial Services has given and delivered an irrevocable power of
attorney to the Indenture Trustee, and such power of attorney together
with the Title Documents are all the documents necessary to permit the
Indenture Trustee to submit the Title Documents for each Financed
Vehicle to the applicable Registrar of Titles for retitling in the name
of the Indenture Trustee as secured party.
(iv) It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Contracts from
the Seller to the Issuer and that the beneficial interest in and title
to such Contracts 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
Insolvency Proceeding. No Contract has been sold, transferred, assigned
or pledged by the Seller to any Person other than the Issuer and the
Seller acquired title to the Contracts in good faith, without notice of
any adverse claim. As of the Closing Date, the Seller had good and
marketable title to and was the sole owner of each Contract to be
transferred to the Issuer pursuant to Section 2.01 free of liens,
claims, encumbrances and rights of others and, upon the transfer of
such Contract to the Issuer pursuant to Section 2.01, the Issuer will
have good and marketable title to and will be the sole owner of such
Contract free of any liens, encumbrances and rights of others, and upon
the pledge of such Contract to the Indenture Trustee pursuant to the
Indenture, the Indenture Trustee will have a first priority, perfected
security interest in such Contract free of liens, encumbrances and
rights of others.
(v) As of the Cut-Off Date, no payment of $40 or more on such
Contract was 31 or more days past due.
(vi) As of the Closing Date there is no lien against the
related Financed Vehicle for delinquent taxes.
(vii) As of the Closing Date, there is no right of rescission,
offset, defense, claim or counterclaim to the obligation of the related
Obligor(s) to pay the unpaid principal or interest due under such
Contract; the operation of the terms of such Contract or the exercise
of any right thereunder will not render such Contract unenforceable in
whole or in part nor subject such Contract to any right of rescission,
offset, defense, claim or counterclaim, and no right of rescission,
offset, defense or counterclaim has been asserted or threatened.
(viii) Such Contract is a retail installment sales contract,
and such Contract and the sale of the Financed Vehicle sold thereunder,
at the time it was made complied and has complied through the Closing
Date in all material respects with all requirements of applicable
federal, state and local laws and regulations thereunder, including
without limitation the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the Federal Trade
27
Commission Act, the Fair Debt Collection Practices Act, the Fair Credit
Billing Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve
Board's Regulations B and Z, the Soldiers' and Sailors' Civil Relief
Act of 1940, state adaptations of the National Consumer Act and of the
Uniform Consumer Credit Code, and any other consumer credit, equal
opportunity and disclosure laws applicable to that contract and sale;
and the consummation of the transactions herein contemplated,
including, without limitation, the transfer of ownership of the
Contracts to the Issuer, the pledge to the Indenture Trustee and the
receipt of interest by the Noteholders, will not violate any applicable
federal, state or local law.
(ix) Such Contract is in full force and effect in accordance
with its respective terms and is the legal, valid and binding
obligation of the related Obligor(s) thereunder and is enforceable in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally; each party to such Contract
had full legal capacity to execute and deliver such Contract and all
other documents related thereto and to grant the security interest
purported to be granted thereby; the terms of such Contract have not
been waived, amended or modified (including, without limitation,
extensions) in any respect, except by instruments that are part of the
related Contract Documents, and no such waiver, amendment or
modification has caused such Contract to fail to meet all of the
representations, warranties and conditions, set forth herein with
respect thereto. To the best of the Seller's knowledge, there are no
proceedings pending or threatened, wherein the Obligor or any
governmental agency has alleged that such Contract is illegal or
unenforceable. Such Contract and the related Contract Documents
constitute the entire agreement between the Seller (as assignee of
AutoNation Financial Services) and the related Obligor.
(x) Such Contract contains customary and enforceable
provisions such as to render the rights and remedies of the holder or
assignee thereof adequate for the practical realization against the
collateral of the benefits of the security, subject, as to
enforceability, bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally.
(xi) As of the Closing Date, there was no default, breach,
violation or event permitting acceleration existing under such Contract
(except payment delinquencies permitted by subparagraph (v) above) and
no event which, with notice and the expiration of any grace or cure
period, would constitute such a default, breach, violation or event
permitting acceleration under such Contract, and the Seller has not
waived any such default, breach, violation or event permitting
acceleration, except payment delinquencies permitted by subparagraph
(v) above.
(xii) As of the Closing Date, such Contract requires that the
related Obligor(s) obtain and maintain in effect for the related
Financed Vehicle a comprehensive and collision insurance policy (i) in
an amount at least equal to the lesser of (x) its fair market value or
(y) the principal amount due from the related Obligor(s) under such
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Contract, (ii) naming AutoNation Financial Services as a loss payee and
(iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by
comprehensive and collision coverage.
(xiii) Such Contract was originated in the United States of
America by AutoNation Financial Services and no adverse selection
procedures have been utilized in selecting such Contract from all other
similar contracts originated by AutoNation Financial Services.
(xiv) Payments under such Contract have been applied in
accordance with the Simple Interest Method, as provided in the
applicable fixed rate Contract, and are due monthly in substantially
equal amounts through its Maturity Date sufficient to fully amortize
the principal balance of such Contract by its Maturity Date.
(xv) There is only one manually executed original of such
Contract and such original, together with all other related Contract
Documents, is being held by World Omni Financial Corp. as agent of the
Custodian;
(xvi) As of the Closing Date, the Servicer has clearly marked
its electronic records to indicate that such Contract is owned by the
Issuer.
(xvii) At the date of origination of the Contract, the
original principal balance of such Contract was not greater than the
purchase price to the related Obligor(s) (including taxes, warranties,
licenses and related charges) of the related Financed Vehicle.
(xviii) As of the Cut-Off Date, the Seller has not received
notice that any Obligor under such Contract has filed for bankruptcy,
and to the best of the Seller's knowledge without any independent
investigation, no Obligor under such Contract is in bankruptcy or
similar proceedings.
(xix) As of the Cut-Off Date, such Contract had an original
maturity of not more than 72 months and such Contract has a remaining
maturity of 72 months or less.
(xx) Such Contract constitutes "chattel paper" under the UCC
as in effect in the applicable jurisdiction.
(xxi) As of the Cut-Off Date, such Contract has a remaining
principal balance of not more than $75,000 and not less than $500.
(xxii) As of the Cut-Off Date, such Contract is secured by a
Financed Vehicle that has not been repossessed without reinstatement.
(xxiii) Each related Obligor listed on such Contract had a
mailing address within the United States on the date of origination of
such Contract.
29
(xxiv) The rights with respect to such Contract are assignable
by the lender thereunder and its assignees without the consent of or
notice to any Person.
(xxv) All payments on such Contract are required to be made in
United States dollars.
(xxvi) None of the Obligors is the United States of America or
any state, or agency, department or instrumentality or political
subdivision of the United States of America or any state.
(xxvii) At the time of origination of such Contract, the
proceeds of such Contract were fully disbursed. There is no requirement
for future advances thereunder and all fees and expenses in connection
with the origination of such Contract have been paid.
(xxviii) The scheduled payments on such Contracts are
applicable only to payment of principal of and interest on such
Contracts and not to the payment of any insurance premiums (although
the proceeds of the extension of credit on such Contract may have been
used to pay insurance premiums).
(xxix) The related Obligor under the Contract does not have
the unilateral right to substitute, exchange or add any Financed
Vehicle under such Contract.
(xxx) Such Contract has a Maturity Date no later than four
months prior to the Final Scheduled Maturity Date of the Class A-4
Notes.
(xxxi) All filings (including UCC filings), notices, transfers
and recordings required under this Agreement and the other Basic
Documents or applicable law to perfect the first priority ownership or
security interest of the Issuer and the Indenture Trustee in the
Contracts and the other Trust Property have been accomplished and are
in full force and effect or will be accomplished within the time period
specified in the Basic Documents.
(xxxii) Such Contract was not originated in, and is not
subject to the laws of, any jurisdiction, the laws of which would make
unlawful the sale, transfer or assignment of such document under any of
the Basic Documents, including any repurchase in accordance with the
Basic Documents.
(xxxiii) Such Contract being acquired by the Issuer and
pledged to the Indenture Trustee is identical to one of the Seller's
standard form loan contracts attached to the Receivables Purchase
Agreement as Exhibit C except for immaterial modifications or
deviations from the form loan contracts. Any such modifications or
deviations from the form loan contracts will not have a material
adverse effect on the Noteholders or the Insurer and will not reduce
the Monthly Scheduled Payments or other payments due under the
Contracts.
30
(xxxiv) Such Obligor and Contract satisfied in all material
respects the requirements under the Underwriting Guidelines as in
effect as of the date of origination or purchase of such Contract by
AutoNation Financial Services.
(xxxv) The sale, transfer, assignment and conveyance of such
Contract and the related Conveyed Property by AutoNation Financial
Services pursuant to the Receivables Purchase Agreement, by the Seller
pursuant to this Agreement and by the Issuer pursuant to the Indenture
is not subject to and will not result in any tax, fee or governmental
charge payable by AutoNation Financial Services, the Seller, the Issuer
or the Indenture Trustee to any federal, state or local government
("Transfer Taxes") other than the Transfer Taxes which have or will be
paid by AutoNation Financial Services or the Seller as due. In the
event that the Issuer or the Indenture Trustee receives actual notice
of any Transfer Taxes arising out of the transfer, assignment and
conveyance of such Contract and the related Trust Property, on written
demand by the Issuer or the Indenture Trustee, or upon the Seller's
otherwise being given notice thereof by the Issuer or the Indenture
Trustee, the Seller shall pay, and otherwise indemnify and hold the
Issuer, the Indenture Trustee and the Insurer harmless, on an after-tax
basis, from and against any and all such Transfer Taxes (it being
understood that the Noteholders, the Indenture Trustee, the Issuer and
the Insurer shall have no obligation to pay such Transfer Taxes).
(xxxvi) Such Contract has an APR equal to or greater than
7.50%.
(xxxvii) To the best of the Seller's knowledge, no Obligor is
a Person who is a lessor or a seller of equipment of a type similar to
the Financed Vehicles.
(xxxviii) Such Contract does not constitute a "consumer lease"
under either (a) the UCC as in effect in the jurisdiction whose law
governs the Contract or (b) the Consumer Leasing Act, 15 U.S.C. 1667.
(xxxix) AutoNation Financial Services and the Seller have duly
fulfilled all obligations to be fulfilled under or in connection with
the origination, acquisition and assignment of such Contract and the
other Trust Property, including, without limitation, giving any notices
or consents necessary to effect the acquisition of such Contract and
the other Trust Property by the Issuer and the subsequent pledge of the
Trust Property to the Indenture Trustee, and have not done anything
that would impair the rights of the Issuer, the Indenture Trustee, the
Noteholders or the Insurer to payments relating thereto.
(xl) To the best of the Seller's knowledge as of the Closing
Date, no Dealer has engaged in any conduct constituting fraud or
misrepresentation with respect to such Contract or the related Trust
Property.
(xli) The collection practices used by the Originator and each
agent of the Originator with respect to such Contract have been in all
material respects in accordance with the Collection Policy.
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(xlii) There are no amounts owing by the Originator to any
Dealer in connection with the origination of any Contract and such
Dealer has no right, title or interest in or to such Contract.
(xliii) Amounts due to, or received by, an Obligor upon the
cancellation by such Obligor of the extended service or other products
or services (the "Additional Products") included in the Amount Financed
shall not reduce the Principal Balance of such Contract unless the
Indenture Trustee will receive all amounts due to an Obligor or
lienholder upon cancellation by such Obligor of such Additional
Product. Each Additional Product, and the sale of the Additional
Product to each Obligor complied at the time of such sale with all
applicable state and federal laws (and regulations thereunder),
including without limitation, insurance, usury, disclosure and consumer
protection laws, equal credit opportunity, fair credit reporting,
truth-in-lending or other similar laws, the Federal Trade Commission
Act, and applicable state laws regulating such Additional Products.
There is not and will not be any right of rescission, offset, defense,
claim or counterclaim to the obligation of the related Obligor to pay
the amount due under each Contract which relates to Additional
Products.
(c) As to all of the Contracts:
(i) The aggregate Outstanding Principal Balance payable by
Obligors of the Contracts as of the Cut-Off Date equals the Original
Pool Balance.
(ii) As of the Cut-Off Date, Contracts representing
approximately 38.43% of the Outstanding Principal Balance are secured
by new Financed Vehicles, and Contracts representing approximately
61.57% of the Outstanding Principal Balance of all Contracts are
secured by used Financed Vehicles.
(iii) The transfer, assignment and conveyance of the Contracts
by the Seller pursuant to this Agreement are not subject to the bulk
transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
(d) None of the foregoing representations and warranties shall
be construed as, and the Seller is specifically not making, any representations
and warranties regarding the collectability of the Contracts or the future
performance of the Contracts.
(e) The Seller has not prepared any financial statement which
accounts for the transfer of the Conveyed Property hereunder to the Issuer in
any manner other than as a sale of the Conveyed Property by it to the Issuer,
and the Seller has not in any other non-income tax respect (including, but not
limited to, for accounting purposes) accounted for or treated the transfer of
the Conveyed Property hereunder in any manner other than as a sale and absolute
assignment to the Issuer of the Seller's full right, title and ownership
interest in the Conveyed Property.
32
Section 2.03. Repurchase of Certain Contracts.
The representations and warranties of the Seller set forth in
Section 2.02(b) and (c) shall survive the Closing Date and shall continue until
the termination of this Agreement. Upon discovery by the Seller, the Servicer,
the Insurer or a Responsible Officer of the Owner Trustee or the Indenture
Trustee that any of such representations and warranties was incorrect, without
regard to any limitation set forth in such representation or warranty concerning
the knowledge of the Seller as to the facts stated therein, or that any of such
conditions was unsatisfied as of the time made or that any of the Contract
Documents relating to any such Contract has not been properly executed by the
Obligor or contains a material defect or has not been received by the Custodian
or its agent, such Person making such discovery shall give prompt notice to the
other such Persons. Without regard to any limitation set forth in such
representation or warranty concerning the knowledge of the Seller as to the
facts stated therein, if any such defect, incorrectness or omission materially
and adversely affects the interest in the Contract of the Noteholders, the
Indenture Trustee, the Issuer or the Insurer, the Seller shall cure the defect
or eliminate or otherwise cure the circumstances or condition in respect of
which such representation or warranty was incorrect as of the time made;
provided that if the Seller does not do so by the last day of the Collection
Period following the Collection Period (or, if the Seller elects, the last day
of such Collection Period) during which the Seller becomes aware of or receives
written notice from the Servicer, the Insurer or the Indenture Trustee of such
defect, incorrectness or omission, the Seller shall repurchase such Contract on
the last day of the applicable Collection Period from the Issuer at the Purchase
Amount. Upon any such repurchase, the Issuer shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the Seller any Contract purchased hereunder. Except as
provided in Section 5.01, the sole remedy of the Issuer, the Indenture Trustee,
the Insurer or the Noteholders with respect to a breach of the Seller's
representations and warranties pursuant to Section 2.02 shall be to require the
Seller to repurchase Contracts pursuant to this Section 2.03; provided that the
Seller shall indemnify the Owner Trustee, the Indenture Trustee, the Insurer,
the Issuer and the Noteholders against all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel, which
may be asserted against or incurred by any of them as a result of third-party
claims arising out of the events or facts giving rise to such breach.
Section 2.04. Custody of Contract Files.
(a) Duties of Custodian. The Custodian shall or shall cause
any agent acting on its behalf to:
(i) maintain or cause to be maintained continuous custody of
the Contract Documents in secure and fire resistant facilities in
accordance with customary standards for such custody. Such Contract
Documents shall be electronically segregated to show the Issuer as
owner thereof and the Indenture Trustee as the pledgee thereof, unless
the Insurer has waived the requirement for such segregation by notice
in writing to the Indenture Trustee, the Custodian and the Servicer.
