SALE AND SERVICING AGREEMENT among UPFC AUTO RECEIVABLES TRUST 2007-B, Trust, UPFC AUTO FINANCING CORPORATION, Seller, UNITED AUTO CREDIT CORPORATION, Servicer, DEUTSCHE BANK TRUST COMPANY AMERICAS, Trust Collateral Agent and Backup Servicer and...
(EXECUTION
VERSION)
SALE
AND
SERVICING
AGREEMENT
among
Trust,
UPFC
AUTO
FINANCING CORPORATION,
Seller,
UNITED
AUTO CREDIT CORPORATION,
Servicer,
DEUTSCHE
BANK TRUST COMPANY AMERICAS,
Trust
Collateral Agent and Backup Servicer
and
CENTERONE
FINANCIAL SERVICES LLC,
Designated
Backup Subservicer
Dated
as
of November 1, 2007
TABLE
OF
CONTENTS
Page
|
||
SECTION
1.1.
|
Definitions
|
1
|
SECTION
1.2.
|
Other
Definitional Provisions
|
18
|
ARTICLE
II Conveyance of Receivables
|
19
|
|
SECTION
2.1.
|
Conveyance
of Receivables
|
19
|
SECTION
2.2.
|
[Reserved]
|
20
|
SECTION
2.3.
|
Further
Encumbrance of Trust Property
|
20
|
ARTICLE
III The Receivables
|
21
|
|
SECTION
3.1.
|
Representations
and Warranties with Respect to the Receivables
|
21
|
SECTION
3.2.
|
Repurchase
Upon Breach
|
21
|
SECTION
3.3.
|
Custodian
Of Receivable Files
|
22
|
SECTION
3.4.
|
Rights
and Duties of the Trust Collateral Agent
|
25
|
ARTICLE
IV Administration and Servicing of Receivables
|
29
|
|
SECTION
4.1.
|
Duties
of the Servicer and the Designated Backup Subservicer
|
29
|
SECTION
4.2.
|
Collection
of Receivable Payments; Modifications of Receivables
|
30
|
SECTION
4.3.
|
Realization
upon Receivables
|
32
|
SECTION
4.4.
|
Insurance
|
34
|
SECTION
4.5.
|
Maintenance
of Security Interests in Vehicles
|
35
|
SECTION
4.6.
|
Covenants,
Representations, and Warranties of Servicer
|
36
|
SECTION
4.7.
|
Purchase
of Receivables Upon Breach of Covenant
|
36
|
SECTION
4.8.
|
Total
Servicing Fee; Payment of Certain Expenses by Servicer
|
37
|
SECTION
4.9.
|
Servicer’s
Certificate
|
38
|
SECTION
4.10.
|
Annual
Statement as to Compliance, Notice of Servicer Termination Event
|
38 |
SECTION
4.11.
|
Annual
Independent Accountants’ Report
|
39
|
SECTION
4.12.
|
Access
to Certain Documentation and Information Regarding Receivables
|
40
|
SECTION
4.13.
|
Monthly
Tape
|
41
|
SECTION
4.14.
|
[Reserved]
|
43
|
SECTION
4.15.
|
Fidelity
Bond and Errors and Omissions Policy
|
43
|
ARTICLE
V Trust Accounts; Distributions; Statements to Holders
|
43
|
|
SECTION
5.1.
|
Establishment
of Trust Accounts
|
43
|
SECTION
5.2.
|
[Reserved]
|
45
|
SECTION
5.3.
|
Certain
Reimbursements to the Servicer
|
45
|
SECTION
5.4.
|
Application
of Collections
|
46
|
SECTION
5.5.
|
Withdrawals
from Spread Account
|
46
|
SECTION
5.6.
|
Additional
Deposits
|
46
|
SECTION
5.7.
|
Distributions
|
47
|
i
SECTION
5.8.
|
Note
Distribution Account
|
|
SECTION
5.9.
|
[Reserved]
|
51
|
SECTION
5.10.
|
Statements
to Holders
|
51
|
SECTION
5.11.
|
Optional
Deposits by the Insurer
|
52
|
ARTICLE
VI The Note Policy
|
52
|
|
SECTION
6.1.
|
Claims
Under Note Policy
|
52
|
SECTION
6.2.
|
Preference
Claims Under Note Policy
|
53
|
SECTION
6.3.
|
Surrender
of Note Policy
|
54
|
ARTICLE
VII The Seller
|
54
|
|
SECTION
7.1.
|
Representations
of Seller
|
54
|
SECTION
7.2.
|
Corporate
Existence
|
56
|
SECTION
7.3.
|
Liability
of UACC; Indemnities
|
56
|
SECTION
7.4.
|
Merger
or Consolidation of, or Assumption of the Obligations of,
Seller.
|
57
|
SECTION
7.5.
|
Limitation
on Liability of Seller and Others
|
58
|
SECTION
7.6.
|
Ownership
of the Certificates or Notes
|
58
|
ARTICLE
VIII The Servicer
|
58
|
|
SECTION
8.1.
|
Representations
of Servicer
|
58
|
SECTION
8.2.
|
Liability
of Servicer, Backup Servicer and Designated Backup
|
|
Subservicer;
Indemnities
|
60
|
|
SECTION
8.3.
|
Merger
or Consolidation of, or Assumption of the Obligations of
the
|
|
|
Servicer,
Designated Backup Subservicer or Backup Servicer
|
62
|
SECTION
8.4.
|
Limitation
on Liability of Servicer, Designated Backup Subservicer, Backup
Servicer
and Others
|
63
|
SECTION
8.5.
|
Delegation
of Duties
|
64
|
SECTION
8.6.
|
Servicer,
the Designated Backup Subservicer and Backup Servicer Not to
Resign
|
66
|
ARTICLE
IX Default
|
67
|
|
SECTION
9.1.
|
Servicer
Termination Event
|
67
|
SECTION
9.2.
|
Consequences
of a Servicer Termination Event
|
68
|
SECTION
9.3.
|
Appointment
of Successor
|
69
|
SECTION
9.4.
|
Notification
to Holders
|
71
|
SECTION
9.5.
|
Waiver
of Past Defaults
|
71
|
ARTICLE
X Termination
|
71
|
|
SECTION
10.1.
|
Optional
Purchase of All Receivables
|
71
|
ARTICLE
XI Administrative Duties of the Servicer
|
72
|
|
SECTION
11.1.
|
Administrative
Duties
|
72
|
SECTION
11.2.
|
Records
|
75
|
SECTION
11.3.
|
Additional
Information to be Furnished to the Trust
|
75
|
SECTION
11.4.
|
Reporting
Requirements of the Commission and Indemnification
|
75
|
ii
ARTICLE
XII Miscellaneous Provisions
|
76
|
|
SECTION
12.1.
|
Amendment
|
76
|
SECTION
12.2.
|
Protection
of Title to Trust
|
77
|
SECTION
12.3.
|
Notices
|
79
|
SECTION
12.4.
|
Assignment
|
81
|
SECTION
12.5.
|
Limitations
on Rights of Others
|
81
|
SECTION
12.6.
|
Severability
|
81
|
SECTION
12.7.
|
Separate
Counterparts
|
81
|
SECTION
12.8.
|
Headings
|
81
|
SECTION
12.9.
|
Governing
Law
|
81
|
SECTION
12.10.
|
Assignment
to Trustee
|
81
|
SECTION
12.11.
|
Nonpetition
Covenants
|
82
|
SECTION
12.12.
|
Limitation
of Liability of Owner Trustee and Trustee
|
82
|
SECTION
12.13.
|
Independence
of the Servicer
|
83
|
SECTION
12.14.
|
No
Joint Venture
|
83
|
SECTION
12.15.
|
Benefits
of Sale and Servicing Agreement
|
83
|
SECTION
12.16.
|
State
Business Licenses
|
83
|
SECTION
12.17.
|
Additional
Liability
|
83
|
SECTION
12.18.
|
Intent
of the Parties; Reasonableness
|
84
|
SCHEDULES
|
||
Schedule
A
|
Schedule
of Receivables
|
|
Schedule
B
|
Location
of Receivables
|
|
Schedule
C
|
Schedule
of Servicer’s Representations
|
|
Schedule
D
|
Terms
and Conditions of Designated Backup Subservicer
|
|
EXHIBITS
|
||
Exhibit
A
|
[Reserved]
|
|
Exhibit
B
|
Form
of Servicer’s Certificate
|
|
Exhibit
C
|
[Reserved]
|
|
Exhibit
D
|
Form
of Request for Release
|
|
Exhibit
E
|
Form
of Assessments of Compliance and Attestation Reports Servicing
Criteria
|
|
Exhibit
F
|
Form
of Annual Certification
|
|
Exhibit
G
|
Form
of Servicing Criteria to be Addressed in Assessment of
Compliance
|
iii
SALE
AND
SERVICING AGREEMENT dated as of November 1, 2007, among UPFC AUTO RECEIVABLES
TRUST 2007-B, a Delaware statutory trust (the “Trust”),
UPFC
AUTO FINANCING CORPORATION, a Texas corporation (the “Seller”),
UNITED AUTO CREDIT CORPORATION, a California corporation (the “Servicer”)
DEUTSCHE BANK TRUST COMPANY AMERICAS, a banking corporation organized under
the
laws of the State of New York, in its capacity as trust collateral agent
(the
“Trust Collateral Agent” and in its capacity as backup servicer, the “Backup
Servicer”) and CENTERONE FINANCIAL SERVICES LLC, a Delaware limited liability
company (the “Designated Backup Subservicer”).
WHEREAS
the Trust desires to purchase a portfolio of receivables arising in connection
with motor vehicle retail installment sale contracts made by United Auto
Credit
Corporation or acquired by United Auto Credit Corporation through motor vehicle
dealers;
WHEREAS
the Seller has purchased such receivables from United Auto Credit Corporation
and is willing to sell such receivables to the Trust;
WHEREAS
the Servicer is willing to service all such receivables;
WHEREAS
the Backup Servicer is willing to provide backup servicing for all such
receivables; and
WHEREAS
the Designated Backup Subservicer is willing to provide backup subservicing
for
all such receivables.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE
I
Definitions
SECTION
1.1. Definitions
.
Whenever used in this Agreement, the following words and phrases shall have
the
following meanings:
“Accountants’
Report”
means
the report of a firm of nationally recognized independent accountants described
in Section 4.11.
“Accounting
Date”
means,
with respect to any Collection Period the last day of such Collection
Period.
“Additional
Funds Available”
means,
with respect to any Distribution Date, the sum of (i) the Spread Account
Claim
Amount, if any, received by the Trust Collateral Agent with respect to such
Distribution Date plus (ii) the Insurer Optional Deposit, if any, received
by
the Trust Collateral Agent with respect to such Distribution Date.
“Affiliate”
means,
with respect to any specified Person, any other Person controlling or controlled
by or under common control with such specified Person. For the purposes of
this
definition, “control” when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.
“Aggregate
Principal Balance”
means,
with respect to any date of determination, the sum of the Principal Balances
for
all Receivables (other than (i) any Receivable that became a Liquidated
Receivable prior to the end of the related Collection Period and (ii) any
Receivable that became a Purchased Receivable prior to the end of the related
Collection Period) as of the date of determination.
“Agreement”
means
this Sale and Servicing Agreement, as the same may be amended and supplemented
from time to time.
“Amount
Financed”
means,
with respect to a Receivable, the aggregate amount advanced under such
Receivable toward the purchase price of the Financed Vehicle and any related
costs, including amounts advanced in respect of accessories, insurance premiums,
service and warranty contracts, other items customarily financed as part
of
retail automobile installment sale contracts or promissory notes, and related
costs.
“Annual
Percentage Rate”
or
“APR”
of
a
Receivable means the annual percentage rate of finance charges or service
charges, as stated in the related Contract.
“Available
Funds”
means,
with respect to any Distribution Date, the sum of (i) the Collected Funds
for
the related Collection Period, (ii) following the acceleration of the Notes
pursuant to Section 5.2 of the Indenture, the amount of money or property
collected pursuant to Section 5.3 of the Indenture since the preceding
Distribution Date by the Trust Collateral Agent or Controlling Party for
distribution pursuant to Section 5.6 and Section 5.8 of the Indenture, (iii)
the
proceeds of any purchase or sale of the assets of the Trust described in
Section
10.1 hereof, (iv) Investment Earnings with respect to the Trust Accounts
for the
related Collection Period and (v) excess amounts released from the Spread
Account.
“Backup
Servicer”
means
the Trust Collateral Agent in its capacity as backup servicer.
“Base
Servicing Fee”
means,
with respect to any Collection Period, the fee payable to the Servicer for
services rendered during such Collection Period, which shall be equal to
the
product of the Servicing Fee Rate times the product of (i) the aggregate
Principal Balance of the Receivables as of the opening of business on the
first
day of such Collection Period multiplied by (ii) one twelfth.
“Basic
Documents”
means
this Agreement, the Certificate of Trust, the Trust Agreement, the Indenture,
the Spread Account Agreement, the Insurance Agreement, the Sale Agreement
and
other documents and certificates delivered in connection therewith.
“Business
Day”
means
any day other than (a) a Saturday or a Sunday, (b) a day on which the Insurer
is
closed or (c) a day on which banking institutions in New York City, Irvine,
California, Texas, Wilmington,
Delaware
or in
the city in which the corporate trust office of the Trustee under the Indenture
or the Owner Trustee under the Trust Agreement is located are authorized
or
obligated by law or executive order to be closed.
2
“CenterOne”
means
CenterOne Financial Services LLC, a Delaware limited liability
company.
“Certificate”
means
the trust certificate evidencing the beneficial interest of the
Certificateholder in the Trust.
“Certificateholder”
means
the Person in whose name the Certificate is registered.
“Class”
means
the Class A-1 Notes, the Class A-2 Notes or the Class A-3 Notes, as the context
requires.
“Class
A-1 Notes”
has
the
meaning assigned to such term in the Indenture.
“Class
A-2 Notes”
has
the
meaning assigned to such term in the Indenture.
“Class
A-3 Notes”
has
the
meaning assigned to such term in the Indenture.
“Closing
Date”
means
November 8, 2007.
“Collateral
Agent”
means
Deutsche Bank Trust Company Americas, in its capacity as Collateral Agent
under
the Spread Account Agreement.
“Collateral
Insurance”
shall
have the meaning set forth in Section 4.4(a).
“Collected
Funds”
means,
with respect to any Collection Period, the amount of funds in the Collection
Account representing collections on the Receivables during such Collection
Period, including all Net Liquidation Proceeds collected during such Collection
Period and any Purchase Amounts deposited in the Collection Account with
respect
to such Collection Period.
“Collection
Account”
means
the account designated as such, established and maintained pursuant to Section
5.1.
“Collection
Period”
means,
with respect to the first Distribution Date, the period beginning on the
close
of business on October 24, 2007 and ending on the close of business on November
30, 2007. With respect to each subsequent Distribution Date, “Collection Period”
means the immediately preceding calendar month.
“Collection
Records”
means
all manually prepared or computer generated records relating to collection
efforts or payment histories with respect to the Receivables.
“Commission”
means
the United States Securities and Exchange Commission.
“Computer
Tape”
means
the computer tapes or other electronic media furnished by the Servicer to
the
Trust and the Insurer and its assigns describing certain characteristics
of the
Receivables as of the Cutoff
Date.
3
“Contract”
means
a
motor vehicle retail installment sale contract or promissory note.
“Controlling
Party”
means
the Insurer, so long as no Insurer Default shall have occurred and be continuing
and the Trust Collateral Agent for the benefit of the Holders, in the event
an
Insurer Default shall have occurred and be continuing.
“Corporate
Trust Office”
means
(i) with respect to the Owner Trustee, the principal corporate trust office
of
the Owner Trustee, which at the time of execution of this agreement is
000
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Trust Administration and (ii) with respect to the Trustee,
the Trust Collateral Agent and the Collateral Agent, the principal office
thereof at which at any particular time its corporate trust business shall
be
administered, which at the time of execution of this agreement is 00 Xxxx
Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 10005, Attention: Trust Securities Services/Structured
Finance Services.
“Cram
Down Loss”
means,
with respect to a Receivable that has not become a Liquidated Receivable,
(i) if
a court of appropriate jurisdiction in a proceeding related to an Insolvency
Event shall have issued an order reducing the amount owed on a Receivable
or
otherwise modifying or restructuring the Scheduled Receivables Payments to
be
made on a Receivable in a manner that reduces the total principal payable
by the
obligor, an amount equal to the excess of the principal balance of such
Receivable immediately prior to such order over the principal balance of
such
Receivable as so reduced or (ii) if such court shall have issued an order
reducing the effective rate of interest on such Receivable, the excess of
the
Principal Balance of such Receivable immediately prior to such order over
the
net present value (using as the discount rate the higher of the APR on such
Receivable or the rate of interest, if any, specified by the court in such
order) of the Scheduled Receivables Payments as so modified or restructured.
A
“Cram
Down Loss”
shall
be deemed to have occurred on the date of issuance of such order.
“Credit
and Collection Policy”
means
the Credit and Collection Policy of UACC as outlined in the policies and
procedures manual provided to Insurer on November 2, 2007, together with
any
amendments approved by Insurer.
“Cutoff
Date”
means
October 24, 2007.
“Dealer”
means
a
dealer who sold a Financed Vehicle and who originated and assigned the
respective Receivable to UACC under a Dealer Agreement or pursuant to a Dealer
Assignment.
“Dealer
Agreement”
means
any agreement between a Dealer and UACC relating to the acquisition of
Receivables from a Dealer by UACC.
“Dealer
Assignment”
means,
with respect to a Receivable, the executed assignment executed by a Dealer
conveying such Receivable to UACC.
“Deficiency
Notice”
shall
have the meaning set forth in Section 5.5.
4
“Delivery”
when
used with respect to Trust Account Property means:
(a) with
respect to bankers’ acceptances, commercial paper, negotiable certificates of
deposit and other obligations that constitute “instruments” within the meaning
of Section 9-102(a)(47) of the UCC and are susceptible of physical delivery,
transfer thereof to the Trust Collateral Agent or its nominee or custodian
by
physical delivery to the Trust Collateral Agent or its nominee or custodian
endorsed to, or registered in the name of, the Trust Collateral Agent or
its
nominee or custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC), transfer thereof (i) by
delivery of such certificated security endorsed to, or registered in the
name
of, the Trust Collateral Agent or its nominee or custodian or endorsed in
blank
to a financial intermediary (as defined in Section 8-313 of the UCC) and
the
making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Trust Collateral
Agent or its nominee or custodian and the sending by such financial intermediary
of a confirmation of the purchase of such certificated security by the Trust
Collateral Agent or its nominee or custodian, or (ii) by delivery thereof
to a
“clearing corporation” (as defined in Section 8-102(3) of the UCC) and the
making by such clearing corporation of appropriate entries on its books reducing
the appropriate securities account of the transferor and increasing the
appropriate securities account of a financial intermediary by the amount
of such
certificated security, the identification by the clearing corporation of
the
certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such clearing
corporation or a “custodian bank” (as defined in Section 8-102(4) of the UCC) or
the nominee of either subject to the clearing corporation’s exclusive control,
the sending of a confirmation by the financial intermediary of the purchase
by
the Trust Collateral Agent or its nominee or custodian of such securities
and
the making by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Trust Collateral
Agent or its nominee or custodian (all of the foregoing, “Physical Property”),
and, in any event, any such Physical Property in registered form shall be
in the
name of the Trust Collateral Agent or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate
to
effect the complete transfer of ownership of any such Trust Account Property
to
the Trust Collateral Agent or its nominee or custodian, consistent with changes
in applicable law or regulations or the interpretation thereof;
(b) with
respect to any security issued by the U.S. Treasury, the Federal Home Loan
Mortgage Corporation or by the Federal National Mortgage Association that
is a
book-entry security held through the Federal Reserve System pursuant to federal
book-entry regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles 8 and
9 of
the UCC: book-entry registration of such Trust Account Property to an
appropriate book-entry account maintained with a Federal Reserve Bank by
a
financial intermediary which is also a “depository” pursuant to applicable
Federal regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to the
Trust Collateral Agent or its nominee or custodian of the purchase by the
Trust
Collateral Agent or its nominee or custodian of such book-entry securities;
the
making by such financial intermediary of entries in its books and records
identifying such book-entry security held through the Federal Reserve System
pursuant to Federal book-entry regulations as belonging to the Trust Collateral
Agent or its nominee or custodian and indicating that such custodian holds
such
Trust Account Property solely as agent for the Trust Collateral Agent or
its
nominee or custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of
any
such Trust Account Property to the Trust Collateral Agent or its nominee
or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof; and
5
(c) with
respect to any item of Trust Account Property that is an uncertificated security
under Article 8 of the UCC and that is not governed by clause (b) above,
registration on the books and records of the Trust thereof in the name of
the
financial intermediary, the sending of a confirmation by the financial
intermediary of the purchase by the Trust Collateral Agent or its nominee
or
custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Trust Collateral Agent or its nominee or
custodian.
“Depositor”
shall
mean the Seller in its capacity as Depositor under the Trust
Agreement.
“Designated
Backup Subservicer”
means
the designated backup subservicer appointed by the Backup Servicer pursuant
to
Section 8.5(c), initially CenterOne.
“Determination
Date”
means,
with respect to any Collection Period the third Business Day preceding the
Distribution Date in the next calendar month and with respect to the first
Distribution Date, December 12, 2007.
“Distribution
Date”
means,
with respect to each Collection Period, the 15th
day of
the following calendar month, or, if such day is not a Business Day, the
immediately following Business Day, commencing December 17, 2007.
“Draw
Date”
means,
with respect to any Distribution Date, the second Business Day immediately
preceding such Distribution Date.
“Electronic
Ledger”
means
the electronic master record of the retail installment sales contracts or
installment loans of the Servicer.
“Eligible
Deposit Account”
means
a
segregated trust account with the corporate trust department of a depository
institution acceptable to the Insurer organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers
and
acting as trustee for funds deposited in such account, so long as (i) any
of the
securities of such depository institution have a credit rating from each
Rating
Agency in one of its generic rating categories which signifies investment
grade
and (ii) such depository institutions’ deposits are insured by the
FDIC.
“Eligible
Investments”
mean
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form which evidence:
6
(a) direct
obligations of, and obligations fully guaranteed as to timely payment by,
the
United States of America;
(b) demand
deposits, time deposits or certificates of deposit of any depository institution
or trust company incorporated under the laws of the United States of America
or
any state thereof or the District of Columbia (or any domestic branch of
a
foreign bank) and subject to supervision and examination by federal or state
banking or depository institution authorities (including depository receipts
issued by any such institution or trust company as custodian with respect
to any
obligation referred to in clause (a) above or portion of such obligation
for the
benefit of the holders of such depository receipts); provided, however, that
at
the time of the investment or contractual commitment to invest therein (which
shall be deemed to be made again each time funds are reinvested following
each
Distribution Date), the commercial paper or other short-term senior unsecured
debt obligations (other than such obligations the rating of which is based
on
the credit of a Person other than such depository institution or trust company)
of such depository institution or trust company shall have a credit rating
from
Standard & Poor’s of A-1+ and from Moody’s of Prime-1;
(c) commercial
paper and demand notes investing solely in commercial paper having, at the
time
of the investment or contractual commitment to invest therein, a rating from
Standard & Poor’s of A-1+ and from Moody’s of Prime-1;
(d) investments
in money market funds (including funds for which the Trust Collateral Agent
or
the Owner Trustee in each of their individual capacities or any of their
respective Affiliates is investment manager, controlling party or advisor)
having a rating from Standard & Poor’s of AAA-m or AAAm-G and from Moody’s
of Aaa and having been approved by the Insurer, which approval shall not
be
unreasonably withheld;
(e) bankers’
acceptances issued by any depository institution or trust company referred
to in
clause (b) above;
(f) repurchase
obligations with respect to any security that is a direct obligation of,
or
fully guaranteed by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States of America, in either case entered into with
a
depository institution or trust company (acting as principal) referred to
in
clause (b) above;
(g) any
other
investment which would satisfy the Rating Agency Condition and is consistent
with the ratings of the Securities and which, so long as no Insurer Default
shall have occurred and be continuing, has been approved by the Insurer,
which
approval shall not be unreasonably withheld, or any other investment that
by its
terms converts to cash within a finite period, if the Rating Agency Condition
is
satisfied with respect thereto;
(h) cash
denominated in United States dollars; and
(i) money
market deposit accounts, time deposits or savings deposits, in each case
as
defined in Regulation D of the Board of Governors of the Federal Reserve
System
and issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a
combined capital and surplus and undivided profits of not less than $250,000,000
which are fully insured by FDIC under the Deposit Insurance Fund or secured
at
all times by collateral described in (a) above. Such collateral must be held
by
a third party and the Trustee must have a perfected security interest in
the
collateral.
7
Any
of
the foregoing Eligible Investments may be purchased by or through the Owner
Trustee or the Trust Collateral Agent or any of their respective
Affiliates.
“Eligible
Servicer”
means,
UACC, Deutsche Bank Trust Company Americas, as Backup Servicer, CenterOne
Financial Services, LLC, as Designated Backup Subservicer, or another Person
which at the time of its appointment as Servicer or Backup Servicer, (i)
is
servicing a portfolio of motor vehicle retail installment sale contracts
and/or
motor vehicle installment loan contracts, (ii) is legally qualified and has
the
capacity to service the Receivables, (iii) has demonstrated the ability
professionally and competently to service a portfolio of motor vehicle retail
installment sale contracts and/or motor vehicle installment loan contracts
similar to the Receivables with reasonable skill and care and (iv) is qualified
and entitled to use, pursuant to a license or other written agreement, and
agrees to maintain the confidentiality of, the software which the Servicer
uses
in connection with performing its duties and responsibilities under this
Agreement or otherwise has available software which is adequate to perform
its
duties and responsibilities under this Agreement.
“Event
of
Default” has the meaning assigned to such term in the Indenture.
“Exchange
Act” means the Securities and Exchange Act of 1934, as amended.
“FDIC”
means
the Federal Deposit Insurance Corporation.
“Final
Scheduled Distribution Date”
means
with respect to (i) the Class A-1 Notes, the November 17, 2008 Distribution
Date, (ii) the Class A-2 Notes, the September 15, 2010 Distribution Date
and
(iii) the Class A-3 Notes, the July 15, 20014 Distribution Date.
“Financed
Vehicle”
means
an automobile or light-duty truck, van or minivan, together with all accessions
thereto, securing an Obligor’s indebtedness under the respective
Receivable.
“Indenture”
means
the Indenture dated as of November 1, 2007, between the Trust and Deutsche
Bank
Trust Company Americas, as Trust Collateral Agent and Trustee, as the same
may
be amended and supplemented from time to time.
“Insolvency
Event”
means,
with respect to a specified Person, (a) the filing of a petition against
such
Person or the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of such Person or any substantial
part
of its property in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator,
or similar official for such Person or for any substantial part of its property,
or ordering the winding-up or liquidation or such Person’s affairs, and such
petition, decree or order shall remain unstayed and in effect for a period
of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry
of an
order for relief in an involuntary case under any such law, or the consent
by
such Person to the appointment of or taking possession by, a receiver,
liquidator, assignee, custodian, trustee, sequestrator, or similar official
for
such Person or for any substantial part of its property, or the making by
such
Person of any general assignment for the benefit of creditors, or the failure
by
such Person generally to pay its debts as such debts become due, or the taking
of action by such Person in furtherance of any of the foregoing.
8
“Insurance
Agreement”
means
the Insurance Agreement, dated as of November 8, 2007, among the Insurer,
the
Trustee, the Trust Collateral Agent, the Trust, the Seller, UACC, individually,
the Servicer and the Backup Servicer, as the same may be amended or supplemented
from time to time.
“Insurance
Agreement Event of Default”
means
an “Insurance Agreement Event of Default” as defined in the Insurance
Agreement.
“Insurance
Policy”
means,
with respect to a Receivable, any insurance policy (including the insurance
policies described in Section 4.4 hereof) benefiting the holder of the
Receivable providing loss or physical damage, credit life, credit disability,
theft, mechanical breakdown or similar coverage with respect to the Financed
Vehicle or the Obligor.
“Insurance
Proceeds”
means
proceeds paid pursuant to any Insurance Policy and amounts (exclusive of
any
rebated insurance premiums) paid by any insurer under any other insurance
policy
related to a Financed Vehicle, a Receivable or an Obligor.
“Insurer”
means
Ambac Assurance Corporation, or any successor thereto, as issuer of the Note
Policy.
“Insurer
Default”
means
the occurrence and continuance of any of the following events:
(a) the
Insurer shall have failed to make a payment required under the Note Policy
in
accordance with its terms;
(b) the
Insurer shall have (i) filed a petition or commenced any case or proceeding
under any provision or chapter of the United States Bankruptcy Code or any
other
similar federal or state law relating to insolvency, bankruptcy, liquidation
or
reorganization, (ii) made a general assignment for the benefit of its creditors,
or (iii) had an order for relief entered against it under the United States
Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, liquidation or reorganization which is final and
nonappealable; or
(c) a
court
of competent jurisdiction, the Wisconsin Department of Insurance or other
competent regulatory authority shall have entered a final and nonappealable
order, judgment or decree (i) appointing a custodian, trustee, agent or receiver
for the Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent or receiver
of the Insurer (or the taking of possession of all or any material portion
of
the property of the Insurer).
9
“Insurer
Optional Deposit”
means,
with respect to any Distribution Date, an amount delivered by the Insurer
pursuant to Section 5.11, at its sole option, other than amounts in respect
of
an Insured Payment (as defined in the Note Policy), to the Trust Collateral
Agent for deposit into the Collection Account for any of the following purposes:
(i) to provide funds in respect of the payment of fees or expenses of any
provider of services to the Trust with respect to such Distribution Date;
or
(ii) to include such amount as part of the Additional Funds Available for
such
Distribution Date to the extent that without such amount a draw would be
required to be made on the Note Policy.
“Interest
Period”
means
with respect to any Distribution Date (i) for the Class A-1 Notes, from and
including the prior Distribution Date (or in the case of the first Distribution
Date, from and including the Closing Date) to, but excluding, the current
Distribution Date, and (ii) with respect to the Class A-2 Notes and the Class
A-3 Notes, from and including the 15th
day of
the preceding calendar month (or, in the case of the first Distribution Date,
from and including the Closing Date) to, but excluding, the 15th
day of
the month of the current Distribution Date.
“Interest
Rate”
means,
with respect to (i) the Class A-1 Notes, 4.98685% per annum (computed on
the
basis of a 360-day year and the actual number of days elapsed in the applicable
Interest Period), (ii) the Class A-2 Notes, 5.75% per annum (computed on
the
basis of a 360-day year consisting of twelve 30-day months), and (iii) the
Class
A-3 Notes, 6.15% per annum (computed on the basis of a 360-day year consisting
of twelve 30-day months).
“Investment
Earnings”
means,
with respect to any date of determination and Trust Account, the investment
earnings on amounts on deposit in such Trust Account on such date.
“Lien”
means
a
security interest, lien, charge, pledge, equity, or encumbrance of any kind,
other than tax liens, mechanics’ liens and any liens that attach to the
respective Receivable by operation of law as a result of any act or omission
by
the related Obligor.
“Lien
Certificate”
means,
with respect to a Financed Vehicle, an original certificate of title,
certificate of lien or other notification issued by the Registrar of Titles
of
the applicable state to a secured party which indicates that the lien of
the
secured party on the Financed Vehicle is recorded on the original certificate
of
title. In any jurisdiction in which the original certificate of title is
required to be given to the Obligor, the term “Lien Certificate” shall mean only
a certificate or notification issued to a secured party.
