EXHIBIT 99.4
------------
EXECUTION COPY
SERVICING AGREEMENT
among
CENTERONE FINANCIAL SERVICES LLC
as Servicer
U.S. BANK NATIONAL ASSOCIATION
as Master Servicer
and
XXXXXXX XXXXX BANK USA,
as Administrator
Dated as of May 31, 2007
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND USAGE............................................1
Section 1.01. Construction and Usage......................................1
Section 1.02. Definitions.................................................2
ARTICLE II CUSTODIAN........................................................6
Section 2.01. Custody of Receivable Files.................................6
Section 2.02. Duties of Custodian.........................................7
Section 2.03. Instructions; Authority to Act..............................8
Section 2.04. Custodian's Indemnification.................................8
Section 2.05. Effective Period and Termination............................8
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES AND
PURCHASED PROPERTY...............................................9
Section 3.01. Appointment of Servicer; Duties of Servicer.................9
Section 3.02. Collection of Receivable Payments..........................10
Section 3.03. Realization Upon Receivables...............................10
Section 3.04. Allocations of Collections.................................10
Section 3.05. Maintenance of Security Interests in Financed Vehicles.....10
Section 3.07. [RESERVED].................................................11
Section 3.08. Servicing Fee and Servicing Fee Rate.......................11
Section 3.09. Servicer Expenses..........................................12
Section 3.10. Annual Statement as to Compliance; Notice of Event of
Servicing Termination; Item 1122 Servicing
Criteria Assessment........................................12
Section 3.11. Annual Independent Certified Public Accountant's Report....13
Section 3.12. Xxxxxxxx-Xxxxx Act of 2002.................................13
Section 3.13. Audit of Servicer's Records................................13
Section 3.14. Legal Proceedings..........................................14
Section 3.15. Additional Regulation AB Provisions........................14
Section 3.16. Limitation of Liability of the Servicer....................15
Section 3.17. Delegation of Servicing Duties.............................16
ARTICLE IV DISTRIBUTIONS; STATEMENTS.......................................16
Section 4.01. Establishment of Collection Account by the Master Servicer.16
Section 4.02. Distributions; Remittance Conditions.......................17
Section 4.03. Statements to Master Servicer..............................17
Section 4.04. Netting....................................................17
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ARTICLE V MATTERS RELATING TO SERVICER, CUSTODIAN, ADMINISTRATOR AND
MASTER SERVICER.................................................17
Section 5.01. Representations............................................17
Section 5.02. Representations And Warranties Of the Master Servicer......19
Section 5.03. Representations And Warranties Of The Administrator........20
Section 5.04. Merger or Consolidation of, or Assumption of the
Obligations of the Servicer................................21
Section 5.05. Effective Period and Termination...........................22
Section 5.06. CenterOne Not to Resign as Servicer........................22
ARTICLE VI SERVICING TERMINATION...........................................23
Section 6.01. Event of Servicing Termination.............................23
Section 6.02. Agreement to Cooperate Upon Termination or Resignation
of the Servicer............................................24
Section 6.03. Waiver of Past Events of Servicing Termination.............24
ARTICLE VII INDEMNIFICATION.................................................24
Section 7.01. Indemnification of the Servicer............................24
Section 7.02. Indemnification by the Servicer............................25
ARTICLE VIII MISCELLANEOUS PROVISIONS........................................25
Section 8.01. Amendment..................................................25
Section 8.02. Counterparts...............................................25
Section 8.03. GOVERNING LAW..............................................25
Section 8.04. Headings and Cross-References..............................26
Section 8.05. Notices....................................................26
Section 8.06. Severability of Provisions.................................26
Section 8.07. Assignment.................................................27
Section 8.08. No Waiver; Cumulative Remedies.............................27
Section 8.09. Termination of Agreement...................................27
Section 8.10. Independent Contractors....................................27
Section 8.11. Failure to Perform.........................................27
EXHIBITS
EXHIBIT A LOCATION OF RECEIVABLES FILES
EXHIBIT B FORM OF MONTHLY SERVICING REPORT
EXHIBIT C FORM OF SERVICER'S XXXXXXXX-XXXXX CERTIFICATION
EXHIBIT D MINIMUM SERVICING CRITERIA ASSESSMENT
ATTACHMENT A MONTHLY DATA LAYOUT
ANNEX A Servicer Holiday List
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This SERVICING AGREEMENT (as from time to time amended, supplemented
or otherwise modified and in effect, this "Agreement"), is made as of May 31,
2007 among CENTERONE FINANCIAL SERVICES LLC, a Delaware limited liability
company, as servicer (the "Servicer"), and as custodian (in such capacity, the
"Custodian"), U.S. BANK NATIONAL ASSOCIATION, a national banking association, as
master servicer (in such capacity, the "Master Servicer") and XXXXXXX XXXXX BANK
USA, a Utah industrial loan bank, as administrator (the "Administrator").
RECITALS:
1. The Servicer is acting as servicer for certain receivables on behalf
of Xxxxxxx Xxxxx Bank USA, pursuant to an existing servicing
agreement.
2. The Purchaser is transferring certain of such receivables to ML Asset
Backed Corporation. Pursuant to a securitization transaction, ML Asset
Backed Corporation, as Depositor, will re-transfer such receivables to
Merrill Auto Trust Securitization 2007-1 which will in turn issue
securities backed by the receivables.
3. The Servicer is willing to service and maintain custody of such
receivables on behalf of the Master Servicer in accordance with the
terms set forth below, and Xxxxxxx Xxxxx Bank USA, as Administrator,
is willing to perform certain administrative duties for the Master
Servicer.
In consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
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Section 1.01. Construction and Usage. The following rules of
construction and usage will be applicable to this Agreement.
(a) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined herein or in any such
certificate or other document, and accounting terms partly defined herein, or in
any such, certificate or other document, to the extent not defined herein have
the respective meanings given to them under generally accepted accounting
principles as in effect in the United States on the date of such agreement or
instrument. To the extent that the definitions of accounting terms herein or in
any such certificate or other document are inconsistent with the meanings of
such terms under such generally accepted accounting principles, the definitions
contained herein or in any such certificate or other document control.
(b) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement refer to this Agreement as a whole and not to
any particular provision or subdivision of this Agreement. References in this
Agreement to "Article," "Section" or another subdivision or to an attachment
are, unless the context otherwise requires,
to an article, section or subdivision of or an attachment to this Agreement. The
term "including" means "including without limitation."
(c) The definitions contained herein are equally applicable to both
the singular and plural forms of such terms and to the masculine as well as to
the feminine and neuter genders of such terms.
(d) Any agreement, instrument or statute defined or referred to in
this Agreement means such agreement or instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and
assigns.
Section 1.02. Definitions. The following words and phrases, unless the
context otherwise requires, will have the following meanings:
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" will have
meanings correlative to the foregoing.
"Amount Financed" means, with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of interest stated in the Receivable.
"Base Servicing Fee" means, with respect to a Collection Period, the
fee payable to the Servicer for services rendered during such Collection Period,
which will be equal to one-twelfth of the Servicing Fee Rate multiplied by the
aggregate Principal Balance of all Receivables as of the first day of the
Collection Period.
"Business Day" means any day other than (i) a Saturday, a Sunday or a
day on which banking institutions or trust companies in New York, New York or
the State of Minnesota are authorized or obligated by law, regulation or
executive order to remain closed and (ii) a holiday for CenterOne Financial
Services LLC as listed on Annex A (as the same may be updated by the Servicer
from time to time).
"Change of Control" means, with respect to any Person, the acquisition
by any other Person or two or more Persons acting in concert, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of 20% or more
of the outstanding voting stock of such Person.
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"Closing Date" means June 11, 2007, or such date as the parties hereto
may otherwise agree.
"Collection Account" has the meaning set forth in Section 4.01.
"Collection Period" means each calendar month during the term of this
Agreement or, in the case of the initial Collection Period, the period from and
excluding the Cutoff Date to and including the last day of June, 2007. Any
amount stated "as of the close of business of the last day of a Collection
Period" gives effect to all applications of Collections and all remittances or
distributions as of the end of the day on such last day.
"Collections" means all amounts collected by the Servicer (from
whatever source) on or with respect to the Receivables.
"Custodian" has the meaning specified in Section 2.01 hereunder.
"Cutoff Date" means the close of business on May 31, 2007.
"Damages" means any and all liabilities, losses, costs, claims,
damages, penalties and expenses, including fees and expenses of counsel and
costs of investigation, enforcement or litigation.
"Dealer Recourse" means, with respect to a Receivable, all recourse
rights relating to misrepresentation or fraud against the Dealer that originated
the Receivable and any successor Dealer.
"Deficiency Recover Servicing Fee" means the fee payable to the
Servicer determined pursuant to and defined in Section 3.08(d).
"Depositor" means ML Asset Backed Corporation, a Delaware corporation,
and its successors and assigns.
"Distribution Date" means the 15th day of each calendar month or, if
such day is not a Business Day, the next succeeding Business Day, beginning in
July 2007.
"Event of Servicing Termination" means an event specified in Section
6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Financed Vehicle" means a new or used automobile, light duty truck or
sport utility vehicle, together with all accessions thereto, securing an
Obligor's indebtedness under the respective Receivable.
"MLBUSA" means Xxxxxxx Xxxxx Bank USA, a Utah industrial bank, and its
successors and assigns.
"Monthly Data File" has the meaning set forth in Section 4.03.
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"Monthly Servicing Report" has the meaning set forth in Section 4.03.
"Obligor" means, with respect to any Receivable, any Person who owes
payments under or with respect to the Receivable (not including any Dealer in
respect of Dealer Recourse).