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(ii) to the extent the Servicer directs the Custodian in
writing, pursuant to a Request for Release of Documents, deliver or
cause to be delivered certain specified Contract Documents to the
Servicer to enable the Servicer to service the Contracts pursuant to
this Agreement. At such time as the Servicer returns such Contract
Documents to the Custodian or its agent, the Servicer shall provide
written notice of such return to the Custodian. The Custodian or its
agent shall acknowledge receipt of the returned Contract Documents by
signing the Servicer's notice and shall promptly send copies of such
acknowledgment or receipt to the Servicer; provided, however, prior to
the release of any Contract to the Servicer, such original Contract
shall be stamped to indicate that such Contract has been sold to ANRC
Auto Owner Trust 2000-A and is subject to a first priority perfected
security interest of The Chase Manhattan Bank, as Indenture Trustee, on
behalf of the Noteholders and MBIA Insurance Corporation; provided,
further, however, that if a Servicer Default shall have occurred, no
part of the Contract Documents shall be released by the Custodian to
the Servicer without the Insurer's prior written consent, which may be
evidenced by the Insurer's execution of the Request for Release of
Documents. Except as provided above, no part of the Contract Documents
shall be delivered by the Custodian to the Seller, the Servicer, the
Originator or otherwise released from the possession of the Custodian,
except upon the written consent or direction of the Insurer and the
Indenture Trustee.
(iii) upon reasonable prior written notice, and without
charge, permit the Noteholders, the Servicer, the Issuer, the Indenture
Trustee and the Insurer to examine the Contract Files and Contract
Documents in the possession, or under the control, of the Custodian or
its agent.
(iv) at its own expense, maintain or cause to be maintained at
all times while acting as Custodian, and keep in full force and effect
(A) fidelity insurance, (B) theft of documents insurance, (C) fire
insurance, and (D) forgery insurance. All such insurance shall be in
amounts, with standard coverage and subject to deductibles, as are
customary for similar insurance typically maintained by banks that act
as custodian in similar transactions.
(v) perform its duties as custodian in accordance with the
terms of this Agreement and applicable law, and to the extent
consistent with such terms, in the same manner in which, and with the
same care, skill, prudence and diligence with which, it administers
files for other portfolios, if any, giving due consideration to
customary and usual standards of practice of prudent custodians. The
Custodian shall promptly report to the Indenture Trustee, the Owner
Trustee and the Insurer any failure by it to hold the complete set of
Contract Documents for each Contract as herein provided and shall
promptly take appropriate action to remedy such failure.
(vi) with respect to the Contract Documents (A) act as the
Custodian exclusively for the benefit of the Indenture Trustee, (B)
acknowledge on the Closing Date and pursuant to Section 2.04(c) that it
is holding each of the Contract Documents in respect of each of the
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Contracts (except as otherwise noted on the certificate given to the
Insurer and the Indenture Trustee), (C) hold such Contract Documents
for the exclusive use and benefit of the Indenture Trustee on behalf of
the Noteholders and the Insurer and (D) maintain accurate records
pertaining to each Contract to enable it to comply with terms hereof
and to maintain a current inventory thereof.
(vii) not have and will not assert any beneficial ownership
interest in the Contracts or the Contract Documents.
(viii) agree that the Contract Documents shall be maintained
at World Omni Financial Corp.'s offices located at 0000 Xxxxx Xxxxx
Xxxxx, Xxxxx Xxxx, XX 00000 or at such of its other offices as the
Custodian shall designate from time to time after giving the Custodian,
the Originator, the Servicer, the Issuer, the Insurer and the Indenture
Trustee 60 days' prior written notice, which office shall be maintained
separate from the offices of AutoNation Financial Services, the
Servicer and the Seller and shall be at all times under the dominion
and control of the Custodian. Prior to any change in the location of
the Contract Documents, the Servicer shall deliver to the Trust, the
Indenture Trustee and the Insurer an Opinion of Counsel regarding the
perfection, under the laws of the state where the Contract Documents
will be maintained based upon possession, of the Indenture Trustee's
first priority security interest in the Contracts and proceeds thereof
and stating that in the opinion of such counsel, all actions necessary
fully to preserve and protect the interest of the Trust, the Indenture
Trustee, the Noteholders and the Insurer in the Contracts, the related
Financed Vehicles and the proceeds thereof have been taken and reciting
the details thereof.
(b) Appointment of Custodian. As of the Closing Date,
AutoNation Financial Services, as initial Servicer, shall be the Custodian of
the Contract Documents; provided that upon the execution by the Indenture
Trustee (or, if the Notes have been paid in full and the Indenture has been
satisfied and discharged, the Issuer) of a letter agreement with the prior
written consent of the Insurer (such consent not to be unreasonably withheld)
revocably appointing another entity acceptable to the Insurer as agent of and
bailee for the Indenture Trustee (or, if applicable, the Trust) to act as
Custodian (such Person, the "Successor Custodian") of the Contract Documents,
such Successor Custodian shall be so appointed and shall from the effective date
of such agreement retain custody of the Contract Documents and any and all other
documents relating to a Contract or the related Obligor or Financed Vehicle. On
or prior to the effective date of any such appointment, the Contract Documents
and any and all other documents relating to a Contract or the related Obligor or
Financed Vehicle will be delivered by the predecessor Custodian to the Successor
Custodian in its capacity as agent of and bailee for the Indenture Trustee (or,
if applicable, the Trust). The Custodian may delegate or subcontract out its
duties as Custodian hereunder to an entity acceptable to the Insurer; provided
that no such delegation or subcontract arrangement shall relieve the Custodian
of its duties and obligations hereunder. The Indenture Trustee, the Seller and
the Insurer hereby consent to the delegation by the initial Custodian of its
duties and obligations to World Omni Financial Corp., as agent of the Custodian.
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(c) Certification.
(i) Within 90 days of the Closing Date, the Custodian shall
ascertain that all Contract Documents for each Contract are in its
possession or in the possession of its designated agent, and shall
deliver to the Issuer, the Indenture Trustee and the Insurer a
certification to the effect that, as to each Contract Document listed
in Schedule A (other than any Contract paid in full or any Contract
specifically identified in such certification as not covered by such
certification): (i) all of the Contract Documents in respect of each
such Contract are in its possession or the possession of its designated
agent and (ii) such Contract Documents have been reviewed by it and
appear regular on their face and relate to such Contract. In making
this certification, the Custodian shall separately list those Contracts
for which an original certificate of title was not found in the
relevant Contract Documents. In addition, the Custodian shall, within
180 days after the Closing Date, deliver to the Issuer, the Indenture
Trustee and the Insurer a certification (the "Second Certification"),
to the effect that, as to each such set of Contract Documents that did
not include an original certificate of title in the initial
certification (other than any Contract paid in full or any Contract
specifically identified in such certification as not covered by such
certification): (i) all of the Contract Documents in respect of each
such Contract are in its possession or the possession of its designated
agent and (ii) such Contract Documents have been reviewed by it and
appear regular on their face and relate to such Contract.
(ii) If the Custodian or its agent, during the process of
reviewing the Contract Documents, pursuant to this Section 2.04, finds
any Contract Document which is not executed, has not been received, is
unrelated to the Contract identified in Schedule A, or does not conform
to the requirements of clause (i) above or the loan number set forth in
Schedule A, then the Custodian or its agent appointed in accordance
with this Section 2.04 shall promptly so notify the Issuer, the
Servicer, the Insurer and the Indenture Trustee in writing of such
discovery.
(iii) The Servicer will use reasonable efforts to remedy a
material defect in a Contract Document or omission of a Contract
Document of which it is so notified by the Custodian or its agent as
set forth above. If, however, within 15 days after the initial
Custodian's certification in respect of such defect or omission (other
than a defect or omission in respect of a certificate of title) or
within 15 days after the Second Certification in respect of a defect or
omission as to a certificate of title, the Servicer has not remedied or
caused the Seller to remedy such defect or omission, the Servicer shall
give notice to the Indenture Trustee of the date and Purchase Amount in
respect of any affected Contract and, on the next succeeding Servicer
Report Date, cause the Seller to repurchase such Contract, which
Purchase Amount shall be deposited into the Collection Account.
(d) Indemnification. The Custodian will indemnify the Trust,
the Insurer, the Owner Trustee and the Indenture Trustee and each of their
respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
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expenses of any kind whatsoever that may be imposed upon, incurred by or
asserted against the Trust, the Insurer, the Owner Trustee or the Indenture
Trustee or any of their respective officers, directors, employees or agents as
the result of negligence, lack of good faith or wilful misconduct on the part of
the Custodian or its agent relating to the maintenance and custody of the
Contract Documents as Custodian thereof; provided, however, that the Custodian
shall not be liable to the Owner Trustee or the Indenture Trustee, or any such
officer, director, employee or agent of the Owner Trustee or the Indenture
Trustee for any portion of any such amount resulting from the wilful
misfeasance, bad faith or negligence of the Owner Trustee or the Indenture
Trustee, as the case may be, or of any such officer, director, employee or agent
of the Owner Trustee or the Indenture Trustee, as the case may be.
Indemnification under this subsection shall survive the
resignation or removal of the Custodian or the termination of this Agreement and
shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Custodian shall have made any indemnity payments pursuant to
this subsection and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Custodian, without interest, to the extent such Person
received more than the indemnity payable pursuant to the Basic Documents.
Section 2.05. Duties of Servicer Relating to the Contracts.
(a) Safekeeping. The Servicer, in its capacity as servicer,
shall hold or cause to be held the Contract Files and any Contract Documents
held by it in accordance with this Agreement on behalf of the Issuer, the
Indenture Trustee and the Insurer for the use and benefit of all present and
future Noteholders, and shall maintain such accurate and complete accounts,
records and computer systems pertaining to each Contract File as shall enable
the Servicer and Issuer to comply with this Agreement. In performing its duties
as servicer, the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the files
relating to all comparable automobile contracts that the Servicer owns or
services for itself or others. The Servicer shall (i) conduct, or cause to be
conducted, periodic physical inspections of the Contract Files (and the Contract
Documents, if the Servicer is acting as Custodian) held by it or its agents
under this Agreement and of the related accounts, records and computer systems;
(ii) maintain or cause to be maintained the Contract Files (and the Contract
Documents, if the Servicer is acting as Custodian) in such a manner as shall
enable the Issuer, the Indenture Trustee and the Insurer to verify the accuracy
of the Servicer's record keeping; (iii) promptly report to the Issuer, the
Indenture Trustee and the Insurer any failure on its part or the part of its
agents to hold the Contract Files (and the Contract Documents, if the Servicer
is acting as Custodian) and maintain its accounts, records and computer systems
as herein provided and (iv) promptly take appropriate action to remedy any such
failure.
(b) Maintenance of and Access to Records. The Servicer shall
maintain or cause to be maintained each Contract File (other than the Contract
Documents, unless the Servicer is acting as Custodian) at the address of the
Servicer or its agents set forth in Section 9.04, or at such other location as
shall be specified to the Issuer, the Indenture Trustee and the Insurer by 30
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days' prior written notice. The Servicer shall permit the Issuer, the Indenture
Trustee and the Insurer or their respective duly authorized representatives,
attorneys or auditors to inspect the Contract Files and the related accounts,
records and computer systems maintained by the Servicer at such times as such
Persons may request.
(c) Release of Documents. If the Servicer is acting as
Custodian pursuant to Section 2.04, upon instruction from the Indenture Trustee
(a copy of which shall be furnished to the Issuer and the Insurer), the Servicer
shall release or cause to be released any document in the Contract 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 as practicable.
(d) Monthly Reports. On each Servicer Report Date, commencing
with the month next succeeding the month of the Closing Date, the Servicer shall
deliver to the Issuer, the Indenture Trustee and the Insurer a certificate of a
Servicing Officer stating (i) the number of Contracts and aggregate outstanding
principal balance of such Contracts that have become Defaulted Contracts since
the Business Day immediately preceding the date of the last statement delivered
pursuant to this subsection (or since the Closing Date in the case of the first
such statement); (ii) that, if such Contract has been the subject of a Full
Prepayment pursuant to clause (a) of the definition of the term "Full
Prepayment", all proceeds received in respect thereof have been deposited in or
credited to the Collection Account in accordance with Section 4.02; (iii) that,
if such Contract has been the subject of a Full Prepayment pursuant to clause
(b) of the definition of the term "Full Prepayment", the correct Purchase Amount
or termination price, as applicable, has been deposited in or credited to the
Collection Account in accordance with Section 2.03, 3.06, 4.02 or 8.01; and (iv)
that the Indenture Trustee is authorized to release such Contract and the
related Contract Documents as provided herein.
On each Servicer Report Date, the Servicer shall also deliver
to the Indenture Trustee, the Owner Trustee and the Insurer a statement setting
forth (i) the amounts on deposit in the Collection Account; (ii) the sources of
such amounts; (iii) the amounts to be paid to Noteholders.
(e) Schedule of Title Documents. The Servicer shall deliver to
the Indenture Trustee, the Issuer and the Insurer (i) within 60 days of the
Closing Date, a schedule of Title Documents for Financed Vehicles which, as of
the Closing Date, did not show AutoNation Financial Services as first lienholder
and (ii) within 180 days of the Closing Date, as to the Contracts, a schedule of
Title Documents for Financed Vehicles which, as of the date prior to such
delivery, do not show AutoNation Financial Services as first lienholder and as
to which the Seller is obligated to repurchase pursuant to the provisions
hereof.
(f) Electronic Marking of Contracts; Possession. The Servicer
shall cause the electronic record of the Contracts maintained by it to be
clearly marked to indicate that the Contracts have been sold to the Issuer and
pledged to the Indenture Trustee and shall not in any way assert or claim an
ownership interest in the Contracts. It is intended that pursuant to the
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applicable provisions of Section 2.04 and this Section 2.05, the Custodian on
behalf of the Indenture Trustee and the Insurer shall be deemed to have
possession of the Contract Documents for purposes of Section 9-305 of the UCC of
the state in which the Contract Documents are located.
(g) Transfer and Delivery of Contract Documents. Following the
occurrence of a Non-Servicer Default, the Insurer may instruct the Servicer and
the Custodian to transfer and deliver and the Servicer and the Custodian shall
transfer and deliver, the Contract Documents to the Indenture Trustee or a
Successor Custodian. The Servicer and the predecessor Custodian shall pay all
costs and expenses of any such transfer of the Contract Documents.
Section 2.06. Instructions; Authority to Act.
The Servicer shall be deemed to have received proper
instructions (a copy of which shall be furnished to the Issuer and the Insurer)
with respect to the Contract Files upon its receipt of written instructions
signed by a Responsible Officer of the Indenture Trustee.
Section 2.07. Indemnification.
Subject to Section 7.02, the Servicer shall indemnify the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the Custodian and
the Noteholders for any and all liabilities, obligations, losses, compensatory
damages, payments, costs or expenses of any kind whatsoever (including the
reasonable fees and expenses of counsel) that may be imposed on, incurred by or
asserted against the Issuer, the Owner Trustee, the Indenture Trustee, the
Insurer, the Custodian or the Noteholders as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer of
the Contract Files or the Contract Documents or the failure of the Servicer to
perform its duties and service the Contracts in compliance with the terms of
this Agreement; provided that the Servicer shall not be liable to the Owner
Trustee, the Indenture Trustee, the Custodian or the Insurer for any portion of
any such amount resulting from the willful misfeasance, bad faith or negligence
of the Owner Trustee, the Indenture Trustee, the Custodian or the Insurer,
respectively.
Section 2.08. Effective Period and Termination.