“Liquidated
Receivable”
means,
with respect to any Collection Period, a Receivable for which, as of the
last
day of the Collection Period, (i) 90 days have elapsed since the Servicer
repossessed the Financed Vehicle provided, however, that in no case shall
5% or
more of a Scheduled Receivables Payment have become 210 or more days delinquent
in the case of a repossessed Financed Vehicle and which is not a Sold
Receivable, (ii) the Servicer has determined in good faith that all amounts
it
expects to recover have been received and which is not a Sold Receivable,
(iii)
5% or more of a Scheduled Receivables Payment shall have become 120 or more
days
delinquent, except in the case of a repossessed Financed Vehicle, and which
is
not a Sold Receivable or (iv) that is a Sold Receivable.
10
“Liquidation
Proceeds”
means,
with respect to a Liquidated Receivable, all amounts realized with respect
to
such Receivable (other than amounts withdrawn from the Spread Account and
drawings under the Note Policy), and, with respect to a Sold Receivable,
the
related Sale Amount.
“Maximum
Insured Amount”
means
$250,000,000 in respect of principal plus interest thereon calculated at
the
applicable Interest Rate for the Notes.
“Minimum
Sale Price”
means
(i) with respect to a Receivable (x) that has become 60 to 210 days delinquent
or (y) that has become greater than 210 days delinquent and with respect
to
which the related Financed Vehicle has been repossessed by the Servicer and
has
not yet been sold at auction, the greater of (A) 55% multiplied by the Principal
Balance of such Receivable and (B) the product of the three month rolling
average recovery rate (expressed as a percentage) for the Servicer in its
liquidation of all receivables for which it acts as servicer, either pursuant
to
this Agreement or otherwise, multiplied by the Principal Balance of such
Receivable or (ii) with respect to a Receivable (x) with respect to which
the
related Financed Vehicle has been repossessed by the Servicer and has been
sold
at auction and the Net Liquidation Proceeds for which have been deposited
in the
Collection Account, or (y) that has become greater than 210 days delinquent
and
with respect to which the related Financed Vehicle has not been repossessed
by
the Servicer despite the Servicer’s diligent efforts, consistent with its
servicing obligations, to repossess the Financed Vehicle, $1.
“Monthly
Extension Rate”
means,
with respect to any Accounting Date, the fraction, expressed as a percentage,
the numerator of which is the aggregate Principal Balance of Receivables
whose
payments are extended during the related Collection Period and the denominator
of which is the aggregate Principal Balance of Receivables as of the immediately
preceding Accounting Date.
“Monthly
Records”
means
all records and data maintained by the Servicer with respect to the Receivables,
including the following with respect to each Receivable: the account number;
the
originating Dealer; Obligor name; Obligor address; Obligor home phone number;
Obligor business phone number; original Principal Balance; original term;
Annual
Percentage Rate; current Principal Balance; current remaining term; origination
date; first payment date; final scheduled payment date; next payment due
date;
date of most recent payment; new/used classification; collateral description;
days currently delinquent; number of contract extensions (months) to date;
amount of Scheduled Receivables Payment; current Insurance Policy expiration
date; and past due late charges.
“Moody’s”
means
Xxxxx’x Investors Service, or its successor.
“Net
Insurance Proceeds”
means,
with respect to any Receivable, Insurance Proceeds net of amounts applied
to the
repair of the related Financed Vehicle, released to the related Obligor in
accordance with the normal servicing procedures of the Servicer or representing
expenses incurred by the Servicer and recoverable hereunder.
“Net
Liquidation Proceeds”
means,
with respect to a Liquidated Receivable Liquidation Proceeds net of (i)
reasonable out-of-pocket expenses incurred by the Servicer in connection
with
the collection of such Receivable and the repossession and disposition of
the
Financed Vehicle and (ii) amounts that are required to be refunded to the
Obligor on such Receivable; provided,
however,
that
the Net Liquidation Proceeds with respect to any Receivable shall in no event
be
less than zero.
11
“Note
Distribution Account”
means
the account designated as such, established and maintained pursuant to Section
5.1.
“Note
Majority”
means
a
majority by principal amount of the Holders.
“Note
Policy”
means
the note guaranty insurance policy issued by the Insurer to the Trustee,
for the
benefit of the Holders.
“Note
Pool Factor”
for
each Class of Notes as of the close of business on any date of determination
means a seven-digit decimal figure equal to the outstanding principal amount
of
such Class of Notes divided by the original outstanding principal amount
of such
Class of Notes.
“Noteholders’
First Principal Distributable Amount”
means,
for any Distribution Date, an amount equal to the sum of:
(1)
the
greater of (i) zero and (ii) (a) the outstanding principal balance of the
Notes
immediately preceding such Distribution Date; less (b) the Aggregate Principal
Balance as of the end of the preceding calendar month; and
(2)
(a)
in
the case of the Final Scheduled Distribution Date for a Class of Notes, the
excess of the outstanding principal balance of that Class of Notes, if any,
over
the amounts described in clause (1), and (b) in the case of the acceleration
of
the Notes under the Indenture, the excess of the outstanding principal balance
of all classes of the Notes then outstanding over the amount described in
clause
(1).
“Noteholders’
Interest Carryover Amount”
means,
with respect to any Class of Notes and any date of determination, all or
any
portion of the Noteholders’ Interest Distributable Amount for that Class for the
immediately preceding Distribution Date, any of which remains unpaid as of
such
date of determination, plus interest on such unpaid amount, to the extent
permitted by law, at the respective Interest Rate borne by such Class of
Notes
from such immediately preceding Distribution Date to but excluding the related
Distribution Date.
“Noteholders’
Interest Distributable Amount”
means,
with respect to any Distribution Date and Class of Notes, the sum of the
Noteholders’ Monthly Interest Distributable Amount for such Distribution Date
and Class of Notes and the Noteholders’ Interest Carryover Amount, if any for
such Distribution Date and such Class.
“Noteholders’
Monthly Interest Distributable Amount”
means,
with respect to any Distribution Date and any Class of Notes, interest accrued
at the related Interest Rate during the applicable Interest Period on the
principal amount of the Notes of such Class outstanding as of the end of
the
prior Distribution Date (or, in the case of the first Distribution Date,
as of
the Closing Date).
12
“Noteholders’
Second Principal Distributable Amount”
means
for a Distribution Date, an amount equal to the lesser of:
(1)
the
excess, if any, of the amount of Available Funds and Additional Funds Available
on the Distribution Date over the amounts payable on the Distribution Date
under
Section 5.7(b)(i) through (vi); and
(2)
the
amount necessary to reduce the principal balance of the notes (after application
of the Noteholders’ First Principal Distributable Amount) to the Targeted Note
Balance.
“Obligor”
on
a
Receivable means the purchaser or co-purchasers of the Financed Vehicle and
any
other Person who owes payments under the Receivable.
“Officers’
Certificate”
means
a
certificate signed by the chairman of the board, the president, any executive
vice president, senior vice president or any vice president, any treasurer,
assistant treasurer, secretary or assistant secretary of the Seller or the
Servicer, as appropriate.
“Opinion
of Counsel”
means
a
written opinion of counsel reasonably acceptable to the Insurer, which opinion
is satisfactory in form and substance to the Trust Collateral Agent and,
if such
opinion or a copy thereof is required by the provisions of this Agreement
to be
delivered to the Insurer, to the Insurer.
“Original
Pool Balance”
means
the Aggregate
Principal Balance
as of
the Cutoff Date, which equaled $268,817,204.56.
“Other
Conveyed Property”
means
all property conveyed by the Seller to the Trust pursuant to Section 2.1(b)
through (j) of this Agreement.
“Owner
Trust Estate”
has
the
meaning assigned to such term in the Trust Agreement.
“Owner
Trustee”
means
Xxxxx Fargo Delaware Trust Company, not in its individual capacity but solely
as
Owner Trustee, acting on behalf of the Trust, under the Trust Agreement,
its
successors in interest or any successor Owner Trustee under the Trust
Agreement.
“Person”
means
any individual, corporation, estate, partnership, joint venture, association,
joint stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision
thereof.
“Physical
Property”
has
the
meaning assigned to such term in the definition of “Delivery”
above.
“Policy
Claim Amount”
means,
(i) with respect to each Distribution Date, the excess, if any, without
duplication, of (a) the Scheduled Payments minus (b) the sum, without
duplication of: (w) all amounts of Available Funds for the related Collection
Period, (x) Additional Funds Available, if any, for such Distribution Date,
(y)
all other funds on deposit in the Collection Account, the Note Distribution
Account, the Spread Account and any other Trust Accounts available for payment
of Scheduled Payments on the Notes on such Distribution Date and (z) any
other
amounts available pursuant to the Basic Documents to pay the Scheduled Payments
on such Distribution Date, in each case to the extent available in accordance
with the priorities set forth in Indenture and Section 5.7 of this Agreement,
and (ii) with respect to any preference payment date, Preference Amounts
as
defined in the Insurance Agreement; provided, however, that the aggregate
amount
of all such Preference Amounts will be subject to the limitations in such
definition; provided, further, that in no event will the aggregate amount
payable by the Insurer under the Note Policy exceed the Maximum Insured Amount
as defined in the Insurance Agreement.
13
“Principal
Balance”
means,
with respect to any Receivable, as of any date of determination, the Amount
Financed minus (i) that portion of all amounts received on or prior to such
date
and allocable to principal in accordance with the terms of the Receivable
and
(ii) any Cram Down Loss accounted for as of such date in respect of such
Receivable.
“Purchase
Amount”
means,
with respect to a Purchased Receivable, the Principal Balance and all accrued
and unpaid interest on the Purchased Receivable, after giving effect to the
receipt of any moneys collected (from whatever source) on such Purchased
Receivable, if any as of the date of purchase.
“Purchased
Receivable”
means
a
Receivable purchased as of the close of business on the last day of a Collection
Period by the Servicer pursuant to Sections 4.2 or 4.7 or repurchased by
the
Seller or the Servicer pursuant to Section 3.2 or Section 10.1(a).
“Rating
Agency”
means
Moody’s and Standard & Poor’s. If no such organization or successor
maintains a rating on the Securities, “Rating
Agency”
shall
be a nationally recognized statistical rating organization or other comparable
Person designated by the Seller and acceptable to the Insurer (so long as
an
Insurer Default shall not have occurred and be continuing), notice of which
designation shall be given to the Trust Collateral Agent, the Owner Trustee
and
the Servicer.
“Rating
Agency Condition”
means,
with respect to any action, that each Rating Agency shall have been given
10
days (or such shorter period as shall be acceptable to each Rating Agency)
prior
notice thereof and that each Rating Agency shall have notified the Seller,
the
Servicer, the Insurer, the Trustee, the Owner Trustee and the Trust in writing
that such action will not result in a reduction or withdrawal of the then
current rating of any Class of Notes without regard to the Note
Policy.
“Realized
Losses”
means,
with respect to any Receivable that becomes a Liquidated Receivable, the
excess
of the Principal Balance of such Liquidated Receivable over Net Liquidation
Proceeds to the extent allocable to principal.
“Receivables”
means
the contracts transferred to the Trust pursuant to this Agreement as listed
on
Schedule A attached hereto (which Schedule may be in the form of microfiche
or a
disk).
“Receivable
Files”
means
the documents specified in Section 3.3.
14
“Record
Date”
means,
with respect to each Distribution Date, the Business Day immediately preceding
such Distribution Date, unless otherwise specified in the Agreement.
“Registrar
of Titles”
means,
with respect to any state, the governmental agency or body responsible for
the
registration of, and the issuance of certificates of title relating to, motor
vehicles and liens thereon.
“Regulation
AB”
means
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§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 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
“Related
Party”
means
any of the Issuing Entity, the Servicer, the Seller, the Indenture Trustee,
the
Designated Backup Subservicer, UACC and any of their respective
Affiliates.
“Requisite
Amount”
has
the
meaning specified in the Spread Account Agreement.
“Sale
Agreement”
means
the means the Sale Agreement between UACC, as seller and the Seller, as
purchaser dated as of November 1, 2007, pursuant to which the Seller acquired
the Receivables, as such Agreement may be amended from time to
time.
“Sale
Amount”
means,
with respect to any Sold Receivable, the amount received from the related
third-party purchaser as payment for such Sold Receivable.
“Schedule
of Receivables”
means
the schedule of all Receivables originally held as part of the Trust, which
schedule is attached as Schedule A, (which Schedule may be in the form of
microfiche or a disk).
“Schedule
of Representations”
means
the Schedule of Representations and Warranties attached hereto as Schedule
C.
“Scheduled
Payments”
means,
with respect to any Distribution Date, an amount equal to the sum of the
Noteholders' Interest Distributable Amount (net of any interest shortfalls
resulting from the application of the Servicemembers Civil Relief Act, as
amended, or any similar state regulation or legislation) and the Noteholders'
First Principal Distributable Amount (other than the amount specified in
clause
(2)(b) of the definition thereof) for the related Distribution Date; provided
that Scheduled Payments will not include (x) any portion of a Noteholders'
Interest Distributable Amount or of a Noteholders' Interest Carryover Amount
due
to Holders (other than Related Parties) because the notice in proper form
was
not timely received by the Insurer or (y) any portion of a Noteholders' Interest
Distributable Amount due to Holders (other than Related Parties) representing
interest on any prior unpaid Noteholders' Monthly Interest Distributable
Amount.
For the avoidance of doubt, the Noteholders’ Interest Distributable Amount shall
be determined after giving effect to any prior payments made by the Insurer
under the Note Policy.
15
“Scheduled
Receivables Payment”
means,
with respect to any Collection Period for any Receivable, the amount set
forth
in such Receivable as required to be paid by the Obligor in such Collection
Period. If after the Closing Date, the Obligor’s obligation under a Receivable
with respect to a Collection Period has been modified so as to differ from
the
amount specified in such Receivable as a result of (i) the order of a court
in
an insolvency proceeding involving the Obligor, (ii) pursuant to the
Servicemembers Civil Relief Act, as amended, or (iii) modifications or
extensions of the Receivable permitted by Section 4.2(b), the Scheduled
Receivables Payment with respect to such Collection Period shall refer to
the
Obligor’s payment obligation with respect to such Collection Period as so
modified.
“Seller”
means
UPFC Auto Financing Corporation, a Texas corporation, and its successors
in
interest to the extent permitted hereunder.
“Service
Contract”
means,
with respect to a Financed Vehicle, the agreement, if any, financed under
the
related Receivable that provides for the repair of such Financed
Vehicle.
“Servicer”
means
United Auto Credit Corporation, as the servicer of the Receivables, and each
replacement Servicer pursuant to Section 9.3.
“Servicer
Termination Event”
means
an event specified in Section 9.1.
“Servicer’s
Certificate”
means
an Officers’ Certificate of the Servicer delivered pursuant to Section 4.9(b),
substantially in the form of Exhibit B.
“Servicing
Fee”
has
the
meaning specified in Section 4.8.
“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 Rate”
means
3.00% per annum.
“Sold
Receivable”
means
a
Receivable that was more than 60 days delinquent and was sold to an unaffiliated
third party by the Trust, at the Servicer’s direction, as of the close of
business on the last day of a Collection Period and in accordance with the
provisions of Section 4.3(c) hereof.
“Spread
Account”
means
the account designated as such, established and maintained pursuant to the
Spread Account Agreement.
“Spread
Account Agreement”
means
the Spread Account Agreement dated as of November 8, 2007, among the Insurer,
the Trust, the Trustee, the Trust Collateral Agent and the Collateral Agent,
as
the same may be modified, supplemented or otherwise amended in accordance
with
the terms thereof.
“Spread
Account Claim Amount”
means
with respect to any Determination Date, after taking into account the
application on the related Distribution Date of the Available Funds for the
related Collection Period, an amount equal to any shortfall in the payment
of
the full amounts described in clauses (i) through (v) of Section 5.7(b)
herein.
16
“Spread
Account Claim Date”
means,
with respect to any Distribution Date, the third Business Day immediately
preceding such Distribution Date.
“Spread
Account Initial Deposit”
means
an amount equal to $5,376,344.09.
“Standard
& Poor’s”
means
Standard & Poor’s, a Division of The XxXxxx-Xxxx Companies, Inc., or its
successor.
“Subcontractor”
means any vendor, subcontractor or other Person that is not responsible for
the
overall servicing (as “servicing” is commonly understood by participants in the
asset-backed securities market) of the Receivables but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
the Receivables under the direction or authority of the Servicer or a
Subservicer.
“Subservicer”
means any Person that services Receivables on behalf of the Servicer or any
Subservicer and is responsible for the performance (whether directly or through
Subservicers or Subcontractors) of a substantial portion of the material
servicing functions required to be performed by the Servicer under this
Agreement that are identified in Item 1122(d) of Regulation AB.
“Supplemental
Servicing Fee”
means,
with respect to any Collection Period, all administrative fees, expenses
and
charges paid by or on behalf of Obligors, including late fees, prepayment
fees
and liquidation fees collected on the Receivables during such Collection
Period
but excluding any fees or expenses related to extensions.
“Targeted
Note Balance”
means,
for any Distribution Date, the product of 86% and the Aggregate Principal
Balance as of the last day of the preceding calendar month. The Insurer may,
in
its discretion, permit the Targeted Note Balance to increase.
“Trigger
Event”
has
the
meaning assigned thereto in the Spread Account Agreement.
“Trust”
means
UPFC Auto Receivables Trust 2007-B.
“Trust
Account Property”
means
the Trust Accounts, all amounts and investments held from time to time in
any
Trust Account (whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or otherwise), and all proceeds
of the foregoing.
“Trust
Accounts”
has
the
meaning assigned thereto in Section 5.1.
“Trust
Agreement”
means
the Trust Agreement dated as of July 19, 2007, between the Seller and the
Owner
Trustee, as amended and restated as of November 8, 2007, as the same may
be
amended and supplemented from time to time.
“Trust
Collateral Agent”
means
Deutsche Bank Trust Company Americas or its successors in interest and any
successor Trust Collateral Agent hereunder.
17
“Trust
Officer”
means,
(i) in the case of the Trust Collateral Agent, the chairman or vice-chairman
of
the board of directors, any managing director, the chairman or vice-chairman
of
the executive committee of the board of directors, the president, any vice
president, assistant vice president, the secretary, any assistant secretary,
the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer or any other officer of the Trust
Collateral Agent customarily performing functions similar to those performed
by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter
is
referred because of such officer’s knowledge of and familiarity with the
particular subject, and (ii) in the case of the Owner Trustee, any officer
in
the corporate trust office of the Owner Trustee or any agent of the Owner
Trustee under a power of attorney (including the Servicer) with direct
responsibility for the administration of this Agreement or any of the Basic
Documents on behalf of the Owner Trustee.
“Trust
Property”
means
the property and proceeds conveyed pursuant to Section 2.1, together with
certain monies paid on or after the Cutoff Date, the Collection Account ,
the
Note Distribution Account, the Spread Account (including all Eligible
Investments in each such account and all proceeds therefrom) and certain
other
rights under this Agreement.
“Trustee”
means
the Person acting as Trustee under the Indenture, its successors in interest
and
any successor trustee under the Indenture.
“UACC”
means
United Auto Credit Corporation, the initial servicer hereunder.
“UCC”
means
the Uniform Commercial Code as in effect in the relevant jurisdiction on
the
date of the Agreement.
SECTION
1.2. Other
Definitional Provisions.
(a) Capitalized
terms used herein and not otherwise defined herein have meanings assigned
to
them in the Indenture, or, if not defined therein, in the Trust
Agreement.
(b) All
terms
defined in this Agreement shall have the defined meanings when used in any
instrument governed hereby and in any certificate or other document made
or
delivered pursuant hereto unless otherwise defined therein.
(c) As
used
in this Agreement, in any instrument governed hereby and in any certificate
or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such instrument, certificate or other
document, and accounting terms partly defined in this Agreement or in any
such
instrument, certificate or other document to the extent not defined, shall
have
the respective meanings given to them under generally accepted accounting
principles as in effect on the date of this Agreement or any such instrument,
certificate or other document, as applicable. To the extent that the definitions
of accounting terms in this Agreement or in any such instrument, certificate
or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement
or
in any such instrument, certificate or other document shall
control.
18
(d) The
words
“hereof,”
“herein,”
“hereunder”
and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
Section, Schedule and Exhibit references contained in this Agreement are
references to Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term “including” shall mean “including without
limitation.”
(e) The
definitions contained in this Agreement are applicable to the singular as
well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
(f) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a
Person
are also to its permitted successors and assigns.
ARTICLE
II
Conveyance
of Receivables
SECTION
2.1. Conveyance
of Receivables.
In
consideration of the Trust’s delivery to or upon the order of the Seller on the
Closing Date of the Notes and Certificates and the amounts to be distributed
from time to time to the Seller in accordance with the terms of this Agreement,
the Seller does hereby sell, transfer, assign, set over and otherwise convey
to
the Trust, without recourse (subject to the obligations set forth herein),
all
right, title and interest of the Seller in and to:
(a) the
Receivables and all moneys received thereon after the Cutoff Date;
(b) the
security interests in the Financed Vehicles granted by Obligors pursuant
to the
Receivables and any other interest of the Seller in such Financed
Vehicles;
(c) any
proceeds and the right to receive proceeds with respect to the Receivables
from
claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors and any proceeds from the liquidation
of
the Receivables;
(d) any
proceeds from any Receivable repurchased by a Dealer pursuant to a Dealer
Agreement as a result of a breach of representation or warranty in the related
Dealer Agreement;
(e) all
rights under any Service Contracts on the related Financed
Vehicles;
(f) the
related Receivable Files;
(g) all
of
the Seller’s right, title and interest in its rights and benefits, but none of
its obligations or burdens, under the Sale Agreement, including the Seller’s
rights with respect to delivery requirements, representations and warranties
and
the repurchase obligations of UACC under the Sale Agreement;
19
(h) all
of
the Seller’s (a) Accounts, (b) Chattel Paper, (c) Documents, (d) Instruments and
(e) General Intangibles (as such terms are defined in the UCC) relating to
the
property described in (a) through (g);
(i) all
proceeds and investments with respect to items (a) through (h); and
(j) all
of
Seller’s right, title and interest in its rights and benefits but none of its
obligations or burdens under the Dealer Agreements.
It
is the
intention of the Seller that the transfer and assignment contemplated by
this
Agreement shall constitute a sale of the Receivables and Other Conveyed Property
from the Seller to the Trust and the beneficial interest in and title to
the
Receivables and the Other Conveyed Property shall not be part of the Seller’s
estate in the event of the filing of a bankruptcy petition by or against
the
Seller under any bankruptcy law. In the event that, notwithstanding the intent
of the Seller, the transfer and assignment contemplated hereby is held by
a
court of competent jurisdiction not to be a sale, this Agreement shall
constitute a grant of a security interest by the Seller to the Trust in the
property referred to in this Section for the benefit of the Holders and the
Insurer.
SECTION
2.2. [Reserved]
SECTION
2.3. Further
Encumbrance of Trust Property.
(a) Immediately
upon the conveyance to the Trust by the Seller of any item of the Trust Property
pursuant to Section 2.1, all right, title and interest of the Seller in and
to
such item of Trust Property shall terminate, and all such right, title and
interest shall vest in the Trust, in accordance with the Trust Agreement
and
Sections 3802 and 3805 of the Statutory Trust Statute (as defined in the
Trust
Agreement).
(b) Immediately
upon the vesting of the Trust Property in the Trust, the Trust shall have
the
sole right to pledge or otherwise encumber, such Trust Property. Pursuant
to the
Indenture, the Trust shall grant a security interest in the Trust Property
to
the Trust Collateral Agent securing the repayment of the Notes and the Trust’s
obligations to the Insurer. The Certificates shall represent the beneficial
ownership interest in the Trust Property, and the Certificateholders shall
be
entitled to receive distributions with respect thereto as set forth
herein.
(c) Following
the payment in full of the Notes and the release and discharge of the Indenture,
all covenants of the Trust under Article III of the Indenture shall, until
payment in full of the Certificates, remain as covenants of the Trust for
the
benefit of the Certificateholders, enforceable by the Certificateholders
to the
same extent as such covenants were enforceable by the Holders prior to the
discharge of the Indenture. Any rights of the Trustee under Article III of
the
Indenture, following the discharge of the Indenture, shall vest in
Certificateholders.
20
(d) The
Trust
Collateral Agent shall, at such time as there are no Notes or Certificates
outstanding and all sums due to (i) the Trustee pursuant to the Indenture,
(ii)
the Insurer pursuant to the Insurance Agreement and (iii) the Trust Collateral
Agent pursuant to this Agreement, have been paid, release any remaining portion
of the Trust Property to the Certificateholder.
ARTICLE
III
The
Receivables
SECTION
3.1. Representations
and Warranties with Respect to the Receivables.
UACC
has
made the representations and warranties set forth in Section 3.3 of the Sale
Agreement, and has consented to the assignment by Seller to Trust of Seller’s
rights with respect thereto. Pursuant to Section 2.1 of this Agreement, Seller
has transferred to Trust all of Seller’s right, title and interest, but none of
its obligations or burdens in, to and under the Sale Agreement, including
Seller’s rights with respect to delivery requirements, representations and
warranties and the cure or repurchase obligations of UACC thereunder, upon
which
Trust relies in accepting the Receivables. Seller hereby represents and warrants
to the Trust that such assignment is or will be valid, enforceable and effective
to permit the Trust to enforce such obligations of UACC under the Sale
Agreement. Any purchase by UACC pursuant to the Sale Agreement shall be deemed
a
purchase by Seller pursuant to Section 3.2 of this Agreement and the definition
of Purchased Receivable. In addition, pursuant to Section 2.1 of this Agreement,
Seller has transferred to Trust all of UACC’s right, title and interest, but
none of its obligations or burdens, in, to and under each Dealer Agreement,
including the representations and warranties of the obligors therein, upon
which
the Trust relies in accepting the Receivables.
SECTION
3.2. Repurchase
Upon Breach.
(a) Seller,
Servicer, Insurer, Backup Servicer, the Designated Backup Subservicer or
Trust
Collateral Agent, as the case may be, shall inform the other parties to this
Agreement promptly, in writing, upon actual knowledge of any breach or failure
to be true of the representations or warranties made by UACC in Section 3.3
of
the Sale Agreement, which materially and adversely affects the interests
of
Trust, the Holders or the Insurer in any Receivable; provided
that the
failure to give such notice shall not affect any obligation of UACC; and,
provided,
further,
that
the Designated Backup Subservicer, so long as it has not been appointed Servicer
or subservicer, shall have no liability for a failure to give such notice.
In
consideration of the repurchase of a Receivable hereunder by UACC under Section
3.4 of the Sale Agreement, UACC shall remit the Purchase Amount of such
Receivable, no later than the close of business on the next Determination
Date,
in the manner specified in Section 5.6.
(b) With
respect to all Receivables repurchased pursuant to this Section 3.2, Trust
shall
assign to the Seller without recourse, all of Trust’s right, title and interest
in and to such Receivables and all other Trust Property, security and documents,
relating solely to such Receivable.
21
(c) In
addition to the foregoing and notwithstanding whether the related Receivable
shall have been purchased by UACC, UACC shall indemnify the Trust, the Trustee,
the Seller, the Backup Servicer, the Designated Backup Subservicer, the Trust
Collateral Agent, Collateral Agent and the officers, directors, agents and
employees thereof, the Insurer, and the Holders against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a
result
of third party claims arising out of the events or facts giving rise to such
breach.
SECTION
3.3. Custodian
Of Receivable Files.
(a) CUSTODY.
To
assure uniform quality in servicing the Receivables and to reduce administrative
costs, Trust, upon the execution and delivery of this Agreement, revocably
appoints the Servicer, as agent, and the Servicer accepts such appointment,
to
act as agent on behalf of the Trustee (or if no Notes are outstanding, Trust)
to
maintain custody of the following documents or instruments, which are hereby
constructively delivered to Trust with respect to each Receivable (with respect
to each Receivable, a “Receivable File”):
(i) copies
of
(A) the original certificate of title, lien card or application of title,
as
used in the applicable jurisdiction and/or (B) if the security interest of
the
applicable Obligor is evidenced with respect to a Financed Vehicle under
the
Uniform Commercial Code of a state and the Servicer is given notice of such
security interest, the UCC-1 financing statements evidencing the applicable
Obligor’s security interest;
(ii) the
fully
executed original counterpart of the (a) installment sale contract or (b)
note
and the security agreement, as applicable relating to each Receivable and,
in
the case of promissory notes, endorsements of such notes in blank;
and
(iii) a
copy of
the credit application of the Obligor.
As
soon
as practicable, but in no event later than fifteen (15) days following the
Closing Date, the Servicer will deliver to the Trust, the Trust Collateral
Agent
and the Insurer a final certification of the Servicer certifying that the
Servicer has possession of all of the Receivable Files, with any exceptions
as
noted thereon.
(b) SAFEKEEPING.
The
Servicer shall hold the applicable Receivable Files as agent on behalf of
Trust
and maintain accurate and complete records and computer systems pertaining
to
each Receivable in accordance with the terms of this Agreement. Servicer
shall
act with reasonable care, exercising the degree of skill, attention and care
that Servicer exercises with respect to receivable files relating to other
similar motor vehicle loans which are held by Servicer on its own behalf
and
that is consistent with industry standards. In accordance with its customary
practice with respect to its custody files, Servicer shall maintain the
Receivable Files in such a manner as shall enable the Trust, the Insurer,
the
Trust Collateral Agent and the Trustee to verify, if the Trust, the Insurer,
the
Trust Collateral Agent or Trustee so elects, the accuracy of the record keeping
of Servicer. Servicer shall promptly report to the Trust and the Insurer
any
failure on its part to hold the Receivable Files and maintain its records
and
computer systems as herein provided, and promptly take appropriate action
to
remedy any such failure. Servicer hereby acknowledges that Servicer or an
agent
of the Servicer has possession of the Receivable File for each Receivable
listed
on the Schedule of Receivables, except as it may report to the Trust in writing.
Nothing herein shall be deemed to require Trust, Owner Trustee or Trustee
to
verify the accuracy of the record keeping of the Servicer.
22
Each
assessment of compliance provided by the Servicer pursuant to Section 4.10(a)(i)
shall address the Servicer’s custodial duties applicable to it identified in
Item 1122(d) of Regulation AB (§ 229.1122(d)).
(c) MAINTENANCE
OF AND ACCESS TO RECORDS.
Servicer shall maintain each Receivable File at the locations specified in
Schedule B to this Agreement, or at such other offices of Servicer or its
Affiliates within the United States (or, in the case of any successor Servicer,
within the state in which its principal place of business is located) as
shall
be specified to the Trust by 30 days’ prior written notice. Servicer will
physically segregate the Receivables Files (other than the original certificates
of title relating to the Receivable Files) from other files in Servicer’s
possession. Servicer’s document tracking system will show the location within
Servicer’s facilities of each original certificate of title relating to the
Receivables File. Servicer shall make available to the Trust, the Trust
Collateral Agent, Trustee, Insurer and their respective agents (or, when
requested in writing by the Trust or Trustee, their respective attorneys
or
auditors) the Receivable Files and the related records maintained by Servicer
at
such times as the Trust, Trustee or Insurer shall instruct for purposes of
inspecting, auditing or making copies of abstracts of the same, but only
upon
two (2) Business Days prior notice and during the normal business hours at
the
respective offices of Servicer.