"Officer's Certificate" means a certificate signed by the chairman of
the board, the president, any executive vice president, any senior vice
president, any vice president, any assistant vice president, the treasurer, any
assistant treasurer, any secretary, any assistant secretary, or the controller
of the Master Servicer, the Seller, the Servicer or the Administrator.
"Opinion of Counsel" means a written opinion of counsel, which counsel
may be internal or external counsel to the Seller, the Servicer, the
Administrator or the Custodian.
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Principal Balance" of a Receivable, as of the close of business on
the Cutoff Date or the last day of a Collection Period or as of any other
specified day, as applicable, means the Amount Financed minus, without
duplication, the sum of:
(i) that portion of all Scheduled Payments actually received on or
prior to such date allocable to principal using the Simple Interest Method;
(ii) any refunded portion of extended warranty protection plan costs,
or of physical damage, credit life, or disability insurance premiums
included in the Amount Financed and allocable to principal; and
(iii) any prepayment in full or any partial prepayments applied to
reduce the principal balance of the Receivable.
"Purchased Property" means the assets sold to the Trust under the Sale
and Servicing Agreement.
"Receivable" means each receivable identified on Schedule A to the
Sale and Servicing Agreement as of the Closing Date. The term "Receivable" does
not include any Repurchased Receivable from and after the date of repurchase.
"Receivable Files" means the documents specified in Section 2.01.
"Regulation AB" means Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518. 70 Fed. Reg. 1,506, 1,531 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
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"Reporting Date" means the 10th day of each calendar month or, if such
day is not a Business Day, the next succeeding Business Day.
"Reporting Subcontractor" shall mean with respect to the Servicer, any
Subcontractor for the Servicer that is "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB that is required to file
separate assessment and attestation reports pursuant to Item 1122 of Regulation
AB.
"Repurchased Receivable" means any Receivable repurchased from the
Trust.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of May 31, 2007, among the Trust, the Master Servicer and the
Depositor, as the same may be amended from time to time.
"Sarbanes Certification" has the meaning as set forth in Section 3.12.
"Scheduled Payment" means, for any Collection Period, the amount shown
on such Receivable as required to be paid by the Obligor of such Receivable in
such Collection Period, net of any portion of such payment that represents any
charges to the Obligor not included within the payment shown on such Receivable.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securitization" means the transaction that involves the transfer of
the Receivables to the Depositor and then the Trust, and the issuance by the
Trust of securities supported by the cash flow generated by the Receivables.
"Seller" means MLBUSA and its successors and assigns as Seller under
the Receivables Purchase Agreement.
"Servicing Criteria" means the "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
"Servicing Fee" means the Base Servicing Fee, the Supplemental
Servicing Fee and the Deficiency Recovery Servicing Fee.
"Servicing Fee Rate" means 0.80% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made and the remainder
of such payment is allocable to principal.
"Subcontractor" shall mean any vendor, subcontractor or other Person
that is not responsible for servicing (as "servicing" is commonly understood by
participants in the asset-backed securities market) of Receivables but performs
one or more discrete functions identified
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in Item 1122(d) of Regulation AB with respect to the Receivables under the
direction or authority of the Servicer or a Subservicer that would be required
to file reports pursuant to Section 1122(d) of Regulation AB.
"Subservicer" means any Person that services Receivables on behalf of
the Servicer or any Subservicer of the Servicer; provided that the term
"Subservicer" expressly excludes any Subcontractor.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of each class
or other interest having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
"Supplemental Servicing Fee" means the fee payable to the Servicer
determined pursuant to and defined in Section 3.08(c).
"Termination Date" means the date on which this Agreement terminates
pursuant to Section 8.09.
"Trust" means Merrill Auto Trust Securitization 2007-1, a Delaware
statutory trust, and its successors and assigns.
"World Omni" means World Omni Financial Corp. and its successors.
Defined terms used herein and not otherwise defined will have the
meanings ascribed thereto in the Sale and Servicing Agreement as it exists on
the date hereof, together with such amendments as shall be consented to by the
Servicer.
ARTICLE II
CUSTODIAN
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Section 2.01. Custody of Receivable Files. The Master Servicer, upon
the execution and delivery of this Agreement, hereby revocably appoints the
Servicer as custodian (in such capacity, the "Custodian"), and the Servicer
hereby accepts such appointment, to act as the agent of the Master Servicer as
custodian of the following documents or instruments, if and to the extent
delivered to the Servicer, which are hereby constructively delivered to the
Master Servicer (collectively, the "Receivable Files") with respect to each
Receivable:
(a) The original loan or installment sale agreement representing the
Receivable and any written agreement modifying such Receivable that has been
delivered to the Custodian.
(b) The original credit application fully executed by the Obligor or a
photocopy thereof or a record thereof on a computer file or diskette or on
microfiche.
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(c) The original certificate of title or, if not yet received, a copy
of the application thereof showing the Seller or Mitsubishi Motors Credit of
America, Inc. (or a derivation thereof) as secured party and such documents that
the Servicer keeps on file, in accordance with its customary standards, policies
and procedures, evidencing the security interest in the related Financed
Vehicle.
(d) Any and all other documents (including any computer file or
diskette or microfiche and any customer correspondence or notations of customer
communications) that the Servicer keeps on file, in accordance with its
customary procedures, relating to a Receivable, an Obligor, or a Financed
Vehicle.
The Servicer, in its capacity as the Custodian, hereby confirms that
it has received on behalf of the Master Servicer the Receivable Files for all
the Receivables and all other documents and instruments that it deems necessary
to carry out its duties hereunder.
Section 2.02. Duties of Custodian.
(a) Safekeeping. The Custodian will hold the Receivable Files for the
benefit of the Master Servicer and maintain such accurate and complete accounts,
records, and computer systems pertaining to each Receivable File as will enable
the Servicer to comply with the terms and conditions of this Agreement. The
Custodian will xxxx its electronic records to clearly indicate the Trust's
ownership interest in the Receivables. In performing its duties, the Custodian
will act with reasonable care, using that degree of skill and attention that the
Custodian exercises with respect to the receivable files relating to all
comparable automotive receivables that the Custodian services for itself and
others and consistent with such reasonable care, the Custodian may utilize the
services of third parties to act as custodian of physical Receivables Files, on
the same terms and conditions specified in Section 3.16. In accordance with its
customary standards, policies and procedures with respect to its retail
installment sale contracts, the Custodian will conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records, and computer systems, in such a
manner as will enable the Master Servicer to verify the accuracy of the
Custodian's record keeping. The Custodian will promptly report to the Master
Servicer any failure on its part, in any material respect, to hold the
Receivable Files and maintain its accounts, records, and computer systems as
herein provided and promptly take appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Custodian will maintain
each Receivable File at one of its offices in the United States or at a location
specified in Exhibit A to this Agreement as such exhibit may be revised from
time to time by the Servicer upon 30 days prior written notice to the Master
Servicer. The Custodian will make available to the Master Servicer a list of
locations of the Receivable Files upon request. The Custodian will provide the
Master Servicer access to the Receivable Files, and the related accounts,
records, and computer systems maintained by the Custodian, together with the
right to inspect and copy the same, but only upon reasonable notice and during
the normal business hours at the respective offices of the Custodian. Any such
access will be at the expense of the Master Servicer. Upon written request from
the Master Servicer, the Custodian will release any document in the Receivables
Files to the Master Servicer or its designee; provided, that (i) such release of
documents will not cause
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undue disruption of the Custodian's or the Servicer's ordinary business
operations and (ii) the Master Servicer will reimburse the Custodian for any
reasonable costs and expenses incurred in effecting such release unless an Event
of Servicing Termination has occurred. Any document so released will be handled
by the Master Servicer or its designee with due care and returned to the
Custodian as soon as the Master Servicer no longer has a need for such document.
Upon the release and delivery of any such document in accordance with the
instructions of the Master Servicer, the Custodian and Servicer shall be
released from any further liability and responsibility with respect to such
documents and any other provision of this Agreement if the fulfillment of its
responsibilities is dependent upon possession of such documents, unless and
until such time as such documents shall be returned to the Custodian. In no
event shall the Custodian be responsible for any loss occasioned by the Master
Servicer's failure to return any Receivable File or any portion thereof in a
timely manner. At all times, the Master Servicer will adhere to all federal and
state statutory and regulatory provisions applying to consumer privacy,
including those governing the treatment and disclosure of account numbers and
other confidential financial information.
Section 2.03. Instructions; Authority to Act. All instructions from
the Master Servicer must be in writing and signed by an authorized officer of
the Master Servicer, and the Custodian will be deemed to have received proper
instructions with respect to the Receivable Files upon its receipt of written
instructions believed by it in good faith to have been signed by an authorized
officer of the Master Servicer.
Section 2.04. Custodian's Indemnification. The Custodian will
indemnify the Master Servicer and each Person who controls the Master Servicer
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, for any and all Damages that may be imposed on, incurred, or
asserted against the Master Servicer or any Person who controls the Master
Servicer, as a result of the occurrence of any of the events described in
Section 7.02 and on the terms set forth in Section 7.02.
Section 2.05. Effective Period and Termination.
(a) The Servicer's appointment as Custodian will become effective as
of the Closing Date and will continue in full force and effect until terminated
pursuant to this Section 2.05.
(b) The Servicer may not resign as Custodian hereunder except in
connection with its resignation as Servicer under Section 5.06 or its
termination as Servicer under Section 5.05 unless its continued performance of
its obligation as Custodian under this Agreement is no longer permitted by
applicable law, as evidenced by an Opinion of Counsel.