The appointment of the initial Servicer as Custodian shall
become effective as of the Closing Date and shall continue in full force and
effect until the earlier of (i) the removal of the initial Servicer as Custodian
or (ii) the termination of this Agreement. If AutoNation Financial Services
shall subsequently resign as Servicer in accordance with the terms of this
Agreement or if all of the rights and obligations of the Servicer shall have
been terminated pursuant to Section 7.01, any appointment of the Servicer as
Custodian may be terminated by the Insurer, or if an Insurer Default has
occurred and is continuing, by the holders of Notes evidencing not less than 25%
of the Outstanding Principal Amount of the Notes, acting together as a single
class, or by the Indenture Trustee. As soon as practicable after any termination
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of such appointment, the Servicer shall, at the Servicer's expense, deliver or
cause the delivery of all Contract Documents and all Contract Files (including
those held in microfiche or electronic form) to the Indenture Trustee or its
agent (or, if the Indenture has been satisfied and discharged, as directed by
the Trust, with the consent of the Issuer) at such place or places as the
applicable party may reasonably designate and shall cooperate in good faith to
effect such delivery. The foregoing notwithstanding, if the Servicer is acting
as Custodian, the Servicer shall, at the request of the Insurer, deliver the
Contract Documents to the Indenture Trustee in the event that such delivery is
required by any Rating Agency to consider the Securities investment grade
without consideration of the Insurance Policy.
Section 2.09. Nonpetition Covenant.
(a) None of the parties hereto shall petition or otherwise
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
(b) The parties hereto shall not, nor cause the Seller to,
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.
Section 2.10. Collecting Title Documents Not Delivered at the
Closing Date.
In the case of any Contract in respect of which, in place of a
Title Document, the Custodian received on or before the Closing Date written
evidence from the Dealer selling the related Financed Vehicle, or from
AutoNation Financial Services, that the Title Document for such Financed Vehicle
showing AutoNation Financial Services as first lienholder has been applied for
from the Registrar of Titles, the Servicer shall use its best efforts to collect
such Title Document from the Registrar of Titles as promptly as possible. If
such Title Document showing AutoNation Financial Services as first lienholder is
not received by the Servicer within 180 days after the Closing Date with respect
to the Contracts, then the representation and warranty in Section 2.02(b)(iii)
as to such Contracts in respect of such Contract shall be deemed to have been
incorrect in a manner that materially and adversely affects the Noteholders, and
the Seller shall be obligated to repurchase such Contract in accordance with
Section 2.03.
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ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 3.01. Duties of Servicer.
The Servicer, for the benefit of the Indenture Trustee and the
Insurer, shall manage, service, administer, and make collections on the
Contracts and perform such other actions required of the Servicer under this
Agreement. The Servicer agrees that its servicing of the Contracts shall be
carried out in accordance with reasonable care consistent with customary and
usual procedures employed by institutions that service motor vehicle retail
installment contracts and, to the extent more exacting, the Collection Policy;
provided that, subject to Section 3.02 as to extensions, the Servicer shall not
release or waive the right to collect the unpaid balance of any Contract unless
the Insurer has provided its prior written consent. The Servicer's duties shall
include, without limitation, collection and posting of all payments, responding
to inquiries of Obligors on the Contracts, investigating delinquencies, sending
payment coupons to Obligors, reporting tax information to Obligors, monitoring
the Trust Property, accounting for collections, furnishing monthly and annual
statements to the Indenture Trustee, the Issuer and the Insurer with respect to
distributions and the preparation of tax forms required by any federal, state or
local tax authority, if any. The Servicer shall have, subject to the terms
hereof and consistent with its Collection Policy, full power and authority,
acting alone, and subject only to the specific requirements and prohibitions of
this Agreement, to do any and all things in connection with such managing,
servicing, administration, and collection of the Contracts that it may deem
necessary or desirable. Without limiting the generality of the foregoing, but
subject to the provisions of this Agreement, the Servicer is authorized and
empowered by the Indenture Trustee and the Issuer to execute and deliver, on
behalf of itself, the Issuer, the Noteholders, the Indenture Trustee 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
the Contracts or to the Financed Vehicles; provided, however, that
notwithstanding the foregoing, the Servicer shall not, except pursuant to an
order from a court of competent jurisdiction or with the prior written consent
of the Insurer, release an Obligor from payment of any unpaid amount due under
any Contract or reduce the related APR. The Issuer shall furnish to the Servicer
any documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer may engage agents
and subservicers to fulfill its duties hereunder with the prior written consent
of the Insurer and pursuant to a subservicing agreement acceptable to the
Insurer; provided, that such subservicer does not primarily service the
Contracts from inside the State of Florida. Unless the Insurer provides its
prior written consent, the Servicer, so long as the Servicer is AutoNation
Financial Services, shall at all times contract with a Subservicer acceptable to
the Insurer to service the Contracts. World Omni Financial Corp. is an
acceptable Subservicer to the Insurer. The Servicer may not terminate or consent
to any assignment of servicing by, any Subservicer, with respect to the
Contracts, without the Insurer's prior written consent, and following the
occurrence of a Non-Servicer Default, shall, at the written direction of the
Insurer, terminate such Subservicer. All amounts payable to any Subservicer
shall be paid by the Servicer and shall not be obligations of the Issuer or paid
41
from the Trust Property. In addition, the Servicer shall pay all costs and
expenses (including, without limitations, reasonable fees and expenses of
counsel) associated with the transfer of subservicing from the existing
Subservicer to a successor. The Servicer may also at any time perform through
agents or subcontractors the specified duties of (i) repossession and subsequent
sale of Financed Vehicles and (ii) pursuing collection of deficiency balances on
certain Defaulted Contracts, in each case without the prior written consent of
the Insurer; provided that any such agent or subcontractor shall be required at
all times to act in accordance with the Collection Policy. No such delegation or
engagement of agents, subservicers or subcontractors by the Servicer shall
relieve the Servicer of its responsibilities with respect to any of its duties
hereunder.
Neither the Servicer nor any Subservicer shall perform any
non-ministerial duties in the State of Florida without first providing an
Opinion of Counsel in form and substance acceptable to the Indenture Trustee and
the Insurer to the effect that the performance of such non-ministerial duties
will not adversely affect the tax treatment of the Issuer.
On or prior to the Closing Date, the Servicer shall deliver to
the Owner Trustee, the Indenture Trustee and the Insurer a list of Servicing
Officers of the Servicer involved in, or responsible for, the administration and
servicing of the Contracts, which list shall from time to time be updated by the
Servicer at the request of the Owner Trustee, the Indenture Trustee or the
Insurer.
On the Closing Date, the Servicer shall deposit in the
Collection Account: (i) all installments of each Monthly Scheduled Payment
received after the Cut-Off Date and received by the Servicer at least two
Business Days prior to the Closing Date; (ii) the proceeds of each Full
Prepayment pursuant to clause (a) of the definition thereof of any Contract and
all partial prepayments on Contracts received by the Servicer after the Cut-Off
Date and at least two Business Days prior to the Closing Date; and (iii) all Net
Liquidation Proceeds and Net Insurance Proceeds received with respect to a
Financed Vehicle to which a Contract relates received after the Cut-Off Date and
at least two Business Days prior to the Closing Date.
The Servicer shall deposit in or credit to the Collection
Account within two Business Days of receipt (i) all collections of Monthly
Scheduled Payments after the Cut-Off Date, together with the proceeds of all
Full Prepayments pursuant to clause (a) of the definition thereof on all
Contracts and all partial prepayments on all Contracts, and any accompanying
interest; (ii) all Net Liquidation Proceeds and Net Insurance Proceeds; (iii)
all Purchase Amounts received or payable by the Servicer; provided such amounts
shall be remitted no later than as required by Section 4.02 and (iv) any amounts
received as a result of the Servicer exercising its rights under certain
circumstances to purchase all of the Contracts. The foregoing requirements for
deposit in the Collection Account are exclusive, it being understood that
collections in the nature of late payment charges, extension fees and similar
charges or fees may, but need not be deposited in the Collection Account and
shall be retained by the Servicer as additional servicing compensation.
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In order to facilitate the servicing of the Contracts by the
Servicer, the Servicer shall retain, subject to and only to the extent permitted
by the provisions of this Agreement, all collections on the Contracts prior to
the time they are remitted or credited, in accordance with such provisions, to
the Collection Account. The Servicer acknowledges that the unremitted
collections on the Contracts are part of the Trust Property and the Servicer
agrees to act as custodian and bailee of the Indenture Trustee, the Issuer and
the Insurer in holding such monies and collections. The Servicer agrees, for the
benefit of the Indenture Trustee, the Issuer, the Noteholders and the Insurer,
to act as such custodian and bailee, and to hold and deal with such monies and
such collections, in trust as custodian and bailee for the Indenture Trustee,
the Issuer and the Insurer, in accordance with the provisions of this Agreement.
The Servicer shall retain all data (including, without
limitation, computerized title records) relating directly to or maintained in
connection with the servicing of the Contracts at the address of the Custodian
or its agent set forth in Section 9.04 or, upon 15 days' prior written notice to
the Issuer, the Indenture Trustee and the Insurer, at such other place where the
servicing offices of the Servicer are located, and shall give the Issuer, the
Indenture Trustee and the Insurer access to all data (including, without
limitation, computerized title records, documentation and personnel having
knowledge of such documentation or software in such cases where the Indenture
Trustee acts as Successor Servicer) at all reasonable times and, while a
Servicer Default shall be continuing, the Servicer shall, on demand of the
Indenture Trustee or the Insurer deliver or cause to be delivered to the
Indenture Trustee or the Insurer, as the case may be, all data (including,
without limitation, computerized title records and, to the extent transferable,
related operating software) necessary for the servicing of the Contracts and all
monies collected by it and required to be deposited in or credited to the
Collection Account.
All deposits made by the Servicer in any Trust Account shall
be made in immediately available funds.
The Administrator shall be responsible for the payment of the
fees and expenses of the Indenture Trustee and the Owner Trustee; provided that
any Indenture Trustee Fee or Owner Trustee Fee not paid as of a Distribution
Date shall be paid as provided in Section 4.03(a)(ii).
Section 3.02. Collection of Contract Payments.
Consistent with the standards, policies and procedures
required by this Agreement, the Servicer shall make reasonable efforts to
collect all payments called for under the terms and provisions of the Contracts
as and when the same shall become due and shall use its reasonable efforts to
cause each Obligor to make all payments in respect of his or her Contract to the
Servicer. Consistent with the foregoing and the Collection Policy, the Servicer
may, on a case-by-case basis, in its discretion (i) waive any late payment
charges in connection with delinquent payments on a Contract, (ii) waive any
prepayment charges or (iii) grant an extension in order to work out a default or
an impending default; provided that following the extension there will have been
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no more than two extensions of the related Contract in the last 12 months and
the sum of the terms of all extensions of the Contract does not exceed six
months. The Servicer shall not extend the Maturity Date of a Contract except as
provided in clause (iii) of the preceding sentence. Except as explicitly
permitted by this paragraph, the Servicer shall not change any material term of
a Contract, including but not limited to the APR, the payment amounts or due
dates, or the property securing such Contract unless the Insurer has provided
prior written consent.
Section 3.03. Realization upon Defaulted Contracts.
The Servicer shall use its best efforts, consistent with the
Servicing Standards and Section 3.01, to repossess or otherwise convert the
ownership of the Financed Vehicle securing any Contract as to which no
satisfactory arrangements can be made for collection of delinquent payments.
Such servicing procedures may include reasonable efforts to realize upon any
recourse to Dealers and selling the Financed Vehicle at public or private sale.
In connection with such repossession or other conversion, the Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual for prudent holders of retail installment sales
contracts and as shall be in compliance with all applicable laws, and, in
connection with the repossession of any Financed Vehicle or any contract in
default, may commence and prosecute any proceedings in respect of such Contract
in its own name or, if the Servicer deems it necessary, in the name of the
Issuer or the Indenture Trustee or on behalf of the Issuer or the Indenture
Trustee. The Servicer's obligations under this Section 3.03 are subject to the
provision that, in the case of damage to a Financed Vehicle from an uninsured
cause, the Servicer shall not expend its own funds in repairing such motor
vehicle unless it shall determine (i) that such restoration will increase the
proceeds of liquidation of the related Contract, after reimbursement to itself
for such expenses and (ii) that such expenses will be recoverable by it either
as Liquidation Expenses or as expenses recoverable under an applicable insurance
policy. The Servicer shall be responsible for all other costs and expenses
incurred by it in connection with any action taken in respect of a Defaulted
Contract; provided that it shall be entitled to reimbursement of such costs and
expenses to the extent they constitute Liquidation Expenses or expenses
recoverable under an applicable insurance policy. All Net Liquidation Proceeds
and Net Insurance Proceeds shall be deposited directly in or credited to the
Collection Account (without deposit in any intervening account) to the extent
required by Section 4.02.
Section 3.04. Maintenance of Security Interests in Financed
Vehicles.
(a) The Servicer shall take such steps as are necessary to
maintain continuous perfection and priority of the security interest created by
each Contract in the related Financed Vehicle, including but not limited to,
obtaining the execution by the related Obligor and the recording, registering,
filing, re-recording, re-registering, and refiling of all security agreements,
financing statements, continuation statements or other instruments as are
necessary to maintain the security interest granted by such Obligor under each
respective Contract. The Issuer and the Indenture Trustee each hereby authorize
the Servicer to take such steps as are necessary to re-perfect such security
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interest on behalf of the Issuer in the event of the relocation of a Financed
Vehicle or for any other reason. In the event that the assignment of a Contract
to the Issuer and the subsequent pledge thereof by the Issuer to the Indenture
Trustee is insufficient, without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the state in which the Financed Vehicle is
located, to grant to the Issuer a perfected security interest in the related
Financed Vehicle and to pledge such perfected security interest to the Indenture
Trustee, the initial Servicer hereby agrees that the identification of
AutoNation Financial Services as the secured party on the Title Document is
deemed to be in its capacity as agent of the Indenture Trustee and further
agrees to hold such Title Document as the Indenture Trustee's agent and
custodian; provided that, except as provided in subsection (b) of this Section
3.04 and the Insurance Agreement, neither the Servicer nor AutoNation Financial
Services shall make, nor shall the Issuer or Noteholders have the right to
require that the Servicer or AutoNation Financial Services make, any such
notation on the related Financed Vehicles' Title Document or fulfill any such
additional administrative requirement of the laws of the state in which a
Financed Vehicle is located.
(b) The Seller, the Indenture Trustee, the Owner Trustee, the
Servicer and the Issuer hereby agree that upon the occurrence of a Non-Servicer
Default, the Insurer may direct the Servicer to take or to cause to be taken
such action as may, in the Insurer's discretion, be necessary to perfect or
re-perfect the security interest in the Financed Vehicles in the name of the
Indenture Trustee, including the amending of the Title Documents of the Financed
Vehicles and the Indenture Trustee agrees to execute any and all documents or
instruments prepared by and at the expense of the Servicer in this regard. The
Servicer hereby agrees to pay all expenses related to such perfection or
reperfection, and the Servicer and the Indenture Trustee hereby agree to take
all action necessary therefor. If such expenses are not paid within 30 days
after delivery of any invoice for such expenses to the Servicer, such expenses
shall be paid pursuant to Section 4.03(a)(x). The Insurer, in its sole
discretion, may pay such costs and any such amounts shall be included in amounts
owed to the Insurer as Reimbursement Amounts.
Section 3.05. Covenants, Representations and Warranties of
Servicer.