(d) RELEASE
OF DOCUMENTS.
If no
Notes are then Outstanding, upon written instructions from the Trust and
receipt
by the Servicer of a request for release (substantially in the form of Exhibit
D), Servicer shall release any document in the Receivable Files to the Trust
or
its agent or designee at such place or places as the Trust may designate,
as
soon thereafter as is practicable and at the cost of the Trust. Any document
so
released shall be handled by the Trust with due care and returned to Servicer
for safekeeping as soon as the Trust or its agent or designee shall have
no
further need therefor.
The
Servicer shall maintain a list of each Receivable of which payment in full
has
been made and shall provide such list to the Trust upon written request by
the
Trust. Upon request by the Trust, the Servicer shall release the related
Receivable File to the Trust or its agent or designee at such place or places
as
the Trust may designate, as soon thereafter as is practicable. Upon such
release
of the Receivable File, the Servicer shall have no further responsibility
with
regard to such Receivable File.
(e) TITLE
TO RECEIVABLES.
Servicer agrees that, in respect of any Receivable File held by Servicer
hereunder, Servicer shall not at any time have or in any way attempt to assert
any interest in such Receivable File or the related Receivable, other than
solely as Servicer for the purpose of collecting or enforcing the Receivable
for
the benefit of Trust and that the entire equitable interest in such Receivable
and the related Receivable File shall at all times be vested in
Trust.
23
(f) INSTRUCTIONS;
AUTHORITY TO ACT.
Servicer shall be deemed to have received proper instructions with respect
to
the Receivable Files upon its receipt of written instructions signed by an
Authorized Officer of the Trust Collateral Agent or the Trust, as applicable,
a
copy of which shall be provided to the Insurer. A certified copy of excerpts
of
certain resolutions of the Board of Directors of the Trust Collateral Agent
shall constitute conclusive evidence of the authority of any such Trust Officer
to act and shall be considered in full force and effect until receipt by
Servicer of written notice to the contrary given by the Trust or the Trust
Collateral Agent, as applicable.
(g) SERVICER’S
INDEMNIFICATION.
The
Servicer shall indemnify and hold harmless the Trust, the Insurer, the Trustee
(individually and in its capacity as such), each of their respective officers,
directors, employees and agents, and the Holders from and against any and
all
direct liabilities, obligations, losses, payments, costs or expenses (including
reasonable legal fees and expenses, if any) of any kind whatsoever that may
be
imposed on, incurred or asserted against the Trust, the Trustee, the Insurer
or
the Holders as the result of the Servicer’s acting as custodian for the
Receivable Files, including without limitation, any failure by the Servicer
to
produce an original note or installment contract with respect to any Receivable.
Indemnification under this Subsection (g) shall survive termination of this
Agreement and the resignation or removal of the Trustee, as the case may
be. If
Servicer shall have made any indemnity payments to Trustee or Insurer pursuant
to this Section and Trustee or Insurer thereafter shall collect any of such
amounts from Persons other than Servicer, Trust, Trustee or Insurer, as the
case
may be, shall, as soon as practicable following such receipt thereof, repay
such
amounts to Servicer, without interest.
(h) EFFECTIVE
PERIOD AND TERMINATION.
If UACC
shall resign as Servicer in accordance with Section 8.6 or be terminated
in
accordance with Article IX, as soon as practicable after such resignation
or
termination, UACC shall deliver, or cause to be delivered at its expense,
the
Receivable Files to Trustee or Owner Trustee, as applicable, or its respective
agent or designee at such place or places as Trustee or Owner Trustee, as
applicable, may reasonably designate and the Servicer’s obligations under this
Section 3.3 shall terminate except those obligations that by their terms
survive
the termination of this Agreement.
In
addition, the obligations of the Servicer under Section 3.3 shall terminate
upon
the final payment or other liquidation (or advance with respect thereto)
of the
last Receivable, and the final remittance of all funds due the Owner Trustee
under the Trust Agreement and the Indenture Trustee under the Indenture.
In such
event, all documents remaining in the Receivable Files shall be released
in
accordance with the written instructions of the Trustee or the Trust, as
applicable.
(i) DELEGATION.
Servicer may, at any time without notice or consent, except to the extent
required by applicable law, delegate any or all of its duties under Section
3.3
to any Affiliate which is legally qualified and has the capacity to perform
such
delegated duties under this Section 3.3; provided that no such delegation
shall
relieve Servicer of its responsibility with respect to such duties and Servicer
shall remain obligated and liable to Trust, Insurer and the Holders for its
duties under this Section 3.3 as if Servicer alone were performing such
duties.
24
(j) XXXXX
0 XXXXXXX XXXXX XX XXXXX 0 XXXXXXX EVENT.
Upon
the occurrence of a Level 2 Trigger Event or a Xxxxx 0 Xxxxxxx Xxxxx (as
defined
in the Spread Account Agreement), the Servicer shall within 30 days and at
its
own expense transfer custody of the Receivables Files to the Trust Collateral
Agent or its designee approved by the Insurer (which approval shall not be
unreasonably held). The Trust Collateral Agent shall confirm or cause a designee
approved by the Insurer (which approval shall not be unreasonably withheld)
to
confirm receipt of each Receivables File (for up to 25,000 Receivable Files)
in
writing to the Insurer within fifteen (15) Business Days of receiving each
Receivables File provided, however, that the Trust Collateral Agent will
have an
additional five (5) Business Days to confirm receipt for each additional
5,000
Receivable Files transferred in excess of 25,000 Receivable Files.
SECTION
3.4. Rights
and Duties of the Trust Collateral Agent.
Upon
the
occurrence of a Level 2 Trigger Event or a Level 3 Trigger Event and the
transfer by the Servicer of the Receivables Files to the Trust Collateral
Agent
pursuant to Section 3.3(j), the Trust Collateral Agent (or its designee approved
by the Insurer pursuant to Section 3.3 which approval shall not be unreasonably
withheld) will act as custodian and will hold the Receivable Files in the
manner
described hereunder. The Trust Collateral Agent shall be bound by the following
provisions of this Section 3.4 only upon the occurrence of a Level 2 Trigger
Event or a Xxxxx 0 Xxxxxxx Xxxxx:
(a) The
Trust
Collateral Agent shall have no duties or responsibilities with respect to
the
contents of the Receivables Files except as specifically set forth
herein.
(b) The
Trust
Collateral Agent shall neither be responsible for or under, nor chargeable
with
knowledge of the terms and conditions of, any other agreement, instrument
or
document in connection herewith.
(c) The
Trust
Collateral Agent may conclusively rely upon, and shall be fully protected
from
all liability, loss, cost, damage or expense in acting or omitting to act
pursuant to any written notice, instrument, request, consent, certificate,
document, letter, telegram, opinion, order resolution or other writing hereunder
which it reasonably believes to be authentic without being required to determine
the authenticity of such document, the correctness of any fact stated therein,
the propriety of the service thereof of the capacity, identity or authority
of
any party purporting to sign or deliver such document.
(d) This
Agreement expressly sets forth all the duties and obligations of the Trust
Collateral Agent with respect to any and all matters pertinent thereto. No
implied duties or obligations of the Trust Collateral Agent shall be read
into
this Agreement.
25
(e) No
provision of this Agreement shall require the Trust Collateral Agent to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers.
(f) In
order
to comply with laws, rules, regulations and executive orders in effect from
time
to time applicable to banking institutions, including those relating to the
funding of terrorist activities and money laundering (“Applicable Law”), the
Trust Collateral Agent is required to obtain, verify and record certain
information relating to individuals and entities which maintain a business
relationship with Trust Collateral Agent. Accordingly, each of the parties
agrees to provide to Trust Collateral Agent upon its request from time to
time
such identifying information and documentation as may be available for such
party in order to enable Trust Collateral Agent to comply with Applicable
Law.
(g) On
or
before March 15th of each calendar year beginning with March 15, 2008 until
and
unless a Form 15 suspension notification has been filed with respect to the
Trust, the Trust Collateral Agent shall, at its own expense, cause a firm
of
independent public accountants (who may also render other services to Trust
Collateral Agent), which is a member of the American Institute of Certified
Public Accountants and registered with the Public Company Accounting Oversight
Board, to furnish to the Depositor a report to the effect that such firm
attests
to and reports on, the assessment made by such asserting party pursuant to
the
following paragraph, which report shall be made in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Exchange Act.
(h) Upon
the
occurrence of a Level 2 Trigger Event or a Xxxxx 0 Xxxxxxx Xxxxx, the Trust
Collateral Agent shall deliver to the Depositor, on or before March 15th
of each
calendar year, until such time as a Form 15 suspension notification is filed
after which the Trust Collateral Agent shall not be required to so deliver,
a
report regarding its assessment of compliance with the servicing criteria
applicable to it identified in Exhibit E attached hereto, as of and for the
fiscal year ending no later than December 31 of the year prior to the year
of
delivery of the report, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Each such report shall include
(a)
a statement of the party’s responsibility for assessing compliance with the
servicing criteria applicable to such party, (b) a statement that such party
used the criteria applicable to it identified in Item 1122(d) of Regulation
AB
(§ 229.1122(d)) to assess compliance with the applicable servicing criteria,
(c)
disclosure of any material instance of noncompliance identified by such party,
and (d) a statement that a registered public accounting firm has issued an
attestation report on such party’s assessment of compliance with the applicable
servicing criteria, which report shall be delivered by the Trust Collateral
Agent as provided in this Section 3.4(g). The Depositor shall, promptly
following its receipt of such report, forward a copy of such report to the
Insurer.
(i) The
Depositor shall indemnify the Trust Collateral Agent for any material
misstatement or omissions in any Form 10D or 10K filing, or failure to timely
file, required under the Exchange Act other than any information, reports,
or
exhibits in such filing that are provided by the Trust Collateral Agent pursuant
to Sections 3.4(g) and 3.4(h).
26
(j) SAFEKEEPING.
The
Trust
Collateral Agent shall hold the applicable Receivable Files as agent on behalf
of Trust and maintain accurate and complete records and computer systems
pertaining to each Receivable in accordance with the terms of this Agreement.
In
performing its duties under this Section 3.4, Trust Collateral Agent shall
act
with reasonable care, exercising the degree of skill, attention and care
that
Trust Collateral Agent exercises with respect to receivable files relating
to
other similar motor vehicle loans which are held by Trust Collateral Agent
and
that is consistent with industry standards. In accordance with its customary
practice with respect to its custody files, Trust Collateral Agent shall
maintain the Receivable Files in such a manner as shall enable the Trust,
the
Insurer and the Trustee to verify, if the Trust, the Insurer or Trustee so
elects, the accuracy of the record keeping of Trust Collateral Agent. Trust
Collateral Agent shall promptly report to the Trust and the Insurer any failure
on its part to hold the Receivable Files and maintain its records and computer
systems as herein provided, and promptly take appropriate action to remedy
any
such failure. Nothing herein shall be deemed to require Trust, Owner Trustee
or
Trustee to verify the accuracy of the record keeping of the Trust Collateral
Agent.
(k) MAINTENANCE
OF AND ACCESS TO RECORDS.
Trust
Collateral Agent shall maintain each Receivable File at the respective offices
of Trust Collateral Agent or its Affiliates within the United States (or,
in the
case of any successor Trust Collateral Agent, within the state in which its
principal place of business is located) and shall promptly specify such
locations to the Trust by written notice. Trust Collateral Agent shall make
available to the Trust, Trustee, the Servicer (including the Designated Backup
Subservicer acting as servicer or subservicer), Insurer and their respective
agents (or, when requested in writing by the Trust or Trustee, their respective
attorneys or auditors) the Receivable Files and the related records maintained
by Trust Collateral Agent at such times as the Trust, Trustee, the Servicer
(including the Designated Backup Subservicer acting as servicer or subservicer)
or Insurer shall instruct for purposes of inspecting, auditing or making
copies
of abstracts of the same, but only upon two (2) Business Days prior notice
and
during the normal business hours at the respective offices of Trust Collateral
Agent.
If
the
Trust Collateral Agent shall be unwilling to so act, or shall be unable to
so
act, the Trust Collateral Agent may appoint, or petition a court of competent
jurisdiction to appoint a custodian as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer as custodian of the Receivable Files hereunder
provided, that any successor is approved by the Insurer (which approval shall
not be unreasonably withheld). Pending appointment of a successor to the
Servicer as custodian hereunder, the Trust Collateral Agent shall act in
such
capacity as herein above provided. In connection with such appointment and
assumption, the Servicer shall make such arrangements for the compensation
of
such successor custodian as agreed upon between the Servicer and such successor
custodian, including if such successor custodian is the Trust Collateral
Agent.
Each of the parties hereto shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. In
no event shall the Trust Collateral Agent or successor custodian be liable
for
the acts or omissions of the Servicer as custodian
hereunder.
(l) RELEASE
OF DOCUMENTS.
Upon
written instructions from Servicer or the successor to the Servicer (or,
if no
Notes are then Outstanding, the Trust), and receipt from the Servicer or
the
successor to the Servicer of a request for release (substantially in the
form of
Exhibit D), Trust Collateral Agent shall release any document in the Receivable
Files to Servicer, the successor to the Servicer or the Trust or its respective
agent or designee, as the case may be, at such place or places as Servicer,
the
successor to the Servicer or the Trust may designate, as soon thereafter
as is
practicable and at the cost of the Trust. Any document so released shall
be
handled by Servicer, the successor to the Servicer or the Trust with due
care
and returned to Trust Collateral Agent for safekeeping as soon as Servicer,
or
the successor to the Servicer or the Trust or its respective agent or designee,
as the case may be, shall have no further need therefor.
27
Upon
becoming aware of the payment in full of any Receivable, the Servicer or
the
successor to the Servicer shall promptly notify the Trust Collateral Agent,
in
writing, that such Receivable has been paid in full and upon such written
notice
from the Servicer or the successor to the Servicer, Trust Collateral Agent
shall
release the related Receivable File to the Servicer, the successor to the
Servicer or the Trust or its respective agent or designee, as the case may
be,
at such place or places as the Servicer, or the successor to the Servicer
or the
Trust may designate, as soon thereafter as is practicable. Upon such release
of
the Receivable File, the Trust Collateral Agent shall have no further
responsibility with regard to such Receivable File.
(m) TITLE
TO RECEIVABLES.
Trust
Collateral Agent agrees that, in respect of any Receivable File held by Trust
Collateral Agent hereunder, Trust Collateral Agent shall not at any time
have or
in any way attempt to assert any interest in such Receivable File or the
related
Receivable, other than solely as Trust Collateral Agent for the purpose of
collecting or enforcing the Receivable for the benefit of Trust and that
the
entire equitable interest in such Receivable and the related Receivable File
shall at all times be vested in Trust.
(n) INSTRUCTIONS;
AUTHORITY TO ACT.
The
Trust Collateral Agent shall be deemed to have received proper instructions
with
respect to the Receivable Files upon its receipt of written instructions
signed
by an Authorized Officer of the Servicer, the successor to the Servicer or
the
Trust, as applicable, a copy of which shall be provided to the Insurer. A
certified copy of excerpts of certain resolutions of the Board of Directors
or
similar authorization of the Servicer, the successor to the Servicer or the
Trust shall constitute conclusive evidence of the authority of any such officer
of the Servicer, the successor to the Servicer or the Trust, as applicable,
to
act and shall be considered in full force and effect until receipt by the
Trust
Collateral Agent of written notice to the contrary given by the Servicer,
the
successor to the Servicer or the Trust, as applicable.
(o) TRUST
COLLATERAL AGENT’S INDEMNIFICATION.
In the
event that the Trust Collateral Agent fails to produce an original note or
installment contract that was in its possession pursuant to Section 3.4 within
five (5) Business Days after required or requested pursuant to Section 3.4(l),
and provided that (i) the Trust Collateral Agent previously notified the
Trust
that it was in possession of such document; (ii) such document is not
outstanding pursuant to a request for release of documents under Section
3.4(l);
and (iii) such document was held by the Trust Collateral Agent on behalf
of the
Trust (a “Trust
Collateral Agent Delivery Failure”),
then
the Trust Collateral Agent shall indemnify the Trust, Insurer and Trustee
in
accordance with the succeeding sentence of this Section 3.4(n). The Trust
Collateral Agent shall indemnify and hold harmless Trust, Insurer and Trustee
(individually and in its capacity as such), and each of their respective
officers, directors, employees and agents from and against any and all direct
liabilities, obligations, losses, payments, costs or expenses (including
reasonable legal fees and expenses, if any) of any kind whatsoever that may
be
imposed on, incurred or asserted against Trust, Trustee, Insurer or the Holders
as the result of such Trust Collateral Agent Delivery Failure. Indemnification
under this Subsection (n) shall survive termination of this Agreement and
the
resignation or removal of the Trustee, as the case may be. If Trust Collateral
Agent shall have made any indemnity payments to Trustee or Insurer pursuant
to
this Section and Trustee or Insurer thereafter shall collect any of such
amounts
from Persons other than Trust Collateral Agent, Trust, Trustee or Insurer,
as
the case may be, shall, as soon as practicable following such receipt thereof,
repay such amounts to Trust Collateral Agent, without interest.
28
ARTICLE
IV
Administration
and Servicing of Receivables
SECTION
4.1. Duties
of the Servicer and the Designated Backup Subservicer
(a) The
Servicer is hereby authorized to act as agent for the Trust and in such capacity
shall manage, service, administer and make collections on the Receivables,
and
perform the other actions required by the Servicer under this Agreement.
The
Servicer agrees that its servicing of the Receivables shall be carried out
in
accordance with customary and usual procedures of institutions which service
motor vehicle retail installment sales contracts and, to the extent more
exacting, the degree of skill and attention that the Servicer exercises from
time to time with respect to all comparable motor vehicle receivables that
it
services for itself or others. In performing such duties, so long as UACC
is the
Servicer, it shall substantially comply with the Credit and Collection Policy.
The Servicer’s duties shall include, without limitation, collection and posting
of all payments, responding to inquiries of Obligors on the Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting
any
required tax information to Obligors, monitoring the collateral, accounting
for
collections and furnishing monthly and annual statements to the Trust Collateral
Agent, the Trustee and the Insurer with respect to distributions, monitoring
the
status of Insurance Policies with respect to the Financed Vehicles and
performing the other duties specified herein.
The
Servicer shall deposit in or credit to the Collection Account within two
Business Days of receipt all collections of monthly principal and interest
(including any prepayments thereof) received after the Cut-Off Date by it
on or
in respect of the Receivables together with Liquidation Proceeds and any
accompanying interest. The Servicer shall likewise deposit in the Collection
Account within two Business Days of receipt all Net Liquidation Proceeds
and Net
Insurance Proceeds.
In
addition, annually, the Servicer will engage an accounting firm to complete
an
operational audit of 15 branches over any immediately preceding consecutive
12 month period. The results of such audits will be delivered to the
Insurer upon completion of each such annual audit.
29
In
addition, annually, the Servicer, upon request, will provide to the Backup
Servicer and the Designated Backup Subservicer a list of the addresses of
all
active branch offices.
The
Servicer, or if UACC is no longer the Servicer, UACC at the request of the
Servicer, shall also administer and enforce all rights and responsibilities
of
the holder of the Receivables provided for in the Dealer Agreements (and
shall
maintain possession of the Dealer Agreements, to the extent it is necessary
to
do so), the Dealer Assignments and the Insurance Policies, to the extent
that
such Dealer Agreements, Dealer Assignments and Insurance Policies relate
to the
Receivables, the Financed Vehicles or the Obligors. To the extent consistent
with the standards, policies and procedures otherwise required hereby, the
Servicer shall follow its customary standards, policies, and procedures and
shall have full power and authority, acting alone, to do any and all things
in
connection with such managing, servicing, administration and collection that
it
may deem necessary or desirable. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered by the Trust to
execute and deliver, on behalf of the Trust, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge,
and
all other comparable instruments, with respect to the Receivables and with
respect to the Financed Vehicles; provided,
however,
that
notwithstanding the foregoing, the Servicer shall not, except pursuant to
an
order from a court of competent jurisdiction, release an Obligor from payment
of
any unpaid amount under any Receivable or waive the right to collect the
unpaid
balance of any Receivable from the Obligor except in accordance with the
Servicer’s customary practices and the Credit and Collection Policy.
The
Servicer is hereby authorized, but not required, to commence, in its own
name or
in the name of the Trust, a legal proceeding to enforce a Receivable pursuant
to
Section 4.3 or to commence or participate in any other legal proceeding
(including, without limitation, a bankruptcy proceeding) relating to or
involving a Receivable, an Obligor or a Financed Vehicle. If the Servicer
commences or participates in such a legal proceeding in its own name, the
Trust
shall thereupon be deemed to have automatically assigned such Receivable
to the
Servicer solely for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Servicer is authorized and empowered
by the Trust to execute and deliver in the Servicer’s name any notices, demands,
claims, complaints, responses, affidavits or other documents or instruments
in
connection with any such proceeding. The Trust Collateral Agent and the Owner
Trustee shall furnish the Servicer with any limited powers of attorney and
other
documents which the Servicer may reasonably request and which the Servicer
deems
necessary or appropriate and take any other steps which the Servicer may
deem
necessary or appropriate to enable the Servicer to carry out its servicing
and
administrative duties under this Agreement.
(b) The
duties of the Designated Backup Subservicer are described in Schedule D hereto.
SECTION
4.2. Collection
of Receivable Payments; Modifications of Receivables.
(a) Consistent
with the standards, policies and procedures required by this Agreement, the
Servicer shall make reasonable efforts to collect all payments called for
under
the terms and provisions of the Receivables as and when the same shall become
due, and shall follow such collection procedures as it follows with respect
to
all comparable automobile receivables that it services for itself or others
and
otherwise act with respect to the Receivables, the Dealer Agreements, the
Dealer
Assignments, the Insurance Policies and the Other Conveyed Property in such
manner as will, in the reasonable judgment of the Servicer, maximize the
amount
to be received by the Trust with respect thereto, including directing the
Trust
to sell the Receivables pursuant to Section 4.3(c) hereof. The Servicer is
authorized in its discretion to waive any prepayment charge, late payment
charge
or any other similar fees that may be collected in the ordinary course of
servicing any Receivable.
30
(b) The
Servicer may (A) at any time agree to a modification or amendment of a
Receivable in order to (i) change on one or more occasions the Obligor’s regular
monthly due date to a date that shall in no event be later than 30 days in
total
after the original monthly due date of that Receivable or (ii) re-amortize
the
Scheduled Receivables Payments on the Receivable following a partial prepayment
of principal, in accordance with its customary procedures or (iii) increase
the
Principal Balance and re-amortize the Scheduled Receivables Payments on the
Receivable following a mechanical re-write; provided, that the number of
Receivables that are subject to a mechanical re-write shall not exceed, in
the
aggregate, 2% of the number of Receivables as of the Closing Date, or (B)
may
direct the Trust to sell the Receivables pursuant to Section 4.3 hereof if
the
Servicer believes in good faith that such extension, modification, amendment
or
sale is necessary to avoid a default on such Receivable, will maximize the
amount to be received by the Trust with respect to such Receivable, and is
otherwise in the best interests of the Trust.
(c) The
Servicer may grant payment extensions on, or other modifications or amendments
to, a Receivable (in addition to those modifications permitted by Section
4.2(b)
hereof), in accordance with its customary procedures if the Servicer believes
in
good faith that such extension, modification or amendment is necessary to
avoid
a default on such Receivable, will maximize the amount to be received by
the
Trust with respect to such Receivable, and is otherwise in the best interests
of
the Trust; provided,
however,
that:
(i) The
aggregate period of all extensions on a Receivable shall not exceed eight
months;
(ii) a
Receivable may be extended no more than twice within a twelve month period
unless the regional manager approves and in no event may a Receivable be
extended more than four times within its lifetime;
(iii) In
no
event may a Receivable be extended beyond the Collection Period immediately
preceding the latest Final Scheduled Distribution Date;
(iv) The
average Monthly Extension Rate for (A) any three consecutive calendar months
shall not exceed 4.0%; and
(v) So
long
as an Insurer Default shall not have occurred and be continuing, the Servicer
shall not amend or modify a Receivable (except as provided in Section 4.2(b)
and
this Section 4.2(c)) without the consent of the Insurer or a Note Majority
(if
an Insurer Default shall have occurred and be continuing).
31
With
respect to clause (iv) of this Section 4.2(c), in the event the average of
the
Monthly Extension Rates calculated with respect to three consecutive calendar
months exceeds 4.0% (which information shall be set forth in the related
Servicer’s Certificate), the Servicer shall, on the third such Accounting Date,
purchase from the Trust the Receivables with respect to which payment had
been
extended (starting with the Receivables most recently so extended) in an
aggregate Principal Balance equal to the product of (i) the difference between
such average of Monthly Extension Rates and 4.0% and (ii) the Aggregate
Principal Balance, and pay the related Purchase Amount on the related
Determination Date; provided,
however,
that in
the event the Backup Servicer shall be acting as Servicer hereunder, the
foregoing sentence shall apply only in respect of Receivables as to which
payments had been extended by such Backup Servicer.
SECTION
4.3. Realization
upon Receivables.
(a) In
addition to the Servicer’s ability to direct the Trust to sell Receivables
pursuant to Section 4.3(c) hereof, and consistent with the standards, policies
and procedures required by this Agreement, the Servicer shall use its best
efforts to repossess (or otherwise comparably convert the ownership of) and
liquidate any Financed Vehicle securing a Receivable with respect to which
the
Servicer has determined that payments thereunder are not likely to be resumed,
as soon as is practicable after default on such Receivable but in no event
later
than the date on which all or any portion of a Scheduled Receivables Payment
has
become 91 days delinquent; provided,
however,
that
the Servicer may elect not to repossess a Financed Vehicle within such time
period if in its good faith judgment it determines that the proceeds ultimately
recoverable with respect to such Receivable would be increased by forbearance
or
if it instead elects to direct the Trust to sell the Receivables pursuant
to
Section 4.3(c). The Servicer is authorized to follow such customary practices
and procedures as it shall deem necessary or advisable, consistent with the
standard of care required by Section 4.1, which practices and procedures
may
include reasonable efforts to realize upon any recourse to Dealers, the sale
of
the related Financed Vehicle at public or private sale, the submission of
claims
under an Insurance Policy and other actions by the Servicer in order to realize
upon such a Receivable. The foregoing is subject to the provision that, in
any
case in which the Financed Vehicle shall have suffered damage, the Servicer
shall not expend funds in connection with any repair or towards the repossession
of such Financed Vehicle unless it shall determine in its discretion that
such
repair and/or repossession shall increase the proceeds of liquidation of
the
related Receivable by an amount greater than the amount of such expenses.
All
amounts received upon liquidation of a Financed Vehicle shall be remitted
directly by the Servicer to the Collection Account pursuant to Section 4.1(a).
The Servicer shall be entitled to recover all reasonable expenses incurred
by it
in the course of repossessing and liquidating a Financed Vehicle into cash
proceeds, including costs to repair the Financed Vehicle, but only out of
the
cash proceeds of such Financed Vehicle, any deficiency obtained from the
Obligor
or any amounts received from the related Dealer, which amounts in reimbursement
may be retained by the Servicer (and shall not be required to be deposited
as
provided in Section 4.2(e)) to the extent of such expenses. The Servicer
shall
pay on behalf of the Trust any personal property taxes assessed on repossessed
Financed Vehicles. The Servicer shall be entitled to reimbursement of any
such
tax from Net Liquidation Proceeds with respect to such Receivable.
(b) If
the
Servicer, or if UACC is no longer the Servicer, UACC at the request of the
Servicer, elects to commence a legal proceeding to enforce a Dealer Agreement
or
Dealer Assignment, the act of commencement shall be deemed to be an automatic
assignment from the Trust to the Servicer, or to UACC at the request of the
Servicer, of the rights under such Dealer Agreement or Dealer Assignment
for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer or UACC, as appropriate, may not
enforce
a Dealer Agreement or Dealer Assignment on the grounds that it is not a real
party in interest or a Person entitled to enforce the Dealer Agreement or
Dealer
Assignment, the Owner Trustee, at UACC’s expense or the Seller, at the Seller’s
expense, shall take such steps as the Servicer deems reasonably necessary
to
enforce the Dealer Agreement or Dealer Assignment , including bringing suit
in
its name or the name of the Seller or of the Trust and the Owner Trustee
and/or
the Trust Collateral Agent for the benefit of the Holders. All amounts recovered
shall be remitted directly by the Servicer as provided in Section
4.2(e).
32
(c) Consistent
with the standards, policies and procedures required by this Agreement, the
Servicer may use its best efforts to locate a third party purchaser that
is not
affiliated with the Servicer, the Seller or the Trust to purchase from the
Trust
any Receivable that has become more than 60 days delinquent, and shall have
the
right to direct the Trust to sell any such Receivable to the third-party
purchaser; provided,
that no
more than 20% of the number of Receivables in the pool as of the Closing
Date
may be sold by the Trust pursuant to this Section 4.3(c) in the aggregate;
provided, further,
that
the Servicer may elect to not direct the Trust to sell a Receivable that
has
become more than 60 days delinquent if in its good faith judgment the Servicer
determines that the proceeds ultimately recoverable with respect to such
Receivable would be increased by forbearance. In selecting Receivables to
be
sold to a third party purchaser pursuant to this Section 4.3(c), the Servicer
shall use commercially reasonable efforts to locate purchasers for the most
delinquent Receivables first. In any event, the Servicer shall not use any
procedure in selecting Receivables to be sold to third party purchasers which
is
materially adverse to the interest of the Holders or the Insurer. The Trust
shall sell each Sold Receivable for the greatest market price possible;
provided,
however,
that
aggregate Sale Amounts received by the Trust for all Receivables sold to
a
single third-party purchaser on a single date must be at least equal to the
sum
of the Minimum Sale Prices for all such Receivables. The Servicer shall remit
or
cause the third-party purchaser to remit all sale proceeds from the sale
of
Receivables directly to the Collection Account without deposit into any
intervening account as soon as practicable, but in no event later than the
Business Day after receipt thereof.
(d) Upon
the
occurrence of a Level 2 Trigger Event or a Xxxxx 0 Xxxxxxx Xxxxx, the Servicer
shall, within 30 Business Days, provide an updated list of Obligors and a
list
of active branch offices to the Backup Servicer and the Designated Backup
Subservicer and post payment instruction signage at each branch directing
payments to be made to the appropriate post office box.
(e) Upon
the
occurrence of a Level 3 Trigger Event (as defined in the Spread Account
Agreement), the Servicer shall (i) within 21 Business Days, send notice to
the
Obligors that payments must be mailed to the Servicer’s service provider, (ii)
within 5 Business Days, send written notice to the Backup Servicer and the
Designated Backup Subservicer of the occurrence of such Trigger Event and
request that the Designated Backup Subservicer provide the Servicer with
revised
payment instructions and (iii) post any payment instruction signage provided
by
the Backup Servicer or the Designated Backup Subservicer in plain view at
each
branch.