(c) As soon as practicable after any termination or resignation under
this Section 2.05, the terminated Custodian will deliver to the Master Servicer
as successor Custodian, or as otherwise directed by the Master Servicer, the
Receivable Files and the related accounts and records maintained by the
terminated Custodian at such place or places as the Master Servicer may
reasonably designate. The Administrator will reimburse the Custodian for its
respective reasonable costs and expenses incurred in connection with the
transfer of Receivable Files and related accounts and records, provided, that
the Administrator will not
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reimburse the Servicer for such costs and expenses incurred after the occurrence
of a Servicer Termination Date.
ARTICLE III
ADMINISTRATION AND SERVICING
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OF RECEIVABLES AND PURCHASED PROPERTY
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Section 3.01. Appointment of Servicer; Duties of Servicer.
(a) CenterOne Financial Services LLC is hereby designated by the
Master Servicer as Servicer hereunder and until CenterOne Financial Services LLC
resigns or is terminated as Servicer hereunder, CenterOne Financial Services LLC
agrees to perform the duties and obligations of the Servicer pursuant and
subject to the terms hereof.
(b) The Servicer will manage, service, administer, and make
collections on the Receivables with reasonable care, using that degree of skill
and attention that the Servicer exercises with respect to all comparable
automobile receivables that it services for itself and that World Omni services
for itself and others. The Servicer's duties will include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons or invoices to Obligors,
reporting tax information to Obligors, accounting for collections and furnishing
monthly and annual statements to the Master Servicer with respect to
distributions and monthly data tapes containing the information included in
Attachment A. The Servicer will follow its customary standards, policies and
procedures, and comply in all material respects with all requirements of
applicable federal, state, and local laws, and regulations thereunder, in
performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered to execute and
deliver, on behalf of itself, the Trust, or the Master Servicer, any and all
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables. All
Receivables will be assigned to the Servicer for servicing purposes as of the
date of this Agreement. If the Servicer commences a legal proceeding to enforce
a Receivable, the Trust (in the case of a Receivable other than a Repurchased
Receivable) will, if necessary to effect the purpose of this Agreement,
thereupon be deemed to have automatically assigned such Receivable to the
Servicer, solely for the purpose of collection. If in any enforcement suit or
legal proceeding it is held that the Servicer may not enforce a Receivable on
the ground that it is not a real party in interest or a holder entitled to
enforce the Receivable, the Master Servicer will at its option and at the
Servicer's direction, cause the Trust to take steps to enforce the Receivable,
including bringing suit in the Trust's name, provided, however, that the
Servicer will not be responsible or obligated to reimburse the Master Servicer
or the Trust for any losses on the Receivables that may occur as a result of
Master Servicer's decision not to bring such action. Further, if in any
enforcement suit or legal action, any counterclaim or affirmative defense is
asserted against the Purchaser, the Trust, the Master Servicer or any other
Person other than the Servicer, upon notice to such parties, the Servicer shall
have no obligation to continue to pursue such suit or legal action, and the
Master Servicer shall assume responsibility for directing such suit or legal
action. The Master Servicer will furnish the Servicer with any powers of
attorney
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(including a power of attorney from the Trust) and other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
Section 3.02. Collection of Receivable Payments. The Servicer will
make reasonable efforts, consistent with its customary standards, policies and
procedures, to collect all payments called for under the terms and provisions of
the Receivables as and when the same become due and will follow such collection
procedures as it follows with respect to all comparable receivables that it
services for itself and others. Subject to Sections 3.06(c), (d) and (e), the
Servicer may grant extensions (but not more than two one-month extensions in any
12-month period and not more than six one-month extensions for any Receivable
and no extension may be granted beyond December 16, 2013), rebates, or
adjustments on a Receivable as the Servicer may determine to be appropriate to
maximize Collections thereof. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Receivable.
Section 3.03. Realization Upon Receivables. The Servicer will use
reasonable efforts, consistent with its customary standards, policies and
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer determines eventual
payment in full is unlikely. The Servicer will follow such customary standards,
policies and procedures as it deems necessary or advisable in its servicing of
comparable receivables, which may include selling the Financed Vehicle at public
or private sale. The foregoing will be subject to the provision that, in any
case in which the Financed Vehicle has suffered damage, the Servicer will not be
required to expend funds in connection with the repair or the repossession of
such Financed Vehicle unless it determines in its sole reasonable discretion
that such repair and/or repossession will increase the amount recoverable in
respect of such vehicle by an amount materially greater than the amount of such
expenses.
Section 3.04. Allocations of Collections. If an Obligor is obligated
under one or more Receivables, then any payment on any such asset received from
or on behalf of such Obligor will, if identified as being made with respect to a
particular item or asset, be applied to such item, and otherwise will be
allocated by the Servicer in accordance with its customary policies.
Section 3.05. Maintenance of Security Interests in Financed Vehicles.
The Servicer will, in accordance with its customary standards, policies and
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Master Servicer hereby authorizes the Servicer to take such steps as are
necessary to re-perfect such security interest on behalf of the Master Servicer
and the Trust in the event of the relocation of a Financed Vehicle or for any
other reason.
Section 3.06. Covenants of Servicer. The Servicer will not:
(a) release the Financed Vehicle securing any Receivable from the
security interest granted by such Receivable in whole or in part except in the
event of payment in full by or on behalf of the Obligor thereunder, satisfaction
of the payment obligation evidenced by such Receivable, repossession, discounted
settlement, substitution of collateral, abandonment or by
10
operation of law, in each case in accordance with the Servicer's customary
standards, policies and procedures;
(b) take any actions or fail to take any actions in connection with
its obligations under this Agreement which, in its reasonable judgment, will
impair the rights of the Master Servicer of the Trust in the Receivables;
(c) change the Annual Percentage Rate on any Receivable (except for
reductions required by the Servicemembers' Civil Relief Act or other applicable
law);
(d) modify the Amount Financed of any Receivable; or
(e) change the number of originally scheduled due dates under any
Receivable.
Section 3.07. [RESERVED].
Section 3.08. Servicing Fee and Servicing Fee Rate.
(a) To compensate the Servicer for services rendered under this
Agreement, the Administrator on behalf of the Master Servicer will pay the
Servicer the Servicing Fee from the Cutoff Date until the earliest to occur of:
(i) resignation of the Servicer pursuant to Section 5.06;
(ii) termination of the Servicer pursuant to Section 5.05;
(iii) the Termination Date; and
(iv) the final payment or liquidation of all the Receivables.
(b) The Base Servicing Fee for any Collection Period will be paid to
the Servicer by the Administrator from amounts on deposit in the Collection
Account on or prior to the related Distribution Date.
(c) For each Collection Period, amounts on deposit in the Collection
Account representing, any late fees, prepayment charges, extension fees and
other administrative fees and expenses or similar charges allowed by applicable
law and received by the Servicer with respect to Receivables, other than
deferral fees, during each Collection Period (such amounts, the "Supplemental
Servicing Fee"), will be withdrawn by the Administrator from the Collection
Account on or prior to the related Distribution Date. As additional compensation
for its services rendered under this Agreement, the Servicer will be entitled to
receive, and the Administrator will, on or prior to the related Distribution
Date, pay to the Servicer, on behalf of the Master Servicer, 50% of the
Supplemental Servicing Fee for each Collection Period, and the Administrator
will retain the remainder thereof as additional compensation to it. The Servicer
will be entitled to retain as additional compensation to it, any and all
interest earned on amounts held by the Servicer on behalf of the Master Servicer
during each Collection Period.
11
(d) The Servicer shall also be entitled to a fee with respect to all
collections of deficiency balances on Receivables equal to 35% of the gross
amount of each deficiency collection, or if any deficiency balance is collected
through the use of a collection agent, the Servicer shall be entitled to a fee
equal to no more than 5% of the gross amount collected by such collection agent
in respect thereof.
Section 3.09. Servicer Expenses. On behalf of the Master Servicer, the
Administrator will reimburse the Servicer for the reasonable expenses and
disbursements incurred by the Servicer in carrying out its obligations as
Servicer hereunder or in connection with this Agreement other than (i) Servicer
expenses in connection with the liquidation of defaulted Receivables through the
repossession of the Financed Vehicle or otherwise and other Obligor collectible
expenses that are reimbursed to the Servicer out of collections and (ii) postage
and other delivery charges in connection with the distribution of monthly
statements to obligors. The Administrator will reimburse the Servicer for all
such expenses and disbursements from its own funds and will do so for any
Collection Period on the related Distribution Date upon the Administrator's
receipt, at least two Business Days' before such Distribution Date, of the
Servicer's electronic invoice therefor; provided, however, that if the
Administrator does not receive the Servicer's electronic invoice at least two
Business Days before such Distribution Date, the Administrator shall not be
required to make such payments until two Business Days after receipt of the
Servicer's electronic invoice therefor.
Section 3.10. Annual Statement as to Compliance; Notice of Event of
Servicing Termination; Item 1122 Servicing Criteria Assessment.
(a) The Servicer will deliver to the Master Servicer and the Depositor
on or before March 15 of each year beginning March 15, 2008, an Officer's
Certificate stating that:
(i) a review of the activities of the Servicer during the preceding
12-month period or shorter period in the case of the first such certificate
and of its performance under this Agreement has been made under such
officer's supervision; and
(ii) to the best of such officer's knowledge, based on such review,
the Servicer has fulfilled all its obligations in all material respects
under this Agreement throughout such year, or, if there has been a failure
to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof.
(b) The Servicer will deliver to the Master Servicer and the Issuer
promptly after having obtained knowledge thereof, notice of the occurrence of
any Event of Servicing Termination.