The Servicer hereby makes the following covenants,
representations and warranties on which (i) the Issuer and the Indenture Trustee
are deemed to have relied in acquiring the Contracts and (ii) the Insurer is
deemed to have relied in issuing the Insurance Policy. Such covenants,
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date, but shall survive the sale, transfer and
assignment of the Contracts to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) The Servicer covenants as to the Contracts:
(i) The Financed Vehicle securing each Contract shall not be
released from the lien granted by the Contract in whole or in part,
except as contemplated herein.
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(ii) The Servicer shall not impair the rights of the
Noteholders or the Insurer in the Contracts or the other Trust
Property.
(iii) The Servicer shall not increase the number of payments
under a Contract, nor increase the amount financed under a Contract,
nor extend, forgive payments on a Contract or otherwise amend the terms
of any Contract, except as provided in Section 3.02 and the Servicer
shall not amend in any materially adverse respect, the Collection
Policy without the Insurer's prior written consent.
(iv) The Servicer shall not consent to the sale or transfer by
an Obligor of any Financed Vehicle unless the original Obligor under
the related Contract remains liable under such Contract and the
transferee assumes all of the Obligor's obligations thereunder and upon
doing so the credit profile with respect to such Obligor will not be
changed from adequate to speculative by virtue of the addition of the
transferee's obligation thereunder.
(v) The Servicer shall not (A) create, incur or suffer to
exist, or agree to create, incur or suffer to exist, or consent to or
permit in the future (upon the occurrence of a contingency or
otherwise) the creation, incurrence or existence of any Lien on or
restriction on transferability of any Contract except for the Lien of
the Indenture and the restrictions on transferability imposed by this
Agreement or (B) sign or file any UCC financing statements with respect
to the Trust Property, in any jurisdiction that names AutoNation
Financial Services, the Servicer or the Depositor as debtor other than
those financing statements executed and filed in connection with the
Basic Documents to create or maintain the first priority perfected
security interest of the Indenture Trustee in the Trust Property, or
sign any security agreement authorizing any secured party thereunder to
file any financing statements with respect to the Trust Property, other
than the Basic Documents.
(b) The Servicer represents and warrants as of the Closing
Date:
(i) The Servicer (1) is duly organized, is validly existing
and in good standing as a corporation organized and existing under the
laws of the State of Delaware, (2) is qualified to do business as a
foreign corporation, is in good standing in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary, and (3) has full power, authority and legal
right to own its property, to carry on its business as presently
conducted, and to enter into and perform its obligations under this
Agreement and the other Basic Documents to which it is a party.
(ii) The execution, delivery and performance by the Servicer
of this Agreement and the other Basic Documents to which it is a party
are within the corporate power of the Servicer and have been duly
authorized by all necessary corporate action on the part of the
Servicer. Neither the execution, delivery and performance of this
Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
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the provisions of the Certificate of Incorporation or By-laws of the
Servicer, or any of the provisions of any material indenture, mortgage,
contract or other instrument to which the Servicer is a party or by
which it is bound or result in the creation or imposition of any lien,
charge or encumbrance upon any of its property pursuant to the terms of
any such indenture, mortgage, contract or other instrument, in each
case, which might have a material adverse effect on the Servicer or the
performance by the Servicer of its obligations under or the validity or
enforceability of this Agreement nor violate any law, governmental
rule, regulation, judgment, decree or order binding on the Servicer or
its properties.
(iii) Other than consents, licenses, approvals and
authorizations and registrations or declarations that have been
obtained prior to the Closing Date, the Servicer is not required to
obtain the consent of any other party or any consent, license, approval
or authorization, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement and the other
Basic Documents to which it is a party, and the consummation of all the
transactions herein contemplated.
(iv) This Agreement and the other Basic Documents to which it
is a party have been duly executed and delivered by the Servicer and,
assuming the due authorization, execution and delivery hereof by the
Issuer, the Seller and the Indenture Trustee, this Agreement and the
other Basic Documents to which it is a party constitute the legal,
valid and binding obligations of the Servicer enforceable against the
Servicer in accordance with their respective terms (subject to
applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of creditors' rights generally).
(v) There are no actions, suits or proceedings pending or, to
the knowledge of the Servicer, threatened against or affecting the
Servicer, before or by any court, administrative agency, arbitrator or
governmental body with respect to any of the transactions contemplated
by this Agreement and the other Basic Documents, or which may be
reasonably expected, if determined adversely to the Servicer, to
materially and adversely affect it or its business, assets, operations
or condition, financial or otherwise, or materially and adversely
affect the Servicer's ability to perform its obligations under this
Agreement and the other Basic Documents. The Servicer is not in default
with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely
affect the transactions contemplated by the above-mentioned documents.
(vi) The Servicer has obtained or made all necessary consents,
approvals, waivers and notifications of creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution
and delivery of this Agreement and the other Basic Documents to which
it is a party, and the consummation of all the transactions herein
contemplated.
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Section 3.06. Purchase of Contracts upon Breach by Servicer;
Third Party Claims.
The Servicer or the Issuer shall inform the other party and
the Indenture Trustee and the Insurer promptly, in writing, upon the discovery
of any breach of the representations and warranties set forth in Section 3.05(b)
or of the covenants set forth in Sections 3.02, 3.04 or 3.05(a); provided,
however, failure to give notice shall not affect any obligation of the Servicer
under this Section 3.06. Unless the breach shall have been cured within 30 days
following such discovery or receipt of notice of such breach, the Servicer shall
purchase any Contract if such breach materially and adversely affects the
interests of the Issuer, the Indenture Trustee, the Owner Trustee, the
Noteholders or the Insurer in the Contract. As consideration for the Contract,
the Servicer shall remit the Purchase Amount on the Business Day preceding the
Servicer Report Date next succeeding the end of such 30-day cure period in the
manner specified in Section 4.02(a). The sole remedy of the Issuer, the
Indenture Trustee, or the Noteholders with respect to a breach of Section 3.02,
3.04 or 3.05(a), if such obligation is fulfilled, shall be to require the
Servicer to purchase Contracts pursuant to this Section 3.06; provided that the
Servicer shall indemnify the Owner Trustee, the Indenture Trustee, the Insurer,
the Issuer, the Custodian and the Noteholders against all costs, expenses,
losses damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a result
of third-party claims arising out of the events or facts giving rise to such
breach; provided, further, that, the Servicer's failure to repurchase or
indemnify in accordance with this Section 3.06 shall be a Servicer Default
pursuant to Section 7.01.
The Servicer shall (i) immediately notify the Issuer, the
Insurer and the Indenture Trustee if a claim is made by a third party with
respect to the Contracts, (ii) assume, with the consent of the Issuer, the
Indenture Trustee and the Insurer, the defense of any such claim, (iii) pay all
expenses in connection therewith, including counsel fees, and (iv) promptly pay,
discharge and satisfy any judgment or decree which may be entered with respect
to such claim against the Servicer, the Issuer, the Owner Trustee, the Indenture
Trustee, the Insurer, the Custodian or the Noteholders.
If the Indenture Trustee is the Successor Servicer it shall
not be obligated to purchase Contracts pursuant to this Section 3.06.
Section 3.07. Servicing Compensation.
As compensation for the performance of its obligations under
this Agreement and subject to the terms of this Section 3.07, the Servicer shall
be entitled to receive on each Distribution Date the Servicing Fee in respect of
each Contract that was Outstanding at the beginning of the Collection Period
ending immediately prior to such Distribution Date; provided that with respect
to the first Distribution Date the Servicer will be entitled to receive the
Servicing Fee in respect of each Contract that was Outstanding as of the Cut-Off
Date. As servicing compensation in addition to the Servicing Fee, the Servicer
shall be entitled to retain all late payment charges, extension fees and similar
items paid in respect of Contracts. The Servicer shall pay all expenses incurred
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by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement of such expenses except to the extent provided in
Section 3.03.
Section 3.08. Reporting by the Servicer.
(a) No later than 12:00 P.M. (New York time) on each Servicer
Report Date, the Servicer shall deliver (by telex, facsimile, electronic
transmission, first class mail, overnight courier, personal delivery or such
other format mutually agreed to by the Issuer, the Indenture Trustee and the
Insurer) to the Issuer, the Indenture Trustee and the Insurer a statement (the
"Distribution Date Statement") setting forth with respect to the next succeeding
Distribution Date:
(i) the Note Principal Distributable Amount for such
Distribution Date;
(ii) the Note Interest Distributable Amount for such
Distribution Date;
(iii) the aggregate distribution amount for such Distribution
Date;
(iv) the Insurance Premium payable to the Insurer;
(v) the amount on deposit in the Spread Account on such
Distribution Date, before and after giving effect to deposits thereto
and withdrawals therefrom to be made in respect of such Distribution
Date;
(vi) the amount of the withdrawal, if any, required to be made
from the Spread Account by the Indenture Trustee pursuant to Section
4.04(b);
(vii) the aggregate Servicing Fee paid to the Servicer with
respect to the related Contracts for the related Collection Period;
(viii) the amount of fees paid to the Owner Trustee and the
Indenture Trustee with respect to the related Collection Period to the
extent paid from Available Funds pursuant to Section 4.03;
(ix) the amount of any Note Interest Carryover Shortfall or
Note Principal Carryover Shortfall on such Distribution Date, the
Insured Payment required to pay any shortfall; and the change in such
shortfall amounts from those with respect to the immediately preceding
Distribution Date;
(x) the number of, and aggregate amount of, monthly principal
and interest payments due on the related Contracts which are delinquent
as of the end of the related Collection Period, presented in increments
of 31 to 60 days, 61 to 90 days, 91 to 120 days and 121 days or more;
(xi) the Available Funds and the Insured Payment, if any, for
such Distribution Date;
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(xii) the aggregate amount of Liquidation Proceeds received
for Defaulted Contracts;
(xiii) the number and net outstanding balance of Contracts for
which the Financed Vehicle has been repossessed;
(xiv) the Pool Balance; and
(xv) The Spread Account Required Amount for such Distribution
Date.
Each such Distribution Date Statement shall be accompanied by
an Officers' Certificate of the Servicer, which Officers' Certificate shall
state that the computations reflected in such statement were made in conformity
with the requirements of this Agreement.
(b) On each Servicer Report Date, no later than 12:00 P.M. New
York Time, the Servicer shall deliver to the Issuer, the Indenture Trustee and
the Insurer a report, in respect of the immediately preceding Collection Period,
setting forth the following:
(i) the aggregate amount, if any, paid by or due from it or
the Seller for the purchases or repurchases of Contracts which the
Servicer or the Seller has become obligated to purchase or repurchase
pursuant to Sections 3.06 or 2.03;
(ii) the net amount of funds which have been deposited in or
credited to the Collection Account in respect of such Collection Period
after giving effect to all permitted deductions therefrom pursuant to
Section 4.02;
(iii) with respect to all Contracts which were the subject of
a Full Prepayment during such Collection Period, the following
information:
(A) the related Contract Number; and
(B) the date(s) of such Full Prepayment;
(iv) the Contract Numbers, Monthly Scheduled Payment,
Principal Balances and Maturity Dates of all Contracts which became
Defaulted Contracts during such Collection Period;
(v) any other information relating to the Contracts reasonably
requested by the Owner Trustee, the Indenture Trustee or the Insurer;
and
(vi) the amount of Net Liquidation Proceeds and Net Insurance
Proceeds which have been deposited in or credited to the Collection
Account in respect of the Collection Period ending immediately prior to
such Servicer Report Date and the cumulative amount of Net Liquidation
Proceeds and Net Insurance Proceeds deposited in or credited to the
Collection Account during the preceding Collection Periods.
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Section 3.09. Annual Statement as to Compliance.
(a) The Servicer shall deliver to the Issuer, the Owner
Trustee, the Indenture Trustee and the Insurer, on or before March 15, 2001 and
on or before March 15 of each year thereafter, an Officers' Certificate of the
Servicer stating that (i) a review of the activities of the Servicer during the
preceding fiscal year (since the Closing Date in the case of the first of such
Officers' Certificates required to be delivered) and of its performance of its
obligations under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
year and that no default under this Agreement has occurred and is continuing,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof.
(b) The Servicer shall deliver to the Issuer, the Owner
Trustee, the Indenture Trustee, the Insurer and each Rating Agency promptly
after having obtained knowledge thereof, but in no event later than three
Business Days thereafter, an Officer's Certificate specifying any event which
with the giving of notice or lapse of time, or both, would become a Servicer
Default under Section 7.01.
Section 3.10. Annual Independent Certified Public Accountant's
Report.
On or before April 30, 2001 and on or before April 30 of each
year thereafter, AutoNation, Inc. at its expense shall cause a firm of
nationally recognized independent certified public accountants acceptable to the
Insurer to furnish a report to the Issuer, the Owner Trustee, the Indenture
Trustee and the Insurer to the effect that (i) they have audited the balance
sheet of AutoNation, Inc. as of the last day of the immediately preceding fiscal
year and the related statements of operations, retained earnings and cash flows
for such fiscal year and have issued an opinion thereon, specifying the date
thereof, (ii) they have also reviewed the reports delivered by the Servicer
pursuant to Section 3.08 and certain other documents and the records relating to
the servicing of the Contracts and the distributions on the Notes under this
Agreement, in each case in accordance with procedures agreed to by the Servicer
and the Insurer, (iii) their audit and review as described under clauses (i) and
(ii) above was made in accordance with generally accepted auditing standards and
accordingly included such tests of the accounting records and such other
auditing procedures as they considered necessary in the circumstances, and (iv)
their audits and reviews described under clauses (i) and (ii) above disclosed no
exceptions which, in their opinion, were material, relating to the servicing of
such Contracts in accordance with this Agreement and the making of distributions
on the Notes in accordance with this Agreement, or, if any such exceptions were
disclosed thereby, setting forth those exceptions which, in their opinion, were
material.
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Section 3.11. Access to Certain Documentation and Information
Regarding Contracts.
Each of the Servicer and the Custodian shall provide to the
Noteholders, the Issuer, the Indenture Trustee and the Insurer reasonable access
to the Contract Files and Contract Documents in its possession. Access shall be
afforded without charge, but only upon reasonable request and during normal
business hours at offices of the Servicer where such documents are kept. Nothing
in this Section 3.12 shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
Section 3.12. Indemnification.
Subject to Section 7.02, the Servicer agrees to indemnify and
hold the Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the
Seller, the Custodian and Noteholders harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any reasonable other costs, fees and expenses that the Issuer,
the Owner Trustee, the Indenture Trustee, the Insurer, the Custodian or the
Noteholders may sustain because of the negligence, willful misconduct or bad
faith of the Servicer in the performance of its duties under this Agreement or
by reason of reckless disregard of its obligations and duties under this
Agreement. Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation.
Section 3.13. Reports to Noteholders and the Rating Agencies.
(a) The Owner Trustee or the Indenture Trustee at its own
expense shall provide to each Noteholder a copy of each Distribution Date
Statement described in Section 3.08(a) concurrently with the delivery of the
statement described in Section 4.05 below and the Indenture Trustee shall be
permitted (but not obligated) to post such statement on its website at
xxx.Xxxxx.xxx/XXX.
(b) The Indenture Trustee shall provide to any Noteholder who
so requests in writing (addressed to the Corporate Trust Office of the Indenture
Trustee) a copy of the annual audit statement described in Section 3.09, or the
annual audit report described in Section 3.10.
(c) The Indenture Trustee shall forward to the Rating Agencies
the statement to Noteholders described in Section 4.05 and any other reports it
may receive pursuant to this Agreement to (i) Standard & Poor's Ratings
Services, Asset-Backed Surveillance Group, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (ii) Xxxxx'x Investors Service, Inc., ABS Monitoring Dept., 00 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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ARTICLE IV
DISTRIBUTIONS; SPREAD ACCOUNT;
STATEMENTS TO NOTEHOLDERS
Section 4.01. Establishment of Trust Accounts.