33
SECTION
4.4. Insurance.
(a) The
Servicer shall require, in accordance with its customary servicing policies
and
procedures, that each Financed Vehicle be insured by the related Obligor
under
the Insurance Policies referred to in Paragraph (cc) of Section 3.3 to the
Sale
Agreement and shall monitor the status of such physical loss and damage
insurance coverage thereafter, in accordance with its customary servicing
procedures. Each Receivable requires the Obligor to maintain such physical
loss
and damage insurance, naming UACC and its successors and assigns as additional
insureds, and permits the holder of such Receivable to obtain physical loss
and
damage insurance at the expense of the Obligor if the Obligor fails to maintain
such insurance. If the Servicer shall determine that an Obligor has failed
to
obtain or maintain a physical loss and damage Insurance Policy covering the
related Financed Vehicle which satisfies the conditions set forth in clause
(i)(a) of such Paragraph (cc) of Section 3.3 to the Sale Agreement (including,
without limitation, during the repossession of such Financed Vehicle) the
Servicer may, but is not required to, enforce the rights of the holder of
the
Receivable under the Receivable to require the Obligor to obtain such physical
loss and damage insurance in accordance with its customary servicing policies
and procedures. The Servicer may, but is not required to, maintain a vendor’s
single interest or other collateral protection insurance policy with respect
to
all Financed Vehicles (“Collateral
Insurance”)
which
policy shall by its terms insure against physical loss and damage in the
event
any Obligor fails to maintain physical loss and damage insurance with respect
to
the related Financed Vehicle. All policies of Collateral Insurance shall
be
endorsed with clauses providing for loss payable to the Servicer. Costs incurred
by the Servicer in maintaining such Collateral Insurance shall be paid by
the
Servicer.
(b) [Reserved].
(c) [Reserved].
(d) The
Servicer may xxx to enforce or collect upon the Insurance Policies, in its
own
name, if possible, or as agent of the Trust. If the Servicer elects to commence
a legal proceeding to enforce an Insurance Policy, the act of commencement
shall
be deemed to be an automatic assignment of the rights of the Trust under
such
Insurance Policy to the Servicer for purposes of collection only. If, however,
in any enforcement suit or legal proceeding it is held that the Servicer
may not
enforce an Insurance Policy on the grounds that it is not a real party in
interest or a holder entitled to enforce the Insurance Policy, the Trust
and/or
the Trust Collateral Agent, at the Servicer’s expense shall take such steps as
the Servicer deems necessary to enforce such Insurance Policy, including
bringing suit in its name or the name of the Trust and/or the Trust Collateral
Agent for the benefit of the Holders.
(e) The
Servicer will cause itself and may cause the Trust Collateral Agent to be
named
as named insured under all policies of Collateral Insurance.
34
SECTION
4.5. Maintenance
of Security Interests in Vehicles.
(a) Consistent
with the policies and procedures required by this Agreement, the Servicer
shall
take such steps on behalf of the Trust as are necessary to maintain perfection
of the security interest created by each Receivable in the related Financed
Vehicle, including, but not limited to, obtaining the execution by the Obligors
and the recording, registering, filing, re-recording, re-filing, and
re-registering of all security agreements, financing statements and continuation
statements as are necessary to maintain the security interest granted by
the
Obligors under the respective Receivables. The Trust Collateral Agent hereby
authorizes the Servicer, and the Servicer agrees, to take any and all steps
necessary to re-perfect such security interest on behalf of the Trust as
necessary because of the relocation of a Financed Vehicle or for any other
reason. In the event that the assignment of a Receivable to the Trust is
insufficient, without a notation on the related Financed Vehicle’s certificate
of title, or without fulfilling any additional administrative requirements
under
the laws of the state in which the Financed Vehicle is located, to perfect
a
security interest in the related Financed Vehicle in favor of the Trust,
the
Servicer hereby agrees that the Seller’s designation as the secured party on the
Lien Certificate is in its capacity as Servicer as agent of the
Trust.
(b) Upon
the
occurrence of an Insurance Agreement Event of Default, the Insurer may (so
long
as an Insurer Default shall not have occurred and be continuing) instruct
the
Trust Collateral Agent and the Servicer to take or cause to be taken, or,
if an
Insurer Default shall have occurred and be continuing, upon the occurrence
of a
Servicer Termination Event, the Trust Collateral Agent and the Servicer shall
take or cause to be taken such action as may, in the opinion of counsel to
the
Controlling Party, be necessary to perfect or re-perfect the security interests
in the Financed Vehicles securing the Receivables in the name of the Trust
by
amending the title documents of such Financed Vehicles or by such other
reasonable means as may, in the opinion of counsel to the Controlling Party,
be
necessary or prudent.
UACC
hereby agrees to pay all expenses related to such perfection or reperfection
and
to take all action necessary therefor. In addition, prior to the occurrence
of
an Insurance Agreement Event of Default, the Controlling Party may instruct
the
Trust Collateral Agent and the Servicer to take or cause to be taken such
action
as may, in the opinion of counsel to the Controlling Party, be necessary
to
perfect or re-perfect the security interest in the Financed Vehicles underlying
the Receivables in the name of the Trust, including by amending the title
documents of such Financed Vehicles or by such other reasonable means as
may, in
the opinion of counsel to the Controlling Party, be necessary or prudent;
provided,
however,
that if
the Controlling Party requests that the title documents be amended prior
to the
occurrence of an Insurance Agreement Event of Default, the out-of-pocket
expenses of the Trust Collateral Agent and the Servicer in connection with
such
action shall be reimbursed to the Trust Collateral Agent and the Servicer
by the
Controlling Party. The Seller hereby appoints the Trust Collateral Agent
and the
Servicer as its attorney-in-fact to take any and all steps required to be
performed by the Seller pursuant to this Section 4.5(b) (it being understood
that and agreed that the Trust Collateral Agent and the Servicer shall have
no
obligation to take such steps with respect to all perfection or reperfection,
except as pursuant to the Basic Documents to which it is a party and to which
UACC or the Seller has paid all expenses), including execution of the Lien
Certificates or any other documents in the name and stead of the Seller and
the
Trust Collateral Agent hereby accepts such appointment.
35
SECTION
4.6. Covenants,
Representations, and Warranties of Servicer.
By
its
execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which the Trust Collateral Agent
relies in accepting the Receivables, on which the Trustee relies in
authenticating the Notes and on which the Insurer relies in issuing the Note
Policy.
(a) The
Servicer covenants as follows:
(i) Liens
in Force.
The
Financed Vehicle securing each Receivable shall not be released in whole
or in
part from the security interest granted by the Receivable, except upon payment
in full of the Receivable or as otherwise contemplated herein;
(ii) No
Impairment.
The
Servicer shall do nothing to impair the rights of the Trust, the Insurer
or the
Holders in the Receivables, the Dealer Agreements, the Dealer Assignments,
the
Insurance Policies or the Other Conveyed Property except as otherwise expressly
provided herein;
(iii) No
Amendments.
The
Servicer shall not extend or otherwise amend the terms of any Receivable,
except
in accordance with Section 4.2; and
(iv) Restrictions
on Liens.
The
Servicer shall not (i) create, incur or suffer to exist, or agree to create,
incur or suffer to exist, or consent to cause or permit in the future (upon
the
happening of a contingency or otherwise) the creation, incurrence or existence
of any Lien or restriction on transferability of the Receivables except for
the
Lien in favor of the Trust Collateral Agent for the benefit of the Holders
and
Insurer, the Lien imposed by the Spread Account Agreement in favor of the
Collateral Agent for the benefit of the Trust Collateral Agent and Insurer,
and
the restrictions on transferability imposed by this Agreement or (ii) sign
or
file under the Uniform Commercial Code of any jurisdiction any financing
statement which names the Servicer as a debtor, or sign any security agreement
authorizing any secured party thereunder to file such financing statement,
with
respect to the Receivables, except in each case any such instrument solely
securing the rights and preserving the Lien of the Trust Collateral Agent,
for
the benefit of the Holders and the Insurer.
(b) UACC
represents, warrants and covenants as of the Closing Date as to itself that
the
representations and warranties set forth on the Schedule of Representations
attached hereto as Schedule C are true and correct.
SECTION
4.7. Purchase
of Receivables Upon Breach of Covenant.
Upon
discovery by any of the Servicer, the Insurer, a Responsible Officer of the
Trust Collateral Agent, the Owner Trustee, a Responsible Officer of the Backup
Servicer, a Responsible Officer of the Designated Backup Subservicer or a
Responsible Officer of the Trustee of a breach of any of the covenants set
forth
in Subsections (a), (b), (c), (d) and (j) of Section 3.3 or in Sections 4.5(a)
or 4.6 hereof, the party discovering such breach shall give prompt written
notice to the others; provided,
however,
that
the failure to give any such notice shall not affect any obligation of UACC
as
Servicer under this Section; provided,
further,
that
the Designated Backup Subservicer, so long as it has not been appointed Servicer
or subservicer, shall have no liability for a failure to give such notice.
As of
the second Accounting Date following its discovery or receipt of notice of
any
breach of any covenant set forth in Sections 4.5(a) or 4.6(a) which materially
and adversely affects the interests of the Holders or the Insurer in any
Receivable (including any Liquidated Receivable) (or, at UACC’s election, the
first Accounting Date so following) or the related Financed Vehicle, UACC
shall,
unless such breach shall have been cured in all material respects, purchase
from
the Trust the Receivable affected by such breach and, on the related
Determination Date, UACC shall pay the related Purchase Amount. It is understood
and agreed that the obligation of UACC to purchase any Receivable (including
any
Liquidated Receivable) with respect to which such a breach has occurred and
is
continuing shall, if such obligation is fulfilled, constitute the sole remedy
against UACC for such breach available to the Insurer, the Holders, the Owner
Trustee, the Backup Servicer, the Designated Backup Subservicer or the Trust
Collateral Agent; provided,
however,
that
UACC shall indemnify the Trust, the Backup Servicer, the Designated Backup
Subservicer, the Collateral Agent, the Insurer, the Owner Trustee, the Trust
Collateral Agent, the Trustee and the Holders from and against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees
and
expenses of counsel, which may be asserted against or incurred by any of
them as
a result of third party claims arising out of the events or facts giving
rise to
such breach. Notwithstanding anything to the contrary contained herein, UACC
will not be required to repurchase Receivables due solely to the Servicer’s not
having received Lien Certificates that have been properly applied for from
the
Registrar of Titles in the applicable states for such Receivables unless
(i)
such Lien Certificates shall not have been received with respect to Receivables
with Principal Balances which total more than 0.25% of the Aggregate Principal
Balance as of the 180th
day
after the Closing Date, in which case UACC shall be required to repurchase
a
sufficient number of such Receivables to cause the aggregate Principal Balances
of the remaining Receivables for which no such Lien Certificate shall have
been
received to be no greater than 0.25% of the Aggregate Principal Balance as
of
such date or (ii) such Lien Certificates shall not have been received as
of the
240th
day
after the Closing Date. This section shall survive the termination of this
Agreement and the earlier removal or resignation of the Trustee and/or the
Trust
Collateral Agent and/or the Backup Servicer and/or the Collateral Agent and/or
the Designated Backup Subservicer.
36
SECTION
4.8. Total
Servicing Fee; Payment of Certain Expenses by Servicer.
On
each
Distribution Date, the Servicer shall be entitled to receive out of the
Collection Account the Base Servicing Fee and any Supplemental Servicing
Fee for
the related Collection Period (together, the “Servicing
Fee”)
pursuant to Section 5.7. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities under this Agreement (including
taxes imposed on the Servicer, expenses incurred in connection with
distributions and reports made by the Servicer to Holders or the Insurer
and all
other fees and expenses of the Owner Trustee, the Collateral Agent, the Backup
Servicer, the Designated Backup Subservicer, the Trust Collateral Agent or
the
Trustee, except taxes levied or assessed against the Trust, and claims against
the Trust in respect of indemnification, which taxes and claims in respect
of
indemnification against the Trust are expressly stated to be for the account
of
UACC). The Servicer shall be liable for the fees and expenses of the Owner
Trustee, the Backup Servicer, the Designated Backup Subservicer, the Trust
Collateral Agent, the Trustee, the Collateral Agent and the Independent
Accountants. Notwithstanding the foregoing, if the Servicer shall not be
UACC, a
successor to UACC as Servicer including the Backup Servicer or the Designated
Backup Subservicer permitted by Section 9.3 shall not be liable for taxes
levied
or assessed against the Trust or claims against the Trust in respect of
indemnification, or the fees and expenses referred to above.
37
SECTION
4.9. Servicer’s
Certificate.
No
later
than 10:00 a.m. Eastern time on the 3rd Business Day prior to each Distribution
Date, the Servicer shall deliver (facsimile delivery being acceptable) to
the
Trustee, the Owner Trustee, the Trust Collateral Agent, the Collateral Agent,
the Backup Servicer, the Designated Backup Subservicer, the Insurer and each
Rating Agency a Servicer’s Certificate executed by a Responsible Officer of the
Servicer containing among other things, (i) all information necessary to
enable
the Trust Collateral Agent to make any withdrawal and deposit required by
Section 5.5 and to make the distributions required by Section 5.7(b), (ii)
a
listing of all Purchased Receivables and Sold Receivables purchased by the
Servicer or sold by the Trust as of the related Accounting Date, identifying
the
Receivables so purchased by the Servicer or sold by the Trust, (iii) all
information necessary to enable the Backup Servicer (or the Designated Backup
Subservicer, as the case may be) to verify the items specified in Section
4.13(a)(iii), (iv) all information necessary to enable the Trust Collateral
Agent to send the statements to Holders and the Insurer required by Section
5.10, and (v) all information necessary to enable the Trust Collateral Agent
to
reconcile the aggregate cash flows, the Collection Account for the related
Collection Period and Distribution Date, including the accounting required
by
Section 5.10. Receivables purchased by the Servicer or by the Seller on the
related Accounting Date and each Receivable which became a Liquidated Receivable
or which was paid in full during the related Collection Period shall be
identified by account number (as set forth in the Schedule of Receivables).
In
addition to the information set forth in the preceding sentence, the Servicer’s
Certificate shall also contain the following information: (a) the Delinquency
Ratio, Monthly Extension Rate and Cumulative Net Loss Ratio (as such terms
are
defined herein or in the Spread Account Agreement) for the related Collection
Period; (b) whether any Trigger Event has occurred as of such Determination
Date; (c) whether any Trigger Event that may have occurred as of a prior
Determination Date is deemed cured as of such Determination Date; (d) whether
to
the knowledge of the Servicer an Insurance Agreement Event of Default has
occurred.
SECTION
4.10. Annual
Statement as to Compliance, Notice of Servicer Termination Event.
(a) On
or
before 60 days after the end of each fiscal year, commencing with the fiscal
year ended December 31, 2007, the Servicer shall:
(i) deliver
to the Depositor, acting on behalf of the Trust, and the Insurer, a report
(in
the form of Exhibit F) regarding the Servicer’s assessment of compliance with
the Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122
of
Regulation AB. Such report shall be addressed to the Trust and signed by
an
authorized officer of the Servicer, and shall address each of the Servicing
Criteria applicable to it specified on a certification substantially in the
form
of Exhibit G hereto;
(ii) deliver
to the Depositor, acting on behalf of the Trust, and the Insurer, a report
of a
registered public accounting firm that attests to, and reports on, the
assessment of compliance made by the Servicer and delivered pursuant to the
preceding paragraph. Such attestation shall 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;
38
(iii) cause
each Subservicer and each Subcontractor determined by UACC to be “participating
in the servicing function” within the meaning of Item 1122 of Regulation AB, to
deliver to the Depositor, acting on behalf of the Trust and the Insurer,
an
assessment of compliance and accountants’ attestation as and when provided in
paragraphs (i) and (ii) of this Section; and
(iv) until
and
unless a Form 15 suspension notification has been filed with respect to the
Trust and if requested by the Depositor, acting on behalf of the Trust, deliver
to the Depositor, acting on behalf of the Trust, and any other Person that
will
be responsible for signing the certification (a “Sarbanes Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a securitization transaction a certification in the
form
attached hereto as Exhibit F.
(b) The
Servicer acknowledges that the parties identified in clause (a)(iv) above
may
rely on the certification provided by the Servicer pursuant to such clause
in
signing a Sarbanes Certification and filing such with the Commission. However,
in no event shall any certificate provided in the form attached hereto as
Exhibit F and supplied under clause (a)(iv) be filed with the SEC. The
Depositor, acting on behalf of the Trust, will not request delivery of a
certification under clause (a)(iv) above unless the Depositor is required
under
the Exchange Act to file an annual report on Form 10-K with respect to an
issuer
whose asset pool includes the Receivables.
(c) Each
assessment of compliance provided by a Subservicer pursuant to Section
4.10(a)(iii) shall address each of the Servicing Criteria applicable to it
specified on a certification to be delivered to the Servicer and the Depositor,
acting on behalf of the Trust, on or prior to the date of such appointment.
An
assessment of compliance provided by a Subcontractor pursuant to Section
4.10(a)(iii) need not address any elements of the Servicing Criteria other
than
those specified by the Servicer and the Depositor, acting on behalf of the
Trust, on the date of such appointment.
(d) The
Servicer shall deliver to the Trustee, the Owner Trustee, the Trust Collateral
Agent, the Backup Servicer, the Designated Backup Subservicer, the Insurer,
the
Collateral Agent, the Seller and each Rating Agency, promptly after having
obtained knowledge thereof, but in no event later than two (2) Business Days
thereafter, written notice in an officer’s certificate of any event which with
the giving of notice or lapse of time, or both, would become a Servicer
Termination Event under Section 9.1.
SECTION
4.11. Annual
Independent Accountants’ Report.
The
Servicer shall cause a firm of nationally recognized independent certified
public accountants (the “Independent
Accountants”),
who
may also render other services to the Servicer or to the Seller, to deliver
to
the Trustee, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer,
the Designated Backup Subservicer, the Insurer and each Rating Agency, on
or
before February 28 of each year, beginning on February 28, 2008, with respect
to
the twelve months ended the immediately preceding December 31 (or other
applicable date) (or such other period as shall have elapsed from the Closing
Date to the date of such certificate), an attestation report (the “Accountants’
Report”)
in
compliance with Item 1122(b) of Regulation AB (17 CFR 229.1122(b)), addressed
to
the Board of Directors of the Servicer, to the Trustee, the Owner Trustee,
the
Trust Collateral Agent, the Backup Servicer, the Designated Backup Subservicer
and to the Insurer, providing information as required by Item 1122(b) of
Regulation AB (17 CFR 229.1122(b)), and a statement to the effect that such
firm
has audited the books and records of United Pan Am Financial Corp. and
subsidiaries and that (1) such audit was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as such firm considered
necessary in the circumstances; (2) the firm is independent of the Seller
and
the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants, and (3) includes a report
on
the application of agreed upon procedures to three randomly selected Servicer’s
Certificates including the delinquency, default and loss statistics required
to
be specified therein noting whether any exceptions or errors in the Servicer’s
Certificates were found.
39
In
the
event such independent public accountants require the Trust Collateral Agent,
Trustee, the Servicer, Backup Servicer or Designated Backup Subservicer to
agree
to the procedures to be performed by such firm in any of the reports required
to
be prepared pursuant to this Section 4.11, the Servicer shall direct the
Trust
Collateral Agent, Trustee, the Backup Servicer and Designated Backup Subservicer
in writing to so agree; it being understood and agreed that the Trust Collateral
Agent, Trustee, Backup Servicer and Designated Backup Subservicer will deliver
such letter of agreement in conclusive reliance upon the direction of the
Servicer, and the Trust Collateral Agent, Trustee, Backup Servicer and
Designated Backup Subservicer have not made any independent inquiry or
investigation as to, and shall have no obligation or liability in respect
of,
the sufficiency, validity or correctness of such procedures.
SECTION
4.12. Access
to Certain Documentation and Information Regarding Receivables.
The
Servicer shall provide to representatives of the Trustee, the Owner Trustee,
the
Trust Collateral Agent, the Backup Servicer, the Designated Backup Subservicer
and the Insurer reasonable access to the documentation regarding the
Receivables. In each case, such access shall be afforded without charge but
only
upon reasonable request and during normal business hours. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access as provided in this Section as
a
result of such obligation shall not constitute a breach of this Section.
(b) At
the
request of the Depositor, acting on behalf of the Trust, for the purpose
of
satisfying its reporting obligation under the Exchange Act with respect to
any
class of asset-backed securities, the Servicer shall (or shall cause each
Subservicer to) (i) notify the Depositor, acting on behalf of the Trust,
in
writing of any material litigation or governmental proceedings pending against
the Servicer or any Subservicer and (ii) provide to the Depositor, acting
on
behalf of the Trust, a description of such proceedings.
40
(c) As
a
condition to the succession to the Servicer or any Subservicer as servicer
or
subservicer under this Agreement by any Person (i) into which the Servicer
or
such Subservicer may be merged or consolidated, or (ii) which may be appointed
as a successor to the Servicer or any Subservicer, the Servicer or such
Subservicer shall provide to the Trust, the Insurer and the Depositor, at
least
10 Business Days prior to the effective date of such succession or appointment,
(x) written notice to the Trust of such succession or appointment and (y)
in
writing and in form and substance reasonably satisfactory to the Trust, all
information reasonably requested by the Trust or the Indenture Trustee, acting
on behalf of the Trust, in order to comply with its reporting obligation
under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(d) In
addition to such information as the Servicer, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, if so requested by
the
Trust or the Depositor, acting on behalf of the Trust, the Servicer shall
provide such information regarding the performance or servicing of the
Receivables as is reasonably required to facilitate preparation of distribution
reports in accordance with Item 1121 of Regulation AB. Such information shall
be
provided concurrently with the monthly reports otherwise required to be
delivered by the Servicer under this Agreement, commencing with the first
such
report due not less than ten Business Days following such request.
(e) UACC
shall be liable to the Trust and the Depositor for any monetary damages incurred
as a result of the failure by any Subservicer or any Subcontractor or any
person
performing a servicing function under the direction or control of UACC to
deliver, including any person UACC is obligated to cause to deliver any
information, report, certification, attestation, accountants’ letter or other
material when and as required under this Article IV, including any failure
by
UACC to identify any Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, and shall reimburse the
applicable party for all costs reasonably incurred by each such party in
order
to obtain the information, report, certification, accountants’ letter or other
material not delivered as required by the Servicer, any Subservicer, or any
Subcontractor.
SECTION
4.13. Monthly
Tape.
(a) On
or
before the seventh calendar day, of each month, the Servicer will deliver
to the
Trust Collateral Agent, the Insurer, the Backup Servicer and the Designated
Backup Subservicer a computer tape or a diskette (or any other electronic
transmission acceptable to the Trust Collateral Agent, the Insurer and the
Backup Servicer) in a format acceptable to the Trust Collateral Agent, the
Insurer and the Backup Servicer containing the information with respect to
the
Receivables as of the preceding Accounting Date necessary for preparation
of the
Servicer’s Certificate relating to the immediately preceding Determination Date
and necessary to review the application of collections as provided in Section
5.4 (the “Monthly
Tape”).
The
Backup Servicer shall cause the Designated Backup Subservicer to use such
tape
or diskette (or other electronic transmission acceptable to the Trust Collateral
Agent and the Backup Servicer) to (i) confirm that the Servicer’s Certificate is
complete on its face or note discrepancies, (ii) confirm or note discrepancies
that such tape, diskette or other electronic transmission is in readable
form,
(iii) calculate and confirm or note discrepancies regarding (A) the aggregate
amount distributable as principal on the related Distribution Date to each
Class
of Notes; (B) the aggregate amount distributable as interest on the related
Distribution Date to each Class of Notes; (C) any amounts distributable on
the
related Distribution Date which are to be paid with funds (y) withdrawn from
the
Spread Account, or (z) drawn under the Note Policy; (D) the outstanding
principal amount of each Class of Notes after giving effect to all distributions
made pursuant to clause (A), above; (E) the Note Pool Factor for each Class
of
Notes after giving effect to all distributions made pursuant to clause (A),
above; (F) the aggregate Noteholders’ Interest Carryover Amount on such
Distribution Date after giving effect to all distributions made pursuant
to
clause (B) above; (G) the Monthly Extension Rate; (H) the Delinquency Ratio;
and
(I) the Cumulative Net Loss Ratio. The Backup Servicer shall cause the
Designated Backup Subservicer to provide a letter to the Controlling Party
and
to the Trustee that it has verified the Servicer’s Certificate in accordance
with this Section and shall notify the Servicer and the Controlling Party
of any
discrepancies, in each case, on or before the fifth Business Day following
the
Distribution Date. In the event that the Designated Backup Subservicer reports
any discrepancies, the Servicer and the Backup Servicer shall attempt to
reconcile such discrepancies prior to the next succeeding Distribution Date,
but
in the absence of a reconciliation, the Servicer’s Certificate shall control for
the purpose of calculations and distributions with respect to the next
succeeding Distribution Date. In the event that the Designated Backup
Subservicer and the Servicer are unable to reconcile discrepancies with respect
to a Servicer’s Certificate by the next succeeding Distribution Date, the
Servicer shall cause the Independent Accountants, at the Servicer’s expense, to
audit the Servicer’s Certificate and, prior to the last day of the month after
the month in which such Servicer’s Certificate was delivered, reconcile the
discrepancies. The effect, if any, of such reconciliation shall be reflected
in
the Servicer’s Certificate for such next succeeding Determination Date. In
addition, upon the occurrence of a Servicer Termination Event the Servicer
shall, if so requested by the Controlling Party, deliver to the Backup Servicer
or any replacement Servicer its Collection Records and its Monthly Records
within 15 days after demand therefor and a computer tape containing as of
the
close of business on the date of demand all of the data maintained by the
Servicer in computer format in connection with servicing the Receivables.
Other
than the duties specifically set forth in this Agreement, the Backup Servicer
shall have no obligations hereunder, including, without limitation, to
supervise, verify, monitor or administer the performance of the Servicer.
The
Backup Servicer shall have no liability for any actions taken or omitted
by the
Servicer.
41
(b) The
Designated Backup Subservicer shall have no liability for the failure to
perform
any duty if such failure results from its failure to receive in a timely
manner
the Monthly Tape or any other information reasonably required by it to perform
its obligations, and the Designated Backup Subservicer shall have no liability
for any error or omission in the Servicer’s Certificate or any other data
confirmed by it, such certificates and data being the sole responsibility
of the
Servicer or the other Person supplying such data.
(c) The
Servicer shall deliver to the Designated Backup Subservicer the Monthly Tape
on
or before the seventh calendar day of each month. The Backup Servicer shall
cause such Designated Backup Subservicer to load such Monthly Tapes into
its
computer system in the format in which they were received (it being understood
that such loading shall not include boarding or other manipulation of the
data)
and to certify to the Trust Collateral Agent that (i) it can access and read
the
data and (ii) the summary totals for each category of information provided
in
such computer tapes conform with the summary totals for such categories of
information as reflected in the books and records of the Servicer. Other
than
the duties specifically set forth in this Agreement, the Designated Backup
Subservicer shall have no obligations hereunder, including, without limitation,
to supervise, verify, monitor or administer the performance of the Servicer.
The
Designated Backup Subservicer shall have no
42
liability
for any actions taken or omitted by the Servicer.
SECTION
4.14. [Reserved].
SECTION
4.15. Fidelity
Bond and Errors and Omissions Policy.
The
Servicer has obtained, and shall continue to maintain in full force and effect,
a Fidelity Bond and Errors and Omissions Policy of a type and in such amount
as
is customary for servicers engaged in the business of servicing automobile
receivables.
ARTICLE
V
Trust
Accounts; Distributions;
Statements
to Noteholders
SECTION
5.1. Establishment
of Trust Accounts.
(a) (i)
The
Trust Collateral Agent, on behalf of the Holders and the Insurer, shall
establish and maintain in its own name an Eligible Deposit Account (the
“Collection
Account”),
bearing a designation clearly indicating that the funds deposited therein
are
held for the benefit of the Trust Collateral Agent, in trust, on behalf of
the
Holders and the Insurer. The Collection Account shall initially be established
with the Trust Collateral Agent.
(ii)
The
Trust Collateral Agent, on behalf of the Holders, shall establish and maintain
in its own name an Eligible Deposit Account (the “Note
Distribution Account”),
bearing a designation clearly indicating that the funds deposited therein
are
held for the benefit of the Trust Collateral Agent, in trust, on behalf of
the
Holders and the Insurer. The Note Distribution Account shall initially be
established with the Trust Collateral Agent.
(b) Funds
on
deposit in the Collection Account and the Note Distribution Account
(collectively, the “Trust
Accounts”)
shall
be invested by the Trust Collateral Agent (or any custodian with respect
to
funds on deposit in any such account) in Eligible Investments selected in
writing by the Servicer (pursuant to standing instructions or otherwise).
All
such Eligible Investments shall be held by or on behalf of the Trust Collateral
Agent for the benefit of the Holders and the Insurer, as applicable. Other
than
as permitted by the Rating Agencies and the Insurer, funds on deposit in
any
Trust Account shall be invested in Eligible Investments that will mature
so that
such funds will be available at the close of business on the Business Day
immediately preceding the following Distribution Date. Funds deposited in
a
Trust Account on the day immediately preceding a Distribution Date upon the
maturity of any Eligible Investments are required to be invested overnight.
All
Eligible Investments will be held to maturity. The Trust Collateral Agent
shall
give notice to each institution that holds Eligible Investments in money
market
deposit accounts in a Trust Account that on each Distribution Date the Trust
Collateral Agent may be withdrawing all funds from the applicable Trust Account
not less than the minimum number of Business Days prior to each Distribution
Date as required by each such institution.
43
(c) All
investment earnings of moneys deposited in the Trust Accounts shall be deposited
(or caused to be deposited), pursuant to the monthly Servicer’s Certificate, on
each Distribution Date by the Trust Collateral Agent in the Collection Account,
and any loss resulting from such investments shall be charged to such account.
The Servicer will not direct the Trust Collateral Agent to make any investment
of any funds held in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be perfected in such
investment, in either case without any further action by any Person, and,
in
connection with any direction to the Trust Collateral Agent to make any such
investment, if requested by the Trust Collateral Agent, the Servicer shall
deliver to the Trust Collateral Agent an Opinion of Counsel, acceptable to
the
Trust Collateral Agent, to such effect.
(d) The
Trust
Collateral Agent shall not in any way be held liable by reason of any
insufficiency in any of the Trust Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Trust
Collateral Agent’s negligence or bad faith or its failure to make payments on
such Eligible Investments issued by the Trust Collateral Agent, in its
commercial capacity as principal obligor and not as trustee, in accordance
with
their terms.
(e) If
(i)
the Servicer shall have failed to give investment directions in writing for
any
funds on deposit in the Trust Accounts to the Trust Collateral Agent by 1:00
p.m. Eastern Time (or such other time as may be agreed by the Trust and Trust
Collateral Agent) on any Business Day; or (ii) a Default or Event of Default
shall have occurred and be continuing with respect to the Notes but the Notes
shall not have been declared due and payable, or, if such Notes shall have
been
declared due and payable following an Event of Default, amounts collected
or
receivable from the Trust Property are being applied as if there had not
been
such a declaration; then the Trust Collateral Agent shall, to the fullest
extent
practicable, invest and reinvest funds in the Trust Accounts in the investment
described in clause (d) of the definition of Eligible Investments; provided
that
the Trust Collateral Agent shall not be liable for any loss or absence of
income
resulting from such investments.
(f) (i)
The
Trust Collateral Agent shall possess all right, title and interest in all
funds
on deposit from time to time in the Trust Accounts and in all proceeds thereof
for the benefit of the Holders and the Insurer and all such funds, investments,
proceeds and income shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and
control
of the Trust Collateral Agent for the benefit of the Holders, as the case
may
be, and the Insurer. If, at any time, any of the Trust Accounts ceases to
be an
Eligible Deposit Account, the Trust Collateral Agent (or the Servicer on
its
behalf) shall within five Business Days (or such longer period as to which
each
Rating Agency and the Insurer may consent) establish a new Trust Account
as an
Eligible Deposit Account and shall transfer any cash and/or any investments
to
such new Trust Account. In connection with the foregoing, the Servicer agrees
that, in the event that any of the Trust Accounts are not accounts with the
Trust Collateral Agent, the Servicer shall notify the Trust Collateral Agent
in
writing promptly upon any of such Trust Accounts ceasing to be an Eligible
Deposit Account.