(c) The Servicer will deliver to the Master Servicer and the
Depositor, on or before March 15 of each year, beginning March 15, 2008, a
report regarding its assessment of compliance with the applicable Servicing
Criteria during the immediately preceding calendar year, including disclosure of
any material instances of non-compliance, in accordance with paragraph (b) of
Rule 13a-18 and Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
Such report shall be signed by an authorized officer of the Servicer and shall
at a minimum
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address each of the Servicing Criteria specified on a certification
substantially in the form of Exhibit D hereto. To the extent any of the
Servicing Criteria are not applicable to the Servicer, with respect to
asset-backed securities transactions taken as a whole involving the Servicer and
that are backed by the same asset type and platform as the Receivables, such
report shall include such a statement to that effect. The Depositor and the
Master Servicer, and each of their respective officers and directors shall be
entitled to rely on upon each such servicing criteria assessment. In the event
that the Trust is not required to file an annual report on Form 10-K for the
applicable year, such report may be delivered on or before the following April
1.
Section 3.11. Annual Independent Certified Public Accountant's Report.
The Servicer shall cause a firm of independent certified public accountants, who
may also render other services to the Servicer, the Seller or the Depositor, to
deliver to the Master Servicer and Depositor, concurrently with the report
delivered pursuant to Section 3.10(c), a report, dated as of December 31 of the
preceding year, addressed to the board of directors of the Servicer, providing
its assessment of compliance with the applicable Servicing Criteria during the
preceding fiscal year, including disclosure of any material instance of
non-compliance, in accordance with Rule 13a-18 or Rule 15d-18 under the Exchange
Act and Item 1122(b) of Regulation AB. Such attestation shall also be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act, including, without limitation that in the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion.
Section 3.12. Xxxxxxxx-Xxxxx Act of 2002. No later than March 15 of
each year in which the Trust is required to file an Annual Report on Form 10-K,
beginning in 2008, the Servicer shall provide to the Master Servicer a
certification covering the preceding calendar year (or the period from the
Cut-off Date to December 31, 2007, in the case of the first such certification)
(each, a "Sarbanes Certification"), in the form attached hereto as Exhibit C on
which the Master Servicer, and its officers and directors can reasonably rely.
Notwithstanding the foregoing, no Sarbanes Certification shall be required to be
delivered by the Servicer if the Trust is not subject to the reporting
requirements under the Exchange Act with respect to the period to be covered by
such Sarbanes Certification.
Section 3.13. Audit of Servicer's Records. The Servicer will, upon
receipt by the Servicer of 10 days' prior notice and at the Master Servicer's
expense, permit the Master Servicer and its agents a total of two times per year
at any time during normal business hours to inspect, audit, and make copies of
and abstracts from the Servicer's records regarding any Receivable; provided,
however, that no such inspection or audit will cause undue disruption of the
Servicer's ordinary business functions. Such audits will include: (i) a review
of the Servicer's policy and procedure manual as it relates to collection,
bankruptcy, repossession and charge-off policy and procedure, (ii) an account
review of the Receivables with respect to each of the following: (A) collection
files (including collection notes and payment histories), (B) loan files with
respect to which the Financed Vehicle is being repossessed and (C) loan files
with respect to which the related Obligor has become a debtor in a bankruptcy
proceeding, (iii) side-by-side reviews with customer service representatives on
live customer service calls relating to retail installment sale contracts and
(iv) cooperation with reasonable requests made by the Master Servicer in
connection with its attempt to conduct any due diligence that the Master
Servicer reasonably believes to be appropriate in order to allow it to deliver
any Xxxxxxxx-Xxxxx
13
Certification with respect to the Trust. If an Event of Servicing Termination
shall have occurred, the Master Servicer will not be limited to the specified
number of audits or the number of days of notice, and such audits will be at the
expense of the Servicer.
Section 3.14. Legal Proceedings. In order to permit the Trust to
comply with Item 1117 of Regulation AB, promptly after the Servicer obtains
knowledge thereof, the Servicer shall furnish to the Master Servicer notice and
a description of any legal proceedings relating to the Servicer or such
proceedings known to the Servicer to be contemplated by any governmental
authority which, in either case, could reasonably be expected to have a material
adverse effect on the Receivables or on the Servicer's ability to act as
Servicer hereunder with respect to the Receivables.
Section 3.15. Additional Regulation AB Provisions.
(a) The Servicer acknowledges and agrees that the purpose of this
Section 3.15 is to facilitate compliance by the Master Servicer, on behalf of
the Depositor, with the provisions of Regulation AB and related rules and
regulations of the Commission. The Master Servicer and the Depositor shall only
exercise its right to request delivery of information or other performance under
these provisions in good faith and for the sole purpose of complying with the
requirements of Regulation AB. The Servicer acknowledges that interpretations of
the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus among
participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agrees to cooperate in good faith at the Master Servicer's
expense with requests made by the Master Servicer and the Depositor in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. The Servicer shall cooperate in good
faith at the Master Servicer's expense with the Master Servicer and the
Depositor to deliver to the Master Servicer and the Depositor (including any of
its assignees or designees) any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of
the Master Servicer or the Depositor to permit the Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Servicer and the Receivables, or the servicing of the Receivables, reasonably
believed by the Depositor or the Master Servicer to be necessary in order to
effect such compliance, it being understood that confidential information shall
not be required to be disclosed.
(b) The Servicer shall cause any Subservicer used by the Servicer (or
by any Subservicer) to comply with the reporting and compliance provisions of
Sections 3.10, 3.11 and 3.12 of this Agreement to the same extent as if such
Subservicer were the Servicer, and to provide the information required with
respect to such Subservicer as is required to file all required reports with the
Commission. The Servicer shall be responsible for obtaining from each
Subservicer and delivering to the Master Servicer and the Depositor when
required to be delivered the compliance statement required to be delivered by
such Subservicer under Section 3.10(a), the assessment of compliance and
attestation required to be delivered by such Subservicer under Section 3.10(c)
and Section 3.11 and any Sarbanes Certification under Section 3.12.
14
(c) The Servicer shall cause any Reporting Subcontractor used by the
Servicer or any Subservicer to deliver to the Master Servicer and the Depositor
an assessment of compliance and accountants' attestation as and when provided in
Section 3.10(c) and Section 3.11 with respect to the Servicing Criteria that are
applicable to such Reporting Subcontractor.
(d) The Servicer shall promptly upon request provide to the Master
Servicer and the Depositor, a written description (in form and substance
reasonably satisfactory to the Master Servicer and the Depositor) of the role
and function of each Subservicer and Reporting Subcontractor utilized by the
Servicer or any Reporting Subservicer, specifying (i) the identity of each such
Subservicer or Reporting Subcontractor, (ii) which Reporting Subcontractors, if
any, are "participating in the servicing function" within the meaning of Item
1122 of Regulation AB, and (iii) which elements, if any, of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subservicer or Reporting Subcontractor.
Section 3.16. Limitation of Liability of the Servicer.
(a) The Servicer may accept and reasonably rely on all accounting and
servicing records and other documentation provided to the Servicer by or at the
direction of the Master Servicer or the Administrator, including documents
prepared or maintained by any other party to this Agreement, including documents
prepared or maintained by any originator, or previous servicer, or any party
providing services related to the Receivables.
(b) If any error, inaccuracy or omission (collectively, "error")
exists in any information provided to the Servicer and such errors cause or
materially contribute to the Servicer making or continuing any error
(collectively "continuing errors"), the Servicer shall have no liability for
such continuing errors; provided, however, that this provision shall not protect
the Servicer against any liability which would otherwise be imposed by reason of
willful misconduct, bad faith or gross negligence in discovering or correcting
any error or in the performance of its duties contemplated herein. In the event
the Servicer becomes aware of errors and/or continuing errors, which in the
opinion of the Servicer impairs its ability to perform its services hereunder,
the Servicer shall immediately notify the Master Servicer and Administrator of
such errors and/or continued errors; and further, the Servicer may, with the
consent of the Master Servicer and Administrator undertake data or records
reconstruction to correct such errors and/or continued errors and to prevent
future continued errors.
(c) Except as otherwise provided herein, neither the Servicer nor any
of its directors, officers, employees or agents shall be under any liability to
the Master Servicer, the Administrator or to any other Person for the taking of
any action or for refraining from the taking of any action in the performance of
its duties as Servicer; provided, however, that this Section shall not protect
the Servicer or any director, officer, employee or agent thereof against any
liability resulting from its failure to perform in accordance with the terms of
this Agreement in all material respects or that would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties (except for errors in judgment). The Servicer and any director,
officer or employee or agent thereof may rely in good faith on any advice of
counsel or opinion of counsel or on any officer's certificate or certificate of
auditors or accountants or any document reasonably believed to be genuine and to
have been signed by the proper party in respect of any matters arising under
this Agreement.
15
(d) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that (i)
shall not be incidental to its duties to service the Receivables in accordance
with the Agreement, (ii) in its opinion may involve it in any expense or
liability for which reimbursement is not available to the Servicer under this
Agreement or (iii) involve the assertion of an affirmative defense or
counterclaim against the Purchaser, the Trust, the Master Servicer or any other
Person other than the Servicer; provided, however, that the Servicer may
undertake any reasonable action that it may, in good faith, deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
to this Agreement. Notwithstanding the foregoing, the Servicer shall appear in,
prosecute or defend any legal action with respect to any licenses or approvals
required to conduct its business as contemplated by this Agreement. In no event
shall the Servicer be liable for the acts or omissions of any predecessor
servicer.
(e) The Servicer shall have no responsibility and shall not be in
default hereunder or incur any liability for any failure, error, malfunction or
any delay in carrying out any of its duties under this Agreement if such failure
or delay in carrying out any of its duties under this Agreement results from the
Servicer acting in accordance with information prepared or supplied by any party
to this Agreement other than Servicer or the failure of any party to this
Agreement (other than the Servicer) to prepare or provide such information.