(a) Prior to the Closing Date, the Indenture Trustee shall
open, at a depository institution (which shall be the same depository
institution which is acting in the capacity as Indenture Trustee) and shall
maintain at the Corporate Trust Office, the following accounts:
(i) an account denominated "Collection Account, ANRC Auto
Owner Trust 0000-X, Xxx Xxxxx Xxxxxxxxx Bank, Indenture Trustee" (the
"Collection Account");
(ii) an account denominated "Note Distribution Account, ANRC
Auto Owner Trust 0000-X, Xxx Xxxxx Xxxxxxxxx Bank, Indenture Trustee"
(the "Note Distribution Account");
(iii) an account denominated "Spread Account, ANRC Auto Owner
Trust 0000-X, Xxx Xxxxx Xxxxxxxxx Bank, Indenture Trustee" (the "Spread
Account"); and
(iv) a trust account denominated "Payment Account, ANRC Auto
Owner Trust 0000-X, Xxx Xxxxx Xxxxxxxxx Bank, Indenture Trustee" (the
"Payment Account" and, together with the accounts described in clauses
(i) and (ii) above, the "Trust Accounts").
The Trust Accounts shall be Eligible Accounts (subject to the
requirement that the Payment Account must be maintained as provided in the
immediately preceding sentence) and relate solely to the Notes and to the
Contracts and, if applicable, the related Eligible Investments, and the
Indenture Trustee shall have sole dominion over the Trust Accounts. The location
and account numbers of the Trust Accounts as of the Closing Date are set forth
on Exhibit B. If at any time a Trust Account ceases to be an Eligible Account,
the Indenture Trustee (or the Servicer on its behalf) shall within 5 Business
Days establish a new Trust Account, which is an Eligible Account, and shall
transfer any cash or any investments from the prior account to the new Trust
Account. The Indenture Trustee shall give the Issuer, the Owner Trustee, the
Servicer and the Insurer at least five Business Days' prior written notice of
any change in the location of any Trust Account and shall not change any related
account identification information without the Insurer's prior written consent.
All amounts, financial assets and investment property held in, deposited in or
credited to, from time to time, the Trust Accounts shall be part of the Trust
Property. All amounts, financial assets and investment property held in,
deposited in or credited to, from time to time, the Collection Account and the
Spread Account shall be invested by the Indenture Trustee in Eligible
Investments pursuant to Section 4.01(b).
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(b) All funds in the Collection Account and the Spread Account shall be invested
by the Indenture Trustee (so long as the Indenture Trustee maintains the
applicable account) or on behalf of the Indenture Trustee by the depository
institution maintaining such account in Eligible Investments. Subject to the
limitations set forth herein, the Servicer shall direct the Indenture Trustee as
to such investment of funds in the Collection Account and the Spread Account in
Eligible Investments (which instructions may be in the form of standing
instructions); provided that in the absence of such directions from the
Servicer, the Indenture Trustee shall invest funds in the Collection Account and
the Spread Account in Eligible Investments described in clause (e) of the
definition thereof. All such investments shall be in the name of the Indenture
Trustee for the benefit of the Noteholders. All income or other gain from
investment of monies in the Collection Account shall be deposited in or credited
to the Collection Account by the depository institution maintaining the
Collection Account monthly and any loss resulting from such reinvestment shall
be charged to the Collection Account. All income or other gain from investment
of monies deposited in or credited to the Spread Account shall be deposited in
or credited to the Spread Account immediately upon receipt, and any loss
resulting from such investment shall be charged to the Spread Account. No
investment in Eligible Investments may be sold prior to its maturity and, except
as permitted in writing by the Rating Agencies and the Insurer, funds on deposit
in the Collection Account and the Spread Account shall be invested in Eligible
Investments that will mature no later than the Business Day immediately
preceding the next Distribution Date. The funds on deposit in the Payment
Account and the Note Distribution Account shall remain uninvested.
The Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in any of the foregoing Trust Accounts held by or on
behalf of the Indenture Trustee resulting from any investment loss on any
Eligible Investments, except in its capacity as obligor thereunder.
(c) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof and subject at all times to the terms
of the Securities Account Control Agreement, that:
(i) any Trust Account Property that is held in deposit
accounts shall be held solely in Eligible Accounts, subject to Section
4.01(a), and each such Eligible Account shall be subject to the
exclusive custody and control of the Indenture Trustee, and the
Indenture Trustee shall have sole signature authority with respect
thereto;
(ii) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Indenture Trustee or a
securities intermediary (as such term is defined in Section
8-102(a)(14) of the UCC) acting solely for the Indenture Trustee;
(iii) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal book-entry
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regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph; and
(iv) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(iii) above shall be delivered to the Indenture Trustee in accordance
with clause (c) of the definition of "Delivery" and shall be maintained
by the Indenture Trustee, pending maturity or disposition, though
continued registration of the Indenture Trustee's or its securities
intermediary's (or its custodian's or its nominee's) ownership of such
security.
Effective upon delivery of any Trust Account Property in the
form of physical property, book-entry securities or uncertificated securities,
the Indenture Trustee shall be deemed to have purchased such Trust Account
Property for value, in good faith and without notice of any adverse claim
thereto.
The Indenture Trustee shall not enter into any subordination
or intercreditor agreement with respect to the Trust Account Property.
Section 4.02. Collections; Realization upon Insurance Policy;
Net Deposits; Transfers to Payment Account.
(a) Subject to the last sentence of this Section 4.02(a), the
Servicer shall remit or credit to the Collection Account all Monthly Scheduled
Payments, all Full Prepayments and partial prepayments and all Net Liquidation
Proceeds and Net Insurance Proceeds and other monies on a daily basis, within
two Business Days of receipt, by or on behalf of Obligors on the Contracts. The
Servicer or the Seller, as the case may be, each shall remit or credit to the
Collection Account each Purchase Amount to be remitted by it with respect to
Purchased Contracts on the Business Day preceding the Servicer Report Date next
succeeding (i) the end of the Collection Period in which the applicable Contract
is repurchased by the Seller pursuant to Section 2.03, in the case of the
Seller, (ii) the last day of the related cure period specified in Section 3.06,
in the case of the Servicer or (iii) the end of the Collection Period related to
purchase by the Servicer pursuant to Section 8.01. On the date of receipt, the
Servicer shall remit to the Collection Account any Purchase Amounts received
from the Originator pursuant to the Receivables Purchase Agreement.
(b) On the Servicer Report Date, the Servicer shall determine
the Insured Payment, if any, which exists with respect to the related
Distribution Date.
(c) The Indenture Trustee, based solely on the Distribution
Date Statement, shall, no later than 12:00 noon, New York City time, on the
second Business Day prior to each Distribution Date, make a claim under the
Insurance Policy for the Insured Payment, if any, for such Distribution Date by
delivering to the Fiscal Agent, with a copy to the Insurer and the Servicer, by
hand delivery, telex or facsimile transmission, a written notice (a "Deficiency
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Notice") specifying the Insured Payment, if any, for such Distribution Date. In
addition, the Indenture Trustee shall make claims under the Insurance Policy for
Preference Amounts as provided in the Insurance Policy. Each Deficiency Notice
shall be in the form set forth as Exhibit A to the Insurance Policy. In making
any such claim, the Indenture Trustee shall comply with all the terms and
conditions of the Insurance Policy. Upon receipt of the Insured Payment, the
Indenture Trustee shall deposit such amount in the Payment Account and apply the
portion thereof, if any, representing the Deficiency Amount with respect to a
Distribution Date as provided in Section 4.03(a) and the Insurance Policy solely
to the applicable Noteholders. Any amounts received by the Indenture Trustee
under the Insurance Policy that represent Preference Amounts shall be paid, in
accordance with the Insurance Policy, to the applicable Noteholder(s).
(d) In connection with any Preference Amount payable under the
Insurance Policy, the Indenture Trustee shall furnish to the Insurer its records
evidencing the distributions of principal of and interest on the Notes that have
been made and subsequently recovered from Noteholders and the dates on which
such payments were made.
(e) The Indenture Trustee shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any Notes from
monies received under the Policy. The Insurer shall have the right to inspect
such records at reasonable times during normal business hours upon three
Business Day's prior notice to the Indenture Trustee, at the expense of the
Insurer.
(f) So long as AutoNation Financial Services is the Servicer,
the Servicer may make deposits in or credits to the Collection Account net of
amounts to be paid to the Servicer under this Agreement. Notwithstanding the
foregoing, the Servicer shall maintain the records and accounts for such
deposits and credits on a gross basis.
Section 4.03. Distributions.
(a) Subject to Sections 5.02 and 5.06 of the Indenture, on the
Business Day immediately preceding each Distribution Date, the Indenture Trustee
will cause funds equal to the amount of Available Funds with respect to such
Distribution Date to be withdrawn from the Collection Account and deposit such
funds into the Payment Account. Subject to Sections 5.02 and 5.06 of the
Indenture, on each Distribution Date, the Indenture Trustee, based solely on the
Distribution Date Statement, will apply the Available Funds on deposit in the
Payment Account, together with amounts, if any, withdrawn from the Spread
Account or representing payment of the Insured Payment, to make the following
deposits and distributions in the following amounts and order of priority:
(i) to the Servicer, from Available Funds and amounts, if any,
withdrawn from the Spread Account, the Servicing Fee, including any
unpaid Servicing Fees with respect to one or more prior Distribution
Dates;
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(ii) to the Indenture Trustee and the Owner Trustee, from
Available Funds (after giving effect to the reduction in Available
Funds described in clause (i) above) and amounts, if any, withdrawn
from the Spread Account, any accrued and unpaid Indenture Trustee Fees
and reasonable out-of-pocket expenses and Owner Trustee Fees of the
Indenture Trustee and the Owner Trustee, in each case to the extent the
Indenture Trustee Fees, the Owner Trustee Fees and the reasonable
out-of-pocket expenses of each have not been previously paid by the
Administrator; provided that such payments pursuant to this clause (ii)
will not during any calendar year exceed $75,000 in the aggregate;
(iii) to the Insurer, from Available Funds (after giving
effect to the reduction in Available Funds described in clauses (i) and
(ii) above) and amounts, if any, withdrawn from the Spread Account, the
Insurance Premium for such Distribution Date;
(iv) to the Note Distribution Account, from Available Funds
(after giving effect to the reduction in Available Funds described in
clauses (i), (ii) and (iii) above) and amounts, if any, withdrawn from
the Spread Account and any amounts representing payment of the Insured
Payment, the Note Interest Distributable Amount to be distributed to
the holders of the Notes at their respective Note Rates;
(v) to the Note Distribution Account, if such Distribution
Date is a Final Scheduled Distribution Date for any Class of Notes, the
Note Principal Distributable Amount to the extent of the remaining
Outstanding Principal Amount of such Class of Notes, from Available
Funds (after giving effect to the reduction in Available Funds
described in clauses (i) through (iv) above), and amounts, if any,
withdrawn from the Spread Account and any amounts representing payment
of the Insured Payment to be paid to the holders of such Class of
Notes;
(vi) to the Note Distribution Account, from Available Funds
(after giving effect to the reduction in Available Funds described in
clauses (i) through (v) above) and amounts, if any, withdrawn from the
Spread Account and any amounts representing payment of the Insured
Payment to be paid to the Noteholders as follows, the remaining Note
Principal Distributable Amount (after giving effect to the payment, if
any, described in clause (v) above), to be distributed first to the
holders of the Class A-1 Notes until the Outstanding Principal Amount
of the Class A-1 Notes has been reduced to zero, second, to the holders
of the Class A-2 Notes until the Outstanding Principal Amount of the
Class A-2 Notes has been reduced to zero, third, to the holders of the
Class A-3 Notes until the Outstanding Principal Amount of the Class A-3
Notes has been reduced to zero, and fourth, to the holders of the Class
A-4 Notes until the Outstanding Principal Amount of the Class A-4 Notes
has been reduced to zero;
(vii) to the Insurer, from Available Funds (after giving
effect to the reduction in Available Funds described in clauses (i)
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through (vi) above) and amounts, if any, withdrawn from the Spread
Account, any Reimbursement Amounts owing to the Insurer;
(viii) to the Spread Account, from Available Funds (after
giving effect to the reduction in Available Funds described in clauses
(i) through (vii) above), the amount, if any, required to increase the
amount on deposit therein to the Spread Account Required Amount;
(ix) to the Indenture Trustee or the Owner Trustee, from
Available Funds (after giving effect to the reduction in Available
Funds described in clauses (i) through (viii) above), the amount of any
fees and reasonable expenses not paid under clause (ii) above as a
result of the dollar limitation on fees and reasonable expenses set
forth in clause (ii);
(x) to the Indenture Trustee or the Successor Servicer, as
applicable, from Available Funds (after giving effect to the reduction
in Available Funds described in clauses (i) through (ix) above), any
Re-Xxxxxxx Expenses, to the extent not paid by the Servicer as required
pursuant to Section 3.04(b);
(xi) to the Successor Servicer, if applicable, from Available
Funds (after giving effect to the reduction in Available Funds
described in clauses (i) through (x) above), Transition Costs and the
amount of any Additional Servicing Fee owing to the Successor Servicer;
and
(xii) any remaining Available Funds will be distributed to the
holder of the Residual Interest Certificate.
Any amounts deposited in the Payment Account pursuant to 4.04(b) with respect to
a Distribution Date shall be applied by the Indenture Trustee solely to make the
distributions referred to in clauses (i) through (vii) above and any Insured
Payment that represents the Deficiency Amount with respect to such Distribution
Date shall be applied by the Indenture Trustee solely to make the distributions
referred to in clauses (iv) through (vi) above, in that order of priority, but
only to the extent that the Available Funds with respect to such Distribution
Date, after application as provided above, were insufficient to make such
distribution.
Section 4.04. Spread Account.
(a) The Spread Account will be held for the benefit of the
Noteholders and the Insurer. On or prior to the Closing Date, the Issuer shall
deposit or cause to have deposited an amount equal to the Spread Account Initial
Deposit into the Spread Account from the net proceeds of the sale of the Notes.
(b) On each Distribution Date, the Indenture Trustee, based
solely on the Distribution Date Statement, shall withdraw funds from the Spread
Account, to the extent funds are on deposit therein, equal to the amount by
which the sum of the amounts set forth in Section 4.03(a), clauses (i) though
(vii), with respect to such Distribution Date exceeds the amount of Available
Funds for such Distribution Date. The Indenture Trustee shall deposit any such
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funds withdrawn from the Spread Account into the Payment Account to be
distributed pursuant to Section 4.03(a). Funds shall also be withdrawn from the
Spread Account by the Indenture Trustee, as directed by the Insurer to reimburse
the Insurer for any draws under the Insurance Policy with respect to any
Preference Amount. If the amount on deposit in the Spread Account on any
Distribution Date (after giving effect to all deposits thereto or withdrawals
therefrom on such Distribution Date other than withdrawals relating to
distributions to be made pursuant to this sentence) exceeds the Spread Account
Required Amount set forth in the Insurance Agreement, the Indenture Trustee
shall, based solely on the Distribution Date Statement, distribute any excess
first, to the Insurer, to the extent of any amounts owing to the Insurer
pursuant to the Insurance Agreement, and then to the holder of the Residual
Interest Certificate. Upon any such distributions to the Insurer, the
Noteholders will have no further rights in, or claims to, such distributed
amounts. None of the Noteholders, the Indenture Trustee, the Owner Trustee, the
Seller or the Insurer will be required to refund any amounts properly
distributed to them, whether or not there are sufficient funds on any subsequent
Distribution Date to make full distributions to the Noteholders. The obligations
of the Insurer under the Insurance Policy will not be diminished or otherwise
affected by any amounts distributed to the Insurer.