44
(ii)
With
respect to the Trust Account Property:
(A) any
Trust
Account Property that is held in deposit accounts shall be held solely in
the
Eligible Deposit Accounts; and, except as otherwise provided herein, each
such
Eligible Deposit Account shall be subject to the exclusive custody and control
of the Trust Collateral Agent, and the Trust Collateral Agent shall have
sole
signature authority with respect thereto;
(B) any
Trust
Account Property that constitutes Physical Property shall be delivered to
the
Trust Collateral Agent in accordance with paragraph (a) of the definition
of
“Delivery”
and
shall be held, pending maturity or disposition, solely by the Trust Collateral
Agent or a financial intermediary (as such term is defined in Section 8-313(4)
of the UCC) acting solely for the Trust Collateral Agent;
(C) any
Trust
Account Property that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations shall be delivered in
accordance with paragraph (b) of the definition of “Delivery”
and
shall be maintained by the Trust Collateral Agent, pending maturity or
disposition, through continued book-entry registration of such Trust Account
Property as described in such paragraph; and
(D) any
Trust
Account Property that is an “uncertificated
security”
under
Article 8 of the UCC and that is not governed by clause (C) above shall be
delivered to the Trust Collateral Agent in accordance with paragraph (c)
of the
definition of “Delivery”
and
shall be maintained by the Trust Collateral Agent, pending maturity or
disposition, through continued registration of the Trust Collateral Agent’s (or
its nominee’s) ownership of such security.
SECTION
5.2. [Reserved]
SECTION
5.3. Certain
Reimbursements to the Servicer.
The
Servicer will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to a Collection Period for amounts previously
deposited in the Collection Account but later determined by the Servicer
to have
resulted from mistaken deposits or postings or checks returned for insufficient
funds. The amount to be reimbursed hereunder shall be paid to the Servicer
on
the related Distribution Date pursuant to Section 5.7(b)(ii) upon certification
by the Servicer of such amounts and the provision of such information to
the
Trust Collateral Agent and the Insurer as may be necessary in the opinion
of the
Insurer to verify the accuracy of such certification; provided,
however,
that
the Servicer must provide such clarification within 12 months of such mistaken
deposit, posting, or returned check. In the event that the Insurer has not
received evidence satisfactory to it of the Servicer’s entitlement to
reimbursement pursuant to this Section, the Insurer shall (unless an Insurer
Default shall have occurred and be continuing) give the Trust Collateral
Agent
notice in writing to such effect, following receipt of which the Trust
Collateral Agent shall not make a distribution to the Servicer in respect
of
such amount pursuant to Section 5.7, or if the Servicer prior thereto has
been
reimbursed pursuant to Section 5.7, the Trust Collateral Agent shall withhold
such amounts from amounts otherwise distributable to the Servicer on the
next
succeeding Distribution Date.
45
SECTION
5.4. Application
of Collections.
All
collections for the Collection Period shall be applied by the Servicer as
follows:
With
respect to each Receivable (other than a Purchased Receivable or a Sold
Receivable), payments by or on behalf of the Obligor, (other than Supplemental
Servicing Fees with respect to such Receivable, to the extent collected)
shall
be applied to interest and principal in accordance with the method applicable
to
the Receivable.
All
amounts collected that are payable to the Servicer as Supplemental Servicing
Fees hereunder shall be deposited in the Collection Account and paid to the
Servicer in accordance with Section 5.7(b).
SECTION
5.5. Withdrawals
from Spread Account.
(a) In
the
event that the Servicer’s Certificate with respect to any Determination Date
shall state that there is a Spread Account Claim Amount then on the Spread
Account Claim Date immediately preceding the related Distribution Date, the
Trust Collateral Agent shall deliver to the Collateral Agent, the Owner Trustee,
the Trustee, the Insurer and the Servicer, by hand delivery or facsimile
transmission, a written notice (a “Deficiency
Notice”)
specifying the Spread Account Claim Amount for such Distribution Date and
the
Policy Claim Amount, if any. Such Deficiency Notice shall direct the Collateral
Agent to remit such Spread Account Claim Amount (to the extent of the funds
available to be distributed pursuant to the Spread Account Agreement) to
the
Trust Collateral Agent for deposit in the Collection Account on the related
Distribution Date.
Any
Deficiency Notice shall be delivered by 12:00 noon, Eastern time, on the
second
Business Day preceding such Distribution Date.
(b) [Reserved].
(c) The
amounts distributed by the Collateral Agent to the Trust Collateral Agent
pursuant to a Deficiency Notice shall be deposited by the Trust Collateral
Agent
into the Collection Account pursuant to Section 5.6.
SECTION
5.6. Additional
Deposits.
(a) The
Servicer or the Seller, as applicable, shall deposit or cause to be deposited
in
the Collection Account on the Determination Date on which such obligations
are
due the aggregate Purchase Amount with respect to Purchased Receivables and
the
aggregate Sale Amounts with respect to Sold Receivables. On the Business
Day
prior to each Distribution Date, the Trust Collateral Agent shall remit to
the
Collection Account any amounts delivered to the Trust Collateral Agent by
the
Collateral Agent.
46
(b) The
proceeds of any purchase or sale of the assets of the Trust described in
Section
10.1 hereof shall be deposited in the Collection Account.
SECTION
5.7. Distributions.
(a) [Reserved].
(b) On
each
Distribution Date, the Trust Collateral Agent shall (based solely on the
information contained in the Servicer’s Certificate delivered with respect to
the related Determination Date) distribute the following amounts from the
Collection Account unless otherwise specified, to the extent of the sources
of
funds stated to be available therefor, and in the following order of
priority:
(i) from
the
Available Funds, to the Servicer (or, if the Designated Backup Subservicer
shall
be appointed successor servicer or subservicer to the Servicer, to such Person),
the Base Servicing Fee and any Supplemental Servicing Fee for the related
Collection Period and, to any successor Servicer (or, if the Designated Backup
Subservicer shall be appointed successor servicer or subservicer to the
Servicer, to such Person), transition fees not to exceed $500,000 (including
boarding fees) in the aggregate;
(ii) from
the
Available Funds, to each of the Trustee, the Trust Collateral Agent, the
Collateral Agent, the Backup Servicer, the Designated Backup Subservicer
and the
Owner Trustee, their respective accrued and unpaid fees and out-of-pocket
expenses and any accrued and unpaid fees and out-of-pocket expenses of the
Trust
Collateral Agent, including the fees and expenses of its counsel (in each
case,
to the extent such fees or expenses have not been previously paid by the
Servicer and provided that such fees and expenses shall not exceed (w) $100,000
in the aggregate in any calendar year to the Owner Trustee, (x) $175,000
in the
aggregate in any calendar year to the Trust Collateral Agent, the Backup
Servicer and the Trustee, collectively and (y) $75,000 in the aggregate in
any
calendar year to the Designated Backup Subservicer);
(iii) from
the
Available Funds to the Note Distribution Account, the Noteholders’ Interest
Distributable Amount;
(iv) from
the
Available Funds to the Note Distribution Account, the Noteholders’ First
Principal Distributable Amount;
(v) from
the
Available Funds, to the Insurer, the Premium (as defined in the Insurance
Agreement) and, so long as no Insurer Default has occurred and is continuing,
any amounts owing to the Insurer under the Insurance Agreement and not
paid;
(vi) from
the
Available Funds, to the Spread Account, an amount, if necessary, required
to
increase the amount therein to the Spread Account Initial Deposit;
47
(vii) from
the
Available Funds to the Note Distribution Account, the Noteholders’ Second
Principal Distributable Amount;
(viii) from
Available Funds, to the Insurer, so long as an Insurer Default has occurred
and
is continuing, the amounts described in clause (v) above, excluding the Premium,
as defined in the Insurance Agreement;
(ix) from
the
Available Funds, to the Spread Account, an amount, if necessary, required
to
increase the amount therein to the Requisite Amount;
(x) from
the
Available Funds, to each of the Servicer, the Trustee, the Trust Collateral
Agent, the Collateral Agent, the Backup Servicer, the Designated Backup
Subservicer and the Owner Trustee, their respective accrued and unpaid fees
and
expenses and any accrued and unpaid fees and expenses of the Trust Collateral
Agent (in each case, to the extent such fees or expenses have not been
previously paid pursuant to clauses (i) and (ii) above) and any additional
fees
of a successor servicer;
(xi) to
the
Class A-3 Notes, additional amounts as described in Section 10.1 herein;
and
(xii) from
Available Funds, any remaining Available Funds to the Collateral Agent for
distribution in accordance with Section 3.03(b) of the Spread Account
Agreement;
provided,
however,
that,
(A) following an acceleration of the Notes pursuant to the Indenture or,
(B) if
an Insurer Default shall have occurred and be continuing and an Event of
Default
pursuant to Section 5.1(i), 5.1(ii), 5.1(iv), 5.1(v) or 5.1(vi) of the Indenture
shall have occurred and be continuing, or (C) the receipt of Insolvency Proceeds
pursuant to Section 10.1(b), amounts deposited in the Note Distribution Account
(including any such Insolvency Proceeds) shall be paid to the Holders, pursuant
to Section 5.6 of the Indenture.
(c) On
each
Distribution Date, the Trust Collateral Agent shall (based solely on the
information contained in the Servicer’s Certificate delivered with respect to
the related Determination Date, unless the Insurer shall have notified the
Trust
Collateral Agent in writing of any errors or deficiencies with respect thereto)
distribute from the Collection Account the Additional Funds Available in
accordance with the priorities set forth in Section 5.7(b) or as may be directed
by the Insurer in writing on the Business Day prior to such Distribution
Date
with respect to that portion of the Additional Funds Available constituting
Insurer Optional Deposits and the Trustee shall deposit in the Note Distribution
Account any Insured Payments (as defined in the Note Policy) due on such
Distribution Date, which amount shall be applied solely to the payment of
amounts then due and unpaid on the Notes in accordance with the priorities
set
forth in Section 5.8(a) hereof or Section 5.6 of the Indenture, as
applicable.
(d) In
the
event that the Collection Account is not able to be held with the Trust
Collateral Agent, the Servicer or the Trust Collateral Agent shall instruct
and
cause such institution to make all deposits and distributions pursuant to
Sections 5.7(b) and 5.7(c) on the related Distribution Date.
48
SECTION
5.8. Note
Distribution Account.
(a) On
each
Distribution Date (based solely on the information contained in the Servicer’s
Certificate) the Trust Collateral Agent shall distribute all amounts on deposit
in the Note Distribution Account to Holders in respect of the Notes to the
extent of amounts due and unpaid on the Notes for principal and interest
in the
following amounts and in the following order of priority:
(i) accrued
and unpaid interest on the Notes; provided
that if
there are not sufficient funds in the Note Distribution Account to pay the
entire amount of accrued and unpaid interest then due on each Class of Notes,
the amount in the Note Distribution Account shall be applied to the payment
of
such interest on each Class of Notes pro rata on the basis of the amount
of
accrued and unpaid interest due on each Class of Notes;
(ii) The
Noteholders’ First Principal Distributable Amount and the Noteholders’ Second
Principal Distributable Amount shall be distributed as follows:
(1) If
an
Event of Default has not occurred:
(A) to
the
Holders of the Class A-1 Notes with the total amount paid out on each
Distribution Date until the outstanding principal amount of the Class A-1
Notes
has been reduced to zero;
(B) to
the
Holders of the Class A-2 Notes with the total amount paid out on each
Distribution Date until the outstanding principal amount of the Class A-2
Notes
has been reduced to zero;
(C) to
the
Holders of the Class A-3 Notes, with the total amount paid out on each
Distribution Date until the outstanding principal amount of the Class A-3
Notes
has been reduced to zero;
(2) After
the
occurrence of an Event of Default:
(A) to
the
Holders of the Class A-1 Notes until the outstanding principal amount of
the
Class A-1 Notes has been reduced to zero;
(B) to
the
Holders of the Class A-2 Notes and the Holders of the Class A-3 Notes, on
a pro
rata basis, based upon their respective outstanding principal amounts, until
the
Class A-2 Notes and Class A-3 Notes have been paid in full;
(b) On
each
Distribution Date, the Trust Collateral Agent shall send to each Holder the
statement provided to the Trust Collateral Agent by the Servicer pursuant
to
Section 5.10 hereof on such Distribution Date.
(c) In
the
event that any withholding tax is imposed on the Trust’s payment (or allocations
of income) to a Noteholder, such tax shall reduce the amount otherwise
distributable to the Holder in accordance with this Section. The Trust
Collateral Agent is hereby authorized and directed to retain from amounts
otherwise distributable to the Holders sufficient funds for the payment of
any
tax attributable to the Trust (but such authorization shall not prevent the
Trust Collateral Agent from contesting any such tax in appropriate proceedings,
and withholding payment of such tax, if permitted by law, pending the outcome
of
such proceedings). The amount of any withholding tax imposed with respect
to a
Holder shall be treated as cash distributed to such Holder at the time it
is
withheld by the Trust and remitted to the appropriate taxing authority. If
there
is a possibility that withholding tax is payable with respect to a distribution
(such as a distribution to a non-US Noteholder), the Trust Collateral Agent
may
in its sole discretion withhold such amounts in accordance with this clause
(c).
In the event that a Holder wishes to apply for a refund of any such withholding
tax, the Trust Collateral Agent shall reasonably cooperate with such Holder
in
making such claim so long as such Holder agrees to reimburse the Trust
Collateral Agent for any out-of-pocket expenses (including legal fees and
expenses) incurred.
49
(d) Distributions
required to be made to Holders on any Distribution Date shall be made to
each
Holder of record on the preceding Record Date either by (i) wire transfer,
in
immediately available funds, to the account of such Holder at a bank or other
entity having appropriate facilities therefore, if such Holder shall have
provided to the Note Registrar appropriate written instructions at least
five
Business Days prior to such Distribution Date and such Holder’s Notes in the
aggregate evidence a denomination of not less than $1,000,000 or (ii) by
check
mailed to such Holder at the address of such holder appearing in the Note
Register. Notwithstanding the foregoing, the final distribution in respect
of
any Note (whether on the Final Scheduled Distribution Date or otherwise)
will be
payable only upon presentation and surrender of such Note at the office or
agency maintained for that purpose by the Note Registrar pursuant to Section
2.4
of the Indenture.
(e) Subject
to Section 5.1 and this section, monies received by the Trust Collateral
Agent
hereunder need not be segregated in any manner except to the extent required
by
law and may be deposited under such general conditions as may be prescribed
by
law, and the Trust Collateral Agent shall not be liable for any interest
thereon.
SECTION
5.9. [Reserved]
SECTION
5.10. Statements
to Holders.
(a) On
or
prior to each Distribution Date, the Trust Collateral Agent shall provide
each
Holder of record (with a copy to the Insurer and the Rating Agencies) a copy
of
the Servicer’s Certificate which shall contain the following information as to
the Notes to the extent applicable:
(i) the
amount of such distribution allocable to principal of each Class of
Notes;
(ii) the
amount of such distribution allocable to interest on or with respect to each
Class of Notes;
50
(iii) the
amount of such distribution payable out of amounts withdrawn from the Spread
Account or pursuant to a claim on the Note Policy;
(iv) the
Aggregate Principal Balance as of the close of business on the last day of
the
preceding Collection Period;
(v) the
aggregate outstanding principal amount of each Class of the Notes and the
Note
Pool Factor for each such Class after giving effect to payments allocated
to
principal reported under (i) above;
(vi) the
amount of the Servicing Fee paid to the Servicer with respect to the related
Collection Period and/or due but unpaid with respect to such Collection Period
or prior Collection Periods, as the case may be;
(vii) the
Noteholders’ Interest Carryover Amount;
(viii) the
amount of the aggregate Realized Losses, if any, for the second preceding
Collection Period;
(ix) the
aggregate Purchase Amounts for Receivables, if any, that were repurchased
by the
Servicer in such period; and
(x) the
aggregate Sale Amounts for Sold Receivables, if any, that were sold by the
Trust
in such period.
Each
amount set forth pursuant to paragraph (i), (ii), (iii), (vi) and (vii) above
shall be expressed as a dollar amount per $1,000 of the initial principal
balance of the Notes (or Class thereof).
(b) The
Trust
Collateral Agent will make available each month to each Holder the statements
referred to in Section 5.10(a) above (and certain other documents, reports
and
information regarding the Receivables provided by the Servicer from time
to
time) via the Trust Collateral Agent’s internet website with the use of a
password provided by the Trust Collateral Agent. The Trust Collateral Agent’s
internet website will be located at xxx.xxx.xx.xxx/xxxx or at such other
address
as the Trust Collateral Agent shall notify the Holders from time to time.
For
assistance with regard to this service, Holders can call the Trust Collateral
Agent’s Corporate Trust Office at (000) 000-0000. The Trust Collateral Agent
shall have the right to change the way the statements referred to in Section
5.10(a) above are distributed in order to make such distribution more convenient
and/or more accessible to the parties entitled to receive such statements.
The
Trust Collateral Agent shall provide notification of any such change to all
parties entitled to receive such statements in the manner described in Section
12.3 hereof, Section 11.4 of the Indenture or Section 11.5 of the Indenture,
as
appropriate.
SECTION
5.11. Optional
Deposits by the Insurer.
The
Insurer shall at any time, and from time to time, with respect to a Distribution
Date, have the option (but shall not be required, except in accordance with
the
terms of the Note Policy) to deliver amounts no later than 12:00 noon Eastern
time on such Distribution Date to the Trust Collateral Agent for deposit
into
the Collection Account for any of the following purposes: (i) to provide
funds
in respect of the payment of fees or expenses of any provider of services
to the
Trust with respect to such Distribution Date, or (ii) to include such amount
to
the extent that without such amount a draw would be required to be made on
the
Note Policy.
51
ARTICLE
VI
The
Note Policy
SECTION
6.1. Claims
Under Note Policy.
(a) In
the
event that the Trust Collateral Agent has delivered a Deficiency Notice with
respect to any Determination Date pursuant to Section 5.5 hereof, the Trust
Collateral Agent shall on the related Draw Date determine the Policy Claim
Amount for the related Distribution Date. If the Policy Claim Amount for
such
Distribution Date is greater than zero, the Trustee shall, to the extent
it has
received sufficient information to make such determinations, furnish to the
Insurer no later than 12:00 pm Eastern time on the related Draw Date a completed
Notice (as defined in (b) below) in the amount of the Policy Claim Amount.
Amounts paid by the Insurer pursuant to a claim submitted under this Section
shall be deposited by the Trustee into the Note Distribution Account for
payment
to Holders on the related Distribution Date.
(b) Any
notice delivered by the Trustee to the Insurer in the form attached as Exhibit
A
to the Note Policy pursuant to subsection 6.1(a) shall specify the Policy
Claim
Amount other than with respect to Preference Amounts claimed under the Note
Policy and shall constitute a “Notice”
under
the Note Policy. In accordance with the provisions of the Note Policy, the
Insurer is required to pay to the Trustee the Policy Claim Amount other than
with respect to Preference Amounts properly claimed thereunder by 12:00 noon.,
New York time, on the later of (i) the second Business Day following receipt
on
a Business Day of the Notice, provided that if such Notice is received after
12:00 noon., New York Time, on such Business Day, it will be deemed to be
received before 12:00 noon on the following Business Day, and (ii) the
applicable Distribution Date. Any payment made by the Insurer under the Note
Policy shall be applied solely to the payment of the Notes, and for no other
purpose.
(c) The
Trustee shall (i) receive as attorney-in-fact of each Holder any Policy Claim
Amount from the Insurer and (ii) deposit the same in the Note Distribution
Account for distribution to Holders. Any and all Policy Claim Amounts disbursed
by the Trustee or the Trust Collateral Agent from claims made under the Note
Policy shall not be considered payment by the Trust or from the Spread Account
with respect to such Notes, and shall not discharge the obligations of the
Trust
with respect thereto. The Insurer shall, to the extent it makes any payment
with
respect to the Notes, become subrogated to the rights of the recipients of
such
payments to the extent of such payments. Subject to and conditioned upon
any
payment with respect to the Notes by or on behalf of the Insurer, the Trustee
shall assign to the Insurer all rights to the payment of interest or principal
with respect to the Notes which are then due for payment to the extent of
all
payments made by the Insurer, and the Insurer may exercise any option, vote,
right, power or the like with respect to the Notes to the extent that it
has
made payment pursuant to the Note Policy. To evidence such subrogation, the
Note
Registrar shall note the Insurer’s rights as subrogee upon the register of
Holders. The foregoing subrogation shall in all cases be subject to the rights
of the Holders to receive all Insured Payments (as defined in the Note Policy)
in respect of the Notes.
52
(d) The
Trustee and the Trust Collateral Agent shall keep a complete and accurate
record
of all funds deposited by the Trustee on behalf of the Insurer into the Note
Distribution Account with respect to the Note Policy and the allocation of
such
funds to payment of interest on and principal paid in respect of any Note.
The
Insurer shall have the right to inspect such records at reasonable times
upon
seven Business Day’s prior notice to the Trust Collateral Agent or the
Trustee.
(e) The
Trustee shall be entitled to enforce on behalf of the Holders the obligations
of
the Insurer under the Note Policy. Notwithstanding any other provision of
this
Agreement or any Basic Document, the Holders are not entitled to institute
proceedings directly against the Insurer.
SECTION
6.2. Preference
Claims Under Note Policy.
(a) In
the
event that the Trustee has received a certified copy of a final, non-appealable
order of the appropriate court that any payment paid on a Note has been avoided
in whole or in part as a preference payment under applicable bankruptcy law
pursuant to a final nonappealable order of a court having competent
jurisdiction, the Trustee shall so notify the Insurer, shall comply with
the
provisions of the Note Policy to obtain payment by the Insurer of such avoided
payment, and shall, at the time it provides notice to the Insurer, notify
Holders of the Notes by mail that, in the event that any Noteholder’s payment is
so recoverable, such Holder will be entitled to payment pursuant to the terms
of
the Note Policy. The Trust Collateral Agent and the Trustee shall furnish
to the
Insurer its records evidencing the payments of principal of and interest
on
Notes, if any, which have been made by the Trust Collateral Agent or the
Trustee
and subsequently recovered from Holders, and the dates on which such payments
were made and the other items required to be delivered under the Note Policy.
Pursuant to the terms of the Note Policy, the Insurer will make such payment
on
behalf of the Holder to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the order and not to the Trust Collateral
Agent,
the Trustee or any Holder directly (unless a Holder has previously paid such
payment to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy, in which case the Insurer will make such payment to the Trustee
for
distribution to such Holder upon proof of such payment reasonably satisfactory
to the Insurer).
(b) The
Trust
Collateral Agent or the Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which a Responsible Officer
of
the Trust Collateral Agent has actual knowledge) seeking the avoidance as
a
preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law of any distribution made with respect to the
Notes
(a “Note
Preference Claim”).
Each
Noteholder, by its purchase of Notes, the Trustee and the Trust Collateral
Agent
hereby agree that so long as an Insurer Default shall not have occurred and
be
continuing, the Insurer may at any time during the continuation of any
proceeding relating to a Note Preference Claim direct all matters relating
to
such Note Preference Claim, including, without limitation, (i) the direction
of
any appeal of any order relating to any Note Preference Claim and (ii) the
posting of any surety, supersedeas or performance bond pending any such appeal
at the expense of the Insurer, but subject to reimbursement as provided in
the
Insurance Agreement. In addition, and without limitation of the foregoing,
as
set forth in Section 6.1(c), the Insurer shall be subrogated to, and each
Noteholder, the Trustee and the Trust Collateral Agent hereby delegate and
assign, to the fullest extent permitted by law, the rights of the Trustee
and
each Holder in the conduct of any proceeding with respect to a Note Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with
any
such Note Preference Claim. Notwithstanding the foregoing, in no event shall
the
Insurer be obligated to make any payment in respect of any Preference Amount
(i)
to the extent that such payment when added to all prior payments of Insured
Payments (as defined in the Note Policy) would exceed the Maximum Insured
Amount
or (ii) prior to the time the Insurer would have been required to make an
Insured Payment pursuant to the Note Policy.
53
SECTION
6.3. Surrender
of Note Policy.
The
Trustee shall surrender the Note Policy to the Insurer for cancellation upon
payment in full of the Notes.
ARTICLE
VII
The
Seller
SECTION
7.1. Representations
of Seller.
The
Seller makes the following representations on which the Insurer shall be
deemed
to have relied in executing and delivering the Note Policy and on which the
Trust is deemed to have relied in acquiring the Receivables and on which
the
Trustee, Collateral Agent, Trust Collateral Agent, Backup Servicer and the
Designated Backup Subservicer may rely. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the
case
of Receivables, and shall survive the sale of the Receivables to the Trust
and
the pledge thereof to the Trust Collateral Agent pursuant to the
Indenture.
(a) [Reserved].
(b) Organization
and Good Standing.
The
Seller has been duly organized and is validly existing as a corporation in
good
standing under the laws of the State of Texas, with power and authority to
own
its properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant times,
and now has, power, authority and legal right to acquire, own and sell the
Receivables and the Other Conveyed Property transferred to the
Trust.
(c) Due
Qualification.
The
Seller is duly qualified to do business as a foreign corporation in good
standing and has obtained all necessary licenses and approvals in all
jurisdictions where the failure to do so would materially and adversely affect
Seller’s ability to transfer the Receivables and the Other Conveyed Property to
the Trust pursuant to this Agreement, or the validity or enforceability of
the
Receivables and the Other Conveyed Property or to perform Seller’s obligations
hereunder and under the Seller’s Basic Documents.
(d) Power
and Authority.
The
Seller has the power and authority to execute and deliver this Agreement
and its
Basic Documents and to carry out its terms and their terms, respectively;
the
Seller has full power and authority to sell and assign the Receivables and
the
Other Conveyed Property to be sold and assigned to and deposited with the
Trust
by it and has duly authorized such sale and assignment to the Trust by all
necessary corporate action; and the execution, delivery and performance of
this
Agreement and the Seller’s Basic Documents have been duly authorized by the
Seller by all necessary corporate action.
54
(e) Valid
Sale, Binding Obligations.
This
Agreement effects a valid sale, transfer and assignment of the Receivables
and
the Other Conveyed Property, enforceable against the Seller and creditors
of and
purchasers from the Seller; and this Agreement and the Seller’s Basic Documents,
when duly executed and delivered, shall constitute legal, valid and binding
obligations of the Seller enforceable in accordance with their respective
terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No
Violation.
The
consummation of the transactions contemplated by this Agreement and the Basic
Documents and the fulfillment of the terms of this Agreement and the Basic
Documents shall not conflict with, result in any breach of any of the terms
and
provisions of or constitute (with or without notice, lapse of time or both)
a
default under the certificate of incorporation or by-laws of the Seller,
or any
indenture, agreement, mortgage, deed of trust or other instrument to which
the
Seller is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, order, rule or regulation applicable
to
the Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Seller or any of its properties.
(g) No
Proceedings.
There
are no proceedings or investigations pending or, to the Seller’s knowledge,
threatened against the Seller, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having jurisdiction
over the Seller or its properties (A) asserting the invalidity of this Agreement
or any of the Basic Documents, (B) seeking to prevent the issuance of the
Notes
or the consummation of any of the transactions contemplated by this Agreement
or
any of the Basic Documents, (C) seeking any determination or ruling that
might
materially and adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Basic
Documents, or (D) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the Notes.
(h) No
Consents.
The
Seller is not required to obtain the consent of any other party or any consent,
license, approval or authorization, or registration or declaration with,
any
governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement which
has
not already been obtained.
(i) True
Sale.
The
Receivables are being transferred with the intention of removing them from
the
Seller’s estate pursuant to Section 541 of the Bankruptcy Code, as the same may
be amended from time to time.
55
(j) Chief
Executive Office.
The
chief executive office of the Seller is at 000 X Xxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxx, Xxxxx, 00000.
SECTION
7.2. Corporate
Existence.
During
the term of this Agreement, the Seller will (i) keep in full force and effect
its existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby and (ii) take all actions reasonably necessary to maintain its separate
corporate entity distinct and separate from its Affiliates.
SECTION
7.3. Liability
of UACC; Indemnities.
UACC
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by UACC under this Agreement.
(a) UACC
shall indemnify, defend and hold harmless the Trust, the Owner Trustee, Trustee,
Seller, Backup Servicer, Designated Backup Subservicer, including in its
capacity as successor Servicer or as subservicer to the Servicer, Collateral
Agent, Insurer and Trust Collateral Agent and the officers, directors, employees
and agents thereof from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in
this
Agreement and any of the Basic Documents (except any income taxes arising
out of
fees paid to the Owner Trustee, the Trust Collateral Agent, the Trustee and
the
Insurer and except any taxes to which the Owner Trustee, the Trust Collateral
Agent or the Trustee may otherwise be subject to, without regard to the
transactions contemplated hereby), including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but
in the
case of the Trust, not including any taxes asserted with respect to federal
or
other income taxes arising out of distributions on the Notes) and costs and
expenses in defending against the same.
(b) UACC
shall indemnify, defend and hold harmless the Trust, the Owner Trustee, Trustee,
Seller, Backup Servicer, Designated Backup Subservicer, including in its
capacity as successor Servicer or as subservicer to the Servicer, Collateral
Agent, Insurer and Trust Collateral Agent and the officers, directors, employees
and agents thereof and the Holders from and against any loss, liability or
expense incurred by reason of (i) UACC’s willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement
and
(ii) UACC’s or the Trust’s violation of federal or state securities laws in
connection with the offering and sale of the Notes.
(c) UACC
shall indemnify, defend and hold harmless the Owner Trustee, Trustee, Seller,
Trust Collateral Agent, Collateral Agent, Backup Servicer, Designated Backup
Subservicer, including in its capacity as successor Servicer or as subservicer
to the Servicer, and the officers, directors, employees and agents thereof
from
and against any and all costs, expenses, losses, claims, damages and liabilities
arising out of, or incurred in connection with the acceptance or performance
of
the trusts and duties set forth herein and in the Basic Documents except
to the
extent that such cost, expense, loss, claim, damage or liability shall be
due to
the willful misfeasance, bad faith or negligence (except for errors in judgment)
of the Owner Trustee, Trustee, Trust Collateral Agent, Collateral Agent,
Backup
Servicer and Designated Backup Subservicer, respectively.
56
Indemnification
under this Section shall survive the resignation or removal of the Owner
Trustee, the Trustee, the Seller, the Backup Servicer, the Designated Backup
Subservicer, the Collateral Agent or the Trust Collateral Agent and the
termination of this Agreement or the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and
other
expenses of litigation. If UACC shall have made any indemnity payments pursuant
to this Section and the Person to or on behalf of whom such payments are
made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to UACC, without interest.
57
SECTION
7.4. Merger
or Consolidation of, or Assumption of the Obligations of, Seller.