Subject in each case to Section 3.15 and Section 3.17, the Servicer shall have
no responsibility, shall not be in default and shall incur no liability for (i)
any act or failure to act of any third party, (ii) any inaccuracy or omission in
a notice or communication received by the Servicer from any third party, (iii)
the invalidity or unenforceability of any Receivable under applicable law, (iv)
the breach or inaccuracy of any representation or warranty made with respect to
any Receivable or (v) the acts or omissions of any successor servicer.
Section 3.17. Delegation of Servicing Duties. The Servicer may
delegate any of its duties and obligations hereunder to any Subservicer or
Subcontractor; provided, that in each delegation: (i) the Servicer shall remain
primarily liable for the performance of its duties and obligations so delegated
and such delegation shall not release the Servicer in any respect from its
responsibility hereunder for such performance, (ii) the Master Servicer shall
look solely to the Servicer for performance, (iii) the Servicer shall be solely
responsible for the fees (but not the reasonable expenses of the Subservicer or
Subcontractor which shall be deemed to be reimbursable expenses of the Servicer)
of any such Subservicer or Subcontractor and (iv) the Servicer shall comply with
the provisions of Section 3.15 with respect to each Subservicer or
Subcontractor.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS
-------------------------
Section 4.01. Establishment of Collection Account by the
Administrator. On behalf of the Master Servicer, the Administrator will, prior
to the Closing Date, establish and maintain an account (the "Collection
Account") at a bank in the United States of America. The Administrator hereby
certifies that the Collection Account has been established as account number
62030 at Xxxxxxx Xxxxx Bank USA, ABA #124 084 669. The Servicer will deposit
into the Collection Account all remittances to the Master Servicer, as required
by Section 4.02, by
16
wire transfer in immediately available funds. All monies on deposit in the
Collection Account will be property of the Master Servicer.
Section 4.02. Distributions; Remittance Conditions.
Subject to the next succeeding paragraph and Section 4.04 hereof, the
Servicer will be required to remit to the Collection Account within 2 Business
Days of the receipt thereof, all Collections and Repurchase Amounts processed in
accordance with the Servicer's ordinary policies and procedures (excluding
payments received by the Servicer from Obligors of Repurchased Receivables).
If the Monthly Servicing Report for any Reporting Date indicates that
the Servicer's aggregate daily remittances to the Collection Account exceed the
amount required to be so deposited for the related Collection Period, net of any
offsets, the Servicer will make subsequent remittances to the Collection Account
net of such excess. If the Monthly Servicing Report indicates that the amounts
required to be so deposited for the related Collection Period exceed the
aggregate of the Servicer's daily remittances to the Collection Account in
respect thereof net of any offsets, the Servicer will deposit on or before the
related Distribution Date an amount equal to such excess in the Collection
Account.
Section 4.03. Statements to Master Servicer. On or before each
Reporting Date, commencing on the Reporting Date in July 2007 the Servicer will
deliver to the Master Servicer with respect to all of the Receivables on an
aggregate basis a monthly report substantially in the form attached hereto as
Exhibit B (each, a "Monthly Servicing Report") and a monthly data file (setting
forth account-level data identified by account number) in a form similar to
Attachment A hereto, with such changes to the information provided in Attachment
A hereto as will be mutually agreed to by the Servicer, the Administrator and
the Master Servicer (the "Monthly Data File"). The Master Servicer shall use the
information in the Monthly Data File to prepare investor reports for the
Securitization.
Section 4.04. Netting. The Servicer will make the remittances required
under Section 4.02 net of (x) Servicer expenses that are Obligor collectable
amounts for which the Servicer has not otherwise been reimbursed and (y) amounts
equal to payments previously deposited or credited to the Collection Account and
returned unpaid or otherwise uncollected or subject to adjustment entry, whether
for insufficient funds or for other reasons; such amounts will be listed
separately on the Monthly Servicing Report as if such amounts were distributed
to the Servicer directly.
ARTICLE V
MATTERS RELATING TO SERVICER,
-----------------------------
CUSTODIAN, ADMINISTRATOR AND MASTER SERVICER
--------------------------------------------
Section 5.01. Representations. The Servicer makes the following
representations as to itself to the Master Servicer:
(a) Organization; Good Standing; Due Qualification. The Servicer has
been duly formed and is validly existing as a limited liability company in good
standing under the
17
laws of the state of its formation, and is duly qualified to transact business
as such business is presently transacted and is in good standing in each
jurisdiction in the United States of America in which the conduct of its
business or the ownership of its property requires such qualification (including
any qualification to do business as a foreign company), and will have obtained
and will maintain all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its business requires
(including the servicing of the Receivables as required by this Agreement).
(b) Power and Authority; Due Authorization; Enforceability. The
Servicer has full power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has power, authority and legal
right to service the Receivables and to hold the Receivable Files, as
applicable, as custodian on behalf of the Master Servicer as contemplated under
this Agreement. The Servicer has power and authority to execute and deliver this
Agreement and to carry out its terms and this Agreement has been duly
authorized, executed and delivered by the Servicer and will constitute the
legal, valid and binding obligation of the Servicer, enforceable against the
Servicer in accordance with its terms, except as such enforceability may be
limited by applicable insolvency, bankruptcy, reorganization, conservatorship,
receivership, liquidation and other similar laws and general equitable
principles.
(c) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not conflict with or
result in any breach of any of the terms and provisions of, nor constitute a
default under (in each case material to the Servicer and its subsidiaries
considered as a whole), or result in the creation or imposition of any lien,
charge or encumbrance (in each case material to the Servicer and its
subsidiaries considered as a whole) upon any of the property or assets of the
Servicer pursuant to the terms of, any indenture, mortgage, deed of trust, loan
agreement, guarantee, lease financing agreement or similar agreement or
instrument under which the Servicer is a debtor or guarantor (other than this
Agreement); nor will such action result in any violation of the provisions of
the formation documents of the Servicer or any law, order, rule, or regulation
applicable to the Servicer or of any federal or State regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over the Servicer or its properties that would materially and adversely affect
the performance by the Servicer of its obligations under, or the validity and
enforceability of, this Agreement.
(d) No Proceedings. No legal or governmental proceedings are pending
to which the Servicer is a party or of that any property of the Servicer is the
subject, and to the Servicer's best knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others,
other than such proceedings that will not have a material adverse effect upon
the general affairs, financial position, net worth or results of operations (on
an annual basis) of the Servicer and its subsidiaries considered as a whole and
will not materially and adversely affect the performance by the Servicer of its
obligations under, or the validity and enforceability of, this Agreement.
(e) Due Qualification. The Servicer has obtained all the licenses and
approvals necessary for the conduct of the Servicer's business in the
jurisdictions where the
18
failure to do so would materially and adversely affect its servicing of the
Receivables or render any of the Receivables unenforceable.
(f) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the Servicer's knowledge, threatened against the
Servicer which, if determined adversely to the Servicer, would draw into
question the validity of this Agreement or the Receivables or of any action
taken or to be taken by it in connection with the obligations of the Servicer
contemplated herein, or which would be likely to impair materially the ability
of the Servicer to perform under the terms of this Agreement.
(g) Solvency. The Servicer is not insolvent (as defined in Title 11
U.S. Code ss. 101(32)).
It is understood and agreed that the representations and warranties
set forth in this Section 5.01 will survive the Closing Date and will inure to
the benefit of the other parties hereto and their respective successors and
assigns.
Section 5.02. Representations And Warranties Of the Master Servicer.
The Master Servicer makes the following representations and warranties to the
Servicer (including in its capacity as the Custodian):
(a) Organization; Good Standing; Due Qualification. The Master
Servicer has been duly organized and is validly existing under the laws of the
United States, and is duly qualified to perform its duties under this Agreement,
and is in good standing in each jurisdiction in the United States of America in
which the conduct of its business or the ownership of its property requires such
qualification.
(b) Power and Authority; Due Authorization; Enforceability. The Master
Servicer has full power and authority to execute and deliver this Agreement and
to carry out its terms and this Agreement has been duly authorized, executed and
delivered by the Master Servicer and constitutes the legal, valid and binding
obligation of the Master Servicer, enforceable against the Master Servicer in
accordance with its terms, except as such enforceability may be limited by
insolvency, bankruptcy, reorganization, conservatorship, receivership,
liquidation or other similar laws and to general equitable principles.
(c) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not conflict with or
result in any breach of any of the terms and provisions of, nor constitute a
default under (in each case material to the Master Servicer and its subsidiaries
considered as a whole), or result in the creation or imposition of any lien,
charge or encumbrance (in each case material to the Master Servicer and its
subsidiaries considered as a whole) upon any of the property or assets of the
Master Servicer pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, guarantee, lease financing agreement or similar agreement
or instrument under which the Master Servicer is a debtor or guarantor (other
than this Agreement); nor will such action result in any violation of the
provisions of the articles of incorporation or bylaws of the Master Servicer or
any law, order, rule, or regulation applicable to the Master Servicer or of any
federal or State regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Master
19
Servicer or its properties that would materially and adversely affect the
performance by the Master Servicer of its obligations under, or the validity and
enforceability of, this Agreement.
(d) No Proceedings. No legal or governmental proceedings are pending
to which the Master Servicer is a party or of that any property of the Master
Servicer is the subject, and to the Master Servicer's best knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others, other than such proceedings that will not have a material
adverse effect upon the performance by the Master Servicer of its obligations
under, or the validity and enforceability of, this Agreement.
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the Master Servicer's knowledge, threatened against
the Master Servicer which, if determined adversely to the Master Servicer, would
draw into question the validity of this Agreement or the Purchased Property or
of any action taken or to be taken by it in connection with the obligations of
the Master Servicer contemplated herein, or which would be likely to impair
materially the ability of the Master Servicer to perform under the terms of this
Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 5.02 will survive the Closing Date and will inure to the
benefit of the Servicer (including in its capacity as Custodian) and its
successors and assigns.