(c) Amounts held in the Spread Account shall be invested in
the manner specified in Section 4.01(b) and (c), and such investments shall be
made in accordance with written instructions from the Servicer;
(d) With respect to the Spread Account Property, the Indenture
Trustee agrees that, subject at all times to the terms of the Securities Account
Control Agreement:
(i) Any Spread Account Property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee, as
collateral agent, with the Indenture Trustee. The Spread Account shall
be subject to the exclusive custody and control of the Indenture
Trustee, and the Indenture Trustee shall have sole signatory authority
with respect thereto.
(ii) Any Spread Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee, as collateral
agent, in accordance with clause (a) of the definition of "Delivery"
and shall be held, pending maturity or disposition, solely by the
Indenture Trustee, as collateral agent, or a securities intermediary,
as such term is defined in Section 8-102(a)(14) of the UCC, acting
solely for the Indenture Trustee, as collateral agent.
(iii) Any Spread 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 clause (b)
of the definition of "Delivery" and shall be maintained by the
Indenture Trustee, as collateral agent, pending maturity or
disposition, through continued book-entry registration of such Trust
Account Property as described in such paragraph.
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(iv) Any Spread Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(iii) above shall be delivered to the Indenture Trustee, as collateral
agent, in accordance with clause (c) of the definition of "Delivery"
and shall be maintained by the Indenture Trustee, as collateral agent,
pending maturity or disposition through continued registration of the
Indenture Trustee's or its securities intermediary's (or its
custodian's or its nominee's) ownership of such security, in its
capacity as collateral agent.
Effective upon delivery of any Spread Account Property in the
form of physical property, book-entry securities or uncertificated securities,
the Indenture Trustee shall be deemed to have purchased such Spread Account
Property for value, in good faith and without notice of any adverse claim
thereto.
The Indenture Trustee shall not enter into any subordination
or intercreditor agreement with respect to the Spread Account Property.
(e) Any amounts on deposit in the Spread Account, after
payments of amounts due to the Noteholders and all amounts due to the Insurer
pursuant to the Insurance Agreement, shall be paid to the holder of the Residual
Interest Certificate on the date of the termination of the Trust pursuant to
Section 9.01 of the Owner Trust Agreement; provided, however, that if an
insolvency proceeding with respect to any of the Seller, the Servicer, the
Trust, the Indenture Trustee or the Noteholders (collectively, the "Potential
Preference Parties") shall have occurred during the period ending ninety-one
(91) days after payment in full to the Noteholders of all amounts payable with
respect to the Notes and the payment in full of the Reimbursement Amount owed to
the Insurer then the funds on deposit in the Spread Account shall be retained
until the date all applicable statute of limitation periods with respect to all
applicable preference actions and periods have expired and during which time no
preference action or similar proceeding at law or in equity is commenced, at
which time, the Indenture Trustee shall release all amounts in the Spread
Account to the holder of the Residual Interest Certificate. In the event that
any preference action referred to above is commenced during any applicable
statute of limitations period, funds deposited in the Spread Account shall be
retained until the date on which there is a final determination by a court of
competent jurisdiction as to whether any payment or payments made pursuant to
this Agreement, the Indenture or the Insurance Agreement is recoverable from the
Insurer or the Noteholders. If it is so determined that a payment is so
recoverable, funds deposited in the Spread Account shall be applied by the
Indenture Trustee at the written direction of the Insurer, first to pay any and
all such claims with respect to such preference actions as the Noteholders and
the Insurer may be required to pay and then to the holder of the Residual
Interest Certificate. If it is determined that any such payment is not
recoverable, the Indenture Trustee shall release all amounts on deposit in the
Spread Account to the holder of the Residual Interest Certificate, upon receipt
by the Insurer of both a final order determining that such payments are not
recoverable and an opinion of nationally recognized bankruptcy counsel to the
effect that such appeal is final and not subject to appeal. For purposes of
compliance with this Section 4.04, the Indenture Trustee shall be entitled to
rely on written instructions from the Insurer.
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(f) In the event the holder of the Residual Interest
Certificate seeks to have the amounts remaining on deposit in the Spread Account
released to it prior to the expiration of the ninety-one (91) day period
specified in Section 4.04(e) above, then, if (i) amounts payable with respect to
the Notes have been fully paid to the Noteholders, (ii) the Reimbursement Amount
and all other amounts owing to the Insurer pursuant to the Insurance Agreement
have been paid in full, (iii) no insolvency proceeding has occurred with respect
to the Potential Preference Parties, and (iv) either (A) the long term unsecured
debt of the Seller and the Servicer is rated "BBB-" or better by Standard &
Poor's and "Baa3" or better by Moody's, (B) the Insurer shall have received a
favorable opinion or opinions, satisfactory in form and substance to the
Insurer, from counsel to AutoNation Financial Services, the Seller and the
Servicer, to the effect that in the event an insolvency proceeding were to occur
with respect to the Potential Preference Parties, no payment pursuant to this
Agreement or the Insurance Agreement would be recoverable from either the
Insurer or the Noteholders, and such other matters as the Insurer may reasonably
request, or (C) the Insurer, in its sole discretion, elects to have the
remaining amounts on deposit in the Spread Account paid to the holder of the
Residual Interest Certificate, then, in any such event, all remaining amounts on
deposit in the Spread Account shall be paid to the holder of the Residual
Interest Certificate.
(g) On or after the occurrence of an Event of Default under
the Indenture and the acceleration of the Notes thereunder, and upon the written
direction of the Insurer, all, or any portion of, amounts on deposit in the
Spread Account shall be applied to pay amounts described in Section 5.06 of the
Indenture.
Section 4.05. Statements to Noteholders.
(a) On each Distribution Date, the Indenture Trustee shall
include with each distribution to a Noteholder of record as of the related
Record Date, a statement, prepared by the Servicer, based solely on the
information in the Distribution Date Statement furnished pursuant to Section
3.08 (which the Indenture Trustee shall be permitted, but not obligated, to post
on its website at xxx.Xxxxx.xxx/XXX), setting forth for such Distribution Date
at least the following information as of the Distribution Date, as the case may
be:
(i) the Note Principal Distributable Amount for such
Distribution Date;
(ii) the Note Interest Distributable Amount for such
Distribution Date;
(iii) the aggregate distribution amount for such Distribution
Date;
(iv) the Insurance Premium payable to the Insurer;
(v) the amount on deposit in the Spread Account on such
Distribution Date, before and after giving effect to deposits thereto
and withdrawals therefrom to be made in respect of such Distribution
Date;
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(vi) the amount of the withdrawal, if any required to be made
from the Spread Account by the Indenture Trustee pursuant to Section
4.04(b);
(vii) the aggregate Servicing Fee paid to the Servicer with
respect to the Contracts for the related Collection Period;
(viii) the amount of the Owner Trustee Fee and Indenture
Trustee Fee paid to the Owner Trustee and the Indenture Trustee, with
respect to the related Collection Period to the extent not paid by the
Servicer or from Available Funds pursuant to Section 4.03;
(ix) the amount of any Note Interest Carryover Shortfall or
Note Principal Carryover Shortfall on such Distribution Date and the
change in such shortfall amounts from those with respect to the
immediately preceding Distribution Date;
(x) the number of, and aggregate amount of, monthly principal
and interest payments due on the related Contracts which are delinquent
as of the end of the related Collection Period presented in increments
of 31 to 60 days, 61 to 90 days, 91 to 120 days and 121 days or more;
(xi) the Available Funds and the Insured Payment, if any, for
such Distribution Date;
(xii) the aggregate amount of Liquidation Proceeds received
for Defaulted Contracts;
(xiii) the number and net outstanding balance of Contracts for
which the Financed Vehicle has been repossessed;
(xiv) the Pool Balance; and
(xv) the Spread Account Required Amount for such Distribution
Date.
Each amount set forth pursuant to subclauses (i) or (ii) above shall be
expressed as a dollar amount per $1,000.00 of Original Principal Amount of a
Note.
(b) No later than the latest date permitted by law, the
Servicer shall prepare and furnish to the Issuer, the Indenture Trustee and each
Paying Agent, and the Paying Agent for the Notes and the Paying Agent for the
Notes shall furnish to each Person who on any Record Date during such calendar
year shall have been a Noteholder, a statement or statements containing the sum
of the amounts set forth in clauses (i) and (ii) above for such calendar year
and such other information as is reasonably necessary for the preparation of
such Person's federal income tax return in respect of the Notes or, in the event
such Person shall have been a Noteholder during a portion of such calendar year,
for the applicable portion of such year, for the purposes of such Noteholder's
preparation of federal income tax returns.
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Section 4.06. Effect of Payments by the Insurer; Subrogation.
(a) Anything herein to the contrary notwithstanding, any
distribution of principal of or interest on the Notes that is made with moneys
received pursuant to the terms of the Insurance Policy shall not be considered
payment of the Notes by the Issuer and shall not discharge the Trust Estate in
respect of such distribution. The Indenture Trustee acknowledges that, without
the need for any further action on the part of the Insurer, the Indenture
Trustee or the Note Registrar, (i) to the extent the Insurer makes payments,
directly or indirectly, on account of principal of or interest on the Notes to
the Noteholders thereof, the Insurer will be fully subrogated to the rights of
such Noteholders to receive such principal and interest from distributions of
the assets of the Trust and will be deemed to the extent of the payments so made
to be a Noteholder and (ii) the Insurer shall be paid principal and interest in
its capacity as a Noteholder until all such payments by the Insurer have been
fully reimbursed, but only from the sources and in the manner provided herein
for the distribution of such principal and interest and in each case only after
the Noteholders have received all payments of principal and interest due to them
under this Agreement on the related Distribution Date.
(b) Without limiting the rights or interests of the
Noteholders as otherwise set forth herein, so long as no Insurer Default exists
or is not continuing, the Indenture Trustee shall cooperate in all respect with
any reasonable request by the Insurer for action to preserve or enforce the
Insurer's rights or interests under this Agreement, including, upon the
occurrence of an Event of Default or a Non-Servicer Default, a request to take
any one or more of the following actions:
(i) institute proceedings for the collection of all amounts
then payable on the Notes or under this Agreement, enforce any judgment
obtained and collect moneys adjudged due; and
(ii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Insurer hereunder or under the other Basic
Documents.
ARTICLE V
THE SELLER
Section 5.01. 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.
The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer and the Custodian
and their respective officers, directors, agents and employees from and against
any taxes that may at any time be asserted against any such Person with respect
to the transactions contemplated herein and in the other Basic Documents,
including any sales, gross receipts, general corporation, tangible or intangible
personal property, privilege or license taxes (but not including any federal or
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other income taxes arising out of distributions on the Notes) and costs and
expenses in defending against the same.
The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the Custodian
their respective officers, directors, agents and employees and the Noteholders
from and against any loss, liability or expense incurred by reason of the
Seller's willful misfeasance, bad faith or negligence (other than errors in
judgment) in the performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement.
The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, and their respective officers,
directors, agents and employees from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties herein and, in the case
of the Owner Trustee, in the Owner Trust Agreement and, in the case of the
Indenture Trustee, in the Indenture, except to the extent that such cost,
expense, loss, claim, damage or liability, in the case of (i) the Owner Trustee,
shall be due to the willful misfeasance, bad faith or negligence of the Owner
Trustee or shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in the Owner Trust Agreement, (ii) the
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence of the Indenture Trustee or (iii) the Custodian, shall be due to the
willful misfeasance, bad faith or negligence of the Custodian, respectively.
Indemnification under this Section 5.01 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
Indemnification under this Section 5.01 shall be payable solely from amounts
payable to the Seller, as holder of the Residual Interest Certificate, pursuant
to clause (xii) of Section 4.03(a) and shall not otherwise be payable from the
Trust Property. If the Seller shall have made any indemnity payments pursuant to
this Section 5.01 and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Seller, without interest to the extent such
Person has received amounts in excess of the indemnity payments such Person is
entitled to under the Basic Documents. Indemnification under this Section 5.01
shall survive the resignation or removal of the Seller or the termination of
this Agreement.
Section 5.02. Merger or Consolidation of, or Assumption of the
Obligations of Seller; Certain Limitations.
(a) The Seller shall keep in full effect its existence, rights
and franchises as a corporation incorporated under the laws of the State of
Delaware, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Contract
Documents and this Agreement.
(b) The Seller shall not consolidate with or merge into any
other corporation or convey, transfer or lease substantially all of its assets
as an entirety to any Person unless such action is accomplished in accordance
with the Insurance Agreement and the corporation formed by such consolidation or
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into which the Seller has merged or the Person which acquires by conveyance,
transfer or lease substantially all the assets of the Seller as an entirety, can
lawfully perform the obligations of the Seller hereunder and executes and
delivers to the Issuer, the Indenture Trustee and the Insurer an agreement in
form and substance reasonably satisfactory to the Issuer, the Indenture Trustee
and the Insurer, which contains an assumption by such successor entity of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by the Seller under this Agreement. The Seller shall
provide prompt notice of any merger, consolidation or succession pursuant to
this Section 5.02 to the Owner Trustee, the Indenture Trustee, the Insurer, the
Servicer and the Rating Agencies. Notwithstanding the foregoing, the Seller
shall not merge or consolidate with any other Person or permit any other Person
to become a successor to the Seller's business unless (x) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 2.02 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation of
such transaction), (y) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee, the Servicer and the Insurer an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 5.02 and that all
conditions precedent provided for in this Agreement relating to such transaction
have been complied with and (z) the Seller shall have delivered to the Owner
Trustee, the Indenture Trustee, the Servicer and the Insurer an Opinion of
Counsel stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been duly
executed and filed that are necessary to preserve and protect the interest of
the Trust in the Contracts and reciting the details of such filings or (B) no
such action is necessary to preserve and protect such interest.
Section 5.03. Limitation on Liability of Seller and Others.
The Seller and any director or officer or employee or agent of
the Seller may rely in good faith on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
Section 5.04. Seller Not to Resign.
Subject to the provisions of Section 5.02, the Seller shall
not resign from the obligations and duties hereby imposed on it as Seller under
this Agreement.
Section 5.05. Seller May Own Notes.
The Seller and any Affiliate thereof 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
expressly provided herein or in any Basic Document. Notes so owned by or pledged
to the Seller or such Affiliate shall have an equal and proportionate benefit
65
under the provisions of this Agreement, without preference, priority or
distinction as among all of the Notes.
ARTICLE VI
THE SERVICER
Section 6.01. Liability of Servicer; Indemnities.
Subject to Section 7.02, the Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement. Such obligations shall include
the following:
(a) The Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the Seller, the
Custodian, their respective officers, directors, agents and employees, and the
Noteholders 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 shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the Custodian and
their respective officers, directors, agents and employees from and against any
taxes that may at any time be asserted against the Issuer, the Owner Trustee,
the Indenture Trustee, the Insurer, the Seller or the Custodian with respect to
the transactions contemplated herein, including, without limitation, any sales,
gross receipts, general corporation, tangible or intangible personal property,
privilege or license taxes (but, not including (i) in the case of the Issuer,
any taxes asserted with respect to, and as of the date of, the sale of the
Contracts to the Issuer or the issuance and original sale of the Securities, or
(ii) any taxes asserted with respect to ownership of the Contracts, or (iii) any
federal or other income taxes arising out of distributions on the Securities)
and costs and expenses in defending against the same.
Indemnification under this Section 6.01 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer shall have made any indemnity payments pursuant to this Section
and the recipient thereafter collects any of such amounts from others, the
recipient Person shall promptly repay such amounts to the Servicer, without
interest to the extent such Person has received amounts in excess of the
indemnity payments such Person is entitled to under the Basic Documents.
This Section 6.01 shall survive the resignation or removal of
the Servicer and the termination of this Agreement.
Section 6.02. Corporate Existence; Status as Servicer; Merger.
(a) The Servicer shall keep in full effect its existence,
rights and franchises as a corporation incorporated under the laws of the State
of Delaware, and will obtain and preserve its qualification to do business as a
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foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Contract
Documents and this Agreement.
(b) The Servicer shall not consolidate with or merge into any
other Person or convey, transfer or lease all or substantially all of its assets
as an entirety to any Person or engage in any similar corporate transaction
pursuant to which the surviving or successor entity is not AutoNation Financial
Services, unless (i) all additional conditions contained in the Insurance
Agreement are satisfied; (ii) the resulting entity executes and delivers to the
Issuer, the Indenture Trustee and the Insurer an agreement in form and substance
reasonably satisfactory to the Issuer, the Indenture Trustee and the Insurer,
which contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Agreement; (iii) the Servicer shall provide
notice of any merger, consolidation or succession pursuant to this Section 6.02
to the Owner Trustee, the Indenture Trustee, the Insurer and each Rating Agency;
(iv) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.05 shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time or both, would become a Servicer Default shall have occurred; (v) the
Servicer shall have delivered to the Owner Trustee, the Indenture Trustee and
the Insurer an Officer's Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or succession and such agreement of assumption
comply with this Section 6.02 and that all conditions precedent provided for in
this Agreement relating to such transaction have been complied with and (vi) the
Servicer shall have delivered to the Owner Trustee, the Indenture Trustee and
the Insurer an Opinion of Counsel stating that either (A) all financing
statements and continuation statements and amendments thereto have been duly
executed and filed that are necessary to preserve and protect the interest of
the Trust and the Indenture Trustee, respectively, in the assets of the Trust
and reciting the details of such filings or (B) no such action shall be
necessary to preserve and protect such interest.
Section 6.03. Performance of Obligations.
(a) The Servicer shall punctually perform and observe all of
its obligations and agreements contained in this Agreement.
(b) The Servicer shall not take any action, or permit any
action to be taken by others, which would excuse any person from any of its
covenants or obligations under any of the Contract Documents or under any other
instrument included in the Trust Property, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the Contract Documents or any such
instrument, except as expressly provided herein and therein.
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Section 6.04. Servicer Not to Resign; Assignment.
(a) The Servicer shall not resign from the duties and
obligations hereby imposed on it except upon determination by its Board of
Directors that by reason of change in applicable legal requirements the
continued performance by the Servicer of its duties hereunder would cause it to
be in violation of such legal requirements in a manner which would result in a
material adverse effect on the Servicer or its financial condition, said
determination to be evidenced by a resolution of its Board of Directors to such
effect accompanied by an Opinion of Counsel, satisfactory to the Issuer, the
Insurer and the Indenture Trustee, to such effect. No such resignation shall
become effective unless and until (i) the Indenture Trustee assumes all of the
Servicer's obligations under this Agreement; provided, however, the Indenture
Trustee shall in no event whatsoever assume the Servicer's obligation to
repurchase Contracts, nor will the Indenture Trustee purchase Contracts or (ii)
a new servicer acceptable to the Insurer assumes the servicing of the Contracts
and enters into a servicing agreement with the Issuer, the Indenture Trustee and
the Insurer in form and substance substantially similar to this Agreement and
satisfactory to the Indenture Trustee and the Insurer, and each Rating Agency
confirms that the selection of such new servicer will not result in the
qualification, reduction or withdrawal of its then-current rating of each Class
of Notes assigned by such Rating Agency, without regard to the Insurance Policy.
No such resignation by the Servicer shall affect the obligation of the Servicer
to repurchase pursuant to Section 3.06 Contracts which were adversely affected
as a result of the Servicer's actions while acting as Servicer.
(b) Except as specifically permitted in this Agreement, the
Servicer may not assign this Agreement or any of its rights, powers, duties or
obligations hereunder; provided that the Servicer may assign this Agreement in
connection with a consolidation, merger, conveyance, transfer or lease made in
compliance with Section 6.02(b). (c) Except as provided in Sections 6.04(a) and
(b), the duties and obligations of the Servicer under this Agreement shall
continue until this Agreement shall have been terminated as provided in Section
8.01 or the Trust shall have been terminated as provided by the terms of the
Owner Trust Agreement, and shall survive the exercise by the Issuer, the
Indenture Trustee or the Insurer of any right or remedy under this Agreement, or
the enforcement by the Issuer, the Indenture Trustee, any Noteholder or the
Insurer of any provision of the Notes, the Indenture, the Insurance Agreement or
this Agreement.
(d) The resignation of the Servicer in accordance with this
Section 6.04 shall not affect the rights of the Seller hereunder. If the
Servicer resigns pursuant to this Section, its appointment as custodian may be
terminated pursuant to Section 2.08.
Section 6.05. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers,
employees or agents of the Servicer shall be under any liability to the Issuer
or the Noteholders, except as provided under this Agreement, for any action
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taken or for refraining from the taking of any action pursuant to this Agreement
or for errors in judgment; provided that this provision shall not protect the
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director, officer, employee or
agent of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any person respecting any matters
arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not
be under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Contracts in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided that the Servicer may undertake any reasonable action that
it may deem necessary or desirable in respect of this Agreement and the other
Basic Documents and the rights and duties of the parties to this Agreement and
the other Basic Documents and the interests of the Noteholders under this
Agreement and the other Basic Documents.
ARTICLE VII
SERVICER DEFAULTS
Section 7.01. Servicer Defaults.
If any one of the following events (each, a "Servicer
Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit or credit to the
Collection Account any amount required under this Agreement to be so deposited
or credited, which failure continues unremedied for a period of two Business
Days after discovery by the Servicer or receipt by the Servicer of written
notice of such failure from the Issuer, the Indenture Trustee or the Insurer or
after discovery of such failure by an officer of the Servicer;
(b) the Insurer, the Indenture Trustee or the Issuer shall not
have received a report in accordance with Section 3.08 by the Servicer Report
Date with respect to which such report is due and which shall continue
unremedied for a period of one day after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given;
(c) failure on the part of the Seller or the Servicer duly to
observe or to perform any other covenants or agreements of the Seller or the
Servicer set forth in this Agreement or any other Basic Document, which failure
shall (i) materially and adversely affect the rights of the Noteholders, the
Insurer, the Issuer, the Owner Trustee or the Indenture Trustee and (ii)
continue unremedied for a period of 30 days after the date on which the Seller,
the Custodian or the Servicer shall have knowledge of such failure or written
notice of such failure, requiring the same to be remedied, shall have been given
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(A) to the Seller or the Servicer, as the case may be, by the Insurer, the
Issuer, the Owner Trustee or the Indenture Trustee or (B) to the Seller or the
Servicer, as the case may be, and to the Issuer and the Indenture Trustee by
Noteholders, acting together as a single class, evidencing in the aggregate not
less than 25% of the Outstanding Principal Amount of the Notes or, so long as no
Insurer Default has occurred and is continuing, by the Insurer;
(d) the entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Servicer or the
Seller in an involuntary case under the federal bankruptcy laws, as now or
hereafter in effect, or another present or future, federal or state, bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Servicer or
the Seller or of any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Servicer or the Seller and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days or the commencement of an involuntary case under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law and such case is not
dismissed within 60 days;
(e) the commencement by the Servicer or the Seller of a
voluntary case under the federal bankruptcy laws, as now or hereafter in effect,
or any other present or future, federal or state, bankruptcy, insolvency or
similar law, or the consent by the Servicer or the Seller to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or the Seller or of any
substantial part of its property or the making by the Servicer or the Seller of
an assignment for the benefit of creditors or the failure by the Servicer or the
Seller generally to pay its debts as such debts become due or the taking of
corporate action by the Servicer or the Seller in furtherance of any of the
foregoing;
(f) any merger or consolidation or sale of assets of the
Servicer in violation of the covenant set forth in Section 6.02 hereof;
(g) the Servicer shall have failed in the reasonable opinion
of the Insurer to service the Contracts in accordance with the Servicing
Standards and such failure shall have continued unremedied for 30 days after
written notice of such failure shall have been delivered to the Servicer by the
Insurer;
(h) any representation, warranty or statement of the Servicer
or the Seller made in this Agreement or the other Basic Documents or any
certificate, report or other writing delivered pursuant hereto or thereto shall
prove to be incorrect in any material respect as of the time when the same shall
have been made (excluding, however, any representation or warranty made in this
Agreement or any other Basic Document as to which Section 2.03 or 3.06 shall be
applicable so long as the Servicer or the Seller shall be in compliance with
Section 2.03 or 3.06, as the case may be), and the incorrectness of such
representation, warranty or statement has a material adverse effect on the
Noteholders or the Insurer and, within 30 days after written notice thereof
shall have been given to the Servicer or the Seller by the Indenture Trustee or
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the Issuer or by Noteholders, acting together as a single Class, evidencing in
the aggregate not less than 25% of the Outstanding Principal Amount of the
Notes, or so long as no Insurer Default has occurred, by the Insurer, the
circumstance or condition in respect of which such representation, warranty or
statement was incorrect shall not have been eliminated or otherwise cured;
(i) the subservicing agreement between World Omni Financial
Corp. and the Servicer shall for any reason cease to be in full force and a
successor Subservicer acceptable to the Insurer shall not be appointed within 60
days, or if any party thereto denies that it has any further liability
thereunder or gives notice to such effect;
(j) the Indenture Trustee shall, for any reason, fail to have
a valid perfected first priority security interest in Contracts pledged by the
Issuer to the Indenture Trustee the outstanding aggregate Principal Balance of
which exceeds 5.00% of the Pool Balance;
(k) unless authorized under Section 5.02, the Seller shall
enter into any transaction described in Section 5.02 regardless of the surviving
entity; or
(l) an Event of Default as defined in the Insurance Agreement;
then and in each and every case, so long as such Servicer Default shall not have
been remedied, (i) if no Insurer Default has occurred and is continuing, the
Insurer or (ii) if an Insurer Default has occurred and is continuing, the
Indenture Trustee acting at the direction of the Noteholders evidencing not less
than 25% of the outstanding amount of the Notes, acting together as a single
Class, by notice then given in writing to the Servicer (and to the Insurer, the
Indenture Trustee and the Issuer if given by the Noteholders) may terminate all
the rights and obligations of the Servicer under this Agreement. Upon such
termination, termination of the Servicer as custodian, if the Servicer is acting
as such, can be made pursuant to Section 2.08.
On or after the receipt by the Servicer of such written notice
of termination, all authority and power of the Servicer under this Agreement,
whether with respect to the Notes, the Contracts or otherwise, shall, without
further action, pass to and be vested in the Indenture Trustee or such Successor
Servicer as may be appointed under Section 7.02 and, without limitation, the
Indenture Trustee and the Issuer are hereby authorized and empowered to execute
and deliver on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Contracts
and related documents, or otherwise. The Servicer shall cooperate with the
Indenture Trustee, the Insurer and the Issuer in effecting the transfer of the
responsibilities and rights of the Servicer under this Agreement (whether due to
termination, resignation or otherwise), including the transfer to the Indenture
Trustee or such Successor Servicer, as applicable, for administration by it of
all cash amounts that (i) shall at the time be held by the Servicer for deposit
in, or shall have been deposited by the Servicer in, the Collection Account or
(ii) shall thereafter be received by it with respect to any Contract. The
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predecessor Servicer shall pay all costs of the Successor Servicer associated
with its transition to the role of Successor Servicer (whether due to
termination, resignation or otherwise).
Section 7.02. Trustee to Act; Appointment of Successor.
(a) Upon the termination of the Servicer by the Insurer
pursuant to Section 7.01 or resignation of the Servicer pursuant to Section 6.04
or otherwise, the Insurer may appoint a successor servicer ("Successor
Servicer") other than the Indenture Trustee. Until the Insurer has appointed a
Successor Servicer, the Indenture Trustee shall be the Successor Servicer for
all purposes of this Agreement. In the event that the Indenture Trustee is
unable to so act and the Insurer has not appointed a Successor Servicer within
60 days, the Indenture Trustee may, with the consent of the Insurer, which
consent will not be unreasonably withheld, appoint, or petition a court of
competent jurisdiction for the appointment of, a successor acceptable to the
Insurer with a net worth of at least $50,000,000 and whose regular business
includes the servicing of automobile and light-duty retail installment sales
contracts. If an Insurer Default has occurred and is continuing, upon the
termination of the Servicer by the Indenture Trustee, the Noteholders shall
appoint a Successor Servicer pursuant to Section 7.01, or upon the resignation
of the Servicer pursuant to Section 6.04 in the event that the Insurer is not
entitled to appoint a Successor Servicer by operation of Section 9.08, (i) if
the Notes have not been paid in full, the Indenture Trustee shall be the
Successor Servicer and (ii) if the Notes have been paid in full, the Depositor
shall appoint the Successor Servicer. If the Indenture Trustee acts as Successor
Servicer, the Indenture Trustee shall be entitled to such compensation (whether
payable out of the Collection Account or otherwise) as the Servicer would have
been entitled to under this Agreement if no such notice of termination shall
have been given, as well as reasonable Transition Costs, which shall be payable
as provided in Section 4.03(a)(xi). Pending appointment of any such Successor
Servicer, the Indenture Trustee shall act in such capacity as provided above.
(b) The Successor Servicer shall succeed to all the
responsibilities, duties and liabilities of the Servicer under this Agreement,
except that if the Indenture Trustee is the Successor Servicer, it shall not be
obligated to purchase Contracts pursuant to Section 3.06; provided, however, the
Successor Servicer (if the Indenture Trustee) shall be obligated to indemnify,
defend and hold harmless the Issuer, the Seller, the Noteholders and the Insurer
and their respective officers, directors, agents and employees from and against
any and all costs, expenses, losses, damages, claims and liabilities arising out
of or resulting from such Successor Servicer's failure to perform its
obligations under Sections 3.02, 3.04 or 3.05(a). Any Successor Servicer has the
right, with the prior written consent of the Insurer, to terminate the services
of any Subservicer in respect of the Contracts arising under the related
subservicing agreement between the predecessor Servicer and such Subservicer
which is in effect at the time such Successor Servicer assumes its
responsibilities as Successor Servicer and any termination fees in connection
with such termination shall be paid by the predecessor servicer. In connection
with any appointment of a Successor Servicer, the Indenture Trustee may make
arrangements for the compensation of such successor out of payments on Contracts
as the Indenture Trustee, the Insurer and such Successor Servicer shall agree;
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provided that such amount shall equal the product of a fixed percentage rate and
the Principal Balance, as of the commencement of each Collection Period, of each
Contract. The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
Section 7.03. Notification to Noteholders.
Upon any termination of, or appointment of a successor to, the
Servicer pursuant to this Article VII, the Indenture Trustee shall give prompt
written notice thereof to each Noteholder of record at their respective
addresses appearing in the Note Register.
Section 7.04. Waiver of Past Defaults.
Unless an Insurer Default shall have occurred and be
continuing, the Insurer, and only the Insurer, may waive any default by the
Servicer in the performance of its obligations under this Agreement or any
Servicer Default. If an Insurer Default has occurred and is continuing, the
Noteholders evidencing at least a majority of the Outstanding Principal Amount
of the Notes, acting together as a single Class on behalf of all Noteholders,
shall have the right to waive any default by the Servicer in the performance of
its obligations under this Agreement or any Servicer Default except a Servicer
Default in making any required deposits to or payment from the Trust Accounts in
accordance with this Agreement. No such waiver shall impair the Insurer's or the
Noteholders' rights with respect to subsequent defaults.
Section 7.05. Insurer Direction of Insolvency Proceedings.
(a) The Indenture Trustee, upon the actual knowledge of a
Responsible Officer of the Indenture Trustee, shall promptly notify the Insurer
of (i) the commencement of any of the events or proceedings by or against any
Obligor, the Servicer, the Seller, the Issuer or the Originator under the United
States Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, receivership, rehabilitation or similar law (individually, an
"Insolvency Proceeding") and (ii) the making of any claim in connection with any
Insolvency Proceeding seeking the avoidance as a preferential transfer (a
"Preference Claim") of any payment of principal of, or interest on, any Notes.
Any Preference Amounts paid by the Insurer shall be reimbursed to the Insurer as
provided in Section 4.03(a) and 4.04(b). Each Noteholder, by its purchase of
Notes, the Owner Trustee and the Indenture Trustee hereby agree that, so long as
no Insurer Default has occurred and is continuing, the Insurer may at any time
during the continuation of an Insolvency Proceeding direct all matters relating
to such Insolvency Proceeding, including, without limitation, (i) all matters
relating to any Preference Claim, (ii) the direction of any appeal of any order
relating to any Preference Claim and (iii) the posting of any surety or
performance bond pending any such appeal. The Insurer shall be subrogated to,
and each Noteholder and the Indenture Trustee hereby delegate and assign, to the
fullest extent permitted by law, the rights of the Indenture Trustee, the Owner
Trustee and each Noteholder in the conduct of any Insolvency Proceeding,
including, without limitation, all rights of any party to an adversary
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proceeding action with respect to any court order issued in connection with any
such Insolvency Proceeding.
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ARTICLE VIII
TERMINATION
Section 8.01. Optional Purchase of All Contracts; Satisfaction
and Discharge of the Indenture.
(a) On any Distribution Date as of which the Pool Balance is
10% or less of the Original Pool Balance, the Servicer shall have the option to
purchase the remaining Contracts from the Trust (such purchase an "Optional
Purchase"). Notice of the exercise of such option shall be given by the Servicer
to the Issuer, the Indenture Trustee and the Insurer not later than the 10th day
prior to the specified Distribution Date and not earlier than the 15th day of
the month prior to the month of the specified Distribution Date. To exercise
such option, the Servicer shall pay to the Indenture Trustee for the benefit of
the Noteholders and the Insurer, by deposit in the Collection Account on the
Business Day immediately preceding the related Servicer Report Date, the greater
of (i) the sum of (x) the Pool Balance on the date of repurchase, plus (y) any
accrued and unpaid interest on the Contracts and (ii) the sum of (x) the
aggregate unpaid principal amount of the Notes, plus (y) any accrued and unpaid
interest thereon to such Distribution Date plus (z) all amounts due to the
Servicer, the Insurer, the Indenture Trustee and the Owner Trustee under the
Basic Documents. Such purchase shall be deemed to have occurred on the last day
of the related Collection Period.
Any Outstanding Notes will be redeemed concurrently with any
Optional Purchase.
(b) Notice of any termination of the Trust shall be given by
the Servicer to the Owner Trustee, the Insurer and the Indenture Trustee as soon
as practicable after the Servicer has received notice thereof. Such notice shall
conform to the notice described in Section 9.01(c) of the Owner Trust Agreement.
(c) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes and all
amounts owed to the Insurer and return of the Insurance Policy to the Insurer
for cancellation, the Residual Interest Certificateholder will succeed to the
rights of the Noteholders hereunder, and the Owner Trustee will succeed to the
rights of, and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.
Section 8.02. Termination of this Agreement. This Agreement
shall terminate upon the termination of the Trust, except that obligations to
make tax reporting shall survive so long as such obligations exist.
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ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendment.
(a) This Agreement may be amended by the Issuer, the Seller,
the Servicer and the Indenture Trustee, collectively without the consent of any
Noteholders or the Custodian but with the consent of the Insurer (which consent,
so long as an Insurer Default has occurred and is continuing, shall not be
unreasonably withheld), to cure any ambiguity, to correct or supplement any
provisions in this Agreement which are inconsistent with the provisions herein,
or to make any other provisions with respect to matters or questions arising
under this Agreement which are not inconsistent with the provisions of this
Agreement; provided that any such action shall not materially and adversely
affect the interests of any Noteholder; and provided, further, that any such
amendment shall be deemed not to materially and adversely affect the interests
of any Noteholder if the Person requesting the amendment obtains (i) a letter
from each Rating Agency to the effect that such amendment would not result in a
downgrading or withdrawal of the ratings then assigned to the applicable Notes
by such Rating Agency, without regard to the Insurance Policy and (ii) the
consent of the Insurer.
(b) This Agreement may also be amended by the Issuer, the
Seller, the Servicer and the Indenture Trustee, with the consent of the Insurer,
without the consent of the Custodian and, for so long as the Notes are
outstanding and an Insurer Default shall have occurred and be continuing, the
Noteholders evidencing in the aggregate more than 50% of the principal amount of
the Notes then outstanding, acting together 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 may without the consent of each
Noteholder (i) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments on the Contracts or distributions
that shall be required to be made for the benefit of the Noteholders, (ii)
reduce the aforesaid percentage of the Noteholders which are required to consent
to any such amendment or (iii) result in a taxable event to any of the
Noteholders for federal income tax purposes or result in the Trust being
classified as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes.
(c) Promptly after the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder.
(d) It shall not be necessary for the consent of Noteholders
pursuant to Section 9.01(b) to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization by Noteholders of the execution thereof shall be subject to
such reasonable requirements as the Indenture Trustee may prescribe. Any consent
by a Noteholder to an amendment of this Agreement shall be conclusive and
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binding on such Noteholder and upon all future Noteholders, of such Note and of
any Note issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon such Note.
(e) The Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Indenture Trustee's own rights,
duties or immunities under this Agreement or otherwise and any such amendment
shall be unenforceable in its entirety absent the execution of such amendment by
the Indenture Trustee. Before consenting to any amendment pursuant to Section
9.01(a), the Indenture Trustee shall, if it requests, be entitled to receive an
Opinion of Counsel (not at its own expense) stating that such amendment is
authorized and permitted under the terms of this Agreement and the Indenture. To
the extent such Opinion of Counsel is provided to the Indenture Trustee, the
Insurer shall also be a recipient thereof.
Section 9.02. Protection of Title to Trust.
(a) The Servicer shall execute and file such financing
statements and cause to be executed and filed such continuation statements, all
in such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer, the Noteholders, the Indenture
Trustee and the Insurer in the Contracts and in the proceeds thereof. The
Servicer shall deliver (or cause to be delivered) to the Indenture Trustee and
the Insurer 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 or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
Section 9.02(a) seriously misleading within the meaning of Section 9-402(7) of
the UCC, unless it shall have given the Insurer and the Indenture Trustee at
least 30 days' prior written notice thereof and shall promptly file appropriate
amendments to all previously filed financing statements or file new financing
statements, as applicable. Promptly thereafter, the Servicer shall deliver to
the Trust, the Indenture Trustee and the Insurer an Opinion of Counsel stating
that in the opinion of counsel, all actions necessary fully to preserve and
protect the interest of the Trust, the Indenture Trustee, the Noteholders and
the Insurer in the Contracts, the related Financed Vehicles and the proceeds
thereof have been taken and reciting the details thereof.
(c) The Seller and the Servicer shall give the Insurer, the
Owner Trustee and the Indenture Trustee at least 30 days' prior written notice
of any relocation of the principal executive office or state of incorporation of
the Seller and the Servicer if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall promptly file appropriate amendments or new financing
statements. Promptly thereafter, the Servicer shall deliver to the Trust, the
Indenture Trustee and the Insurer an Opinion of Counsel stating that in the
opinion of counsel, all actions necessary fully to preserve and protect the
interest of the Trust, the Indenture Trustee, the Noteholders and the Insurer in
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the Trust Property have been taken and reciting the details thereof. The
Servicer shall at all times maintain each office from which it shall service
Contracts, and its principal executive office, within the United States.
(d) The Servicer shall maintain or cause to be maintained
accounts and records as to each Contract accurately and in sufficient detail to
permit (i) the reader thereof to know at any time the status of such Contract,
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 Contract and the amounts from time to time deposited in or credited to
the Collection Account in respect of such Contract.
(e) The Servicer shall maintain or cause to be maintained its
or its agent's computer systems so that, from and after the time of sale under
this Agreement of the Contracts to the Issuer, the Servicer's master computer
records (including any backup archives) that shall refer to a Contract indicate
clearly the interest of the Issuer and the Indenture Trustee in such Contract
and that such Contract is owned by the Issuer and has been pledged to the
Indenture Trustee.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive retail installment sales contracts to any prospective purchaser,
lender or other transferee, the Servicer shall give or cause to be given to such
prospective purchaser, lender or other transferee computer tapes, records or
print-outs (including any restored from back-up archives) that, if they shall
refer in any manner whatsoever to any Contract, shall indicate clearly that such
Contract has been sold and is owned by the Issuer and has been pledged to the
Indenture Trustee.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee and the Insurer and their respective agents, at any time during normal
business hours, to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Contract.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee, the Indenture Trustee and the Insurer, within five Business Days, a
list of all Contracts then held as part of the Trust Property.
(i) The Servicer shall deliver to the Indenture Trustee and
the Insurer:
(i) promptly after the execution and delivery of this
Agreement and of each amendment hereto, an Opinion of Counsel stating
that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Contracts, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) no such action shall be necessary
to preserve and protect such interest; and
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(ii) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cut-Off Date an Opinion of Counsel, dated as of a date during
such 90-day period, stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Issuer and the Indenture Trustee in the
Contracts, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given or (B) no
such action shall be necessary to preserve and protect such interest.
(j) Each Opinion of Counsel referred to in clause (i) or (ii)
above shall specify any action necessary (as of the date of such opinion) to be
taken in the following year to preserve and protect such interest.
(k) The Seller shall, to the extent required by applicable
law, cause the Notes to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities Exchange
Act of 1934, as amended, within the time periods specified in such sections.
(l) For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterpart shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
Section 9.03. Governing Law.
This Agreement shall, in accordance with Section 5-1401 of the
General Obligations Law of the State of New York, be governed by, and construed
in accordance with, the laws of the State of New York without regard to its
conflict of laws principles.
Section 9.04. Notices.
All demands, notices and communications under this Agreement
shall be in writing, personally delivered or mailed by certified mail, return
receipt requested, and shall be deemed to have been duly given upon receipt in
the case of
(i) the Seller, at AutoNation Receivables Corporation, 000
Xxxxx Xxxx 0xx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxx
Xxxxxxx, facsimile (000) 000-0000;
(ii) the Servicer, at AutoNation Financial Services Corp., 000
Xxxxx Xxxx 0xx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxx
Xxxxxxx, facsimile (000) 000-0000, with a copy to World Omni Financial
Corp., 0000 Xxxxx Xxxxx Xxxxx, Xxxxx Xxxx, XX 00000, as Custodian;
(iii) the Insurer, at MBIA Insurance Corporation, 000 Xxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Insured Portfolio Management
- Structured Finance (ANRC Auto Owner Trust 2000-A), facsimile (914)
765-3810;
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(iv) the Issuer or the Owner Trustee, at the Owner Trustee
Corporate Trust Office (with, in the case of the Issuer, a copy to the
Seller);
(v) the Indenture Trustee, at the Corporate Trust Office;
(vi) Moody's, to Xxxxx'x Investors Service, ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000;
(vii) Standard & Poor's, to Standard & Poor's Ratings
Services, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset
Backed Surveillance Department; and
(viii) the Custodian, to AutoNation Financial Services Corp.,
000 Xxxxx Xxxx 0xx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attention:
Xxxx Xxxxxxx, facsimile (000) 000-0000;
or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties. 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. Any notice so
mailed within the time prescribed herein shall be conclusively presumed to have
been duly given, whether or not such Noteholder shall receive such notice.
Section 9.05. Severability of Provisions.
If 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
or of the Notes or the rights of the Noteholders thereof.
Section 9.06. Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided in Sections 5.02 and 6.02, neither the Seller nor the
Servicer may transfer or assign all, or a portion of, its rights, obligations
and duties under this Agreement unless such transfer or assignment (i)(A) will
not result in a reduction or withdrawal by any Rating Agency of the rating then
assigned by it to the Notes, without regard to the Insurance Policy and (B) the
Issuer, the Indenture Trustee, acting at the direction of the Noteholders
evidencing more than 50% of the outstanding amount of Notes, and the Insurer
have consented to such transfer or assignment, or (ii) the Insurer, the Issuer,
the Indenture Trustee and the Noteholders of each Class evidencing more than 50%
of the outstanding amount of Notes of such Class consent thereto. Any transfer
or assignment with respect to the Servicer of all of its rights, obligations and
duties will not become effective until a Successor Servicer has assumed the
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Servicer's rights, duties and obligations under this Agreement. In the event of
a transfer or assignment pursuant to clause (ii) above, each Rating Agency shall
be provided with notice of such transfer or assignment.
Section 9.07. Third Party Beneficiaries.
The parties hereto intend for the Insurer to be, and the
Insurer hereby is an express third party beneficiary of this Agreement entitled
to enforce the provisions hereof as if it were a party hereto. Except as
otherwise specifically provided herein, the parties to this Agreement hereby
manifest their intent that no third party other than the Insurer shall be deemed
a third party beneficiary of this Agreement, and specifically that the Obligors
are not third party beneficiaries of this Agreement.
Section 9.08. Certain Matters Relating to the Insurer.
So long as an Insurer Default shall not have occurred and be
continuing, the Insurer shall have the right to exercise all rights, including
voting rights, which the Noteholders are entitled to exercise pursuant to this
Agreement, without any consent of such Noteholders, subject to any rights
specifically granted to Noteholders in respect of amendments to this Agreement
pursuant to Section 9.01.
All notices, statements or reports required by this Agreement
to be sent to any other party hereto or to the Noteholders at any time shall
also be sent to the Insurer unless the Insurance Policy is no longer in effect
(and the Insurer has been paid all amounts owing to it under this Agreement and
the Insurance Agreement).
Notwithstanding any provision in this Agreement to the
contrary, for so long as an Insurer Default shall have occurred and be
continuing, the Insurer shall not have the right to take any action under this
Agreement or to control or direct the actions of the Trust, the Seller, the
Indenture Trustee pursuant to the terms of this Agreement, nor shall the consent
of the Insurer be required with respect to any action (or waiver of a right to
take action) to be taken by the Trust, the Seller, the Indenture Trustee or the
Noteholders; provided that the consent of the Insurer shall be required at all
times (which consent, so long as an Insurer Default has occurred and is
continuing, shall not be unreasonably withheld) with respect to any amendment of
this Agreement.
Section 9.09. Headings.
The headings of the various Articles and Sections herein are
for convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
Section 9.10. Assignment by Issuer.
The Seller hereby acknowledges and consents to any mortgage,
pledge, assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders
and the Insurer of all right, title and interest of the Issuer in, to and under
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the Contracts and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
Section 9.11. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary,
this instrument has been executed by The Bank of New York (Delaware), not in its
individual capacity but in its capacity as Owner Trustee of the Issuer, and in
no event shall The Bank of New York (Delaware), in its individual capacity or
any beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer.
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IN WITNESS WHEREOF, the parties hereto have caused this Sale
and Servicing Agreement to be duly executed by their respective officers as of
the day and year first above written.
ANRC AUTO OWNER TRUST 2000-A,
as Issuer
By: THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but solely as
Owner Trustee
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AUTONATION RECEIVABLES CORPORATION,
as Seller
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
AUTONATION FINANCIAL SERVICES CORP.,
as Servicer and as Custodian
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By: /s/ Xxxxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: Assistant Vice President
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EXHIBIT A
List of Contracts
-----------------
(Delivered to the Indenture Trustee at Closing)
EXHIBIT B
Location and Account Numbers of Trust Accounts
----------------------------------------------
EXHIBIT C
Distribution Date Statement
---------------------------