Any
Person (a) into which the Seller may be merged or consolidated, (b) which
may
result from any merger or consolidation to which the Seller shall be a party
or
(c) which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the foregoing cases executes
an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided,
however,
that
(i) the Seller shall have received the written consent of the Insurer prior
to
entering into any such transaction, (ii) immediately after giving effect
to such transaction, no Servicer Termination Event, and no event which, after
notice or lapse of time, or both, would become a Servicer Termination Event,
shall have happened and be continuing, (iii) the Seller shall have delivered
to
the Owner Trustee, the Trust Collateral Agent, the Collateral Agent, the
Trustee
and the Insurer an Officer’s Certificate and an Opinion of Counsel each stating
that such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided
for
in this Agreement relating to such transaction have been complied with, (iv)
the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Seller shall have delivered to the Owner Trustee,
the
Trust Collateral Agent, the Collateral Agent, the Trustee and the Insurer
an
Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect
the
interest of the Trust Collateral Agent, the Owner Trustee and the Trustee,
respectively, in the Receivables and reciting the details of such filings
or (B)
no such action shall be necessary to preserve and protect such interest.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii), (iii), (iv)
and
(v) above shall be conditions to the consummation of the transactions referred
to in clauses (a), (b) or (c) above.
SECTION
7.5. Limitation
on Liability of Seller and Others.
The
Seller and any director, officer or employee or agent of the Seller may rely
in
good faith on the advice of counsel or on any document of any kind, prima
facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Document. The Seller shall not be under any obligation to
appear
in, prosecute or defend any legal action that shall not be incidental to
its
obligations under this Agreement, and that in its opinion may involve it
in any
expense or liability.
SECTION
7.6. Ownership
of the Certificates or Notes.
The
Seller and any Affiliate thereof may in its individual or any other capacity
become the owner or pledgee of Certificates or Notes with the same rights
as it
would have if it were not the Seller or an Affiliate thereof, except as
expressly provided herein or in any Basic Document. Notes or Certificates
so
owned by the Seller or such Affiliate shall have an equal and proportionate
benefit under the provisions of the Basic Documents, without preference,
priority, or distinction as among all of the Notes or Certificates; provided,
however,
that
any Notes or Certificates owned by the Seller or any Affiliate thereof, during
the time such Notes or Certificates are owned by them, shall be without voting
rights for any purpose set forth in the Basic Documents and will not be entitled
to the benefits of the Note Policy. The Seller shall notify the Owner Trustee,
the Trustee, the Trust Collateral Agent and the Insurer with respect to any
other transfer of any Certificate.
58
ARTICLE
VIII
The
Servicer
SECTION
8.1. Representations
of Servicer.
The
Servicer makes the following representations on which the Insurer shall be
deemed to have relied in executing and delivering the Note Policy and on
which
the Trust is deemed to have relied in acquiring the Receivables. The
representations speak as of the execution and delivery of this Agreement
and as
of the Closing Date, in the case of the Receivables, and shall survive the
sale
of the Receivables to the Trust and the pledge thereof to the Trust Collateral
Agent pursuant to the Indenture.
(a) [Reserved];
(b) Organization
and Good Standing.
The
Servicer has been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization, with power, authority
and
legal right to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted, and had at
all
relevant times, and now has, power, authority and legal right to enter into
and
perform its obligations under this Agreement;
(c) Due
Qualification.
The
Servicer is duly qualified to do business as a foreign corporation in good
standing and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the conduct
of its
business (including the servicing of the Receivables as required by this
Agreement) requires or shall require such qualification;
(d) Power
and Authority.
The
Servicer has the power and authority to execute and deliver this Agreement
and
its Basic Documents and to carry out its terms and their terms, respectively,
and the execution, delivery and performance of this Agreement and the Servicer’s
Basic Documents have been duly authorized by the Servicer by all necessary
corporate action;
(e) Binding
Obligation.
This
Agreement and the Servicer’s Basic Documents shall constitute legal, valid and
binding obligations of the Servicer enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement
of
creditors’ rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered
in a
proceeding in equity or at law;
(f) No
Violation.
The
consummation of the transactions contemplated by this Agreement and the
Servicer’s Basic Documents, and the fulfillment of the terms of this Agreement
and the Servicer’s Basic Documents, shall not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the articles of incorporation or
bylaws of the Servicer, or any indenture, agreement, mortgage, deed of trust
or
other instrument to which the Servicer is a party or by which it is bound,
or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust
or other instrument, other than this Agreement, or violate any law, order,
rule
or regulation applicable to the Servicer of any court or of any federal or
state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or any of its properties;
59
(g) No
Proceedings.
There
are no proceedings or investigations pending or, to the Servicer’s knowledge,
threatened against the Servicer, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over the Servicer or its properties (A) asserting the invalidity
of
this Agreement or any of the Basic Documents, (B) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, or (C) seeking
any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the Basic Documents or (D) seeking
to adversely affect the federal income tax or other federal, state or local
tax
attributes of the Notes;
(h) No
Consents.
The
Servicer is not required to obtain the consent of any other party or any
consent, license, approval or authorization, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
which has not already been obtained.
SECTION
8.2. Liability
of Servicer, Backup Servicer and Designated Backup Subservicer;
Indemnities.
(a) The
Servicer (in its capacity as such) shall be liable hereunder only to the
extent
of the obligations in this Agreement specifically undertaken by the Servicer
and
the representations made by the Servicer.
(b) The
Servicer shall defend, indemnify and hold harmless the Trust, the Trustee,
the
Seller, the Trust Collateral Agent, the Owner Trustee, the Backup Servicer,
the
Designated Backup Subservicer, including in its capacity as successor Servicer
or as subservicer to the Servicer, the Collateral Agent, the Insurer, their
respective officers, directors, agents and employees, and the Holders from
and
against any and all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel and expenses of litigation
arising out of or resulting from the use, ownership or operation by the Servicer
or any Affiliate thereof of any Financed Vehicle;
(c) The
Servicer (when the Servicer is UACC) shall indemnify, defend and hold harmless
the Trust, the Trustee, the Seller, the Trust Collateral Agent, the Owner
Trustee, the Backup Servicer, the Designated Backup Subservicer, including
in
its capacity as successor Servicer or as subservicer to the Servicer, the
Collateral Agent, the Insurer, their respective officers, directors, agents
and
employees and the Holders from and against any taxes that may at any time
be
asserted against any of such parties with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales,
gross
receipts, tangible or intangible personal property, privilege or license
taxes
(but not including any federal or other income taxes, including franchise
taxes
asserted with respect to, and as of the date of, the sale of the Receivables
and
the Other Conveyed Property to the Trust or the issuance and original sale
of
the Notes) and costs and expenses in defending against the same;
60
UACC
(when the Servicer is not UACC) shall indemnify, defend and hold harmless
the
Trust, the Trustee, the Trust Collateral Agent, the Owner Trustee, the Backup
Servicer, the Designated Backup Subservicer, including in its capacity as
successor Servicer or as subservicer to the Servicer, the Collateral Agent,
the
Insurer, their respective officers, directors, agents and employees and the
Holders from and against any taxes with respect to the sale of Receivables
in
connection with servicing hereunder that may at any time be asserted against
any
of such parties with respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts, tangible or intangible
personal property, privilege or license taxes (but not including any federal
or
other income taxes, including franchise taxes asserted with respect to, and
as
of the date of, the sale of the Receivables and the Other Conveyed Property
to
the Trust or the issuance and original sale of the Notes) and costs and expenses
in defending against the same; and
(d) The
Servicer shall indemnify, defend and hold harmless the Trust, the Trustee,
the
Trust Collateral Agent, the Owner Trustee, the Backup Servicer, the Designated
Backup Subservicer, including in its capacity as successor Servicer or as
subservicer to the Servicer, the Collateral Agent, the Insurer, their respective
officers, directors, agents and employees and the Holders from and against
any
and all costs, expenses, losses, claims, damages, and liabilities (including
reasonable fees and expenses of counsel and expenses of litigation, if any)
to
the extent that such cost, expense, loss, claim, damage, or liability arose
out
of, or was imposed upon the Trust, the Trustee, the Owner Trustee, the Trust
Collateral Agent, the Backup Servicer, the Designated Backup Subservicer,
the
Collateral Agent, the Insurer or the Holders by reason of the breach of this
Agreement by the Servicer, the negligence, willful misfeasance, or bad faith
of
the Servicer in the performance of its duties under this Agreement or by
reason
of reckless disregard of its obligations and duties under this
Agreement.
(e) UACC
shall indemnify, defend and hold harmless the Trust, the Trustee, the Trust
Collateral Agent, the Owner Trustee, the Backup Servicer, the Designated
Backup
Subservicer, including in its capacity as successor Servicer or as subservicer
to the Servicer, the Collateral Agent, the Insurer, their respective officers,
directors, agents and employees and the Holders from and against any loss,
liability or expense incurred by reason of the violation by Servicer, Seller
or
Trust of federal or state securities laws in connection with the registration
or
the sale of the Notes, including for any material misstatement or omissions
in
any 10-D or 10-K filing, or failure to timely file, required under the Exchange
Act other than any information, report or exhibits in such filing that are
provided by the Trust Collateral Agent pursuant to Section 3.4(g); provided,
that
UACC shall not indemnify the Insurer for the disclosure under the captions
“The
Insurer” and “The Policy” in the Prospectus Supplement (including any
information provided by the Insurer or its auditors incorporated by reference
therein under such captions or in any report filed with respect to the Trust).
(f) UACC
shall indemnify the Trustee, the Owner Trustee, the Trust Collateral Agent,
the
Backup Servicer, the Designated Backup Subservicer, including in its capacity
as
successor Servicer or as subservicer to the Servicer, and the Collateral
Agent,
and the respective officers, directors, agents and employees thereof against
any
and all loss, liability or expense, (other than overhead and expenses incurred
in the normal course of business) incurred by each of them in connection
with
the acceptance or administration of the Trust and the performance of their
duties under the Basic Documents other than if such loss, liability or expense
was incurred by the Trustee, the Owner Trustee, the Backup Servicer, the
Collateral Agent or the Trust Collateral Agent or the Designated Backup
Subservicer as a result of any such entity’s willful misfeasance, bad faith or
negligence.
61
(g) Indemnification
under this Article shall include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer has made
any
indemnity payments pursuant to this Article and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts collected to the Servicer, without interest. Notwithstanding
anything contained herein to the contrary, any indemnification payable by
the
Servicer to the Backup Servicer or the Designated Backup Subservicer, to
the
extent not paid by the Servicer, shall be paid solely from the Spread Account
in
accordance with the terms of the Spread Account Agreement.
(h) When
the
Trustee, the Trust Collateral Agent, the Collateral Agent, the Designated
Backup
Subservicer, including in its capacity as successor Servicer or as subservicer
to the Servicer, or the Backup Servicer incurs expenses after the occurrence
of
a Servicer Termination Event specified in Section 9.1(d) or (e) with respect
to
the Servicer, the expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable federal
or
state bankruptcy, insolvency or similar law.
The
provisions of this Section 8.2 shall survive the earlier removal or resignation
of the Trustee, Trust Collateral Agent, Collateral Agent, Owner Trustee,
Backup
Servicer and Designated Backup Subservicer and the termination of this
Agreement.
SECTION
8.3. Merger
or Consolidation of, or Assumption of the Obligations of the Servicer,
Designated Backup Subservicer or Backup Servicer.
(a) UACC
shall not merge or consolidate with any other person, convey, transfer or
lease
substantially all its assets as an entirety to another Person, or permit
any
other Person to become the successor to UACC’s business unless, after the
merger, consolidation, conveyance, transfer, lease or succession, the successor
or surviving entity shall be capable of fulfilling the duties of UACC contained
in this Agreement and shall be consented to by the Controlling Party in writing,
and, if an Insurer Default shall have occurred and be continuing, shall be
an
Eligible Servicer. Any entity (i) into which UACC may be merged or consolidated,
(ii) resulting from any merger or consolidation to which UACC shall be a
party,
(iii) which acquires by conveyance, transfer, or lease substantially all
of the
assets of UACC, or (iv) succeeding to the business of UACC, in any of the
foregoing cases shall execute an agreement of assumption to perform every
obligation of UACC under this Agreement and, whether or not such assumption
agreement is executed, shall be the successor to UACC 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, anything in this Agreement to the contrary
notwithstanding; provided,
however,
that
nothing contained herein shall be deemed to release UACC from any obligation.
UACC shall provide notice of any merger, consolidation or succession pursuant
to
this Section to the Owner Trustee, the Trust Collateral Agent, the Holders,
the
Insurer and each Rating Agency. Notwithstanding the foregoing, UACC shall
not
merge or consolidate with any other Person or permit any other Person to
become
a successor to UACC’s business, unless (x) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section
4.6
shall have been breached (for purposes hereof, such representations and
warranties shall speak as of the date of the consummation of such transaction)
and no event that, after notice or lapse of time, or both, would become an
Insurance Agreement Event of Default shall have occurred and be continuing,
(y) UACC shall have delivered to the Owner Trustee, the Trust Collateral
Agent, Trustee, Backup Servicer, the Designated Backup Subservicer and
Collateral Agent, the Rating Agencies and the Insurer an Officer’s Certificate
and an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section and
that
all conditions precedent, if any, provided for in this Agreement relating
to
such transaction have been complied with, and (z) UACC shall have delivered
to
the Owner Trustee, the Trust Collateral Agent, the Trustee, the Collateral
Agent, the Rating Agencies and the Insurer an Opinion of Counsel, stating
in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to preserve and protect the interest of the Trust in the Receivables
and the Other Conveyed Property and reciting the details of the filings or
(B)
no such action shall be necessary to preserve and protect such
interest.
62
(b) Any
corporation or other entity (i) into which the Backup Servicer or the Designated
Backup Subservicer, as the case may be, may be merged or consolidated, (ii)
resulting from any merger or consolidation to which the Backup Servicer or
the
Designated Backup Subservicer respectively shall be a party, (iii) which
acquires by conveyance, transfer or lease substantially all of the assets
of the
Backup Servicer or the Designated Backup Subservicer, respectively, or (iv)
succeeding to the business of the Backup Servicer or the Designated Backup
Subservicer, respectively, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the Backup Servicer
or
the Designated Backup Subservicer, as the case may be, under this Agreement
and,
whether or not such assumption agreement is executed, shall be the successor
to
the Backup Servicer or the Designated Backup Subservicer, respectively, 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, anything in this Agreement
to the contrary notwithstanding; provided, however, that nothing contained
herein shall be deemed to release the Backup Servicer or the Designated Backup
Subservicer from any obligation.
SECTION
8.4. Limitation
on Liability of Servicer, Designated Backup Subservicer, Backup Servicer
and
Others.
(a) None
of
UACC, the Designated Backup Subservicer, including in its capacity as successor
Servicer or as subservicer to the Servicer, the Backup Servicer nor any of
the
directors or officers or employees or agents of UACC, the Designated Backup
Subservicer, the Backup Servicer, The Trust Collateral Agent, the Collateral
Agent shall be under any liability to the Trust or the Holders, except as
provided in this Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement; provided,
however,
that
this provision shall not protect UACC, the Designated Backup Subservicer,
the
Backup Servicer or any such person against any liability that would otherwise
be
imposed by reason of a breach of this Agreement or willful misfeasance, bad
faith or negligence (excluding errors in judgment) in the performance of
duties;
provided further that this provision shall not affect any liability to indemnify
the Trustee, the Trust Collateral Agent, the Collateral Agent and the Owner
Trustee for costs, taxes, expenses, claims, liabilities, losses or damages
paid
by the Trustee, the Trust Collateral Agent, the Collateral Agent and the
Owner
Trustee, in their individual capacities. UACC, the Designated Backup
Subservicer, the Backup Servicer and any director, officer, employee or agent
of
UACC, the Designated Backup Subservicer or Backup Servicer may rely in good
faith on the written advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.
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(b) Unless
acting as Servicer hereunder, the Backup Servicer shall not be liable for
any
obligation of the Servicer contained in this Agreement or for any errors
of the
Servicer contained in any computer tape, certificate or other data or document
delivered to the Backup Servicer hereunder or on which the Backup Servicer
must
rely in order to perform its obligations hereunder, and the Owner Trustee,
the
Trustee, the Trust Collateral Agent, the Collateral Agent, the Backup Servicer,
the Designated Backup Subservicer, the Seller and the Insurer and the Holders
shall look only to the Servicer to perform such obligations. Unless acting
as
Servicer hereunder, the Designated Backup Subservicer shall not be liable
for
any obligation of the Servicer contained in this Agreement or for any error
of
the Servicer contained in any computer tape, certificate or other data or
document delivered in connection with the Basic Documents, and the Owner
Trustee, the Trustee, the Trust Collateral Agent, the Collateral Agent, the
Backup Servicer, the Seller, the Insurer and the Holders shall look only
to the
Servicer to perform such obligations. The Backup Servicer, Designated Backup
Subservicer, including in its capacity as successor Servicer or as subservicer
to the Servicer, Trust Collateral Agent, the Collateral Agent, the Trustee
and
the Owner Trustee 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 their respective duties under this Agreement
if
such failure or delay results from the Backup Servicer or the Designated
Backup
Subservicer acting in accordance with information prepared or supplied by
a
Person other than itself (or contractual agents) or the failure of any such
other Person to prepare or provide such information. The Backup 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 (other than its contractual
agents), including the Servicer or the Controlling Party, (ii) any inaccuracy
or
omission in a notice or communication received by the Backup Servicer from
any
third party (other than its contractual agents), (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 Backup Servicer.
The
Designated Backup Subservicer 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 (other than its contractual agents), including the Servicer (other
than when CenterOne is the Servicer), the Backup Servicer, or the Controlling
Party, (ii) any inaccuracy or omission in a notice, certificate or communication
received by the Designated Backup Subservicer from any third party (whether
or
not the Designated Backup Subservicer has confirmed, verified or otherwise
reviewed such data), (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 the Servicer (other than
when
CenterOne is the Servicer), or (v) the acts or omissions of any other Designated
Backup Subservicer.
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SECTION
8.5. Delegation
of Duties.
(a) The
Servicer, including the Designated Backup Subservicer as successor Servicer
or
as Subservicer to the Servicer, may delegate duties under this Agreement
to an
Affiliate with the prior written consent of the Insurer (unless an Insurer
Default shall have occurred and be continuing), the Trust Collateral Agent,
the
Trust, the Designated Backup Subservicer and the Backup Servicer. The Servicer,
including the Designated Backup Subservicer as successor Servicer or as
Subservicer to the Servicer, also may at any time perform through Subcontractors
the specific duties of (i) repossession of Financed Vehicles, (ii) tracking
Financed Vehicles’ insurance and (iii) pursuing the collection of deficiency
balances on certain Liquidated Receivables, in each case, without the consent
of
the Insurer and may perform other specific duties through such Subcontractors
in
accordance with Servicer’s customary servicing policies and procedures, with the
prior consent of the Insurer; provided,
however,
that no
such delegation or sub-contracting of duties by the Servicer shall relieve
the
Servicer of its responsibility with respect to such duties. So long as no
Insurer Default shall have occurred and be continuing neither UACC or any
party
acting as Servicer hereunder shall appoint any Subservicer hereunder without
the
prior written consent of the Insurer, the Trustee, the Designated Backup
Subservicer and the Backup Servicer.
(b) If
UACC
is not the Servicer, such Servicer may delegate any of its duties and
obligations hereunder to the Designated Backup Subservicer or one or more
other
Subservicers pursuant to a sub-servicing agreement in form and substance
approved by the Insurer (unless an Insurer Default shall have occurred and
be
continuing), the Trust Collateral Agent, the Trust and the Backup Servicer.
Notwithstanding the foregoing, the Servicer shall be liable for the fees
and
expenses of its delegates (other than the fees and expenses of the Designated
Backup Subservicer which are paid under Section 5.7(b)(ii)) and remain primarily
liable for the performance of the duties and obligations so delegated and
each
of the Insurer (unless an Insurer Default shall have occurred and be
continuing), the Trust Collateral Agent, the Trust and the Backup Servicer
shall
have the right to look solely to the Servicer for performance.
(c) The
Backup Servicer may delegate duties under this Agreement to one or more
Designated Backup Subservicers with the prior written consent of the Insurer
(unless an Insurer Default shall have occurred and be continuing), the Trust
Collateral Agent and the Trust. The Backup Servicer hereby appoints CenterOne as
the initial Designated Backup Subservicer. CenterOne hereby accepts such
appointment and each of Insurer, the Trust Collateral Agent, the Trust and
the
Backup Servicer hereby consents to such appointment. Each of the Backup
Servicer, the Designated Backup Subservicer, the Insurer, the Trust Collateral
Agent and the Trust acknowledge that in the event that the Backup Servicer
becomes the Servicer or as subservicer of the Servicer hereunder, the Backup
Servicer may appoint the Designated Backup Subservicer as its Subservicer
under
this Agreement to service the Receivables and the Designated Backup Subservicer
shall service the Receivables, subject to the terms, conditions and
modifications contained in Schedule D, and in that event, the rights, duties,
obligations and liabilities of the Designated Backup Subservicer as Subservicer
or Servicer under this Agreement shall be modified as provided in Schedule
D.
The Backup Servicer may terminate the appointment of any Designated Backup
Subservicer only upon the prior written consent of the Insurer (unless an
Insurer Default shall have occurred and be continuing), the Trust Collateral
Agent and the Trust.
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(d) The
Servicer shall cause any Subservicer retained by the Servicer (or by any
Subservicer) to perform its servicing duties under this Agreement to comply
with
the reporting and compliance provisions 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 Trust any servicer compliance statement
required to be delivered by such Subservicer under Section 4.10, any assessment
of compliance and attestation required to be delivered by such Subservicer
under
Section 4.10 and any certification required to be delivered to the Person
that
will be responsible for signing the Sarbanes Certification under Section
4.10(a)(iv) as and when required to be delivered.
(e) The
Servicer shall promptly upon request provide to the Depositor, acting on
behalf
of the Trust, a written description (in form and substance satisfactory to
the
Depositor) of the role and function of each Subcontractor retained by the
Servicer or any Subservicer to perform its servicing duties under this
Agreement, specifying (i) the identity of each such Subcontractor, (ii) which,
if any, of such Subcontractors are “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, and (iii) which, if any,
elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (ii)
of
this paragraph.
(f) As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor retained by
the
Servicer (or by any Subservicer) to perform its servicing duties under this
Agreement to comply with the reporting and compliance provisions of this
Agreement to the same extent as if such Subcontractor were the Servicer.
The
Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Depositor, acting on behalf of the Trust, and the Owner
Trustee any assessment of compliance and attestation required to be delivered
by
such Subcontractor, in each case as and when required to be
delivered.
SECTION
8.6. Servicer,
the Designated Backup Subservicer and Backup Servicer Not to
Resign.
Subject
to the provisions of Section 8.3, none of the Servicer, the Designated Backup
Subservicer nor the Backup Servicer shall resign from the obligations and
duties
imposed on it by this Agreement as Servicer, the Designated Backup Subservicer
or Backup Servicer except upon a determination that by reason of a change
in
legal requirements the performance of its duties under this Agreement would
cause it to be in violation of such legal requirements in a manner which
would
have a material adverse effect on the Servicer, the Designated Backup
Subservicer or the Backup Servicer, as the case may be, and the Insurer (so
long
as an Insurer Default shall not have occurred and be continuing) or a Note
Majority (if an Insurer Default shall have occurred and be continuing) does
not
elect to waive the obligations of the Servicer, the Designated Backup
Subservicer or the Backup Servicer, as the case may be, to perform the duties
which render it legally unable to act or to delegate those duties to another
Person. Any such determination permitting the resignation of the Servicer,
the
Designated Backup Subservicer or Backup Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered and acceptable to the Trust
Collateral Agent, the Owner Trustee and the Insurer (unless an Insurer Default
shall have occurred and be continuing). No resignation of the Servicer shall
become effective until, so long as no Insurer Default shall have occurred
and be
continuing, the Backup Servicer or an entity acceptable to the Insurer shall
have assumed the responsibilities and obligations of the Servicer or, if
an
Insurer Default shall have occurred and be continuing, the Backup Servicer
or a
replacement Servicer that is an Eligible Servicer shall have assumed the
responsibilities and obligations of the Servicer. No resignation of the Backup
Servicer or the Designated Backup Subservicer shall become effective until,
so
long as no Insurer Default shall have occurred and be continuing, an entity
acceptable to the Insurer shall have assumed the responsibilities and
obligations of the Backup Servicer or the Designated Backup Subservicer or,
if
an Insurer Default shall have occurred and be continuing, a Person that is
an
Eligible Servicer shall have assumed the responsibilities and obligations
of the
Backup Servicer or the Designated Backup Subservicer; provided,
however,
that
(i) in the event a successor Backup Servicer or Designated Backup Subservicer
as
the case may be is not appointed within 60 days after the Backup Servicer
or the
Designated Backup Subservicer has given notice of its resignation and has
provided the Opinion of Counsel required by this Section, the Backup Servicer
or
the Designated Backup Subservicer as the case may be may petition a court
for
its removal, and (ii) the Backup Servicer or the Designated Backup Subservicer
may resign with the written consent of the Insurer; provided further,
however,
that,
with regard to clause (i) above, the Designated Backup Subservicer, acting
solely in its capacity as Designated Backup Subservicer under this Agreement
and
prior to its being appointed subservicer or Servicer under this Agreement,
may
resign as Designated Backup Subservicer rather than petitioning the court
for
its removal.
66
ARTICLE
IX
Default
SECTION
9.1. Servicer
Termination Event.
For
purposes of this Agreement, each of the following shall constitute a
“Servicer
Termination Event”:
(a) Any
failure by the Servicer to deposit to the Collection Account any amount required
to be deposited therein or to purchase any Receivable required to be purchased
by it.
(b) Failure
by the Servicer to deliver to the Trust Collateral Agent and (so long as
an
Insurer Default shall not have occurred and be continuing) the Insurer the
Servicer’s Certificate by the Determination Date;
(c) Failure
on the part of the Servicer duly to observe or perform any other covenants
or
agreements of the Servicer set forth in this Agreement or under any other
Basic
Documents to which it is a party, which failure (i) materially and
adversely affects the rights of Holders (determined without regard to the
availability of funds under the Note Policy), or of the Insurer (unless an
Insurer Default shall have occurred and be continuing), and (ii) continues
unremedied for a period of 30 days after the earlier of (x) knowledge thereof
by
the Servicer, or (y) the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the Trust
Collateral Agent or the Insurer (or, if an Insurer Default shall have occurred
and be continuing, by any Noteholder);
67
(d) The
entry
of a decree or order for relief by a court or regulatory authority having
jurisdiction in respect of the Servicer or United Pan Am Financial Corp.
in an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or United Pan Am
Financial Corp. or of any substantial part of its property or ordering the
winding up or liquidation of the affairs of the Servicer or United Pan Am
Financial Corp. and the continuance of any such decree or order unstayed
and in
effect for a period of 60 consecutive days or the commencement of an involuntary
case under the federal bankruptcy laws, as now or hereinafter in effect,
or
another present or future federal or state bankruptcy, insolvency or similar
law
and such case is not dismissed within 60 days; or
(e) The
commencement by the Servicer or United Pan Am Financial Corp. of a voluntary
case under the federal bankruptcy laws, as now or hereafter in effect, or
any
other present or future, federal or state, bankruptcy, insolvency or similar
law, or the consent by the Servicer or United Pan Am Financial Corp. to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Servicer
or of
any substantial part of its property or the making by the Servicer or United
Pan
Am Financial Corp. of an assignment for the benefit of creditors or the failure
by the Servicer or United Pan Am Financial Corp. generally to pay its debts
as
such debts become due or the taking of corporate action by the Servicer or
United Pan Am Financial Corp. in furtherance of any of the foregoing;
or
(f) Any
representation, warranty or statement of the Servicer made in this Agreement
or
any certificate, report or other writing delivered pursuant hereto shall
prove
to be incorrect in any material respect as of the time when the same shall
have
been made, and the incorrectness of such representation, warranty or statement
has a material adverse effect on the Trust, the Insurer or the Holders and,
within 30 days after knowledge thereof by the Servicer or after written notice
thereof shall have been given to the Servicer by the Trust Collateral Agent
or
the Insurer (or, if an Insurer Default shall have occurred and be continuing,
a
Noteholder), the circumstances or condition in respect of which such
representation, warranty or statement was incorrect shall not have been
eliminated or otherwise cured; or
(g) So
long
as an Insurer Default shall not have occurred and be continuing, an Insurance
Agreement Event of Default occurs;
(h) A
claim
is made under the Note Policy;
(i) Any
failure by the Servicer to deliver to the Trustee for distribution to Holders
any proceeds or payment required to be so delivered that continues unremedied
for a period of two Business Days (or one Business Day with respect to Purchase
Amounts) after knowledge thereof by the Servicer or after written notice
thereof
shall have been given to the Servicer by the Trustee or the
Insurer;
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(j) an
Event
of Default under the Indenture shall have occurred.
SECTION
9.2. Consequences
of a Servicer Termination Event.
If
a
Servicer Termination Event shall occur and be continuing, the Insurer (or,
if an
Insurer Default shall have occurred and be continuing either the Trust
Collateral Agent (to the extent it has knowledge thereof) or a Note Majority),
by notice given in writing to the Servicer (and to the Trust Collateral Agent
if
given by the Insurer or the Holders) may terminate all of the rights and
obligations of the Servicer under this Agreement. On or after the receipt
by the
Servicer of such written notice or upon termination of the term of the Servicer,
all authority, power, obligations and responsibilities of the Servicer under
this Agreement, whether with respect to the Notes, the Certificates or the
Other
Conveyed Property or otherwise, automatically shall pass to, be vested in
and
become obligations and responsibilities of the Backup Servicer, which shall
cause the Designated Backup Subservicer to assume the duties pursuant to
Section
8.5(c), (or such other replacement Servicer appointed by the Controlling
Party);
provided,
however,
that
the replacement Servicer shall have no liability with respect to any obligation
which was required to be performed by the terminated Servicer prior to the
date
that the replacement Servicer becomes the Servicer or any claim of a third
party
based on any alleged action or inaction of the terminated Servicer. The
replacement Servicer is authorized and empowered by this Agreement to execute
and deliver, on behalf of the terminated Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes
of such
notice of termination, whether to complete the transfer and endorsement of
the
Receivables and the Other Conveyed Property and related documents to show
the
Trust as lienholder or secured party on the related Lien Certificates, or
otherwise. The terminated Servicer agrees to cooperate with the Controlling
Party and the replacement Servicer in effecting the termination of the
responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the replacement Servicer for
administration by it of all cash amounts that shall at the time be held by
the
terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in the Collection Account or thereafter received with respect to
the
Receivables and the delivery to the replacement Servicer of all Receivable
Files, Monthly Records and Collection Records and a computer tape in readable
form as of the most recent Business Day containing all information necessary
to
enable the replacement Servicer or a replacement Servicer to service the
Receivables and the Other Conveyed Property. The terminated Servicer shall
grant
the Trust Collateral Agent, the replacement Servicer and the Controlling
Party
reasonable access to the terminated Servicer’s premises at the terminated
Servicer’s expense.
SECTION
9.3. Appointment
of Successor.
(a) On
and
after the time the Servicer receives a notice of termination pursuant to
Section
9.2 or upon the resignation of the Servicer pursuant to Section 8.6; (i)
the
Backup Servicer (unless the Controlling Party shall have exercised its option
pursuant to Section 9.3(b) to appoint an alternate replacement Servicer)
shall
be the successor in all respects to the Servicer, in its capacity as servicer
under this Agreement and the Insurance Agreement and the transactions set
forth
or provided for in this Agreement, and shall be subject to all the rights,
responsibilities, restrictions, duties, liabilities and termination provisions
relating thereto placed on the Servicer by the terms and provisions of this
Agreement or the Insurance Agreement except as otherwise stated herein. The
Trust Collateral Agent and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
If
a replacement Servicer is acting as Servicer hereunder, it shall be subject
to
termination under Section 9.2 upon the occurrence of any Servicer Termination
Event applicable to it as Servicer.