Section 5.03. Representations And Warranties Of The Administrator. The
Administrator makes the following representations and warranties to the Servicer
(including in its capacity as Custodian) and the Master Servicer:
(a) Organization; Good Standing; Due Qualification. The Administrator
has been duly organized and is validly existing as an industrial loan
corporation in good standing solely under the laws of the State of Utah, and is
duly qualified to perform its duties under this Agreement, and is in good
standing in each jurisdiction in the United States of America in which the
conduct of its business or the ownership of its property requires such
qualification.
(b) Power and Authority; Due Authorization; Enforceability. The
Administrator has full power and authority to execute and deliver this Agreement
and to carry out its terms and this Agreement has been duly authorized, executed
and delivered by the Administrator and constitutes the legal, valid and binding
obligation of the Administrator, enforceable against the Administrator in
accordance with its terms, except as such enforceability may be limited by
insolvency, bankruptcy, reorganization, conservatorship, receivership,
liquidation or other similar laws and to general equitable principles.
(c) Due Qualification. The Administrator has obtained all the licenses
and approvals required in connection with the Administrator's performance of its
obligations under this Agreement in all jurisdictions where the failure to do so
would materially and adversely affect the Servicer's ability to service the
Receivables or render any of the Receivables unenforceable.
(d) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not conflict with or
result in any breach of
20
any of the terms and provisions of, nor constitute a default under (in each case
material to the Administrator and its subsidiaries considered as a whole), or
result in the creation or imposition of any lien, charge or encumbrance (in each
case material to the Administrator and its subsidiaries considered as a whole)
upon any of the property or assets of the Administrator pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement, guarantee, lease
financing agreement or similar agreement or instrument under which the
Administrator is a debtor or guarantor (other than this Agreement); nor will
such action result in any violation of the provisions of the articles of
incorporation or bylaws of the Administrator or any law, order, rule, or
regulation applicable to the Administrator or of any federal or State regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Administrator or its properties that would materially and
adversely affect the performance by the Administrator of its obligations under,
or the validity and enforceability of, this Agreement.
(e) No Proceedings. No legal or governmental proceedings are pending
to which the Administrator is a party or of that any property of the
Administrator is the subject, and to the Administrator's best knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others, other than such proceedings that will not have a material
adverse effect upon the general affairs, financial position, net worth or
results of operations (on an annual basis) of the Administrator and its
subsidiaries considered as a whole and will not materially and adversely affect
the performance by the Administrator of its obligations under, or the validity
and enforceability of, this Agreement.
(f) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the Administrator's knowledge, threatened against
the Administrator which, if determined adversely to the Administrator, would
draw into question the validity of this Agreement or the Receivables or of any
action taken or to be taken by it in connection with the obligations of the
Administrator contemplated herein, or which would be likely to impair materially
the ability of the Administrator to perform under the terms of this Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 5.03 will survive the Closing Date and will inure to the
benefit of the Servicer (including in its capacity as Custodian) and its
successors and assigns.
Section 5.04. Merger or Consolidation of, or Assumption of the
Obligations of the Servicer.
(a) Subject to Section 5.04(b), a Person will be the successor to the
Servicer under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties to this Agreement, if:
(i) the Servicer merges or consolidates with the Person;
(ii) the Person results from any merger, conversion, or consolidation,
to which the Servicer will be a party; or
(iii) the Person succeeds to the business of the Servicer.
21
(b) The following conditions must be met upon the consummation of any
of the transactions listed under Section 5.04(a):
(i) the Person (A) has, or has its obligations unconditionally
guaranteed by a Person with, a net worth of not less than $50,000,000, (B)
is servicing a portfolio of motor vehicle retail installment sale contracts
and/or motor vehicle loans, (C) is legally qualified, and has the capacity,
to service the Receivables, and (D) has demonstrated the ability
professionally and competently to service a portfolio of motor vehicle
retail installment sale contracts and/or motor vehicle loans similar to
Receivables in accordance with standards of skill and care that are
consistent with prudent industry standards;
(ii) the Person executes an agreement of assumption to perform every
obligation of the Custodian and the Servicer under this Agreement; and
(iii) the Servicer will have delivered to the Master Servicer an
Officer's Certificate and an Opinion of Counsel each stating that such
merger, conversion, consolidation, or succession and such agreement of
assumption comply with this Section 5.04 and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with.
Section 5.05. Effective Period and Termination. The Servicer's
appointment as servicer will become effective as of the Closing Date and will
continue in full force and effect until terminated pursuant to this Section 5.05
or its resignation pursuant to Section 5.06(a) is effective. The Master Servicer
shall have the right to terminate all the rights and obligations of the Servicer
hereunder upon the occurrence of and Event of Servicing Termination in
accordance with Section 6.01 hereunder. As soon as practicable after any
termination under this Section 5.05, the Servicer will cooperate with the Master
Servicer in effecting the termination of servicing and transition to a new
servicer as provided in Section 6.02 hereof. Unless an Event of Servicing
Termination has occurred, the Master Servicer will reimburse the Servicer for
all of its reasonable costs and expenses incurred by the Servicer in connection
with the termination of the Servicer hereunder and replacement with a new
Servicer, upon receipt of reasonable documentation of such costs and expenses.
Section 5.06. CenterOne Not to Resign as Servicer.
(a) Subject to the provisions of Section 5.04, the Servicer will not
resign from the obligations and duties hereby imposed on it as Servicer under
this Agreement except:
(i) with the express written consent of the Master Servicer; or
(ii) upon determination that the performance of its duties under this
Agreement is no longer permissible under applicable law.
After any determination to resign under this Section 5.06(a), the Servicer will
cooperate with the Master Servicer in effecting the transition to a new Servicer
as provided in Section 6.02 hereof.
(b) Upon any determination under (a)(ii) of this Section 5.06, notice
of such determination will be communicated to the Master Servicer at the
earliest practicable time (and,
22
if such communication is not in writing, will be confirmed in writing at the
earliest practicable time) and such determination will be evidenced by an
Opinion of Counsel to such effect delivered to the Master Servicer concurrently
with or promptly after such notice.
ARTICLE VI
SERVICING TERMINATION
---------------------
Section 6.01. Event of Servicing Termination. The Master Servicer may
terminate all of the rights and obligation of the servicer under this Agreement
if any one or more of the following events ("Event of Servicing Termination")
shall occur and be continuing;
(a) (i) The Servicer shall fail to perform or observe any term,
covenant or agreement under this Agreement (other than as referred to in clauses
(ii) or (iii) next following) and such failure shall remain unremedied for 30
days after actual knowledge thereof by the Servicer or written notice thereof is
received by the Servicer, (ii) the Servicer shall fail to make when due any
payment or deposit to be made by it under this Agreement and such failure shall
remain unremedied for five Business Days after actual knowledge thereof by the
Servicer or written notice thereof is received by the Servicer or (iii) the
Servicer shall fail to deliver the Monthly Servicing Report pursuant to this
Agreement and such failure shall remain unremedied for five days after actual
knowledge thereof by the Servicer or written notice thereof is received by the
Servicer; or
(b) Any representation or warranty made or deemed made by the Servicer
(or any of its officers) under or in connection with this Agreement or any
written information or report delivered by the Servicer pursuant to this
Agreement shall prove to have been incorrect or untrue in any material respect
when made or deemed made or delivered and such failure shall remain unremedied
for 30 days after actual knowledge thereof by the Servicer or written notice
thereof is received by the Servicer; or
(c) The Servicer or World Omni Financial Corp. shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall have made a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Servicer
or World Omni Financial Corp. seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief; or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a received, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 60 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or for any substantial part of its property) shall occur; or the Servicer or
World Omni Financial Corp. shall take any corporate action to authorize any of
the actions set forth above in this Section 6.01(c); or
(d) A Change of Control shall occur with respect to the Servicer.
23
On and after receipt by the Servicer of written notice from the Master
Servicer during the continuance of an Event of Servicing Termination, all
authority and power of the Servicer under this Agreement will pass to and be
vested in the Master Servicer or Master Servicer's designee; provided that the
Servicer will remain obligated to perform its obligations hereunder until a
successor Servicer has accepted appointment as Servicer hereunder. The Master
Servicer is authorized to take any action appropriate to transfer the Servicer's
servicing duties hereunder to a successor servicer.
Section 6.02. Agreement to Cooperate Upon Termination or Resignation
of the Servicer. Upon termination under Section 5.05 or resignation under
Section 5.06, the Servicer will cooperate with the Master Servicer or its
designee in effecting the termination of the responsibilities and rights of the
Servicer under this Agreement, including, as soon as practicable, the transfer
to the Master Servicer or the Master Servicer's designee for administration of
all cash amounts that are at the time held by the Servicer for deposit or are
thereafter received with respect to a Receivable and the delivery of the
Receivable Files and the related accounts and records maintained by the
Servicer. In no event, however, will the Servicer be obligated to license its
proprietary servicing software or other applications to any successor servicer
or any other third party. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the Master Servicer or Master Servicer's designee pursuant to Sections 6.01
and 6.02 will be paid by the terminated Servicer. No such payment or
reimbursement shall be made by the party responsible for such payment unless
such party has received reasonable documentation of such costs and expenses.
Section 6.03. Waiver of Past Events of Servicing Termination. The
Master Servicer may waive any Event of Servicing Termination hereunder and its
consequences. Upon any such waiver of a past Event of Servicing Termination,
such Event of Servicing Termination will cease to exist, and will be deemed to
have been remedied for every purpose of this Agreement. No such waiver will
extend to any subsequent or other event or impair any right consequent thereon.
ARTICLE VII
INDEMNIFICATION
---------------
Section 7.01. Indemnification of the Servicer.