69
(b) The
Controlling Party may exercise at any time its right to appoint as Backup
Servicer or Designated Backup Subservicer or as successor to the Servicer
a
Person other than the Person serving as Backup Servicer or the Designated
Backup
Subservicer at the time, and (without limiting its obligations under the
Note
Policy) shall have no liability to the Trust Collateral Agent, the Servicer,
the
Seller, the Person then serving as Backup Servicer, the Designated Backup
Subservicer, any Holders or any other Person if it does so; provided, however,
that at the time of such transfer, the outstanding fees, expenses and
indemnities of the current Backup Servicer and the Designated Backup Subservicer
shall be paid in full. Notwithstanding the above, if the Backup Servicer
or the
Designated Backup Subservicer shall be legally unable or unwilling to act
as
Servicer, and an Insurer Default shall have occurred and be continuing, the
Backup Servicer, the Designated Backup Subservicer, the Trust Collateral
Agent
or a Note Majority may petition a court of competent jurisdiction to appoint
any
Eligible Servicer as the successor to the Servicer. Pending appointment pursuant
to the preceding sentence, the Backup Servicer shall act as replacement Servicer
unless it is legally unable to do so, in which event the outgoing Servicer
shall
continue to act as Servicer until a successor has been appointed and accepted
such appointment. Subject to Section 8.6, no provision of this Agreement
shall
be construed as relieving the Backup Servicer of its obligation to succeed
as
replacement Servicer upon the termination of the Servicer pursuant to Section
9.2 or the resignation of the Servicer pursuant to Section 8.6. If upon the
termination of the Servicer pursuant to Section 9.2 or the resignation of
the
Servicer pursuant to Section 8.6, the Controlling Party appoints a replacement
Servicer other than the Backup Servicer, the Backup Servicer shall not be
relieved of its duties as Backup Servicer hereunder.
(c) Any
replacement Servicer shall be entitled to such compensation (whether payable
out
of the Collection Account or otherwise) as the Servicer would have been entitled
to under this Agreement if the Servicer had not resigned or been terminated
hereunder or such other compensation as agreed to by the Insurer in writing.
If
any replacement Servicer is appointed as a result of the Backup Servicer’s
refusal (in breach of the terms of this Agreement) to act as Servicer although
it is legally able to do so, the Insurer and such replacement Servicer may
agree
on reasonable additional compensation to be paid to such replacement Servicer;
provided,
however,
it
being understood and agreed that the Insurer shall give prior notice to the
Backup Servicer with respect to the appointment of such successor and the
payment of additional compensation, if any. If, any replacement Servicer
is
appointed for any reason other than the Backup Servicer’s refusal to act as
Servicer although legally able to do so, the Backup Servicer shall not be
liable
for any Servicing Fee, additional compensation or other amounts to be paid
to
such replacement Servicer in connection with its assumption and performance
of
the servicing duties described herein.
70
(d) Notwithstanding
anything contained in this Agreement to the contrary, the Backup Servicer
is
authorized to accept and rely on all of the accounting records (including
computer records) and work of the prior Servicer relating to the Receivables
(collectively, the “Predecessor Servicer Work Product”) without any audit or
other examination thereof, and the Backup Servicer shall have no duty,
responsibility, obligation or liability for the acts and omissions of the
prior
Servicer. If any error, inaccuracy, omission or incorrect or non-standard
practice or procedure (collectively, “Errors”) exist in any Predecessor Servicer
Work Product and such Errors make it materially more difficult to service
or
should cause or materially contribute to the Backup Servicer making or
continuing any Errors (collectively, “Continuing Errors”), the Backup Servicer
shall have no duty, responsibility, obligation or liability for such Continuing
Errors; provided,
however,
that
the Backup Servicer agrees to use its best efforts to prevent further Continuing
Errors. In the event that the Backup Servicer becomes aware of Errors or
Continuing Errors, it shall, with the prior consent of the Controlling Party
use
its best efforts to reconstruct and reconcile such data as is commercially
reasonable to correct such Errors and Continuing Errors and to prevent future
Continuing Errors. The Backup Servicer shall be entitled to recover its costs
thereby expended in accordance with Section 3.03 of the Spread Account
Agreement.
SECTION
9.4. Notification
to Holders.
Upon
any
termination of, or appointment of a successor to, the Servicer, the Designated
Backup Subservicer or the Backup Servicer, the Trust Collateral Agent shall
give
prompt written notice thereof to each Holder, the Insurer and to the Rating
Agencies.
SECTION
9.5. Waiver
of Past Defaults.
So
long
as no Insurer Default shall have occurred and be continuing, the Insurer
(or, if
an Insurer Default shall have occurred and be continuing, the Note Majority)
may, on behalf of all Holders, waive any default by the Servicer, the Designated
Backup Subservicer or the Backup Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement and the Basic Documents. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
ARTICLE
X
Termination
SECTION
10.1. Optional
Purchase of All Receivables.
(a) On
the
last day of any Collection Period as of which the Aggregate Principal Balance
shall be less than or equal to 10% of the Original Pool Balance, the Servicer
shall have the option to purchase the Owner Trust Estate, other than the
Trust
Accounts (with the consent of the Insurer if such purchase would result in
a
claim on the Note Policy or would result in any amount owing to the Insurer
under the Insurance Agreement remaining unpaid); provided,
however,
that
the amount to be paid for such purchase (as set forth in the following sentence)
shall be sufficient to pay the full amount of principal and interest then
due
and payable on the Class A-3 Notes then outstanding, and amounts due and
unpaid
to the Insurer under the Insurance Agreement and the Note Policy and amounts
due
to the Trustee, the Trust Collateral Agent, the Collateral Agent, the Backup
Servicer, the Designated Backup Subservicer and the Owner Trustee hereunder
or
under the Trust Agreement. To exercise such option, the Servicer shall deposit
pursuant to Section 5.6 in the Collection Account an amount equal to the
aggregate Purchase Amount for the Receivables (including Liquidated
Receivables), plus the appraised value of any other property held by the
Trust,
such value to be determined by an appraiser mutually agreed upon by the
Servicer, the Insurer (as the Controlling Party) and the Trust Collateral
Agent
or such amount as the Servicer, Insurer and Trust Collateral Agent may mutually
agree, and shall succeed to all interests in and to the Trust.
71
If
the
Servicer does not exercise its rights with respect to the optional purchase
within 31 days of the first Distribution Date that the optional purchase
is
permitted, the Class A-3 Notes will be paid additional amounts on future
Distribution Dates, equal to the product of (i) one twelfth, (ii) 0.50% and
(iii) the outstanding principal balance on the Class A-3 Notes as of such
Distribution Date pursuant to clause (xi) under Section 5.7 herein. Such
additional amounts shall not be included in the calculation of Noteholders’
Monthly Interest Distributable Amount or in any other calculations derived
therefrom. The
Policy does not guarantee payment of any additional amounts that become due
to
the Class A-3 Notes pursuant to the immediately preceding sentence.
(b) Upon
any
sale of the assets of the Trust pursuant to Section 8.1 of the Trust Agreement,
the Servicer shall instruct the Trust Collateral Agent to deposit the proceeds
from such sale after all payments and reserves therefrom (including the expenses
of such sale) have been made (the “Insolvency
Proceeds”)
in the
Collection Account.
(c) Notice
of
any termination of the Trust shall be given by the Servicer to the Owner
Trustee, the Trustee, the Backup Servicer, the Designated Backup Subservicer,
the Trust Collateral Agent, the Collateral Agent, the Insurer and the Rating
Agencies as soon as practicable after the Servicer has received notice
thereof.
(d) Following
the satisfaction and discharge of the Indenture and the payment in full of
the
principal of and interest on the Notes, the Certificateholders will succeed
to
the rights of the Holders hereunder.
ARTICLE
XI
Administrative
Duties of the Servicer
SECTION
11.1. Administrative
Duties.
(a) Duties
with Respect to the Indenture.
The
Servicer shall perform all its duties and the duties of the Trust under the
Indenture. In addition, the Servicer shall consult with the Owner Trustee
as the
Servicer deems appropriate regarding the duties of the Trust under the
Indenture. The Servicer shall monitor the performance of the Trust and shall
advise the Owner Trustee when action is necessary to comply with the Trust’s
duties under the Indenture. The Servicer shall prepare for execution by the
Trust or shall cause the preparation by other appropriate Persons of all
such
documents, reports, filings, instruments, certificates and opinions as it
shall
be the duty of the Trust to prepare, file or deliver pursuant to the Indenture.
In furtherance of the foregoing, the Servicer shall take all necessary action
that is the duty of the Trust to take pursuant to the Indenture, including,
without limitation, pursuant to Sections 2.7, 3.5, 3.6, 3.7, 3.9, 3.10, 3.17,
5.1, 5.4, 7.3, 8.3, 9.2, 9.3, 11.1 and 11.15 of the Indenture.
72
(b) Duties
with Respect to the Trust.
(i) In
addition to the duties of the Servicer set forth in this Agreement or any
of the
Basic Documents, the Servicer shall perform such calculations and shall prepare
for execution or shall cause the timely preparation by other appropriate
Persons
and it shall execute all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Trust or the Owner
Trustee to prepare, file or deliver pursuant to this Agreement or any of
the
Basic Documents or under state and federal tax and securities laws (including
any filings required pursuant to the Xxxxxxxx-Xxxxx Act of 2002 or any rule
or
regulation promulgated thereunder), and at the request of the Owner Trustee
shall take all appropriate action that it is the duty of the Trust to take
pursuant to this Agreement or any of the Basic Documents, including, without
limitation, pursuant to Sections 2.6 and 2.11 of the Trust Agreement. In
accordance with the directions of the Trust or the Owner Trustee, the Servicer
shall administer, perform or supervise the performance of such other activities
in connection with the Collateral (including the Basic Documents) as are
not
covered by any of the foregoing provisions and as are expressly requested
by the
Trust or the Owner Trustee and are reasonably within the capability of the
Servicer. UACC shall monitor the activities of the Trust to ensure the Trust’s
compliance with Section 4.6 of the Trust Agreement and shall take all action
necessary to ensure that the Trust is operated in accordance with the provisions
of such section.
(ii) Notwithstanding
anything in this Agreement or any of the Basic Documents to the contrary,
the
Servicer shall be responsible for promptly notifying the Owner Trustee and
the
Trust Collateral Agent in the event that any withholding tax is imposed on
the
Trust’s payments (or allocations of income) to an Owner (as defined in the Trust
Agreement) as contemplated by this Agreement. Any such notice shall be in
writing and specify the amount of any withholding tax required to be withheld
by
the Owner Trustee or the Trust Collateral Agent pursuant to such
provision.
(iii) Notwithstanding
anything in this Agreement or the Basic Documents to the contrary, the Servicer
shall be responsible for performance of the duties of the Trust set forth
in
Section 5.1(a) and (b) of the Trust Agreement with respect to, among other
things, accounting and reports to Owners (as defined in the Trust Agreement);
provided,
however,
that
once prepared by the Servicer the Owner Trustee shall retain responsibility
for
the distribution of the Schedule K-1s necessary to enable the Certificateholder
to prepare its federal and state income tax returns.
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(iv) The
Servicer shall perform the duties of the Servicer specified in Section 9.2
of
the Trust Agreement required to be performed in connection with the resignation
or removal of the Owner Trustee, and any other duties expressly required
to be
performed by the Servicer under this Agreement or any of the Basic
Documents.
(v) In
carrying out the foregoing duties or any of its other obligations under this
Agreement, the Servicer may enter into transactions with or otherwise deal
with
any of its Affiliates; provided,
however,
that
the terms of any such transactions or dealings shall be in accordance with
any
directions received from the Trust and shall be, in the Servicer’s opinion, no
less favorable to the Trust in any material respect.
(c) Tax
Matters.
The
Servicer shall prepare and file, on behalf of the Seller, all tax returns,
tax
elections, financial statements and such annual or other reports attributable
to
the activities engaged in by the Trust as are necessary for preparation of
tax
reports, including without limitation forms 1099. All tax returns will be
signed
by the Seller.
(d) Non-Ministerial
Matters.
With
respect to matters that in the reasonable judgment of the Servicer are
non-ministerial, the Servicer shall not take any action pursuant to this
Article
unless within a reasonable time before the taking of such action, the Servicer
shall have notified the Owner Trustee, the Trustee and the Insurer of the
proposed action and the Owner Trustee and, with respect to items (A), (B),
(C)
and (D) below, the Trustee shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence,
“non-ministerial matters” shall include:
(A) the
amendment of or any supplement to the Indenture;
(B) the
initiation of any claim or lawsuit by the Trust and the compromise of any
action, claim or lawsuit brought by or against the Trust (other than in
connection with the collection of the Receivables);
(C) the
amendment, change or modification of this Agreement or any of the Basic
Documents;
(D) the
appointment of successor Note Registrars, successor Paying Agents and successor
Trustees pursuant to the Indenture or the appointment of replacement Servicers
or the consent to the assignment by the Note Registrar, Paying Agent or Trustee
of its obligations under the Indenture; and
(E) the
removal of the Trustee or the Trust Collateral Agent.
(e) Exceptions.
Notwithstanding anything to the contrary in this Agreement, except as expressly
provided herein or in the other Basic Documents, the Servicer, in its capacity
hereunder, shall not be obligated to, and shall not, (1) make any payments
to
the Holders or Certificateholders under the Basic Documents, (2) sell the
Trust
Estate pursuant to Section 5.5 of the Indenture, (3) take any other action
that
the Trust directs the Servicer not to take on its behalf or (4) in connection
with its duties hereunder assume any indemnification obligation of any other
Person. Notwithstanding that UACC may no longer be the Servicer hereunder,
UACC
shall continue to perform the duties and obligations of the Servicer under
this
Section 11.1.
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(f) The
Backup Servicer, the Designated Backup Subservicer (including in its capacity
as
successor Servicer or subservicer) or any replacement Servicer shall not
be
responsible for any obligations or duties of the servicer under this Section
11.1.
SECTION
11.2. Records.
The
Servicer shall maintain appropriate books of account and records relating
to
services performed under this Agreement, which books of account and records
shall be accessible for inspection by the Trust and the Insurer at any time
during normal business hours.
SECTION
11.3. Additional
Information to be Furnished to the Trust.
The
Servicer shall furnish to the Trust and the Insurer from time to time such
additional information regarding the Collateral as the Trust and the Insurer
shall reasonably request.
SECTION
11.4. Reporting
Requirements of the Commission and Indemnification.
(a) In
order
to comply with any rules adopted by the Securities and Exchange Commission,
notwithstanding any other provision of this Agreement, the Servicer shall
(i)
agree to such modifications and enter into such amendments to this Agreement
as
may be necessary, in the judgment of the Seller and its counsel, to comply
with
any rules promulgated by the Commission and any interpretations thereof by
the
staff of the Commission (collectively, “SEC Rules”) and (ii) promptly upon
request provide to the Seller for inclusion in any periodic report required
to
be filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) such items of information regarding this Agreement and matters related
to
the Servicer, including as applicable (by way of example and not limitation),
a
description of any material litigation or governmental action or proceeding
involving the Servicer or its affiliates (collectively, the “Servicer
Information”), provided, that such information shall be required to be provided
by the Servicer only to the extent that such shall be determined by the Seller
and its counsel to be necessary to comply with any SEC Rules.
(b) The
Servicer hereby agrees to indemnify and hold harmless the Seller, its respective
officers and directors and each person, if any, who controls the Seller within
the meaning of Section 15 of the Securities Act of 1933, as amended (the
“Act”),
or Section 20 of the Exchange Act, from and against any and all losses, claims,
expenses, damages or liabilities to which the Seller, its respective officers
or
directors and any such controlling person may become subject under the Act
or
otherwise, as and when such losses, claims, expenses, damages or liabilities
are
incurred, insofar as such losses, claims, expenses, damages or liabilities
(or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Servicer
Information or arise out of, or are based upon, the omission or alleged omission
to state therein any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading, and will reimburse the Seller, its respective officers
and
directors and any such controlling person for any legal or other expenses
reasonably incurred by it or any of them in connection with investigating
or
defending any such loss, claim, expense, damage, liability or action, as
and
when incurred; provided, however, that the Servicer shall be liable only
insofar
as such untrue statement or alleged untrue statement or omission or alleged
omission relates solely to the information in the Servicer Information furnished
to the Seller by or on behalf of the Servicer specifically in connection
with
this Agreement.
75
(c) The
Servicer
(for so long as UACC is the Servicer) shall, at its expense, timely execute
and
cause to be prepared and filed with the Commission all periodic reports required
to be filed with respect to the Trust under the provisions of the Exchange
Act,
and the rules and regulations of the Commission thereunder. The Seller shall
cooperate in any reasonable request made by the Servicer in connection with
such
filings.
ARTICLE
XII
Miscellaneous
Provisions
SECTION
12.1. Amendment.
(a) This
Agreement may be amended from time to time by the parties hereto, with the
consent of the Trustee (which consent may not be unreasonably withheld),
with
the prior written consent of the Insurer (so long as no Insurer Default has
occurred and is continuing) but without the consent of any of the Holders,
to
cure any ambiguity, to correct or supplement any provisions in this Agreement,
to comply with any changes in the Code, or to make any other provisions with
respect to matters or questions arising under this Agreement which shall
not be
inconsistent with the provisions of this Agreement or the Insurance Agreement;
provided,
however,
that
such action shall not, as evidenced by an Opinion of Counsel delivered to
Owner
Trustee, the Insurer and the Trustee, adversely affect in any material respect
the interests of any Noteholder; provided further that if an Insurer Default
has
occurred and is continuing, such action shall not materially adversely affect
the interests of the Insurer unless the Insurer consents.
This
Agreement may also be amended from time to time by the parties hereto, with
the
consent of the Insurer, the consent of the Trustee, and, if an Insurer Default
has occurred and is continuing, with the consent of the Holders of Notes
evidencing not less than a majority of the outstanding principal amount of
the
Notes for the purpose of adding any provisions to or changing in any manner
or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders; provided,
however,
that no
such amendment shall (a) increase or reduce in any manner the amount of,
or
accelerate or delay the timing of, collections of payments on Receivables
or
distributions that shall be required to be made for the benefit of the Holders
or (b) reduce the aforesaid percentage of the outstanding principal amount
of
the Notes, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes of each class
affected thereby; provided,
further,
that if
an Insurer Default has not occurred and is continuing, such action shall
not
materially adversely affect the interest of the Insurer unless the Insurer
consents.
In
order
to comply with any rules adopted by the Commission, this Agreement may be
amended from time to time by the parties hereto, with the consent of the
Trustee
and the Insurer, so long as an Insurer Default has not occurred and is occurring
(which consent may not be unreasonably withheld), without the consent of
any of
the Holders, as may be necessary, in the judgment of the Seller and its counsel,
pursuant to Section 11.4, to comply with any rules promulgated by the Commission
and any interpretations thereof by the staff of the Commission.
76
Promptly
after the execution of any such amendment or consent, the Trust Collateral
Agent
shall furnish written notification of the substance of such amendment or
consent
to each Holder and the Rating Agencies. No such amendment will be permitted
if,
as a result, any Rating Agency would lower its publicly issued rating on
any
class of the Notes then outstanding.
It
shall
not be necessary for the consent of Holders pursuant to this Section to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner
of
obtaining such consents (and any other consents of Holders provided for in
this
Agreement) and of evidencing the authorization of any action by Holders shall
be
subject to such reasonable requirements as the Trustee or the Owner Trustee,
as
applicable, may prescribe.
Prior
to
the execution of any amendment to this Agreement, the Owner Trustee and the
Trustee, Trust Collateral Agent, Collateral Agent, Designated Backup
Subservicer, Backup Servicer and the Insurer shall be entitled to receive
and
conclusively rely upon an Opinion of Counsel stating that the execution of
such
amendment is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in Section 12.2(h)(1) has been delivered. The Owner Trustee,
the Trust Collateral Agent, the Designated Backup Subservicer, the Backup
Servicer and the Trustee may, but shall not be obligated to, enter into any
such
amendment which affects the Trust’s, the Owner Trustee’s, the Trust Collateral
Agent’s, the Designated Backup Subservicer’s, the Backup Servicer’s or the
Trustee’s, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
(b) Notwithstanding
anything to the contrary contained in Section 12.1(a) above, the provisions
of
the Agreement relating to (i) the Spread Account Agreement, the Spread Account,
the Requisite Amount, a Trigger Event or any component definition of a Trigger
Event and (ii) any additional sources of funds which may be added to the
Spread
Account or uses of funds on deposit in the Spread Account may be amended
in any
respect by the Servicer, the Insurer and the Collateral Agent (the consent
of
which shall not be withheld or delayed with respect to any amendment that
does
not adversely affect the Collateral Agent) without the consent of, or notice
to,
the Holders.
77
SECTION
12.2. Protection
of Title to Trust.
(a) The
Seller shall execute and file such financing statements and cause to be executed
and filed such continuation statements, all in such manner and in such places
as
may be required by law fully to preserve, maintain and protect the interest
of
the Trust and the interests of the Trust Collateral Agent in the Receivables
and
in the proceeds thereof. The Seller shall deliver (or cause to be delivered)
to
the Insurer, the Owner Trustee and the Trust Collateral Agent file-stamped
copies of, or filing receipts for, any document filed as provided above,
as soon
as available following such filing.
(b) Neither
the Seller nor the Servicer shall change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of 9-506 of the UCC, unless it shall have given
the Insurer, the Owner Trustee, the Trust Collateral Agent, the Backup Servicer
and the Trustee at least five days’ prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements. Promptly upon such filing, the Seller
or
the Servicer, as the case may be, shall deliver an Opinion of Counsel in
form
and substance reasonably satisfactory to the Insurer, stating either (A)
all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Trust
and
the Trust Collateral Agent in the Receivables, and reciting the details of
such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and protect such
interest.
(c) Each
of
the Seller and the Servicer shall have an obligation to give the Insurer,
the
Owner Trustee, the Trust Collateral Agent and the Trustee at least 60 days’
prior written notice of any relocation of its principal executive office
or
jurisdiction of organization if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall promptly file any such amendment or new financing statement.
The Servicer shall at all times maintain (i) each office from which it shall
service Receivables within the United States of America or Canada, and (ii)
its
principal executive office within the United States of America.
(d) The
Servicer shall maintain accounts and records as to each Receivable accurately
and in sufficient detail to permit (i) the reader thereof to know at any
time
the status of such Receivable, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Receivable and the amounts from
time
to time deposited in the Collection Account in respect of such
Receivable.
(e) The
Servicer shall maintain its computer systems so that, from and after the
time of
sale under this Agreement of the Receivables to the Trust, the Servicer’s master
computer records (including any backup archives) that refer to a Receivable
shall indicate clearly the interest of the Trust in such Receivable and that
such Receivable is owned by the Trust. Indication of the Trust’s interest in a
Receivable shall be deleted from or modified on the Servicer’s computer systems
when, and only when, the related Receivable shall have been paid in full
or
repurchased.
78
(f) If
at any
time the Seller or the Servicer shall propose to sell, grant a security interest
in or otherwise transfer any interest in automotive receivables to any
prospective purchaser, lender or other transferee, the Servicer shall give
to
such prospective purchaser, lender or other transferee computer tapes, records
or printouts (including any restored from backup archives) that, if they
shall
refer in any manner whatsoever to any Receivable, shall indicate clearly
that
such Receivable has been sold and is owned by the Trust.
(g) Upon
request, the Servicer shall furnish to the Insurer, the Owner Trustee or
to the
Trustee, within five Business Days, a list of all Receivables (by contract
number and name of Obligor) then held as part of the Trust, together with
a
reconciliation of such list to the Schedule of Receivables and to each of
the
Servicer’s Certificates furnished before such request indicating removal of
Receivables from the Trust.
(h) UACC
shall deliver to the Insurer, the Backup Servicer, the Owner Trustee and
the
Trustee:
(1) promptly
after the execution and delivery of this Agreement and, if required pursuant
to
Section 12.1, of each amendment, an Opinion of Counsel in form and substance
reasonably satisfactory to the Insurer, stating that, in the opinion of such
Counsel, either (A) all financing statements and continuation statements
have
been executed and filed that are necessary fully to preserve and protect
the
interest of the Trust and the Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in which
such
details are given, or (B) no such action shall be necessary to preserve and
protect such interest; and
(2) within
90
days after the beginning of each calendar year beginning with the first calendar
year beginning more than three months after the Cutoff Date, an Opinion of
Counsel, in form and substance reasonably satisfactory to the Insurer, dated
as
of a date during such 90-day period, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements
have
been executed and filed that are necessary fully to preserve and protect
the
interest of the Trust and the Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in which
such
details are given, or (B) no such action shall be necessary to preserve and
protect such interest.
Each
Opinion of Counsel referred to in clause (1) or (2) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to preserve and protect such interest.
SECTION
12.3. Notices.
All
demands, notices and communications upon or to the Seller, the Servicer,
the
Owner Trustee, the Trustee, the Insurer or the Rating Agencies under this
Agreement shall be in writing, personally delivered, or mailed by certified
mail, return receipt requested, federal express or similar overnight courier
service, and shall be deemed to have been duly given upon receipt
79
(a)
|
in
the case of the Seller to UPFC Auto Financing Corporation, 000
X Xxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxx, Xxxxx, 00000, Attention: Xxxxx X. Xxxxxxx,
with
a copy to the Servicer at the address set forth
below;
|
(b)
|
in
the case of the Servicer to United Auto Credit Corporation, 00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxx
Xxxxxx;
|
(c)
|
in
the case of the Trust or the Owner Trustee, at the Corporate Trust
Office
of the Owner Trustee;
|
(d)
|
in
the case of the Trustee, the Backup Servicer, the Collateral Agent
or the
Trust Collateral Agent, at the Corporate Trust
Office;
|
(e)
|
in
the case of the Designated Backup Subservicer, to CentreOne Financial
Services LLC, 000 Xxx Xxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx
00000,
Attention: President;
|
(f)
|
in
the case of the Insurer, Ambac Assurance Corporation, Xxx Xxxxx
Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Department
- ABS (in each case in which notice or other communication to the
Insurer
refers to a claim on the Note Policy, a Deficiency Notice pursuant
to
Section 5.5 of this Agreement or with respect to which failure
on the part
of the Insurer to respond shall be deemed to constitute consent
or
acceptance, then a copy of such notice or other communication should
also
be sent to the attention of the General Counsel and shall be marked
to
indicate “URGENT MATERIAL
ENCLOSED”);
|
(g)
|
in
the case of Moody’s, to Xxxxx’x Investors Service, Inc., ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and
|
(h)
|
in
the case of Standard & Poor’s, to Standard & Poor’s Ratings Group,
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Transaction Oversight Department,
xxxxxxxx_xxxxxxx@xxxxx.xxx
|
Any
notice required or permitted to be mailed to a Holder shall be given by first
class mail, postage prepaid, at the address of such Holder as shown in the
Note
Register. Any notice so mailed within the time prescribed in the Agreement
shall
be conclusively presumed to have been duly given, whether or not the Holder
shall receive such notice.
80
SECTION
12.4. Assignment.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Notwithstanding anything
to the contrary contained herein, except as provided in Sections 7.4 and
8.4 and
as provided in the provisions of this Agreement concerning the resignation
of
the Servicer, this Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of the Owner Trustee, the Trust Collateral
Agent, the Backup Servicer, the Designated Backup Subservicer, the Trustee
and
the Insurer (or if an Insurer Default shall have occurred and be continuing
the
Holders of Notes evidencing not less than 66-2/3% of the principal amount
of the
outstanding Notes).
SECTION
12.5. Limitations
on Rights of Others.
The
provisions of this Agreement are solely for the benefit of the parties hereto,
the Trustee, the Insurer and the Holders, as third-party beneficiaries. The
Insurer and its successors and assigns shall be a third-party beneficiary
to the
provisions of this Agreement, and shall be entitled to rely upon and directly
enforce such provisions of this Agreement so long as no Insurer Default shall
have occurred and be continuing. Except as expressly stated otherwise herein,
any right of the Insurer to direct, appoint, consent to, approve of, or take
any
action under this Agreement, shall be a right exercised by the Insurer in
its
sole and absolute discretion. The Insurer may disclaim any of its rights
and
powers under this Agreement (but not its duties and obligations under the
Note
Policy) upon delivery of a written notice to the Owner Trustee. Nothing in
this
Agreement, whether express or implied, shall be construed to give to any
other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION
12.6. Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision
in any
other jurisdiction.
SECTION
12.7. Separate
Counterparts.
This
Agreement may be executed by the parties hereto in separate counterparts,
each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument.
SECTION
12.8. Headings.
The
headings of the various Articles and Sections herein are for convenience
of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION
12.9. Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND THIS AGREEMENT AND ALL
MATTERS ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE,
GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
NEW
YORK GENERAL OBLIGATIONS LAW).
SECTION
12.10. Assignment
to Trustee.
The
Seller hereby acknowledges and consents to any mortgage, pledge, assignment
and
grant of a security interest by the Trust to the Trust Collateral Agent pursuant
to the Indenture for the benefit of the Holders of all right, title and interest
of the Trust in, to and under the Receivables listed in Schedule A hereto
and/or
the assignment of any or all of the Trust’s rights and obligations hereunder to
the Trust Collateral Agent.
81
SECTION
12.11. Nonpetition
Covenants.
(a) Notwithstanding
any prior termination of this Agreement, the Servicer, Backup Servicer,
Designated Backup Subservicer and the Seller shall not, prior to the date
which
is one year and one day after the termination of this Agreement with respect
to
the Trust, acquiesce, petition or otherwise invoke or cause the Trust to
invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against the Trust under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or
any
substantial part of its property, or ordering the winding up or liquidation
of
the affairs of the Trust.
(b) Notwithstanding
any prior termination of this Agreement, the Servicer, Backup Servicer,
Designated Backup Subservicer shall not, prior to the date that is one year
and
one day after the termination of this Agreement with respect to the Seller,
acquiesce to, petition or otherwise invoke or cause the Seller to invoke
the
process of any court or government authority for the purpose of commencing
or
sustaining a case against the Seller under any federal or state bankruptcy,
insolvency or similar law, appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation
of
the affairs of the Seller.
SECTION
12.12. Limitation
of Liability of Owner Trustee and Trustee.
(a) Notwithstanding
anything contained herein to the contrary, this Agreement has been countersigned
by Xxxxx Fargo Delaware Trust Company not in its individual capacity but
solely
in its capacity as Owner Trustee of the Trust and in no event shall Xxxxx
Fargo
Delaware Trust Company in its individual capacity or, except as expressly
provided in the Trust Agreement, as Owner Trustee have any liability for
the
representations, warranties, covenants, agreements or other obligations of
the
Trust hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Trust. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
obligations of the Trust hereunder, the Owner Trustee shall be subject to,
and
entitled to the benefits of, the terms and provisions of Articles V, VI and
VII
of the Trust Agreement.
(b) Notwithstanding
anything contained herein to the contrary, this Agreement has been executed
and
delivered by Deutsche Bank Trust Company Americas, not in its individual
capacity but solely as Trust Collateral Agent and Backup Servicer and in
no
event shall Deutsche Bank Trust Company Americas, have any liability for
the
representations, warranties, covenants, agreements or other obligations of
the
Trust hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Trust.