(a) The Administrator shall defend, indemnify and hold harmless the
Servicer 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 Administrator or any Affiliate of the Administrator of a
Financed Vehicle. The Master Servicer shall defend, indemnify and hold harmless
the Servicer 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 Master Servicer or any Affiliate of the Master Servicer of a
Financed Vehicle.
(b) The Administrator shall indemnify the Servicer, its successors and
assigns, and each Person, if any, who controls any of them within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all Damages
24
suffered by it in connection with this Agreement, excluding, however, for the
Administrator's benefit, (i) Damages to the extent resulting from gross
negligence or willful misconduct on the part of the Servicer and (ii) any
overall net income taxes or franchise taxes imposed (in the case of franchise
taxes) on the Servicer by the jurisdiction under the laws of which such party is
organized or qualified (or should be qualified) to do business or any political
subdivision thereof.
(c) If the Master Servicer or the Administrator shall have made any
indemnity payments pursuant to this Section 7.01, and the recipient thereafter
collects all or any portion of such amounts from others, the recipient shall
promptly repay any duplicative amounts to the Master Servicer or the
Administrator, as the case may be, without interest.
Section 7.02. Indemnification by the Servicer. Without limiting any
other rights that the Master Servicer or the Administrator may have hereunder or
under applicable law, the Servicer hereby agrees to indemnify the Master
Servicer, the Administrator, their respective successors and assigns and each
Person, if any, who controls any of them within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against all Damages
arising out of or resulting from (a) the use, ownership or operation by the
Servicer or any Affiliate of the Servicer of a Financed Vehicle, (b) the gross
negligence or willful misconduct of the Servicer or its officers, directors,
employees or agents, (c) the Servicer's failure to perform materially in
accordance with this Agreement or (d) any failure of the representations and
warranties made by the Servicer hereunder or in connection herewith to be true
and correct in all material respects when made or deemed made, excluding,
however, Damages to the extent resulting from the gross negligence or willful
misconduct of such indemnified party or failure by such indemnified party to
comply with applicable laws and regulations relating to the transactions
contemplated by this Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
------------------------
Section 8.01. Amendment. This Agreement may only be amended by a
written amendment duly executed and delivered by the Administrator, the
Servicer, the Custodian and the Master Servicer.
Section 8.02. Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed in any number of counterparts, each of which counterparts will be
deemed to be an original, and all of which counterparts will constitute but one
and the same instrument.
Section 8.03. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER WILL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
25
Section 8.04. Headings and Cross-References. The various headings in
this Agreement are included for convenience only and will not affect the meaning
or interpretation of any provision of this Agreement.
Section 8.05. Notices. All communications and notices pursuant hereto
to either party must be in writing or by fax and addressed or delivered to it at
its address as shown below or at such other address as may be designated by it
by notice to the other party and, if mailed or sent by fax, will be deemed given
upon receipt at the address or fax number for each party set forth below:
To Master Servicer: U.S. Bank Portfolio Services
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxx 00000
Telephone No.: (507) 532 - 7129
Fax No.: (866) 806 - 0775
with a copy to:
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
EP - MN - 353D
Xx. Xxxx, Xxxxxxxxx 00000 - 1419
Attention: Corporate Trust Services/ MATS 2007-1
Telephone No.: (651) 495 - 3923
Fax No.: (651) 495 - 8090
To Administrator: Xxxxxxx Xxxxx Bank USA
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
4 Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
To Servicer: CenterOne Financial Services LLC
000 Xxx Xxxxx Xxxxxxxxx
Xxxxxxxxx Xxxxx, XX 00000
Attn: Xx Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (954) 596 - 3080
Section 8.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement will be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms will be deemed severable from the
26
remaining covenants, agreements, provisions, or terms of this Agreement and will
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 8.07. Assignment. Notwithstanding anything to the contrary
contained herein, (i) except as provided in Section 3.17 and Section 5.04 and
related provisions, this Agreement may not be assigned by the Servicer, or the
Custodian without the prior written consent of the Master Servicer, (ii) this
Agreement may not assigned by the Master Servicer except to a successor master
servicer in accordance with the provisions of the Sale and Servicing Agreement
and (iii) this Agreement may not be assigned by the Administrator without the
prior written consent of the Servicer.
Section 8.08. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Master Servicer any right,
remedy, power or privilege hereunder, will operate as a waiver thereof; nor will
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges therein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 8.09. Termination of Agreement. This Agreement shall terminate
on the Distribution Date following the final payment or liquidation of all
Receivables. Sections 2.04 and 8.03 and the indemnification provisions set forth
in Article VII shall survive termination of this Agreement.
Section 8.10. Independent Contractors. Nothing in this Agreement shall
constitute U.S. Bank, National Association, the Trust, Xxxxxxx Xxxxx Bank USA
and CenterOne Financial Services LLC as members of any partnership or joint
venture in connection with the servicing of the Purchased Property.
Section 8.11. Failure to Perform. No party hereunder will be liable
for its failure to perform any of its obligations hereunder when the failure
arises out of causes beyond its control, including, without limitation, an act
of a governmental regulatory/authority, an act of God, accident, equipment
failure, labor disputes or system failure, provided it has exercised such
diligence as the circumstances require.
27
The parties have caused this Servicing Agreement to be executed by
their respective duly authorized officers as of the date and year first above
written.
U.S. BANK NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXXX XXXXX BANK USA.,
as Administrator
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Managing Director
CENTERONE FINANCIAL SERVICES LLC,
as Servicer
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Group Vice President
[SIGNATURE PAGE TO SERVICING AGREEMENT]
EXHIBIT A
LOCATION OF RECEIVABLE FILES
Locations at which Receivables Files will be kept:
0000 Xxxxx Xxxxx X.
Xxxxx Xxxx, XX 00000
185 - 000 Xxx Xxxxx Xxxxxxxxx
Xxxxxxxxx Xxxxx, XX 00000
0000 Xxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Space Savers Document Storage
0000 Xxxx X-00 Xxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Recall Total Information Management
0000 Xxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
A-1
EXHIBIT B
FORM OF MONTHLY SERVICING REPORT
MATS 2007-1
Servicer Monthly Activity Report
For Monthly Period:
Original Amount Purchased (includes refinances)
Original # of Contracts Purchased
Remaining Number of Contracts Current Period
Weighted Avg APR of remaining contracts Current Period
Weighted Avg Maturity of remaining contracts Current Period (Months)
Account Activity Interest Principal Repossessions Misc Totals
---------------- -------- --------- ------------- ---- ------
Beginning of Period Principal Balance
Contracts Paid Off
P&l Payments
Liquidation Proceeds
Recoveries Collected on Charged Off Accounts
Collection Expenses
Misc Payments
Principal Balance of Charged-off Receivables (Non-Cash)
Repossessed Receivables (Non-Cash)
Less Adjustment (Non-cash)
Total Non-cash transactions
End of Period Principal Balance
Total Reported Cash Collection
Collections Available for Distribution
Collections Available for Distribution: Life-to-Date
Beginning of Period Number of Active Contracts
Number of Contracts Paid Off in Period (net of payoff reversals)
Number of Contracts Repurchased in Period
Number of Contracts Charged-off in Period
Number of Contracts Moved to Repo Inventory in Period
Number of Contracts Adjusted (Rebooks/Flat Cancels)
Number of Contracts in Repo Inventory
End of Period Number of Contracts
Number of Accounts with Deferments Current Period
Principal Balance of Accounts with Deferments Current Period
Principal Balance of Accounts Changed to BK Status in Current Period
Number of Accounts in Bankruptcy Status End of Period
Bankruptcy End of Period Principal Balance
Delinquency (Units 1 %) Excluding BK's Number Percent
-------------------------------------- ------ -------
31-60 days past due
61-90 days past due
91-120 days past due
121 + days past due
Total Delinquency (Units / %) Excluding BK's
Delinquency ($ 1 %) Excluding BK's
----------------------------------
31-60 days past due
61-90 days past due
91-120 days past due
121 + days past due
121 + days past due
Total Delinquency (S I %) Excluding BK's
B-1
MATS 2007-1
Servicer Monthly Activity Report
For Monthly Period:
Delinquency Ratio Trigger Level
Current Month Delinquency Ratio
Prior Month Delinquency Ratio
2 Months Prior Delinquency Ratio
3 mo-avg Delinquency Ratio
In Compliance?
Delinquent BKs ($ / %) Dollars Percent
---------------------- ------- -------
31-60 days past due
61-90 days past due
91-120 days past due
121 + days past due
Total Delinquency BKs ($ / %)
Repossession Inventory (Units)
------------------------------
Beginning of Period Repossession Inventory
Redeemed in Full
Current Period Repossessions
Repossession Inventory Moved to Charge-off
Repossessions Reinstated
End of Period Repossession Inventory
Repossession Inventory ($)
--------------------------
Beginning of Period Repossession Inventory
Redeemed in Full
Current Period Repossessions
Repossessions Sold
Repossession Inventory Moved to Charge-off
Repossessions Reinstated
Miscellaneous Transactions
End of Period Repossession Inventory
Credit Losses (E) Current Month Cumulative
----------------- ------------- ----------
Principal Balance of Defaulted Accounts
Net Liquidation Proceeds
Credit Loss Before Deficiency Balance Recoveries
Recoveries on Previously Charged-Off Receivables
Net Credit Loss
Cumulative Net Credit Loss as Percent of Cutoff Pool Balance
Triggers
Default Ratio Trigger
---------------------
Current Month Default Ratio
Prior Month Default Ratio
2 Months Prior Default Ratio
3 mo-avg Delinquency Ratio
Sales Proceeds Net of Expenses
Principal Balance of Sold Accounts
Sales Proceeds Ratio
--------------------
Days in Repossession Inventory
------------------------------
In Compliance?
Monthly Servicer Compensation
-----------------------------
Servicing Fee
Liquidation Related Servicer Reimbursements
Deficiency Collections Fees and Expenses
Reimbursements Paid by Administrator
Fee Due to CenterOne
B-2
EXHIBIT C
FORM OF SERVICER'S XXXXXXXX-XXXXX CERTIFICATION
Re: Servicing Agreement, dated as of May 31, 2007 (the "Servicing
Agreement"), between U.S. Bank National Association, Xxxxxxx
Xxxxx Bank USA and CenterOne Financial Services LLC
-------------------------------------------------------------
I, [identify the certifying individual] [state position] of CenterOne Financial
Services LLC (the "Servicer"), certify to the Master Servicer and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
1. I have reviewed the servicer compliance statement of the Servicer provided
in accordance with Item 1123 of Regulation AB (the "Compliance Statement"), the
report on assessment of the Servicer's compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the "Servicing Criteria"), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the "Attestation Report"), and all
monthly servicing reports [from [the Closing Date] to December 31, 2007] [during
20[ ]] that were delivered by the Servicer to the Master Servicer pursuant to
the Servicing Agreement (collectively, the "Servicer Servicing Information");
2. Based on my knowledge, the Servicer Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to period covered by the Servicer Servicing Information;
3. Based on my knowledge, all of the Servicer Servicing Information required
to be provided to the Master Servicer by the Servicer under the Servicing
Agreement is included in these reports;
4. I am responsible for reviewing the activities performed by the Servicer
under the Servicing Agreement and based upon my knowledge and the annual
compliance review required under the Servicing Agreement in connection with
preparing the Compliance Statement, and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report or the Monthly
Servicing Reports, the Servicer has fulfilled its obligations under the
Servicing Agreement in all material respects; and
5. The Compliance Statement required to be delivered by the Servicer pursuant
to the Servicing Agreement, and the Servicing Assessment and Attestation Report
required to be provided by the Servicer pursuant to the Servicing Agreement,
have been provided to the Master
C-1
Servicer. Any material instance of noncompliance with the Servicing Criteria (as
defined in the Servicing Agreement) has been disclosed in such reports.
________________________________________
[Signature]
[Title] Date:
C-2
EXHIBIT D
MINIMUM SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by the Servicer shall
address, at a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
----------------------------------------------------------------------------------------------------------------------
Reg AB Reference Servicing Criteria Applicable Servicing Criteria
------------------------------ -------------------------------------------------- ------------------------------------
General Servicing Considerations
------------------------------ -------------------------------------------------- ------------------------------------
Policies and procedures are instituted to N/A
monitor any performance or other triggers and
events of default in accordance with the
1122(d)(1)(i) transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
If any material servicing activities are X
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
1122(d)(1)(ii) servicing activities.
------------------------------ -------------------------------------------------- ------------------------------------
Any requirements in the transaction agreements N/A
to maintain a back-up servicer for the Pool
1122(d)(1)(iii) Assets are maintained.
------------------------------ -------------------------------------------------- ------------------------------------
A fidelity bond and errors and omissions policy X
is in effect on the party participating in the
servicing function throughout the reporting
period in the amount of coverage required by and
otherwise in accordance with the terms of the
1122(d)(1)(iv) transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Cash Collection and Administration
------------------------------ -------------------------------------------------- ------------------------------------
Payments on pool assets are deposited into the X
appropriate custodial bank accounts and related
bank clearing accounts no more than two business
days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Disbursements made via wire transfer on behalf N/A
of an obligor or to an investor are made only by
1122(d)(2)(ii) authorized personnel.
------------------------------ -------------------------------------------------- ------------------------------------
Advances of funds or guarantees regarding N/A
collections, cash flows or distributions, and any
interest or other fees charged for such advances,
are made, reviewed and approved as
1122(d)(2)(iii) specified in the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
The related accounts for the transaction, such N/A
as cash reserve accounts or accounts
established as a form of over collateralization,
are separately maintained (e.g., with respect to
commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Each custodial account is maintained at a X
federally insured depository institution as set
forth in the transaction agreements. For
purposes of this criterion, "federally insured
depository institution" with respect to a
foreign financial institution means a foreign
financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
1122(d)(2)(v) Securities Exchange Act.
------------------------------ -------------------------------------------------- ------------------------------------
Unissued checks are safeguarded so as to prevent X
1122(d)(2)(vi) unauthorized access.
------------------------------ -------------------------------------------------- ------------------------------------
Reconciliations are prepared on a monthly basis N/A
for all asset-backed securities related bank
accounts, including custodial accounts and
1122(d)(2)(vii) related bank clearing
----------------------------------------------------------------------------------------------------------------------
D-1
----------------------------------------------------------------------------------------------------------------------
Reg AB Reference Servicing Criteria Applicable Servicing Criteria
------------------------------ -------------------------------------------------- ------------------------------------
accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30
calendar days after the bank statement cutoff
date, or such other number of days specified in
the transaction agreements; (C) reviewed and
approved by someone other than the person who
prepared the reconciliation; and (D) contain
explanations for reconciling items. These
reconciling items are resolved within 90 calendar
days of their original identification, or such
other number of days specified in the transaction
agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Investor Remittances and Reporting
------------------------------ -------------------------------------------------- ------------------------------------
Reports to investors, including those to be N/A
filed with the Commission, are maintained in
accordance with the transaction agreements and
applicable Commission requirements.
Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set
forth in the transaction agreements; (B) provide
information calculated in accordance with the
terms specified in the transaction agreements;
(C) are filed with the Commission as required by
its rules and regulations; and (D) agree with
investors' or the trustee's records as to the
total unpaid principal balance and number of Pool
1122(d)(3)(i) Assets serviced by the Servicer.
------------------------------ -------------------------------------------------- ------------------------------------
Amounts due to investors are allocated and N/A
remitted in accordance with timeframes,
distribution priority and other terms set forth
1122(d)(3)(ii) in the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Disbursements made to an investor are posted N/A
within two business days to the Servicer's
investor records, or such other number of days
1122(d)(3)(iii) specified in the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Amounts remitted to investors per the investor N/A
reports agree with cancelled checks, or other
1122(d)(3)(iv) form of payment, or custodial bank statements.
------------------------------ -------------------------------------------------- ------------------------------------
Pool Asset Administration
------------------------------ -------------------------------------------------- ------------------------------------
Collateral or security on pool assets is X
maintained as required by the transaction
1122(d)(4)(i) agreements or related pool asset documents.
------------------------------ -------------------------------------------------- ------------------------------------
Pool assets and related documents are X
safeguarded as required by the transaction
1122(d)(4)(ii) agreements
------------------------------ -------------------------------------------------- ------------------------------------
Any additions, removals or substitutions to the X
asset pool are made, reviewed and approved in
accordance with any conditions or requirements
1122(d)(4)(iii) in the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Payments on pool assets, including any payoffs, X
made in accordance with the related pool asset
documents are posted to the Servicer's obligor
records maintained no more than two business
days after receipt, or such other number of days
specified in the transaction agreements, and
allocated to principal, interest or other items
(e.g., escrow) in accordance with the related
1122(d)(4)(iv) pool asset documents.
------------------------------ -------------------------------------------------- ------------------------------------
The Servicer's records regarding the pool assets X
agree with the Servicer's records with respect
1122(d)(4)(v) to an obligor's unpaid principal balance.
------------------------------ -------------------------------------------------- ------------------------------------
Changes with respect to the terms or status of X
an obligor's pool assets (e.g., loan
modifications or re-agings) are made, reviewed
1122(d)(4)(vi) and approved by
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D-2
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Reg AB Reference Servicing Criteria Applicable Servicing Criteria
------------------------------ -------------------------------------------------- ------------------------------------
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
------------------------------ -------------------------------------------------- ------------------------------------
Loss mitigation or recovery actions (e.g., X
forbearance plans, modifications and deeds in
lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated,
conducted and concluded in accordance with the
timeframes or other requirements established by
1122(d)(4)(vii) the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Records documenting collection efforts are X
maintained during the period a pool asset is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
delinquent pool assets including, for example,
phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
------------------------------ -------------------------------------------------- ------------------------------------
Adjustments to interest rates or rates of return N/A
for pool assets with variable rates are computed
1122(d)(4)(ix) based on the related pool asset documents.
------------------------------ -------------------------------------------------- ------------------------------------
Regarding any funds held in trust for an obligor N/A
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's pool
asset documents, on at least an annual basis, or
such other period specified in the transaction
agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with
applicable pool asset documents and state laws;
and (C) such funds are returned to the obligor
within 30 calendar days of full repayment of the
related pool assets, or such other number of
1122(d)(4)(x) days specified in the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Payments made on behalf of an obligor (such as N/A
tax or insurance payments) are made on or before
the related penalty or expiration dates, as
indicated on the appropriate bills or notices
for such payments, provided that such support
has been received by the servicer at least 30
calendar days prior to these dates, or such
other number of days specified in the
1122(d)(4)(xi) transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Any late payment penalties in connection with N/A
any payment to be made on behalf of an obligor
are paid from the Servicer's funds and not
charged to the obligor, unless the late payment
1122(d)(4)(xii) was due to the obligor's error or omission.
------------------------------ -------------------------------------------------- ------------------------------------
Disbursements made on behalf of an obligor are N/A
posted within two business days to the
obligor's records maintained by the servicer, or
such other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Delinquencies, charge-offs and uncollectible X
accounts are recognized and recorded in
1122(d)(4)(xiv) accordance with the transaction agreements.
------------------------------ -------------------------------------------------- ------------------------------------
Any external enhancement or other support, N/A
identified in Item 1114(a)(1) through (3) or Item
1115 of Regulation AB, is maintained as set
1122(d)(4)(xv) forth in the transaction agreements.
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D-3