(c) In
no
event shall Deutsche Bank Trust Company Americas, in any of its capacities
hereunder, be deemed to have assumed any duties of the Owner Trustee under
the
Delaware Statutory Trust Statute, common law, or the Trust
Agreement.
82
SECTION
12.13. Independence
of the Servicer.
For
all
purposes of this Agreement, the Servicer shall be an independent contractor
and
shall not be subject to the supervision of the Trust, the Trust Collateral
Agent, Designated Backup Subservicer and Backup Servicer or the Owner Trustee
with respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by this Agreement or the
Trust Agreement, the Servicer shall have no authority to act for or represent
the Trust or the Owner Trustee in any way and shall not otherwise be deemed
an
agent of the Trust or the Owner Trustee.
SECTION
12.14. No
Joint Venture.
Nothing
contained in this Agreement (i) shall constitute the Servicer and either of
the Trust or the Owner Trustee as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity,
(ii)
shall be construed to impose any liability as such on any of them or (iii)
shall
be deemed to confer on any of them any express, implied or apparent authority
to
incur any obligation or liability on behalf of the others.
SECTION
12.15. Benefits
of Sale and Servicing Agreement.
The
Insurer and its successors and assigns shall be a third-party beneficiary
to the
provisions of this Sale and Servicing Agreement, and shall be entitled to
rely
upon and directly enforce such provisions of this Sale and Servicing Agreement
so long as no Insurer Default shall have occurred and be
continuing.
SECTION
12.16. State
Business Licenses.
The
Servicer or the Certificateholder shall prepare and instruct the Trust to
file
each state business license (and any renewal thereof) required to be filed
under
applicable state law without further consent or instruction from the Instructing
Party (as defined in the Trust Agreement), including a Sales Finance Company
Application (and any renewal thereof) with the Pennsylvania Department of
Banking, Licensing Division, and a Financial Regulation Application (and
any
renewal thereof) with the Maryland Department of Labor, Licensing and
Regulation.
SECTION
12.17. Additional
Liability. In
no
event shall the Trustee, the Trust Collateral Agent, the Collateral Agent,
the
Backup Servicer and the Designated Backup Subservicer, including in its capacity
as successor Servicer or subservicer of the Servicer, be liable for any
indirect, special, punitive or consequential loss or damage of any kind
whatsoever, including, but not limited to, lost profits, even if the Trustee,
the Trust Collateral Agent, the Collateral Agent, the Backup Servicer and
the
Designated Backup Subservicer, including in its capacity as successor Servicer
or subservicer of the Servicer, have been advised of the likelihood of such
loss
or damage and regardless of the form of action.
In
no
event shall the Trustee, the Trust Collateral Agent, the Collateral Agent,
the
Backup Servicer and the Designated Backup Subservicer, including in its capacity
as successor Servicer or subservicer of the Servicer, be liable for any failure
or delay in the performance of its obligations hereunder because of
circumstances beyond its control, including, but not limited to, acts of
God,
flood, war (whether declared or undeclared), terrorism, fire, riot, embargo,
government action, including any laws, ordinances, regulations, governmental
action or the like which delay, restrict or prohibit the providing of the
services contemplated by this Agreement.
83
SECTION
12.18. Intent
of the Parties; Reasonableness.
The
Seller, Servicer and the Trust acknowledge and agree that the purpose of
Article
Four of this Agreement is to facilitate compliance by the Trust and the
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission.
Neither
the Servicer nor the Trust shall exercise its right to request delivery of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder (or
the
provision in a private offering of disclosure comparable to that required
under
the Securities Act). 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 comply with requests made by the Trust in good faith for delivery
of
information under these provisions on the basis of evolving interpretations
of
Regulation AB. In connection
with this transaction, the Servicer shall cooperate fully with the Trust
to
deliver to the Trust any and all statements, reports, certifications, records
and any other information necessary in the good faith determination of the
Trust
to permit the Trust to comply with the provisions of Regulation AB, together
with such disclosures relating to the Servicer, any Subservicer and the
Receivables, or the servicing of the Receivables, reasonably believed by
the
Trust to be necessary in order to effect such compliance.
The
Trust
shall cooperate with the Servicer by providing timely notice of requests
for
information under these provisions and by reasonably limiting such requests
to
information required, in the reasonable judgment of the Trust to comply with
Regulation AB.
[Remainder
of page intentionally left blank.]
84
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of
the
day and the year first above written.
By:
XXXXX
FARGO DELAWARE
TRUST
COMPANY,
not in
its individual capacity but
solely
as
Owner Trustee on behalf of the Trust
By:
________________________
Name:
Title:
UPFC
AUTO
FINANCING CORPORATION, Seller
By:
________________________
Name:
Xxxxx X. Xxxxxxx
Title:
Senior Vice President
UNITED
AUTO CREDIT CORPORATION, Servicer
By:
________________________
Name:
Xxxxx Xxxxxxxx
Title:
Executive Vice President
DEUTSCHE
BANK TRUST COMPANY AMERICAS,
not
in
its individual capacity but solely as Trust
Collateral
Agent and Backup Servicer
By:
________________________
Name:
Title:
CENTERONE
FINANCIAL SERVICES LLC,
Designated
Backup Subservicer
By:
________________________
Name:
Title:
[Sale
and
Serivicing Agreement]
SCHEDULE
A
SCHEDULE
OF RECEIVABLES
Sch-A-1
SCHEDULE
B
Location
of Receivables Files
-------------------------------------------
The
Receivables are located at the offices of the Servicer listed
below.
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxxxx 00000
Sch-B-1
SCHEDULE
C
Schedule
of Servicer’s Representations
Representations
and Warranties Regarding the Receivables:
1. Security
Interest in Financed Vehicle.
To the
extent that the transfer under this Agreement is deemed to be other than
a sale,
this Agreement, and all filings under this Agreement, creates a valid and
continuing security interest (as defined in the applicable UCC) in the
Receivables in favor of the Trust, which security interest (as pledged by
the
Trust to the Trust Collateral Agent pursuant to the Indenture) is prior to
all
other Liens, and is enforceable as such as against creditors of and purchasers
from the Seller. The Trust owns and has good and marketable title to the
Receivables free and clear of any Lien (other than the Lien in favor of the
Trust Collateral Agent), claim or encumbrance of any Person.
2. All
Filings Made.
The
Trust has taken all steps necessary to perfect the Trust Collateral Agent’s
security interest in the property securing the Receivables, provided that,
if
not done as of the Closing Date, the Trust will cause, within ten days of
the
Closing Date, the filing of all appropriate financing statements in the proper
filing office in the State of Delaware under applicable law in order to perfect
the security interest in the Receivables granted to the Trust Collateral
Agent
under the Indenture.
3. No
Impairment.
The
Trust has not done anything to convey any right to any Person that would
result
in such Person having a right to payments due under the Receivable or otherwise
to impair the rights of the Insurer, the Trustee, the Trust Collateral Agent
and
the Holders in any Receivable or the proceeds thereof. Other than the security
interest granted to the Trust Collateral Agent pursuant to the Indenture,
the
Trust has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Receivables. The Trust has not authorized the
filing of and is not aware of any financing statements against the Trust
that
include a description of collateral covering the Receivables other than any
financing statement relating to the security interest granted to the Trust
Collateral Agent hereunder or that has been terminated. The Trust is not
aware
of any judgment or tax lien filings against it. The Receivables do not have
any
marks or notations indicating that they have been pledged by the Seller to
any
person other than the Trust.
4. Chattel
Paper.
The
Receivables constitute tangible chattel paper within the meaning of the
applicable UCC as in effect in the States of California, Florida, New York,
Delaware, Nevada and Minnesota.
5. Good
Title.
Immediately prior to the pledge of the Receivables to the Trust Collateral
Agent
pursuant to the Indenture, the Trust was the sole owner thereof and had good
and
indefeasible title thereto, free of any Lien and, upon execution and delivery
of
this Agreement, the Trust shall have good and indefeasible title to and will
be
the sole owner of such Receivables, free of any Lien. No Dealer or Third-Party
Lender has a participation in, or other right to receive, proceeds of any
Receivable. The Trust has not taken any action to convey any right to any
Person
that would result in such Person having a right to payments received under
the
related Insurance Policies or the related Dealer Agreements, Auto Loan Purchase
and Sale Agreements, Dealer Assignments or Third-Party Lender Assignments
or to
payments due under such Receivables.
Sch-C-1
6. Possession
of Original Copies.
The
Servicer, as custodian on behalf of the Trust, has in its possession all
original copies of the contracts that constitute or evidence the
Receivable.
Sch-C-2
SCHEDULE
D
TERMS
AND
CONDITIONS OF
DESIGNATED
BACKUP SUBSERVICER
In
the
event that the Backup Servicer shall be appointed the successor Servicer
or
CenterOne shall be appointed the successor Servicer or as subservicer of
the
Servicer, the following terms, conditions, and modifications to the Sale
and
Servicing Agreement shall apply; provided,
that
all modifications made to the Sale and Servicing Agreement on behalf of
CenterOne shall apply to the Backup Servicer unless otherwise
noted:
Upon
the
notice to CenterOne that it shall be appointed as Servicer or subservicer,
CenterOne shall develop a reasonable transition plan and shall be granted
a
reasonable period of time, which shall not exceed 90 days, to implement such
plan and assume the obligations of the Servicer and the servicing of the
Receivables in accordance with its customary servicing procedures, including
a
reasonable period of time to hire required personnel, load and configure
the
necessary information onto its computer systems, establish necessary cash
management procedures, locate and contact the obligors to redirect payments,
and
any other transition related item required or reasonably necessary to perform
its obligations as Servicer or subservicer.
CenterOne
shall service the Receivables in its own name from centralized locations
using
its own personnel and properties and shall have no liability arising from
or
responsibility for the personnel or properties of any other or predecessor
Servicer. All powers, rights and authorities granted to the Servicer are
hereby
granted to CenterOne and each of its Affiliates and agents as are necessary,
appropriate or convenient to perform its functions as Servicer or subservicer.
If CenterOne shall be a subservicer, the Servicer shall deliver to CenterOne
copies of all information delivered to or by it in its capacity as Servicer,
and
CenterOne’s obligations and liabilities shall be solely to the Servicer and not
to any other party or Person. Any provision requiring CenterOne to use best
efforts shall require only reasonable efforts with respect thereto.
The
level
of servicing performance provided by CenterOne is based on and subject to
CenterOne maintaining an average of not greater than 375 collection accounts
per
dedicated full-time equivalent collection associate, together with attendant
supervisory personnel ratios in accordance with CenterOne's customary servicing
policies. In the event that the Controlling Party desires to decrease the
minimum average number of accounts per dedicated full-time equivalent servicing
associate, the Base Servicing Fee and Supplemental Servicing Fee or other
compensation to CenterOne will be adjusted by the mutual agreement of CenterOne
and the Controlling Party. In the event that CenterOne is appointed Servicer
or
subservicer to the Servicer, its obligations under the Agreement as Designated
Backup Subservicer shall terminate and CenterOne shall be under no obligation
to
appoint a successor Designated Backup Subservicer.
“Base
Servicing Fee” means, with respect to CenterOne as Servicer or subservicer, with
respect to any Collection Period, the sum of (1) the aggregate for each
Receivable of the greater of (a) the Servicing Fee Rate times the Principal
Balance of that Receivable as of the opening of business on the first day
of
such Collection Period times one twelfth and (b) $15.00, but not less than
$5,000 and (2) the expenses of CenterOne incurred in that Collection
Period.
“Additional
Base Servicing Fee” means, the excess, if any, of the Base Servicing Fee
calculated using $20.00 in clause (b) of the definition thereof over the
Base
Servicing Fee calculated using $15.00 in clause (b) thereof. The Additional
Base
Servicing Fee will be paid pursuant to clause (x) of Section 5.7(b) of the
Agreement.
Sections
3.3 and 3.4(k) shall not apply to CenterOne.
Notwithstanding
anything to the contrary in this Agreement, CenterOne shall not be required
to
service the Receivables in accordance with the second sentence of Section
4.1 or
the Credit and Collection Policy, but rather CenterOne shall service the
Receivables with reasonable care, using that degree of skill and attention
that
CenterOne exercises with respect to all comparable automobile receivables
that
it services for itself and others. CenterOne shall have no obligation to
monitor
the status of any Insurance Policy.
Notwithstanding
Section 4.1(a), CenterOne shall not be required to engage an accounting firm
to
complete an operational audit or to deliver other internal or third party
audits
to the Insurer or any other Person.
Notwithstanding
Section 4.2(a) or any other provision of the Basic Documents, CenterOne shall
have no responsibility or obligation with respect to any Dealer Agreement
or
Dealer Assignment, and shall have no obligation to enforce any provisions
of
those agreements.
CenterOne
shall have no obligation or purchase any Receivables pursuant to Section
4.2(c)
or any other provision of the Basic Documents; provided,
however,
that
CenterOne shall indemnify the Trust in an amount equal to the outstanding
principal balance of the applicable Receivable or Receivables plus accrued
and
unpaid interest thereon which would have otherwise been repurchased pursuant
to
Section 4.2(c); provided,
further,
that
any future payments made on such Receivable or Receivables and any proceeds
with
respect to such Receivables, including any Liquidation Proceeds with respect
to
the related Financed Vehicles, shall be used to reimburse CenterOne for any
such
indemnities paid pursuant to this clause.
Notwithstanding
Section 4.3(a) or any other provision of the Basic Documents, CenterOne shall
have no obligation to pursue any Dealer to realize upon a Receivable, and
the
reimbursement of CenterOne’s fees and expenses incurred in repossessing,
liquidating or repairing a Financed Vehicle will not be limited to the cash
proceeds of such Financed Vehicle and shall be reimbursed on a monthly basis
similar to other expenses of CenterOne. In the event that CenterOne shall
pay
any personal property taxes assessed on repossessed Financed Vehicles, it
shall
be entitled to reimbursement of such amount on a monthly basis similar to
other
expenses of CenterOne. Notwithstanding the foregoing, reimbursements under
this
paragraph shall be limited to Liquidation Proceeds received in the
aggregate.
Section
4.3(b), (c), (d) and (e) shall not apply to CenterOne.
Annually
and upon the occurrence of a Xxxxx 0 Xxxxxxx Xxxxx, the Designated Backup
Subservicer shall be required to: (1) conduct a site visit at UACC’s main office
and (2) refresh its data mapping of the servicing system.
Within
5
Business Days after receiving notice from the Servicer of the occurrence
of a
Xxxxx 0 Xxxxxxx Xxxxx, the Designated Backup Subservicer shall provide to
UACC
revised payment instructions.
Section
4.4(a) and (e) shall not apply to CenterOne. Notwithstanding Section 4.4(d),
in
the event that CenterOne shall xxx to enforce or collect upon any Insurance
Policy and it is held that CenterOne may not enforce an Insurance Policy
on the
grounds that it is not a real party in interest or a holder entitled to enforce
the Insurance Policy, any action taken by the Owner Trustee, the Trust
Collateral Agent or any other person to enforce such Insurance Policy shall
be
the expense of the Trust and not the expense of CenterOne, CenterOne being
entitled to reimbursement for any such expenses.
Section
4.5(b) shall not apply to CenterOne.
Section
4.6(b) shall not apply to CenterOne.
Notwithstanding
Section 4.8 or any other provision of the Basic Documents, CenterOne shall
be
entitled to reimbursement for the expense incurred by it in connection with
its
activities under the Sale and Servicing Agreement, including taxes (other
than
taxes on its own income) and expenses incurred in connection with distributions
and reports made by the Servicer as described in Exhibit A to this Schedule
D.
CenterOne shall not be liable for any of the fees and expenses of the Owner
Trustee, the Collateral Agent, the Backup Servicer, the Designated Backup
Subservicer, the Trust Collateral Agent, the Trustee, the Collateral Agent,
any
Independent Accountant or any other Person other than its
personnel.
Notwithstanding
Sections 4.10, 4.11, 4.12, 8.5, 12.18 or any other provisions of the Agreement,
CenterOne shall have no obligation or liability with respect to or have any
obligation to cause any Person other than CenterOne and the Subservicers
and
Subcontractors retained by it to perform its servicing duties under the
Agreement to deliver any information, report, certification, accountant’s letter
or attestation or other material specified in Sections 4.10, 4.11, 4.12,
8.5,
12.18 or any other provisions of the Agreement requiring such compliance
with
Regulation AB, and in connection with any remaining obligation of CenterOne
in
connection therewith, CenterOne shall only be required to use reasonable
efforts
to obtain or supply such material and shall be entitled to additional reasonable
compensation therefore, including reimbursement of its out-of-pocket expenses
in
connection therewith.
With
respect to the annual independent accountants report pursuant to Section
4.11,
the report (A) shall relate only to the Receivables and CenterOne’s servicing of
those Receivables, (B) the fees and expenses related thereto shall be
reimbursable expenses of CenterOne, and (C) the independence of the accountants
will be with respect to only CenterOne and its affiliates, not the Seller
or
UACC.
Notwithstanding
Section 5.1 or any other provision of the Basic Documents, CenterOne shall
have
no obligation or liability for failure to direct the form of investment in
any
account, establish any new Trust Account or notify any party if a Trust Account
shall not be an Eligible Trust Account.
Section
5.7(d) shall not apply to CenterOne.
CenterOne
hereby makes the representation and warranty in Section 8.1(b); provided,
that
such representation and warranty in Section 8.1(b) shall be limited to those
licenses and approvals the failure of which to maintain would have a material
adverse effect on the ability of CenterOne to perform its obligations under
the
Agreement, and the representation and warranty contained in Section 8.1(g)(D)
shall not apply to CenterOne.
CenterOne
shall have no obligation or liability under Section 8.2(c).
Notwithstanding
Section 8.6, in the event that (a) CenterOne is removed as Servicer or
subservicer of the Servicer unless a Servicer Termination Event with respect
to
CenterOne has occurred and is continuing or (b) all or substantially all
of the
Receivables are sold by the trust in connection with an Event of Default,
CenterOne shall be entitled to a termination fee, immediately payable in
cash as
part of the Base Servicing Fee, in an amount equal to six times the average
monthly fee of CenterOne over the preceding four Collection
Periods.
Notwithstanding
Section 9.1, in the event that CenterOne shall be appointed the successor
Servicer or subservicer of the Servicer, each of, and solely, the following
shall constitute a “Servicer
Termination Event”
with
respect to CenterOne:
1.
|
Any
failure by CenterOne to deposit to the Collection Account any amount
required to be deposited therein that continues unremedied for
a period of
two Business Days after written notice thereof shall have been
given to
CenterOne by the Trustee or the
Insurer.
|
2.
|
Failure
by CenterOne to deliver to the Trust Collateral Agent and (so long
as an
Insurer Default shall not have occurred and be continuing) the
Insurer the
Servicer’s Certificate by the Determination Date that continues unremedied
for a period of two Business Days;
|
3.
|
Failure
on the part of CenterOne duly to observe or perform any other covenants
or
agreements of CenterOne set forth in this Agreement which failure
(i) materially and adversely affects the rights of Holders
(determined without regard to the availability of funds under the
Note
Policy), or of the Insurer (unless an Insurer Default shall have
occurred
and be continuing), and (ii) continues unremedied for a period
of 30 days
after the earlier of (x) knowledge thereof by CenterOne, or (y)
the date
on which written notice of such failure, requiring the same to
be
remedied, shall have been given to CenterOne by the Trust Collateral
Agent
or the Insurer (or, if an Insurer Default shall have occurred and
be
continuing, by any Noteholder);
|
4.
|
The
entry of a decree or order for relief by a court or regulatory
authority
having jurisdiction in respect of CenterOne in an involuntary case
under
the federal bankruptcy laws, as now or hereafter in effect, or
another
present or future, federal bankruptcy, insolvency or similar law,
or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of CenterOne or of any substantial
part of its property or ordering the winding up or liquidation
of the
affairs of CenterOne and the continuance of any such decree or
order
unstayed and in effect for a period of 60 consecutive days or the
commencement of an involuntary case under the federal bankruptcy
laws, as
now or hereinafter in effect, or another present or future federal
or
state bankruptcy, insolvency or similar law and such case is not
dismissed
within 60 days;
|
5.
|
The
commencement by CenterOne of a voluntary case under the federal
bankruptcy
laws, as now or hereafter in effect, or any other present or future,
federal or state, bankruptcy, insolvency or similar law, or the
consent by
CenterOne to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other
similar
official of CenterOne or of any substantial part of its property
or the
making by CenterOne of an assignment for the benefit of creditors
or the
failure by CenterOne generally to pay its debts as such debts become
due
or the taking of corporate action by CenterOne in furtherance of
any of
the foregoing; or
|
6.
|
Any
representation, warranty or statement of CenterOne made in this
Agreement
or any certificate, report or other writing delivered pursuant
hereto
shall prove to be incorrect in any material respect as of the time
when
the same shall have been made, and the incorrectness of such
representation, warranty or statement has a material adverse effect
on the
Trust, the Insurer or the Holders and, within 30 days after knowledge
thereof by CenterOne or after written notice thereof shall have
been given
to CenterOne by the Trust Collateral Agent or the Insurer (or,
if an
Insurer Default shall have occurred and be continuing, a Noteholder),
the
circumstances or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated
or
otherwise cured in all material
respects.
|
Article
X
shall not apply to CenterOne.
Section
11.4(a) shall not apply to CenterOne; provided, however, that CenterOne shall
provide any information or certificates to the Seller regarding CenterOne
which
the Seller is required to provide to the Commission.
EXHIBIT
A TO SCHEDULE D
FEE
SCHEDULE OF THE
DESIGNATED
BACKUP SUBSERVICER
Fees
Back-up
Servicing
Set-Up
Fee:
|
$3,000
|
|||
Monthly
Fee:
|
the
greater of
|
1.5
bsp per annum or
|
||
$1,000
|
||||
Successor
Servicing
|
||||
Boarding
Fee/Expense
|
$5.00
per contract
|
|||
Monthly
Fee:
|
the
greater of
|
300
bsp per annum or
|
||
$20.00
per contract
|
||||
Minimum
Monthly Servicing Fee:
|
$5,000
|
PASS
THRU EXPENSES:
Pass
through expenses listed include but, are not limited to the following
items:
Back-up
Servicing
·
|
Costs
associated with due-diligence effort, including
travel
|
·
|
Legal
fees
|
Transition
Period Servicing -
(items
related to the transfer of servicing from the branch offices to CenterOne’s
centralized approach)
·
|
Travel
|
·
|
Document
packaging and shipments
|
·
|
Obligor
letters (welcome and good-bye) and mailing
costs
|
Successor
Servicing
· |
Third
party insurance or insurance
tracking
|
· |
Third-party
audit fees
|
· |
Legal
fees
|
· |
Statement
and mailing costs
|
· |
Costs
related to repossession and liquidation processes (including the
replevin
process)
|
· |
Costs
related to the collection or preservation of active accounts (including
third-party skip tracing and field
calls)
|
· |
Bankruptcy
fees
|
· |
Lockbox
fees and bank charges
|
· |
Boarding
fee/expense
|
ASSUMPTIONS:
·
|
After
the transition period, all administrative fees including but, not
limited
to late fees, NSF and Phone Pay fee income will be retained by
CenterOne.
|
·
|
Monthly
duties are limited to receiving a month-end file from UPFC and
comparing
the summarized results to the month-end servicer
statement/certificate.
|
·
|
The
Successor Servicing fee assumes a 375 to one collection account
to
collection associate ratio. Any additional presence required would
need to
be addressed through a different fee arrangement.
|
·
|
CenterOne
also recognizes that $5 of the $20 minimum servicing fee may be
paid in a
later spot in waterfall.
|
EXHIBIT
A
[RESERVED]
EXHIBIT
B
SERVICER’S
CERTIFICATE
EXHIBIT
C
[Reserved]
EXHIBIT
D
FORM
OF
REQUEST FOR RELEASE
DATE:
TO:
RE:
|
REQUEST
FOR RELEASE OF DOCUMENTS
|
In
connection with your administration of the Receivables, we request the release
of the Receivable File(s) described below.
Agreement
Dated:
Series
#:
Loan
#:
Borrower
Name(s):
Reason
for Document
Request:_______________________________________________________________________________
_______________________________________________________________________________________________________
_______________________________________________________________________________________________________
PLEASE
DELIVER THE RECEIVABLE FILE(S) TO
_________________________________________________________________
_______________________________________________________________________________________________________
_____
“We
hereby certify that all amounts received or to be received in connection
with
such payments which are required to be deposited have been deposited as provided
in the Sale and Servicing Agreement.”
______________________
[Name
of
Servicer]
Authorized
Signature
******************************************************************************
TO
SERVICER: Please acknowledge this request, and check off documents being
enclosed with a copy of this form. You should retain this form for your files
in
accordance with the terms of the Sale and Servicing Agreement.
Enclosed
Documents:
Name
_______________________
Title
_______________________
Date
EXHIBIT
E
ASSESSMENTS
OF COMPLIANCE AND ATTESTATION REPORTS SERVICING XXXXXXXX0
Reg.
AB Item 1122(d) Servicing Criteria
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Trust
Collateral Agent
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(1) General
Servicing Considerations
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(i) monitoring
performance or other triggers and events of
default
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(ii) monitoring
performance of vendors of activities outsourced
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(ii) maintenance
of back-up servicer for pool assets
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(iv) fidelity
bond and E&O policies in effect
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(2) Cash
Collection and Administration
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(i) timing
of deposits to custodial account
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(ii) wire
transfers to investors by authorized personnel
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(iii) advances
or guarantees made, reviewed and approved as
required
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(iv) accounts
maintained as required
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(v) accounts
at federally insured depository institutions
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(vi) unissued
checks safeguarded
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(vii) monthly
reconciliations of accounts
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(3) Investor
Remittances and Reporting
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(i) investor
reports
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(ii) remittances
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(iii) proper
posting of distributions
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(iv) reconciliation
of remittances and payment statements
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(4) Pool
Asset Administration
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(i) maintenance
of pool collateral
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X
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(ii) safeguarding
of pool assets/documents
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X
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(iii) additions,
removals and substitutions of pool assets
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________________
* |
The
descriptions of the Item 1122(d) servicing criteria use key
words and
phrases and are not verbatim recitations of the servicing criteria.
Refer
to Regulation AB, Item 1122 for a full description of servicing
criteria.
|
Reg.
AB Item 1122(d) Servicing Criteria
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Trust
Collateral Agent
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(iv) posting
and allocation of pool asset payments to pool
assets
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(v) reconciliation
of servicer records
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(vi) modifications
or other changes to terms of pool assets
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(vii) loss
mitigation and recovery actions
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(viii)
records regarding collection efforts
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(ix) adjustments
to variable interest rates on pool assets
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(x) matters
relating to funds held in trust for obligors
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(xi) payments
made on behalf of obligors (such as for taxes or
insurance)
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(xii) late
payment penalties with respect to payments made on behalf of
obligors
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(xiii)
records with respect to payments made on behalf of
obligors
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(xiv) recognition
and recording of delinquencies, charge-offs and uncollectible
accounts
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(xv) maintenance
of external credit enhancement or other support
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EXHIBIT
F
FORM
OF
ANNUAL CERTIFICATION
Re: |
The
Sale and Servicing Agreement dated as of
[ ],
200[ ] (the
“Agreement”),
among _____________________ (the “Seller”),
______________________
(the “Servicer”) and
_______________20[__]-[_]
(the “Issuer”).
|
I,
________________________________, the _______________________ of [NAME OF
COMPANY] (the “Company”), certify to the Issuer and the Depositor, and their
officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
assessment of the Company’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 servicing reports, officer’s certificates and other
information relating to the servicing of the Receivables by the Company during
200[ ] that were delivered by the Company to the Issuer and the Depositor
pursuant to the Agreement (collectively, the “Company Servicing
Information”);
(2) Based
on
my knowledge, the Company 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 the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3) Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the Issuer and the
Depositor;
(4) I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Company has fulfilled its obligations under the Agreement in all material
respects; and
(5) The
Compliance Statement required to be delivered by the Company pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by any Subservicer or Subcontractor pursuant
to the
Agreement, have been provided to the Issuer, the Depositor, the Insurer and
the
Trustees. Any material instances of noncompliance described in such reports
have
been disclosed to the Issuer and the Depositor. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date: _________________________
By:
________________________
Name:
Title:
EXHIBIT
G
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by the Servicer, shall address,
at a
minimum, the criteria listed below as “Applicable Servicing Criteria” applicable
to the Servicer:
Reference
|
Criteria
|
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General
Servicing Considerations
|
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1122(d)(1)(i)
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Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
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1122(d)(1)(ii)
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If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
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1122(d)(1)(iii)
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Any
requirements in the transaction agreements to maintain a back-up
servicer
for the receivables are maintained.
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1122(d)(1)(iv)
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A
fidelity bond and errors and omissions policy 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 transaction agreements.
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Cash
Collection and Administration
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1122(d)(2)(i)
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Payments
on receivables are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in
the
transaction agreements.
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1122(d)(2)(ii)
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Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel..
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1122(d)(2)(iii)
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Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are
made,
reviewed and approved as specified in the transaction
agreements.
|
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1122(d)(2)(iv)
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The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are
separately
maintained (e.g., with respect to commingling of cash) as set
forth in the
transaction agreements.
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|
1122(d)(2)(v)
|
Each
custodial account is maintained at a 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 Securities
Exchange
Act.
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1122(d)(2)(vi)
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Unissued
checks are safeguarded so as to prevent unauthorized
access.
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1122(d)(2)(vii)
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Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank
clearing
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.
|
Reference
|
Criteria
|
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Investor
Remittances and Reporting
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1122(d)(3)(i)
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Reports
to investors, including those to be 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 receivables serviced by the
Servicer.
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1122(d)(3)(ii)
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Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
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1122(d)(3)(iii)
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Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
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1122(d)(3)(iv)
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Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
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Pool
Asset Administration
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1122(d)(4)(i)
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Collateral
or security on receivables is maintained as required by the transaction
agreements or related receivables documents.
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1122(d)(4)(ii)
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Receivables
and related documents are safeguarded as required by the transaction
agreements
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1122(d)(4)(iii)
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Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
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1122(d)(4)(iv)
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Payments
on receivables, including any payoffs, made in accordance with
the related
receivables 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 receivables documents.
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1122(d)(4)(v)
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The
Servicer’s records regarding the receivables agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
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1122(d)(4)(vi)
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Changes
with respect to the terms or status of an obligor's receivables
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with usual customary
procedures.
|
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1122(d)(4)(vii)
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Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions,
as
applicable) are initiated, conducted and concluded in accordance
with
usual customary procedures.
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1122(d)(4)(viii)
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Records
documenting collection efforts are maintained during the period
a
receivable 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 receivables including, for
example,
phone calls, letters and payment rescheduling plans in cases
where
delinquency is deemed temporary (e.g., illness or
unemployment).
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1122(d)(4)(ix)
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Adjustments
to interest rates or rates of return for receivables with variable
rates
are computed based on the related receivables documents.
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Reference
|
Criteria
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1122(d)(4)(x)
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Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s receivables
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 receivables
documents
and state laws; and (C) such funds are returned to the obligor
within 30
calendar days of full repayment of the related receivables, or
such other
number of days specified in the transaction agreements.
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1122(d)(4)(xi)
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Payments
made on behalf of an obligor (such as 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 transaction
agreements.
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1122(d)(4)(xii)
|
Any
late payment penalties in connection with 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 was due to the obligor’s error or
omission.
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1122(d)(4)(xiii)
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Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of
days
specified in the transaction agreements.
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1122(d)(4)(xiv)
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Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
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1122(d)(4)(xv)
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Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
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By:
________________________
Name:
Title: