EXHIBIT 99.1
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EXECUTION COPY
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SALE AND SERVICING AGREEMENT
among
XXXXXXX AUTO TRUST SECURITIZATION 2007-1,
as Issuer,
ML ASSET BACKED CORPORATION,
as Depositor,
and
U.S. BANK NATIONAL ASSOCIATION,
as Master Servicer
Dated as of May 31, 2007
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Table of Contents
Page
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ARTICLE I DEFINITIONS AND USAGE........................................1
ARTICLE II TRUST PROPERTY...............................................1
SECTION 2.1 Conveyance of Trust Property; Intent of the Parties..........1
SECTION 2.2 Representations and Warranties of the Depositor regarding
the Receivables..............................................1
SECTION 2.3 Repurchase upon Breach.......................................2
SECTION 2.4 Custody of Receivable Files..................................3
SECTION 2.5 Duties of Master Servicer as Custodian.......................3
SECTION 2.6 Instructions; Authority to Act...............................4
SECTION 2.7 Custodian's Indemnification..................................4
SECTION 2.8 Effective Period and Termination.............................5
SECTION 2.9 Representations and Warranties as to the Security Interest
of the Issuer in the Receivables.............................5
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES AND
TRUST PROPERTY...............................................6
SECTION 3.1 Duties of Master Servicer....................................6
SECTION 3.2 Collection of Receivable Payments............................7
SECTION 3.3 Realization Upon Receivables.................................7
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles.......8
SECTION 3.5 Covenants of Master Servicer.................................8
SECTION 3.6 Purchase of Receivables Upon Breach..........................9
SECTION 3.7 Servicer Fees................................................9
SECTION 3.8 Investor Report..............................................9
SECTION 3.9 Annual Statement as to Compliance; Notice of Event of
Servicing Termination.......................................10
SECTION 3.10 Annual Independent Certified Public Accountant's Report.....10
SECTION 3.11 Access to Certain Documentation and Information Regarding
Receivables.................................................11
SECTION 3.12 Master Servicer Expenses....................................11
SECTION 3.13 Insurance...................................................11
SECTION 3.14 Form 10-D Reporting.........................................11
SECTION 3.15 Form 10-K Reporting.........................................12
SECTION 3.16 Form 8-K Reporting..........................................14
SECTION 3.17 Delisting; Amendment; Late Filing of Reports................14
SECTION 3.18 Licenses....................................................14
ARTICLE IV DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS AND
CERTIFICATEHOLDERS..........................................15
SECTION 4.1 Accounts....................................................15
SECTION 4.2 Collections.................................................16
SECTION 4.3 Application of Collections..................................16
SECTION 4.4 Additional Deposits.........................................16
SECTION 4.5 Distributions...............................................17
SECTION 4.6 Net Deposits................................................17
SECTION 4.7 Statements to Noteholders and Certificateholders............17
ARTICLE V THE DEPOSITOR...............................................18
SECTION 5.1 Representations, Warranties and Covenants of Depositor......18
SECTION 5.2 Liability of Depositor; Indemnities.........................19
SECTION 5.3 Merger or Consolidation of, or Assumption of the
Obligations of Depositor....................................20
SECTION 5.4 Limitation on Liability of Depositor and Others.............20
SECTION 5.5 Depositor May Own Notes or Certificates.....................20
SECTION 5.6 Depositor Certificate of Incorporation......................20
ARTICLE VI THE MASTER SERVICER.........................................21
SECTION 6.1 Representations of Master Servicer..........................21
SECTION 6.2 Indemnities of Master Servicer..............................22
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of Master Servicer..............................22
SECTION 6.4 Limitation on Liability of Master Servicer and Others.......23
SECTION 6.5 Subservicing and Delegation of Duties.......................26
SECTION 6.6 Master Servicer Not to Resign as Master Servicer;
Resignation and Termination of Receivables Servicers........26
SECTION 6.7 Master Servicer May Own Notes or Certificates...............26
ARTICLE VII SERVICING TERMINATION.......................................27
SECTION 7.1 Events of Servicing Termination.............................27
SECTION 7.2 Appointment of Successor Master Servicer....................28
SECTION 7.3 Notification to Noteholders and Certificateholders..........30
SECTION 7.4 Waiver of Past Events of Servicing Termination..............30
ARTICLE VIII TERMINATION.................................................30
SECTION 8.1 Optional Purchase of All Receivables........................30
SECTION 8.2 Succession Upon Satisfaction and Discharge of Indenture.....31
ARTICLE IX MISCELLANEOUS PROVISIONS....................................31
SECTION 9.1 Amendment...................................................31
SECTION 9.2 Protection of Title to Trust Property.......................33
SECTION 9.3 Governing Law...............................................34
SECTION 9.4 Notices.....................................................34
SECTION 9.5 Severability of Provisions..................................35
SECTION 9.6 Assignment..................................................35
SECTION 9.7 Further Assurances..........................................35
SECTION 9.8 No Waiver; Cumulative Remedies..............................35
SECTION 9.9 Third-Party Beneficiaries...................................36
SECTION 9.10 Actions by Noteholders or Certificateholders................36
SECTION 9.11 Information to Be Provided by the Securities Administrator..36
SECTION 9.12 Form 8-K Filings............................................37
SECTION 9.13 Additional Regulation AB Provisions.........................37
SECTION 9.14 Representations and Warranties..............................38
SECTION 9.15 Limitation of Liability of Owner Trustee, the
Indenture Trustee and the Securities Administrator..........38
SECTION 9.16 Savings Clause..............................................38
SECTION 9.17 No Petition.................................................39
Schedule A Schedule of Receivables....................................A-1
Schedule B Location of Receivable Files...............................B-1
Appendix A Definitions and Usage ............................Appendix X-0
Xxxxxxxx X Form 10-K Certification ..........................Appendix B-1
Appendix C Item 1119 Parties.................................Appendix C-1
Appendix D Form of Servicing Criteria to be Addressed in
Assessment of Compliance Statement................Appendix D-1
Appendix E Form 10-K Certification...........................Appendix E-1
SALE AND SERVICING AGREEMENT, dated as of May 31, 2007 (as from time to
time amended, supplemented or otherwise modified and in effect, this
"Agreement"), among XXXXXXX AUTO TRUST SECURITIZATION 2007-1 (the "Issuer"), a
Delaware statutory trust, ML ASSET BACKED CORPORATION, a Delaware corporation
(the "Depositor") and U.S. BANK NATIONAL ASSOCIATION, a national banking
association, as master servicer (in such capacity, the "Master Servicer").
WHEREAS, the Issuer desires to purchase a portfolio of receivables and
related property consisting of motor vehicle retail installment sale contracts
and loans;
WHEREAS, the Master Servicer is willing to service such receivables on
behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property; Intent of the Parties. In
consideration of the Issuer's delivery to, or upon the order of, the Depositor
of the Notes and the Certificates, the Depositor does hereby irrevocably sell,
transfer, assign and otherwise convey to the Issuer without recourse (subject to
the obligations herein) all right, title and interest of the Depositor, whether
now owned or hereafter acquired, in and to the Trust Property. The sale,
transfer, assignment and conveyance made hereunder shall not constitute and is
not intended to result in an assumption by the Issuer of any obligation of the
Depositor to the Obligors or any other Person in connection with the Receivables
and the other Trust Property or any agreement, document or instrument related
thereto. The Depositor and the Issuer intend that the sale, transfer, assignment
and conveyance of the Trust Property pursuant to this Section 2.1 shall be a
sale and not a secured borrowing.
SECTION 2.2 Representations and Warranties of the Depositor regarding
the Receivables. The Depositor makes the following representations and
warranties with respect to the Receivables, on which the Issuer relies in
purchasing the Receivables and pledging the same to the Indenture Trustee. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Transfer Date, but shall survive the sale, transfer and
assignment of the Receivables by the Depositor to the Issuer and the pledge of
the Receivables by the Issuer to the Indenture Trustee pursuant to the
Indenture.
(i) Schedule of Receivables. No selection procedures adverse to the
Securityholders have been used in selecting the Receivables from all
receivables owned by the Depositor which meet the selection criteria
specified herein.
(ii) No Sale or Transfer. No Receivable has been sold, transferred,
assigned or pledged by the Depositor to any Person other than the
Issuer; provided that such Receivable has been previously assigned
and reacquired by the Depositor.
(iii) Good Title. Immediately prior to the transfer and assignment of the
Receivables to the Issuer herein contemplated, each Receivable was
free and clear of all Liens and rights of others to the extent
created by the Depositor; and, immediately upon the transfer
thereof, the Issuer has either (i) good and marketable title to each
Receivable, free and clear of all of all Liens and rights of others
to the extent created by the Depositor and the transfer has been
perfected under applicable law or (ii) a first priority perfected
security interest in the Depositor's rights in each Receivable.
SECTION 2.3 Repurchase upon Breach. Each of the Depositor, the Master
Servicer, the Issuer and the Owner Trustee shall inform the other parties to
this Agreement promptly, in writing, upon the discovery by it of any breach of
the Depositor's representations and warranties pursuant to Section 2.2. Unless
the breach shall have been cured by the last day of the second Collection Period
following written notice to the Indenture Trustee and the Securities
Administrator of such breach, the Securities Administrator shall enforce the
obligation of the Depositor under this Section 2.3 to repurchase any Receivable,
the Issuer's interest in which is materially and adversely affected by the
breach as of such last day (or, at the Depositor's option, the last day of the
first Collection Period following the discovery). In consideration of the
purchase of the Receivable, the Depositor shall remit the related Purchase
Amount (less any Liquidation Proceeds deposited, or to be deposited, in the
Collection Account with respect to such Receivable pursuant to Section 3.3), in
the manner specified in Section 4.4. The sole remedy of the Issuer, the Owner
Trustee, the Indenture Trustee, the Securities Administrator, the Noteholders or
the Certificateholders with respect to a breach of the Depositor's
representations and warranties pursuant to Section 2.2 shall be to require the
Depositor to repurchase such Receivables pursuant to this Section 2.3. The
obligation of the Depositor to repurchase under this Section 2.3 shall not be
solely dependent upon the actual knowledge of the Depositor of any breached
representation or warranty. None of the Owner Trustee, the Indenture Trustee or
the Securities Administrator shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section 2.3 or the eligibility of any Receivable
for purposes of this Agreement.
Each of the Depositor, the Master Servicer, the Issuer and the Owner
Trustee shall inform the other parties to this Agreement promptly, in writing,
upon the discovery by it of any breach of any of the representation and
warranties made with respect to the Receivables in the Receivables Purchase
Agreement. The Master Servicer shall notify the Seller of its repurchase
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obligation. Unless the breach shall have been cured by the last day of the
second Collection Period following written notice to the Master Servicer of such
breach, the Master Servicer, on behalf of the Issuer, shall enforce the
obligation of Seller to repurchase any applicable Receivable, the Issuer's
interest in which is materially and adversely affected by the breach, as of such
last day. The Purchase Amount (less any Liquidation Proceeds deposited, or to be
deposited, in the Collection Account with respect to such Receivable pursuant to
Section 3.3) from such purchase shall be remitted in the manner specified in
Section 4.4. None of the Owner Trustee, the Depositor, the Master Servicer, the
Issuer, the Indenture Trustee or the Securities Administrator shall have any
duty to conduct an affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section
2.3 or the eligibility of any Receivable for purposes of this Agreement.
SECTION 2.4 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer, upon
the execution and delivery of this Agreement, hereby revocably appoints the
Master Servicer, and the Master Servicer hereby accepts such appointment, to act
as the agent of the Issuer and the Indenture Trustee as custodian of the
following documents or instruments, which are hereby constructively delivered to
the Indenture Trustee, as pledgee of the Issuer pursuant to the Indenture, with
respect to each Receivable:
(i) The original executed Receivable or, if no such original exists, a
copy thereof.
(ii) The original credit application fully executed by the Obligor or
a photocopy thereof or a record thereof on a computer file, diskette or on
microfiche.
(iii) The original certificate of title or such documents that the
Master Servicer or the Depositor shall keep on file, in accordance with its
or the Receivables Servicer's customary procedures, evidencing the first
priority perfected security interest of the related Seller in the Financed
Vehicle.
(iv) Any and all other documents (including any computer file,
diskette or microfiche) that the Master Servicer or the Receivables
Servicer shall keep on file, in accordance with its or the Receivables
Servicer's customary procedures, relating to a Receivable, an Obligor (to
the extent relating to a Receivable), or a Financed Vehicle.
The Master Servicer acknowledges that it holds the documents and
instruments relating to the Receivables for the benefit of the Issuer and the
Indenture Trustee. The Issuer and the Indenture Trustee shall have no
responsibility to monitor the Master Servicer's performance as custodian and
shall have no liability in connection with the Master Servicer's performance of
such duties hereunder.
SECTION 2.5 Duties of Master Servicer as Custodian.
(a) Safekeeping. The Master Servicer (or the Receivables Servicer on its
behalf) shall hold the Receivable Files for the benefit of the Issuer and the
Indenture Trustee and shall maintain such accurate and complete accounts,
records and computer systems pertaining to each Receivable File as shall enable
the Master Servicer and the Issuer to comply with the terms and
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conditions of this Agreement and the Indenture Trustee to comply with the terms
and conditions of the Indenture. In performing its duties as custodian, the
Master Servicer shall act with reasonable care, using that degree of skill and
attention that the Master Servicer (or the Receivables Servicer) exercises with
respect to the receivable files relating to all comparable automotive
receivables that the Master Servicer (or such Receivables Servicer) services for
itself or others. The Master Servicer shall enable the Issuer or the Indenture
Trustee to identify all Receivables Files and such related accounts, records and
computer systems and verify the accuracy of the Master Servicer's record
keeping. The Master Servicer shall promptly report to the Issuer and the
Indenture Trustee in writing any failure on its part to hold the Receivable
Files and maintain its accounts, records, and computer systems as herein
provided and shall promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or any periodic
review by the Issuer, the Owner Trustee or the Indenture Trustee of the
Receivable Files.
(b) Maintenance of and Access to Records. The Master Servicer shall
maintain each Receivable File at its (or the Receivables Servicer's) offices
specified in Schedule B to this Agreement, or at such other office as shall be
specified to the Issuer and the Indenture Trustee by 30 days' prior written
notice. The Master Servicer shall make available to the Issuer and the Indenture
Trustee or their duly authorized representatives, attorneys, or auditors, the
Receivable Files and the related accounts, records and computer systems
maintained by the Master Servicer upon reasonable notice during normal business
hours as the Issuer or the Indenture Trustee shall reasonably request, which
does not unreasonably interfere with the Master Servicer's (or the Receivables
Servicer's) normal operations.
(c) Release of Documents. Upon written instructions from the Indenture
Trustee, the Master Servicer shall release or cause to be released any document
in the Receivable Files to the Indenture Trustee, the Indenture Trustee's agent
or the Indenture Trustee's designee, as the case may be, at such place or places
as the Indenture Trustee may reasonably designate, as soon as is reasonably
practicable, to the extent it does not unreasonably interfere with the Master
Servicer's normal operations. The Master Servicer shall not be responsible for
any loss occasioned by the failure of the Indenture Trustee or its agent or
designee to return any document or any delay in doing so.
SECTION 2.6 Instructions; Authority to Act. All instructions from the
Indenture Trustee shall be in writing and signed by an Authorized Officer of the
Indenture Trustee, and the Master Servicer shall be deemed to have received
proper instructions with respect to the Receivable Files upon its receipt of
such written instructions.
SECTION 2.7 Custodian's Indemnification. The Master Servicer, as custodian,
shall indemnify the Issuer, the Owner Trustee and the Indenture Trustee for any
and all liabilities, obligations, losses, compensatory damages, payments, costs,
or expenses of any kind whatsoever that may be imposed on, incurred, or asserted
against the Issuer, the Owner Trustee or the Indenture Trustee as the result of
any improper act or omission in any way relating to the maintenance and custody
by the Master Servicer as custodian of the Receivable Files, subject to and in
accordance with Section 6.4 hereof; provided, however, that the Master Servicer
shall not be liable (i) to the Issuer for any portion of any such amount
resulting from the willful
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misfeasance, bad faith, or negligence of the Indenture Trustee, the Owner
Trustee or the Issuer, (ii) to the Owner Trustee for any portion of any such
amount resulting from the willful misfeasance, bad faith, or negligence of the
Indenture Trustee, the Owner Trustee or the Issuer and (iii) to the Indenture
Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith, or negligence of the Indenture Trustee, the Owner
Trustee or the Issuer.
SECTION 2.8 Effective Period and Termination. The Master Servicer's
appointment as custodian shall become effective as of the Closing Date, and
shall continue in full force and effect until terminated pursuant to this
Section 2.8. If U.S. Bank National Association shall resign as Master Servicer
in accordance with the provisions of this Agreement or if all of the rights and
obligations of the Master Servicer shall have been terminated under Section 7.1,
the appointment of the Master Servicer as custodian hereunder may be terminated
by the Indenture Trustee or by the holders of Notes evidencing not less than a
majority of the Outstanding Amount of the Notes (or if no Notes are Outstanding,
by holders of Certificates evidencing Certificate Percentage Interests
aggregating at least 51%), in the same manner as the Indenture Trustee or such
Securityholders may terminate the rights and obligations of the Master Servicer
under Section 7.1. As soon as practicable after any termination of such
appointment, the Master Servicer shall deliver to the Indenture Trustee or the
Indenture Trustee's agent any Receivable Files and the related accounts and
records maintained by the Master Servicer at such place or places as the
Indenture Trustee may reasonably designate. Notwithstanding the foregoing, after
any termination of the rights and obligations of the Master Servicer under this
Agreement, the Receivables Servicer, unless the rights and obligations of the
Receivables Servicer have been terminated pursuant to the terms and conditions
of the Receivables Servicing Agreement, shall maintain custody of the
Receivables and the related accounts and records maintained by it pursuant to
the Receivables Servicing Agreement.
SECTION 2.9 Representations and Warranties as to the Security Interest of
the Issuer in the Receivables. The Depositor makes the following representations
and warranties to the Issuer. The representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, and shall
survive the sale of the Trust Property to the Issuer and the pledge thereof to
the Indenture Trustee pursuant to the Indenture.
(a) This Agreement creates a valid and continuing security interest (as
defined in the UCC) in the Receivables in favor of the Issuer, which security
interest is prior to all other Liens, and is enforceable as such as against
creditors of and purchasers from the Depositor.
(b) The Receivables constitute "tangible chattel paper" within the meaning
of Article 9 of the UCC.
(c) Immediately prior to its transfer to the Issuer, the Depositor owned
and had good and marketable title to the Receivables free and clear of any lien,
claim or encumbrance of any Person.
(d) The Depositor has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Receivables granted to the Issuer hereunder. Each such
financing statement will contain a statement to the following effect "A
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purchase of or security interest in any collateral described in this financing
statement will violate the rights of the Issuer and its assigns."
(e) Other than the security interest granted to the Issuer pursuant to this
Agreement, the Depositor has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The Depositor has not
authorized the filing of and is not aware of any financing statements against
the Depositor that include a description of collateral covering the Receivables
other than any financing statement relating to the security interest granted to
the Issuer hereunder or that has been terminated. The Depositor is not aware of
any judgment or tax lien filings against it.
(f) The Master Servicer (or the Receivables Servicer) as custodian for the
Issuer has in its possession all original copies of the contracts that
constitute or evidence the Receivables. The contracts that constitute or
evidence the Receivables do not have any marks or notations indicating that they
have been pledged, assigned or otherwise conveyed to any Person other than the
Issuer.
Each of the parties hereto agrees that it shall not waive any of the
foregoing representations and warranties.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Master Servicer. The Master Servicer shall manage,
service, administer and make collections on the Receivables with reasonable
care, using that degree of skill and attention that the Master Servicer (or the
Receivables Servicer) exercises with respect to all comparable new and used
automobile, light-duty truck and sport utility vehicle receivables that it (or
the Receivables Servicer) services for itself. The Master Servicer's duties
shall include collection and posting of all payments, responding to inquiries of
Obligors on such Receivables, investigating delinquencies, reporting tax
information to Obligors, accounting for collections, furnishing (or causing to
be furnished) monthly and annual statements to the Owner Trustee, the Indenture
Trustee and the Securities Administrator with respect to distributions and
preparing (or causing to be prepared) the tax returns of the Trust in accordance
with Section 5.06 of the Trust Agreement. The Master Servicer shall follow its
(or the Receivables Servicer's) customary standards, policies and procedures in
performing its duties as Master Servicer. Without limiting the generality of the
foregoing, the Master Servicer is hereby (and the Receivables Servicer pursuant
to the Receivables Servicing Agreement is thereby) authorized and empowered to
execute and deliver, on behalf of itself (the Master Servicer, in the case of
the Receivables Servicer), the Issuer, the Owner Trustee, the Indenture Trustee,
the Securities Administrator, the Noteholders, the Certificateholders, or any of
them, any and all instruments of satisfaction or cancellation, or partial or
full release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Vehicles securing such Receivables. If the
Master Servicer (or the Receivables Servicer) shall commence a legal proceeding
to enforce a Receivable, the Issuer (in the case of a Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such
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Receivable to the Master Servicer (or the Receivables Servicer). If in any
enforcement suit or legal proceeding it shall be held that the Master Servicer
(or the Receivables Servicer) may not enforce a Receivable on the ground that it
shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Master Servicer, on behalf of the Issuer, shall, at the Master
Servicer's expense and direction (or, to the extent permitted in the Receivables
Servicing Agreement, the Receivables Servicer's expense and direction), take
steps to enforce the Receivable, including bringing suit in its name or the
names of the Indenture Trustee, the Issuer, the Noteholders, the
Certificateholders, or any of them. The Issuer shall furnish the Master Servicer
(or the Receivables Servicer) with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Master Servicer to carry out
its servicing and administrative duties hereunder.
It is hereby acknowledged that the Master Servicer has engaged CenterOne as
Receivables Servicer under the Receivables Servicing Agreement and MLBUSA as
Administrator. The Master Servicer shall promptly notify each Rating Agency of
any material amendment to the Receivables Servicing Agreement. The Master
Servicer shall enforce the obligations of the Receivables Servicer under the
Receivables Servicing Agreement in all material respects until the Receivables
Servicing Agreement has been terminated in accordance with its terms.
SECTION 3.2 Collection of Receivable Payments. The Master 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
new and used automobiles, light-duty trucks and sport utility vehicles
receivables that it services for itself. The Master Servicer shall not change
the amount of, change the annual percentage rate of or extend any Receivable or
change any material term of a Receivable, except as provided by the terms of the
Receivable or of this Agreement or as required by law or court order, except
that the Master Servicer may permit the Receivables Servicer to grant
extensions, rebates or adjustments to the extent permitted in the Receivables
Servicing Agreement; provided, however, that the Master Servicer may extend any
Receivable that is in default or with respect to which default is reasonably
foreseeable and that would be acceptable to the Master Servicer with respect to
comparable new and used automobiles, light-duty trucks and sport utility
vehicles receivables that it (or the Receivables Servicer) services for itself,
if the maturity of such Receivable will not be extended beyond June 13, 2013.
If, as a result of inadvertently rescheduling or extending payments, such
rescheduling or extension breaches any of the terms of the proviso to the
preceding sentence, then the Master Servicer shall be obligated to purchase such
Receivable pursuant to Section 3.6. For the purpose of such purchases pursuant
to Section 3.6, notice shall be deemed to have been received by the Master
Servicer at such time as shall make purchase mandatory as of the last day of the
Collection Period during which the discovery of such breach occurred.
SECTION 3.3 Realization Upon Receivables. On behalf of the Issuer, the
Master Servicer shall use reasonable efforts, consistent with its (or the
Receivables Servicer's) customary standards, policies and procedures, to
repossess or otherwise convert the ownership of the Financed Vehicle securing
any Receivable as to which the Master Servicer shall have determined to be a
Defaulted Receivable or otherwise (and shall identify any such Defaulted
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Receivable in writing to the Indenture Trustee and the Securities Administrator
no later than the Determination Date following the Collection Period in which
the Master Servicer shall have made such determination). The Master Servicer
shall follow such customary standards, policies and procedures as it (or the
Receivables Servicer) shall deem necessary or advisable in its servicing of
comparable receivables, which may include selling the Financed Vehicle at public
or private sale. The Master Servicer shall be entitled to recover from proceeds
all reasonable expenses incurred by it in the course of converting the Financed
Vehicle into cash proceeds. The Liquidation Proceeds (net of such expenses)
realized in connection with any such action with respect to a Receivable shall
be deposited by the Master Servicer into the Collection Account in the manner
specified in Section 4.2 and shall be applied to reduce (or to satisfy, as the
case may be) the Purchase Amount of the Receivable, if such Receivable is to be
repurchased by the Depositor or the Seller pursuant to Section 2.3 or is to be
purchased by the Master Servicer pursuant to Section 3.6 or by the Administrator
pursuant to Sections 2(b)(A) of the Administration Agreement. The foregoing
shall be subject to the provision that, in any case in which the Financed
Vehicle shall have suffered damage, the Master Servicer shall not be required to
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles. The
Master Servicer shall, in accordance with its (or the Receivables Servicer's)
customary procedures, take such steps as are necessary to maintain perfection of
the security interest created by each Receivable in the related Financed
Vehicle. The Issuer hereby authorizes the Master Servicer to take such steps as
are necessary to re-perfect such security interest on behalf of the Issuer and
the Indenture Trustee in the event of the relocation of a Financed Vehicle or
for any other reason, in either case when the Master Servicer has knowledge of
the need for such re-perfection. In the event that the assignment of a
Receivable to the Issuer 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 transfer to the Issuer a perfected security interest in
the related Financed Vehicle, the Master Servicer hereby agrees that the
Receivables Servicer's listing as the secured party on the certificate of title
is deemed to be in its capacity as agent of the Issuer and the Indenture Trustee
and further agrees to hold such certificate of title as the agent and custodian
of the Issuer and the Indenture Trustee; provided that the Master Servicer shall
not, nor shall the Issuer or the Indenture Trustee have the right to require
that the Master Servicer, make any such notation on the related Financed
Vehicles' certificate of title or fulfill any such additional administrative
requirement of the laws of the state in which such Financed Vehicle is located.
SECTION 3.5 Covenants of Master Servicer. The Master Servicer shall not (i)
release the Financed Vehicle securing each such Receivable from the security
interest granted by such Receivable in whole or in part except in the event of
payment in full by or on behalf of the Obligor thereunder, (ii) impair the
rights of the Issuer in the Receivables or (iii) increase the number of payments
under a Receivable, increase the Amount Financed under a Receivable or extend or
forgive payments on a Receivable, except as provided in Section 3.2. In the
event that at the end of the scheduled term of any Receivable the outstanding
principal amount thereof is such that the final payment to be made by the
related Obligor is larger than the regularly
8
scheduled payment of principal and interest made by such Obligor, the Master
Servicer may permit such Obligor to pay such remaining principal amount in more
than one payment of principal and interest; provided that the last such payment
shall be due on or prior to the last Business Day of the Collection Period
immediately preceding the month in which the Class C Final Scheduled Payment
Date occurs.
SECTION 3.6 Purchase of Receivables Upon Breach. (a) The Master Servicer,
the Depositor or the Owner Trustee, as the case may be, promptly shall inform
the other parties to this Agreement, in writing, upon the discovery of any
breach pursuant to Section 3.2, 3.4 or 3.5. Unless the breach shall have been
cured by the last day of the second Collection Period following such discovery
(or, at the Master Servicer's election, the last day of the first following
Collection Period), the Master Servicer shall purchase any Receivable materially
and adversely affected by such breach (which shall include any Receivable as to
which a breach of Section 3.5 has occurred) at the related Purchase Amount (less
any Liquidation Proceeds deposited, or to be deposited, in the Collection
Account with respect to such Receivable pursuant to Section 3.3). In
consideration of the purchase of such Receivable, the Master Servicer shall
remit the Purchase Amount in the manner specified in Section 4.4. The sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the Securities
Administrator, the Noteholders or the Certificateholders with respect to a
breach pursuant to Section 3.2, 3.4 or 3.5 shall be to require the Master
Servicer to purchase Receivables pursuant to this Section 3.6, subject to
Section 2(b)(A) of the Administrator Agreement.
(b) With respect to all Receivables purchased pursuant to this Section 3.6,
the Issuer shall assign to the Master Servicer, without recourse, representation
or warranty, all of the Issuer's right, title and interest in and to such
Receivables and all security and documents relating thereto.
SECTION 3.7 Servicer Fees. The Master Servicer shall be entitled to the
Servicing Fee, which shall be payable as provided in Section 8.2 of the
Indenture. It is acknowledged and agreed that (i) the Receivables Servicer
Servicing Fee will be paid to the Receivables Servicer (including any successor
sub-Servicer thereto) from the Collections on the related Receivables and (ii)
if the Master Servicer becomes a direct servicer of Receivables in place of the
Receivables Servicer (or any successor sub-Servicer thereto), the Master
Servicer shall receive the Receivables Servicer Servicing Fee.
SECTION 3.8 Investor Report. The Master Servicer will compile the
information submitted by the Receivables Servicers, and deliver such information
to the Securities Administrator. On or prior to the Determination Date for each
Payment Date, the Securities Administrator shall deliver to the Depositor, the
Owner Trustee, each Note Paying Agent and Certificate Paying Agent and the
Indenture Trustee, with a copy to the Rating Agencies, an investor report
containing all information (including all specific dollar amounts) necessary to
make the transfers and distributions pursuant to Section 8.2 of the Indenture
for the Collection Period preceding the date of such investor report (the
"Investor Report") and the written statements to be furnished by the Owner
Trustee to the Certificateholders pursuant to Section 4.7 hereof and by the
Securities Administrator to the Noteholders pursuant to Section 4.7 hereof and
Section 7.4 of the Indenture. Receivables purchased or to be purchased by the
Master Servicer,
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the Depositor, the Seller or the Administrator shall be identified by the Master
Servicer by the Seller's account number with respect to such Receivable (as
specified in the Schedule of Receivables).
SECTION 3.9 Annual Statement as to Compliance; Notice of Event of Servicing
Termination. (a) The Master Servicer shall deliver to the Issuer on or before
March 15 of each year beginning March 15, 2008, an Officer's Certificate stating
that (i) a review of the activities of the Master Servicer during the preceding
12-month period (or such shorter period in the case of the first such
certificate) and of its performance under this Agreement has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Master Servicer has fulfilled all its obligations
under this Agreement throughout such period, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof. The Receivables
Servicer shall deliver to the Issuer on or before March 15 of each year
beginning March 15, 2008, an Officer's Certificate stating that (i) a review of
the activities of the Receivables Servicer during the preceding 12-month period
(or such shorter period in the case of the first such certificate) and of its
performance under the Receivables Servicing Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based on
such review, the Receivables Servicer has fulfilled all its obligations under
the Receivables Servicing Agreement throughout such period, or, if there has
been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status
thereof.
(b) The Master Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency promptly after having obtained actual knowledge
thereof, but in no event later than five 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 an Event of Servicing Termination under
Section 7.1 or a default under the Receivables Servicing Agreement.
(c) The Master Servicer will each deliver to the Depositor, on or before
March 15 of each year, beginning March 15, 2008, a report regarding the Master
Servicer's assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, in accordance with paragraph (b) of Rule
13a-18 and Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such
report shall be signed by an authorized officer of the Master Servicer and shall
at a minimum address each of the Servicing Criteria specified on Appendix D
hereto. To the extent any of the Servicing Criteria are not applicable to the
Master Servicer, with respect to asset-backed securities transactions taken as a
whole involving the Master Servicer and that are backed by the same asset type
as the Receivables, such report shall include such a statement to that effect.
The Depositor and its officers and directors shall be entitled to rely on upon
each such servicing assessment. In the event that the Trust is not required to
file an annual report on Form 10-K for the applicable year, such report may be
delivered on or before the following April 1.
SECTION 3.10 Annual Independent Certified Public Accountant's Report. The
Master Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Master Servicer, the
Receivables Servicer, the Depositor, the
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Seller or their respective Affiliates) to furnish to the Depositor, concurrently
with the report delivered pursuant to Section 3.9(c), a report providing its
assessment of compliance with the Servicing Criteria during the preceding fiscal
year, including disclosure of any material instance of non-compliance, as
required by Rule 13a-18 or Rule 15d-18 under the Exchange Act and Item 1122(b)
of Regulation AB. Such attestation shall also be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act, including, without limitation that in the event that an overall
opinion cannot be expressed, such registered public accounting firm shall state
in such report why it was unable to express such an opinion.
SECTION 3.11 Access to Certain Documentation and Information Regarding
Receivables. In each case subject to the Master Servicer's rights to access
under the related Receivables Servicing Agreement, the Master Servicer shall
cause each Receivables Servicer, pursuant to the terms of the Receivables
Servicing Agreement, to provide to the Certificateholders, the Indenture Trustee
and the Noteholders access to the Receivable Files without charge, but only upon
reasonable request and during the normal business hours at the offices of the
Master Servicer or the respective offices of the Receivables Servicer, as
applicable. Nothing in this Section 3.11 shall affect the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Master Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 3.11.
SECTION 3.12 Master Servicer Expenses. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees, expenses (including counsel fees and expenses) and
disbursements of the independent accountants, taxes imposed on the Master
Servicer, other than (i) out-of-pocket expenses incurred in connection with the
enforcement of the Receivables Servicing Agreement, (b) out-of-pocket expenses
incurred in connection with the termination of the Receivables Servicer and the
assumption of servicing obligations with respect to the related Receivables, (c)
out-of-pocket expenses incurred to correct servicing errors committed by a
terminated Receivables Servicer, and (d) out-of-pocket expenses incurred on
behalf of the Issuer, including the maintenance of licenses pursuant to Section
3.18 hereof and the delivery of an opinion of Counsel pursuant to Section 3.6(b)
of the Indenture.
SECTION 3.13 Insurance. The Master Servicer, in accordance with the
customary servicing procedures and underwriting standards, of the Receivables
Servicer pursuant to the Receivables Servicing Agreement, shall cause the
Receivables Servicer, to the extent required pursuant to the terms of the
Receivables Servicing Agreement, to require that each Obligor shall have
obtained and shall maintain comprehensive and collision insurance covering the
related Financed Vehicle as of the execution of the Receivable.
SECTION 3.14 Form 10-D Reporting.
Within 15 days after each Payment Date (subject to permitted extensions
under the Exchange Act), the Master Servicer shall prepare and file on behalf of
the Issuer any Form 10-D required by the Exchange Act, in form and substance as
required by the Exchange Act. The
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Master Servicer shall file each Form 10-D with a copy of the related Investor
Report attached thereto. Any disclosure in addition to the Investor Report that
is required to be included on Form 10-D ("Additional Form 10-D Disclosure")
shall be determined and prepared by and at the direction of the Depositor and
the Master Servicer will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-D Disclosure, except as set forth in
the next paragraph.
After preparing the Form 10-D, but no later than the 12th calendar day
after the related Payment Date, the Master Servicer shall forward electronically
a copy of the Form 10-D to the Depositor (provided that such Form 10-D includes
any Additional Form 10-D Disclosure) for review. By the 13th calendar day after
the related Payment Date, the Depositor shall notify the Master Servicer in
writing (which may be furnished electronically) of any changes to or approval of
such Form 10-D. In the absence of any receipt of any written changes or approval
from the Depositor by the 13th calendar day after the related Payment Date, the
Master Servicer shall be entitled to assume that such Form 10-D is in final form
and the Master Servicer may proceed with the execution and filing of the Form
10-D. A duly authorized officer of the Master Servicer shall sign the Form 10-D.
If a Form 10-D cannot be filed on time or if a previously filed Form 10-D needs
to be amended, the Master Servicer will follow the procedures set forth in
Section 3.17. Promptly (but no later than 1 Business Day) after filing with the
Commission, the Master Servicer will make available on its internet website a
final executed copy of each Form 10-D prepared and filed by the Master Servicer.
Each party to this Agreement acknowledges that the performance by the Master
Servicer of its duties under this Section 3.14 related to the timely
preparation, execution and filing of Form 10-D is contingent upon such parties
strictly observing all applicable deadlines in the performance of their duties
under this Section 3.14. The Master Servicer shall have no liability for any
loss, expense, damage, claim arising out of or with respect to any failure to
properly prepare, timely execute and/or timely file such Form 10-D, where such
failure results from the Master Servicer's inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 10-D, not resulting from its
own negligence, bad faith or willful misconduct.
SECTION 3.15 Form 10-K Reporting.
Within 90 days after the end of each fiscal year of the Issuer or such
earlier date as may be required by the Exchange Act (the "10-K Filing Deadline")
(it being understood that the fiscal year for the Issuer ends on December 31st
of each year), commencing in March 2008, the Master Servicer shall prepare and
file on behalf of the Issuer a Form 10-K, in form and substance as required by
the Exchange Act. Each such Form 10-K shall include the following items, in each
case to the extent they have been delivered to the Master Servicer within the
applicable time frames set forth in this Agreement and the related Servicing
Agreement, (i) the Item 1123 Certification for the Receivables Servicer, each
Servicing Function Participant, and the Master Servicer (together with the
Custodian, each, a "Reporting Servicer") as described under Section 3.9(a),
(ii)(A) the Assessment of Compliance with servicing criteria for the Receivables
Servicer, the Master Servicer, the Custodian and each Servicing Function
Participant, as described under Section 3.9(c) and Section 9.11 of this
Agreement, together with Section 3.10 of the Receivables Servicing Agreement and
Section 11 of the Administration Agreement, and (B) if any of the Receivables
Servicer's, the Master Servicer's, the Custodian's or any Servicing Function
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Participant's Assessment of Compliance identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
of the Receivables Servicer's, the Master Servicer's, the Custodian's or any
Servicing Function Participant's Assessment of Compliance is not included as an
exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, (iii)(A) the Accountant's
Attestation for the Receivables Servicer, the Master Servicer, the Custodian and
each Servicing Function Participant, as described under Sections 3.10 and 9.11
of this Agreement and Section 3.11 of the Receivables Servicing Agreement, and
(B) if any Accountant's Attestation identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
such Accountant's Attestation is not included as an exhibit to such Form 10-K,
disclosure that such report is not included and an explanation why such report
is not included, and (iv) a Xxxxxxxx-Xxxxx Certification as described in
Appendix B (provided, however, that the Master Servicer, in its reasonable
discretion, may omit from the Form 10-K, any Assessment of Compliance or
Accountant's Attestation that is not required to be filed with such Form 10-K
pursuant to Regulation AB). Any disclosure or information in addition to (i)
through (iv) above that is required to be included on Form 10-K ("Additional
Form 10-K Disclosure") shall be determined and prepared by and at the direction
of the Depositor and the Master Servicer will have no duty or liability for any
failure hereunder to determine or prepare any Additional Form 10-K Disclosure,
except as set forth in the next paragraph.
After preparing the Form 10-K, but no later than March 23th of each year,
the Master Servicer shall forward electronically a draft copy of the Form 10-K
to the Depositor (provided that such Form 10-K includes any Additional Form 10-K
Disclosure) for review. Within four Business Days before the 10-K Filing
Deadline, the Depositor shall notify the Master Servicer in writing (which may
be furnished electronically) of any changes to or approval of such Form 10-K. In
the absence of any receipt of any written changes or approval from the Depositor
by the close of business on the 4th Business Day prior to the 10-K Filing
Deadline, the Master Servicer shall be entitled to assume that such Form 10-K is
in final form and the Master Servicer may proceed with the execution and filing
of the Form 10-K. A senior officer of the Master Servicer shall sign the Form
10-K. If a Form 10-K cannot be filed on time or if a previously filed Form 10-K
needs to be amended, the Master Servicer will follow the procedures set forth in
Section 3.17. Promptly (but no later than 1 Business Day) after filing with the
Commission, the Master Servicer will make available on its internet website a
final executed copy of each Form 10-K prepared and filed by the Master Servicer.
The parties to this Agreement acknowledge that the performance by the Master
Servicer and the Master Servicer of its duties under this Section 3.15 related
to the timely preparation, execution and filing of Form 10-K is contingent upon
such parties (and any Servicing Function Participant) strictly observing all
applicable deadlines in the performance of their duties under this Article and
the relevant sections of the Receivables Servicing Agreement and the
Administration Agreement. The Master Servicer shall have no liability for any
loss, expense, damage, claim arising out of or with respect to any failure to
properly prepare, execute and/or timely file such Form 10-K, where such failure
results from the Master Servicer's inability or failure to obtain or receive, on
a timely basis, any information from any other party hereto needed to prepare,
arrange for execution or file such Form 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
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SECTION 3.16 Form 8-K Reporting.
The Depositor shall be responsible for any form 8-K to be filed with
respect to the Notes or the Issuer.
SECTION 3.17 Delisting; Amendment; Late Filing of Reports.
On or prior to January 30 of the first year in which the Master Servicer is
able to do so under applicable law, the Master Servicer shall prepare and file a
Form 15 Suspension Notification relating to the automatic suspension of
reporting in respect of the Issuer under the Exchange Act.
In the event that the Master Servicer is unable to timely file with the
Commission all or any required portion of any Form, 10-D or 10-K required to be
filed by this Agreement because required disclosure information was either not
delivered to it or delivered to it after the delivery deadlines set forth in
this Agreement or for any other reason, the Master Servicer will promptly notify
the Depositor. In the case of Form 10-D and 10-K, the parties to this Agreement
and the Servicer will cooperate to prepare and file a Form 12b-25 and a 10-D/A
and 10-K/A as applicable, pursuant to Rule 12b-25 of the Exchange Act. In the
event that any previously filed Form, 10-D or 10-K needs to be amended in
connection with any Additional Form 10-D Disclosure (other than for the purpose
of restating any Monthly Report), Additional Form 10-K Disclosure, the Master
Servicer will electronically notify the Depositor and such other parties to the
transaction as are affected by such amendment and such parties will cooperate to
prepare any necessary Form, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any
amendment to Form, 10-D or 10-K shall be signed by a duly authorized
representative, or senior officer of the Master Servicer in charge of master
servicing, as applicable. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Master Servicer of its duties under
this Section 3.17 related to the timely preparation, execution and filing of
Form 15, a Form 12b-25 or any amendment to Form, 10-D or 10-K is contingent upon
each such party performing its duties under this Section. The Master Servicer
shall have no liability for any loss, expense, damage, claim arising out of or
with respect to any failure to properly prepare, execute and/or timely file any
such Form 15, Form 12b-25 or any amendments to Forms, 10-D or 10-K, where such
failure results from the Master Servicer's inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 15, Form 12b-25 or any
amendments to Forms, 10-D or 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
SECTION 3.18 Licenses. The Master Servicer shall maintain, on behalf of the
Issuer, the Issuer's license as a sales finance company in the states of
Maryland and Pennsylvania as set forth in Section 3.4 of the Indenture.
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ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.1 Accounts. (a) Prior to the Closing Date there shall have been
established a deposit account pursuant to which the Receivables Servicer shall
deposit collections on the Receivables, as more specifically described in the
Receivables Servicing Agreement. The foregoing deposit account was established
and shall initially be maintained with the Depository Institution. On or prior
to each Payment Date, the Master Servicer shall instruct the Depository
Institution to withdraw from such deposit account for deposit into the
Collection Account the Available Collections for the related Collection Period.
All monies owned by the Trust deposited from time to time in the foregoing
deposit account shall be held by the Depository Institution for the benefit of
the Noteholders and, after payment in full of the Notes, as agent of the Issuer
and as part of the Trust Property; provided, however, that all monies owned by
third parties deposited from time to time in the foregoing deposit account shall
not be so held and shall not be available for deposit into the Collection
Account and shall not be available to make payments in respect of the Notes or
the Certificates.
(b) The Master Servicer shall, prior to the Closing Date, cause to be
established and maintained an Eligible Deposit Account in the name "U.S. Bank
National Association, on behalf of HSBC Bank USA, National Association as
Indenture Trustee and as secured party with respect to Xxxxxxx Auto Trust
Securitization 2007-1", initially at the corporate trust department of the
Securities Administrator, which shall be designated as the "Collection Account".
The Collection Account shall be under the sole dominion and control of the
Indenture Trustee; provided, that the Master Servicer and/or relevant Depository
Institution may make deposits to, and the Indenture Trustee and the Securities
Administrator may (following written instruction of the Master Servicer) make
withdrawals from, the Collection Account in accordance with the terms of the
Basic Documents. In addition, the Collection Account shall be established and
maintained at an institution which agrees in writing that for so long as the
Notes are outstanding it will comply with entitlement orders (as defined in
Article 8 of the UCC) originated by the Indenture Trustee without further
consent of the Issuer. All monies deposited from time to time in the Collection
Account shall be held by the Securities Administrator on behalf of the Indenture
Trustee as secured party for the benefit of the Noteholders and, after payment
in full of the Notes, as agent of the Issuer and as part of the Trust Property.
All deposits to and withdrawals from the Collection Account shall be made only
upon the terms and conditions of the Basic Documents.
All amounts held in the Collection Account shall, to the extent permitted
by applicable law, rules and regulations, be invested, as directed in writing by
the Master Servicer, by the depository institution or trust company then
maintaining the Collection Account in specified Permitted Investments that
mature not later than the Business Day immediately prior to the Payment Date (or
if the Rating Agency Condition is satisfied, not later than such Payment Date)
for the Collection Period to which such amounts relate and such Permitted
Investments shall be held to maturity. Neither the Indenture Trustee nor the
Securities Administrator shall be liable for investment losses in Permitted
Investments made in accordance with directions from the Master Servicer. In the
event that the Collection Account is no longer to be maintained at the
15
corporate trust department of the Securities Administrator, the Master Servicer
shall, with the Indenture Trustee's or Issuer's assistance as necessary, cause
an Eligible Deposit Account to be established as the Collection Account within
ten Business Days (or such longer period not to exceed 30 calendar days as to
which each Rating Agency may consent). The Master Servicer shall not be required
to invest amounts representing Available Collections for a Payment Date that are
deposited into the Collection Account on or after the Business Day immediately
preceding the related Payment Date.
(c) The Master Servicer shall, prior to the Closing Date, establish and
maintain an administrative subaccount within the Collection Account, which
subaccount shall be designated as the "Principal Distribution Account". The
Principal Distribution Account is established and maintained solely for
administrative purposes.
(d) The Master Servicer shall, prior to the Closing Date, cause an Eligible
Deposit Account to be established and maintained, in the name "Xxxxxxx Auto
Trust Securitization 2007-1 Certificate Distribution Account", initially at the
corporate trust department of the Securities Administrator, which shall be
designated as the "Certificate Distribution Account". The Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee. All monies deposited from time to time in the Certificate Distribution
Account pursuant to this Agreement and the Indenture shall be held by the Owner
Trustee as part of the Trust Property and shall be applied as provided in the
Basic Documents. In the event that the Certificate Distribution Account is no
longer to be maintained at the corporate trust department of the Securities
Administrator, the Master Servicer shall cause an Eligible Deposit Account to be
established as the Certificate Distribution Account within ten Business Days (or
such longer period not to exceed 30 calendar days as to which each Rating Agency
may consent) and shall give written notice of the location and account number of
such account to the Owner Trustee.
SECTION 4.2 Collections. (a) The Receivables Servicer is obligated, subject
to the terms of the Receivables Servicing Agreement, to remit to the Deposit
Account (i) all payments by or on behalf of the Obligors on the Receivables (but
excluding Purchased Receivables) and (ii) all Liquidation Proceeds in respect of
the Receivables, both as collected during the Collection Period within two
Business Days of receipt thereof.
SECTION 4.3 Application of Collections. For the purposes of this Agreement,
as of the close of business on the last day of each Collection Period, all
collections for the Collection Period with respect to each Receivable (other
than a Purchased Receivable) shall be applied in accordance with the customary
practices of the Receivables Servicer or, if such Receivables Servicer is no
longer engaged by the Master Servicer, the customary practice of the Master
Servicer.
SECTION 4.4 Additional Deposits. The Depositor and the Master Servicer
shall deposit in the Collection Account the aggregate Purchase Amount with
respect to Purchased Receivables pursuant to Sections 2.3 and 3.6, respectively,
the Administrator shall deposit in the Collection Account the aggregate Purchase
Amount with respect to Purchased Receivables pursuant to Sections 2(b)(A) or
2(d) of the Administration Agreement and the Master Servicer shall deposit
therein all amounts to be paid under Section 8.1. All such deposits with respect
to a Collection
16
Period shall be made, in immediately available funds, on the Business Day
preceding the Payment Date related to such Collection Period.
SECTION 4.5 Distributions. On each Payment Date, the Securities
Administrator shall make withdrawals from the Collection Account and make
deposits, distributions and payments, to the extent of Available Collections for
such Payment Date, in the manner and order of priority set forth in Section 8.2
of the Indenture.
SECTION 4.6 Net Deposits. Remittances pursuant to Sections 4.2 and 4.4 may
be made net of the Aggregate Servicing Fee. Nonetheless, the Master Servicer
shall account for all of the above described remittances and distributions in
the Investor Report as if the amounts were deposited and/or transferred
separately.
SECTION 4.7 Statements to Noteholders and Certificateholders. No later than
five Business Days prior to each Payment Date, the Master Servicer shall provide
to the Securities Administrator the information necessary to create the Investor
Report. On the Payment Date the Securities Administrator shall provide to the
Indenture Trustee, the Rating Agencies, the Counterparties and each Note Paying
Agent and make available to each Noteholder of record as of the most recent
Record Date and to the Owner Trustee for the Owner Trustee to make available to
each Certificateholder of record as of the most recent Record Date the Investor
Report, setting forth for the Collection Period relating to such Payment Date
the following information as to the Notes and the Certificates to the extent
applicable:
(i) the amount of such distribution allocable to principal allocable
to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest allocable
to each Class of Notes and the Certificates;
(iii) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(iv) the amount of the Servicing Fee paid to the Master Servicer with
respect to the related Collection Period and the amount of any unpaid
Servicing Fees and the change in such amount from that of the prior Payment
Date;
(v) the aggregate Receivables Servicing Fee Rate for the related
Collection Period for all Receivables;
(vi) the amounts of the Class A Noteholders' Interest Carryover
Shortfall, the Class B Noteholders' Interest Carryover Shortfall and the
Class C Noteholders' Interest Carryover Shortfall, if any, on such Payment
Date and the change in such amounts from the preceding Payment Date;
(vii) the aggregate outstanding principal amount of each Class of
Notes and the Note Pool Factor for each Class of Notes;
17
(viii) the amount of any previously due and unpaid payment of
principal of each Class of Notes, and the change in such amount from that
of the prior Payment Date;
(ix) Cumulative Net Loss Ratio;
(x) the aggregate Purchase Amount of Receivables repurchased by the
Depositor, the Seller, the Administrator or the Receivables Servicer, or
purchased by the Master Servicer, if any, with respect to the related
Collection Period;
(xi) the aggregate amount of Defaulted Receivables;
(xii) the Available Collections for the related Collection Period
(with each of the separate components as set forth in clauses (i) though
(vii) of the definition of "Available Collections" separately stated);
(xiii) the Class A-3 Rate and the Class A-4 Rate for the related
Payment Date and, to the extent it has been determined at the time such
report is issued, for the following Payment Date; and
(xiv) any Net Swap Receipt payable by the Issuer on such Payment Date
and any Net Swap Payment due on such Payment Date.
In addition, such statements may be posted by the Securities Administrator
on its website at xxx.xxxxxx.xxx/xxx.
Each amount set forth on the Payment Date statement pursuant to clauses
(i), (ii), (iv), (v) and (vii) above shall be expressed as a dollar amount per
$1,000 of original principal amount of a Note or original Certificate Balance of
a Certificate, as applicable.
ARTICLE V
THE DEPOSITOR
SECTION 5.1 Representations, Warranties and Covenants of Depositor. The
Depositor makes the following representations and warranties on which the Issuer
is deemed to have relied in acquiring the Trust Property. The representations
and warranties speak as of the execution and delivery of this Agreement and
shall survive the conveyance of the Trust Property by the Depositor to the
Issuer and the pledge thereof by the Issuer to the Indenture Trustee pursuant to
the Indenture:
(a) Organization and Good Standing. The Depositor is a duly formed, validly
existing and in good standing under the laws of the State of Delaware, with all
corporate power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently conducted,
and had at all relevant times, and has, power, authority, and legal right to
acquire and own the Receivables.
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(b) Power and Authority. The Depositor has all corporate power and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their terms; the Depositor has full power
and authority to sell and assign the property to be sold, and assigned to and
deposited, with the Issuer, and the Depositor shall have duly authorized such
sale and assignment to the Issuer by all necessary corporate action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which the Depositor is a party have been duly authorized, executed
and delivered by the Depositor by all necessary corporate action.
(c) Binding Obligations. This Agreement, when duly executed and delivered
by the other parties hereto, constitutes a legal, valid, and binding obligation
of the Depositor enforceable against the Depositor in accordance with its terms,
except as the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting creditors' rights in general and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(d) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which the Depositor is a party and
the fulfillment of the terms hereof and thereof do not (i) 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 certificate of
incorporation or by-laws of the Depositor, or conflict with or breach any of the
material terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement, or other instrument to which
the Depositor is a party or by which it is bound, (ii) result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of any
such indenture, agreement, or other instrument, or (iii) violate any law or, to
the best of the Depositor's knowledge, any order, rule, or regulation applicable
to the Depositor of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over the Depositor or its properties.
(e) No Proceedings. There are no proceedings or investigations pending, or,
to the best of the Depositor's knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Depositor or its properties (i) asserting the
invalidity of this Agreement, any of the other Basic Documents or the
Securities, (ii) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by this Agreement or the
other Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement, any of
the other Basic Documents or the Securities or (iv) relating to the Depositor
and which might adversely affect the federal income tax attributes of the
Securities.
SECTION 5.2 Liability of Depositor; Indemnities. The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Depositor under this Agreement, and hereby agrees to the
following:
(a) The Depositor shall indemnify, defend, and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Securities Administrator, the
Noteholders and the
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Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Depositor's willful misfeasance, bad faith, or negligence in
the performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and (ii) the
Depositor's violation of federal or State securities laws in connection with the
registration or the sale of the Notes or the Certificates.
(b) Indemnification under this Section 5.2 shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee or the Securities
Administrator and the termination of this Agreement and shall include reasonable
fees and expenses of counsel and expenses of litigation. If the Depositor shall
have made any indemnity payments pursuant to this Section 5.2 and the Person to
or on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
Depositor, without interest.
SECTION 5.3 Merger or Consolidation of, or Assumption of the Obligations of
Depositor. Any Person (i) into which the Depositor may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Depositor shall be a party, or (iii) succeeding to the business of the
Depositor, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Depositor under this Agreement,
will be the successor to the Depositor under this Agreement without the
execution or filing of any document or any further act on the part of any of the
parties to this Agreement. The Depositor shall provide notice of any merger,
conversion, consolidation, or succession pursuant to this Section 5.3 to the
Rating Agencies, the Owner Trustee, the Indenture Trustee and the Securities
Administrator.
SECTION 5.4 Limitation on Liability of Depositor and Others. The Depositor
and any officer or employee or agent of the Depositor may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor shall not be under any obligation to appear in, prosecute, or
defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
SECTION 5.5 Depositor May Own Notes or Certificates. The Depositor, and any
Affiliate of the Depositor, may in its individual or any other capacity become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Depositor or an Affiliate thereof, except as otherwise
expressly provided herein or in the other Basic Documents. Except as set forth
herein or in the other Basic Documents, Notes and Certificates so owned by or
pledged to the Depositor or any such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement and the other Basic
Documents, without preference, priority, or distinction as among all of the
Notes and Certificates.
SECTION 5.6 Depositor Certificate of Incorporation. The Depositor shall not
amend its certificate of incorporation unless the Rating Agency Condition is
satisfied.
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ARTICLE VI
THE MASTER SERVICER
SECTION 6.1 Representations of Master Servicer. The Master Servicer makes
the following representations on which the Issuer is deemed to have relied in
acquiring the Trust Property. The representations speak as of the execution and
delivery of this Agreement and shall survive the conveyance of the Trust
Property to the Issuer and the pledge thereof by the Issuer pursuant to the
Indenture:
(a) Organization and Good Standing. The Master Servicer is duly formed,
validly existing and in good standing under the laws of the United States, with
all power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted,
and had at all relevant times, and has, power, authority and legal right to
acquire, own, sell, and service the Receivables and to hold the Receivable Files
as custodian on behalf of the Indenture Trustee.
(b) Power and Authority. The Master Servicer has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to carry out their terms; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is a
party shall have duly authorized, executed and delivered by the Master Servicer
by all necessary corporate action.
(c) Binding Obligations. This Agreement constitutes a legal, valid, and
binding obligation of the Master Servicer enforceable in accordance with their
terms subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization, liquidation or other similar laws and equitable principles
relating to or affecting the enforcement of creditors' rights in general and by
general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or law.
(d) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which the Master Servicer is a party
and the fulfillment of the terms hereof do not conflict with, result in any
breach of any of the terms and provisions of, nor constitute (i) (with or
without notice or lapse of time) a default under, the articles of incorporation
or bylaws of the Master Servicer, or conflict with or breach any of the material
terms or provisions of, or constitute (with or without notice or lapse of time)
a default under, any indenture, agreement, or other instrument to which the
Master Servicer is a party or by which it shall be bound, (ii) result in the
creation or imposition of any lien upon any of its properties pursuant to the
terms of any such indenture, agreement, or other instrument or (iii) violate any
law or, to the best of the Master Servicer's knowledge, any order, rule, or
regulation applicable to the Master Servicer of any court or of any federal or
State regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Master Servicer or its properties.
(e) No Proceedings. There are no proceedings or investigations pending, or
to the best of the Master Servicer's knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Master
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Servicer or its properties (i) asserting the invalidity of this Agreement, any
of the other Basic Documents or the Securities, (ii) seeking to prevent the
issuance of the Securities or the consummation of any of the transactions
contemplated by this Agreement and the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Master Servicer of its obligations under, or the validity or
enforceability of, this Agreement, any of the other Basic Documents or the
Securities, or (iv) relating to the Master Servicer and which might adversely
affect the federal income tax attributes of the Securities.
(f) Fidelity Bond. The Master Servicer maintains a fidelity bond in such
form and amount as is customary for Master Servicers acting as custodian of
funds and documents in respect of retail automotive installment sales contracts
and loans.
SECTION 6.2 Indemnities of Master Servicer. The Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Master Servicer under this Agreement, and hereby agrees to the
following:
(a) The Master Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Securities Administrator,
the Noteholders, the Certificateholders and the Depositor from and against any
and all costs, expenses, losses, damages, claims and liabilities, arising out of
or resulting from the use, ownership or operation by the Master Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Master Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Securities Administrator,
the Noteholders, the Certificateholders and the Depositor from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the extent
that such cost, expense, loss, claim, damage, or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance, or
bad faith of the Master Servicer in the performance of its duties under this
Agreement or any other Basic Document to which it is a party, or by reason of
reckless disregard of its obligations and duties under this Agreement or any
other Basic Document to which it is a party.
(c) Indemnification under this Section 6.2 by U.S. Bank National
Association (or any successor thereto pursuant to Section 7.2) as Master
Servicer, with respect to the period such Person was the Master Servicer, shall
survive the termination of such Person as Master Servicer or a resignation by
such Person as Master Servicer as well as the termination of this Agreement or
the resignation or removal of the Owner Trustee, the Indenture Trustee or the
Securities Administrator and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Master Servicer shall have made any
indemnity payments pursuant to this Section 6.2 and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Master Servicer,
without interest.
SECTION 6.3 Merger or Consolidation of, or Assumption of the Obligations of
Master Servicer. Any Person (i) into which the Master Servicer may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Master Servicer shall be a party or (iii) succeeding to the business
of the Master Servicer, which Person in any of the
22
foregoing cases executes an agreement of assumption to perform every obligation
of the Master Servicer under this Agreement, will be the successor to the Master
Servicer under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties to this Agreement. The Master
Servicer shall provide notice of any merger, conversion, consolidation or
succession pursuant to this Section 6.3 to the Rating Agencies, the Indenture
Trustee and the Securities Administrator.
SECTION 6.4 Limitation on Liability of Master Servicer and Others. (a)
Neither the Master Servicer nor any of the directors or officers or employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
Noteholders or the Certificateholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
that would otherwise be imposed by reason of willful misfeasance or bad faith in
the performance of duties or by reason of reckless disregard of its obligations
and duties under this Agreement, or by reason of negligence in the performance
of its duties under this Agreement. The Master Servicer and any director,
officer or employee or agent of the Master Servicer may rely in good faith on
any Opinion of Counsel or on any Officer's Certificate of the Depositor or
certificate of auditors believed to be genuine and to have been signed by the
proper party in respect of any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Master Servicer shall not be
under any obligation to appear in, prosecute, or defend any legal action that
shall not be incidental to its duties under this Agreement, and that in its
opinion may cause it to incur any expense or liability; provided, however, that
the Master Servicer may undertake any reasonable action that it may deem
necessary or desirable in respect of this Agreement, the rights and duties of
the parties to this Agreement and the interests of the Noteholders and
Certificateholders under this Agreement. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Issuer, and the Master Servicer shall be entitled
to be reimbursed therefor. Any amounts due the Master Servicer pursuant to this
subsection shall be payable on a Payment Date from the Available Collections on
deposit in the Collection Account only after all payments required to be made on
such date to the Noteholders, the Certificateholders, the Owner Trustee, the
Indenture Trustee, the Securities Administrator and the Master Servicer have
been made.
(c) The Master Servicer and any director or officer or employee or agent of
the Master Servicer shall be indemnified by the Trust and held harmless against
any loss, liability, or expense including reasonable attorneys' fees and
expenses incurred in connection with any legal action relating to the
performance of the Master Servicer's duties under this Agreement, other than (i)
any loss or liability otherwise reimbursable pursuant to this Agreement; (ii)
any loss, liability, or expense incurred solely by reason of the Master
Servicer's willful misfeasance, negligence, or bad faith in the performance of
its duties hereunder or by reason of reckless disregard of its obligations and
duties under this Agreement; and (iii) any loss, liability, or expense for which
the Issuer is to be indemnified by the Master Servicer under this Agreement. Any
amounts due the Master Servicer pursuant to this subsection shall be payable on
a Payment Date from the Available Collections on deposit in the Collection
Account only after all payments
23
required to be made on such date to the Noteholders, the Certificateholders, the
Owner Trustee, the Indenture Trustee and the Securities Administrator have been
made.
(d) The parties acknowledge that the direct servicing and custodianship of
the Receivables will initially be conducted by the Receivables Servicer, and
that the Master Servicer will not directly service or maintain custody of the
Receivables or become obligated to do so unless, with respect to any of the
Receivables, the Receivables Servicer resigns or is terminated under the
Receivables Servicing Agreement and no successor Receivables Servicer is named
thereunder. Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Issuer, the Noteholders or the Certificateholders for any action or inaction of
the Receivables Servicer and shall not in any way be responsible for the
performance of the Receivables Servicer of their servicing or other obligations.
The Master Servicer shall, however, acting on behalf of the Trust, enforce the
obligations of the Receivables Servicer relating to the servicing and custody of
the Receivables under the Receivables Servicing Agreement, and in so doing:
(i) If any Receivables Servicer Termination Event has occurred and is
continuing under the related Receivables Servicing Agreement, the Master
Servicer shall exercise the rights and powers vested in it by this
Agreement and the related Receivables Servicing Agreement and use the same
degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(ii) Except during the continuance of a Receivables Servicer
Termination Event with respect to the Receivables Servicer:
(A) the Master Servicer undertakes to perform such duties and
only such duties as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read
into this Agreement against the Master Servicer; and
(B) in the absence of bad faith on its part, the Master Servicer
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Master Servicer
and, if required by the terms of this Agreement, conforming
to the requirements of this Agreement; provided, however,
that the Master Servicer shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Agreement.
(iii) The Master Servicer may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(A) this paragraph does not limit the effect of paragraph (ii)
of this Section 6.4(d);
24
(B) the Master Servicer shall not be liable for any error of
judgment made in good faith by an Authorized Officer unless
it is proved that the Master Servicer was negligent in
ascertaining the pertinent facts; and
(C) the Master Servicer shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with an Issuer Request given in accordance with the terms of
this Agreement or the Indenture.
(iv) The Master Servicer shall not be charged with knowledge of any
Receivables Servicer Termination Event unless either (1) an Authorized
Officer shall have actual knowledge of such Receivables Servicer
Termination Event or (2) written notice of such Receivables Servicer
Termination Event shall have been given to the Master Servicer in
accordance with the provisions of this Agreement.
(v) The Master Servicer may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper Person. The Master Servicer need not investigate any fact or matters
stated in any such document.
(vi) Before the Master Servicer acts or refrains from acting, it may
require an Officer's Certificate from the Issuer or an Opinion of Counsel.
The Master Servicer shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officer's Certificate or Opinion of
Counsel.
(vii) Neither the Master Servicer nor any of its officers, directors,
employees or agents shall be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights
or powers; provided, however, that such action or omission by the Master
Servicer does not constitute willful misconduct, negligence or bad faith.
(viii) The right of the Master Servicer, with respect to its
enforcement of the Receivables Servicing Agreement, to perform any
discretionary act enumerated in this Agreement shall not be construed as a
duty, and the Master Servicer shall not be answerable for other than its
negligence or willful misconduct in the performance of such act.
(ix) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Master Servicer be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Master Servicer has been advised of
the likelihood of such loss or damage and regardless of the form of action.
25
SECTION 6.5 Subservicing and Delegation of Duties. The Master Servicer may
engage a sub-Servicer to perform some or all of its duties hereunder and may at
any time perform specific duties as Master Servicer under this Agreement through
sub-contractors; provided that, except as provided in respect to the Receivables
Servicer pursuant to Section 6.4(d), no such subservicing, delegation or
subcontracting shall relieve the Master Servicer of its responsibilities with
respect to such duties, as to all of which the Master Servicer shall remain
primarily responsible and the Master Servicer shall be solely responsible for
the fees of any such sub-Servicers and sub-contractors. The Master Servicer
shall cause any sub-Servicer, including for this purpose any Reporting
Subcontractor with respect to the Master Servicer, to comply with the provisions
of Section 3.9 and 3.10 as if such sub-Servicer or Reporting Subcontractor were
the Master Servicer.
SECTION 6.6 Master Servicer Not to Resign as Master Servicer; Resignation
and Termination of Receivables Servicers. (a) Subject to the provisions of
Section 6.3, the Master Servicer shall not resign from its obligations and
duties under this Agreement except upon determination that the performance of
its duties under this Agreement shall no longer be permissible under applicable
law. Notice of any such determination permitting the resignation of the Master
Servicer shall be communicated to the Owner Trustee, the Indenture Trustee and
the Securities Administrator at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Owner Trustee, the Indenture Trustee and
the Securities Administrator concurrently with or promptly after such notice. No
such resignation shall become effective until the Securities Administrator (so
long as the Person serving as the Securities Administrator is not also the
Master Servicer), the Indenture Trustee or a Successor Master Servicer shall
have (i) taken the actions required by Section 7.1(b) and (ii) assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 7.2.
(b) The Master Servicer may terminate its Receivables Servicing Agreement
with the Receivables Servicer upon the terms and conditions set forth in such
agreement. Notwithstanding the foregoing, to the extent that the Receivables
Servicing Agreement permits the Receivables Servicer to resign with the express
written consent of the Depositor, the Depositor and Master Servicer hereby agree
that they will not grant such consent unless the Rating Agency Condition is
satisfied. In the event the Master Servicer terminates the Receivables Servicing
Agreement, the Master Servicer shall not be responsible for the acts or inaction
of the terminated Receivables Servicer, and the Master Servicer shall be
entitled to reimbursement for its out-of-pocket expenses incurred in connection
with enforcement of the Receivables Servicing Agreement, transition of servicing
responsibilities, and correction of servicing errors committed by the terminated
Receivables Servicer.
SECTION 6.7 Master Servicer May Own Notes or Certificates. The Master
Servicer, and any Affiliate of the Master Servicer, may, in its individual or
any other capacity, become the owner or pledgee of Notes or Certificates with
the same rights as it would have if it were not the Master Servicer or an
Affiliate thereof, except as otherwise expressly provided herein or in the other
Basic Documents. Except as set forth herein or in the other Basic Documents,
Notes and Certificates so owned by or pledged to the Master Servicer or such
Affiliate shall have an equal
26
and proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Notes and Certificates.
ARTICLE VII
SERVICING TERMINATION
SECTION 7.1 Events of Servicing Termination. (a) If any one of the
following events ("Events of Servicing Termination") shall occur and be
continuing:
(i) Any failure by the Master Servicer to deliver to the Owner
Trustee, the Indenture Trustee or the Securities Administrator any proceeds
or payment required to be so delivered under the terms of the Notes and the
Certificates and this Agreement that shall continue unremedied for a period
of five Business Days after written notice of such failure is received by
the Master Servicer from the Owner Trustee, the Indenture Trustee or the
Securities Administrator or after discovery of such failure by an officer
of the Master Servicer; or
(ii) Failure on the part of the Master Servicer duly to observe or to
perform in any material respect any other covenants or agreements, as the
case may be, set forth in the Notes, the Certificates or in this Agreement,
which failure shall (A) materially and adversely affect the rights of
Noteholders or Certificateholders and (B) continue unremedied for a period
of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (1) to the Master
Servicer by the Depositor or the Indenture Trustee or (2) to the Owner
Trustee, the Indenture Trustee, the Securities Administrator and the Master
Servicer by the Noteholders of Notes evidencing not less than 25% of the
principal amount of the Notes or, if no Notes are outstanding, by holders
of Certificates evidencing Certificate Percentage Interests aggregating at
least 25%; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the Master
Servicer in any insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings, or for the winding up or liquidation
of its respective affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(iv) The consent by the Master Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of or
relating to the Master Servicer of or relating to substantially all of its
property; or the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment
of its obligations or become insolvent;
then the Indenture Trustee shall cause the Securities Administrator to promptly
notify each Rating Agency, and in each and every case, so long as an Event of
Servicing Termination shall
27
not have been remedied, either the Indenture Trustee or the holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes (or, if no
Notes are Outstanding, Certificates evidencing Certificate Percentage Interests
aggregating at least 51%), by notice then given in writing to the Master
Servicer (and to the Indenture Trustee, the Securities Administrator and the
Owner Trustee if given by the Noteholders and to the Owner Trustee if given by
the Certificateholders and in each case with a copy to the Rating Agencies) may
terminate all of the rights and obligations of the Master Servicer under this
Agreement. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this Agreement,
whether with respect to the Notes, the Certificates or the Trust Property or
otherwise, shall pass to and be vested in the Securities Administrator (so long
as the Person serving as the Securities Administrator is not also the Master
Servicer), and otherwise in the Indenture Trustee or such Successor Master
Servicer as may be appointed under Section 7.2; and, without limitation, the
Securities Administrator (so long as the Person serving as the Securities
Administrator is not also the Master Servicer), the Indenture Trustee and the
Owner Trustee are hereby authorized and empowered to execute and deliver, on
behalf of the predecessor Master 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 related documents, or otherwise.
(b) Upon termination of the Master Servicer under Section 7.1(a), the
predecessor Master Servicer shall cooperate with the Securities Administrator,
the Indenture, the Owner Trustee and such Successor Master Servicer in effecting
the termination of the responsibilities and rights of the predecessor Master
Servicer under this Agreement, including the transfer to the Securities
Administrator (so long as the Person serving as the Securities Administrator is
not also the Master Servicer), and otherwise to the Indenture Trustee or such
Successor Master Servicer for administration of all cash amounts that shall at
the time be held by the predecessor Master Servicer, for deposit, or shall
thereafter be received with respect to a Receivable and the delivery of the
Receivable Files and the related accounts and records maintained by the Master
Servicer. All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Receivable Files to the Successor Master
Servicer and amending this Agreement to reflect such succession as Master
Servicer pursuant to this Section 7.1 shall be paid by the predecessor Master
Servicer upon presentation of reasonable documentation of such costs and
expenses.
(c) Upon termination of the Master Servicer under Section 7.1(a), the
Successor Master Servicer, by acceptance of its appointment, agrees that the
Receivables will continue to be serviced through their respective Receivables
Servicing Agreements, unless the applicable Receivables Servicing Agreement has
been terminated pursuant to the terms and conditions set forth therein.
SECTION 7.2 Appointment of Successor Master Servicer. (a) Upon the Master
Servicer's receipt of notice of termination pursuant to Section 7.1 or the
Master Servicer's resignation in accordance with the terms of this Agreement,
the predecessor Master Servicer shall continue to perform its functions as
Master Servicer under this Agreement, in the case of termination, only until the
date specified in such termination notice or, if no such date is
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specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the later of (x) the date 45 days from the delivery
to the Indenture Trustee, the Securities Administrator and the Owner Trustee of
written notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Master Servicer shall become unable to act as Master Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Master Servicer's resignation or termination hereunder, the
Issuer shall appoint a Successor Master Servicer, and the Successor Master
Servicer shall accept its appointment by a written assumption in form acceptable
to the Owner Trustee, the Securities Administrator and the Indenture Trustee
(with a copy to each Rating Agency). In the event that a Successor Master
Servicer has not been appointed at the time when the predecessor Master Servicer
has ceased to act as Master Servicer in accordance with this Section 7.2, the
Securities Administrator (so long as the Person serving as the Securities
Administrator is not also the Master Servicer), and otherwise the Indenture
Trustee, without further action shall automatically be appointed the Successor
Master Servicer. The Securities Administrator or the Indenture Trustee, as the
case may be, may resign as the Master Servicer by giving written notice of such
resignation to the Issuer and in such event shall be released from such duties
and obligations, such release not to be effective until the date a Successor
Master Servicer enters into a written assumption as provided in this Section.
Upon delivery of any such notice to the Issuer, the Issuer shall obtain a new
Master Servicer as the Successor Master Servicer in accordance with this
Section. Notwithstanding the above, if the Securities Administrator (so long as
the Person serving as the Securities Administrator is not also the Master
Servicer) and the Indenture Trustee shall be legally unable so to act or if,
within 30 days after the delivery of its notice of resignation, the Issuer shall
not have obtained a Successor Master Servicer, the Securities Administrator (so
long as the Person serving as the Securities Administrator is not also the
Master Servicer) or the Indenture Trustee, as appropriate, shall appoint, or
petition a court of competent jurisdiction to appoint, any established
institution, having a net worth of not less than $100,000,000 and whose regular
business shall include the servicing of automotive receivables, as the successor
to the Master Servicer under this Agreement; provided that the Rating Agency
Condition shall be satisfied in connection with such appointment.
(b) Upon appointment, the Successor Master Servicer shall be the successor
in all respects to the predecessor Master Servicer and shall be subject to all
the responsibilities, duties, and liabilities arising thereafter relating
thereto placed on the predecessor Master Servicer, by the terms and provisions
of this Agreement; provided, that (i) any failure of such Successor Master
Servicer to perform such responsibilities or duties that are caused by the
predecessor Master Servicer's failure to provide information or monies required
hereunder shall not be considered a default by such Successor Master Servicer
and (ii) such Successor Master Servicer shall have no liability for actions,
inactions or representations of the predecessor Master Servicer.
(c) In connection with such appointment, the Indenture Trustee may make
such arrangements for the compensation of such Successor Master Servicer out of
payments on Receivables as it and such Successor Master Servicer shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the predecessor Master Servicer under this Agreement. The Indenture
Trustee and such Successor Master Servicer shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
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(d) Notwithstanding anything herein or in the other Basic Documents to the
contrary, in no event shall the Securities Administrator or the Indenture
Trustee, should it be appointed Successor Master Servicer, be required to
purchase any Receivable pursuant to Section 3.6 herein or otherwise or indemnify
the Issuer, the Owner Trustee, the Noteholders, the Certificateholders, the
Depositor or any other Person pursuant to Section 3.13.
SECTION 7.3 Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, the Master Servicer pursuant
to this Article VII, the Indenture Trustee shall cause the Securities
Administrator to give prompt written notice thereof to Noteholders, and the
Owner Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses of record and to each Rating Agency.
SECTION 7.4 Waiver of Past Events of Servicing Termination. The holders of
Notes evidencing not less than a majority of the Outstanding Amount of the Notes
(or, if no Notes are outstanding, holders of Certificates evidencing Certificate
Percentage Interests aggregating at least 75%) may, on behalf of all Noteholders
and Certificateholders, waive any Event of Servicing Termination hereunder and
its consequences, except an event resulting from the failure to make any
required deposits to or payments from any of the Trust Accounts or the
Certificate Distribution Account in accordance with this Agreement, which shall
require the unanimous vote of all Holders of Outstanding Securities. Upon any
such waiver of a past Event of Servicing Termination, such Event of Servicing
Termination shall cease to exist, and shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other Event of Servicing Termination or impair any right consequent thereon.
The Issuer shall provide written notice of any such waiver to the Rating
Agencies.
ARTICLE VIII
TERMINATION
SECTION 8.1 Optional Purchase of All Receivables. As of the last day of any
Collection Period as of which the Pool Factor shall be equal to or less than the
Optional Purchase Percentage, the Master Servicer shall have the option to
purchase the Trust Property from the Trust. To exercise such option, the Master
Servicer shall deposit pursuant to Section 4.4 in the Collection Account an
amount equal to the greater of (i) the aggregate Purchase Amount for the
Receivables (as calculated by the Administrator and reported to the Master
Servicer) and (ii) the fair market value of the Receivables, and shall succeed
to all interests in and to the Trust. To determine the fair market value of the
Receivables, the Master Servicer shall solicit bids from not less than three
recognized purchasers of whole loan pools of motor vehicle loans selected by the
Master Servicer in its sole discretion (which bidders shall not include the
Depositor, the Seller or any of their respective Affiliates). Notwithstanding
the foregoing, the Master Servicer shall not be permitted to exercise such
option unless the amount to be deposited in the Collection Account pursuant to
the preceding sentence, together with the other amounts on deposit in the
Collection Account, is greater than or equal to the sum of the outstanding
principal amount of the Notes and all accrued but unpaid interest (including any
overdue interest) thereon plus any Net Swap Payments or Swap Termination
Payments due to the Counterparties under the Interest Rate Swap Payments plus
all amounts then due and payable by the Trust for fees or other reimbursable
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amounts to the Receivables Servicer, the Master Servicer, the Securities
Administrator, the Administrator, the Owner Trustee and the Indenture Trustee.
The amount deposited in the Collection Account pursuant to this Section 8.1
shall be used on the next Payment Date to make payments in full to Noteholders
and Certificateholders in the manner set forth in Article IV. The Master
Servicer or the Issuer shall furnish written notice of the Master Servicer's
election to exercise such option to the Indenture Trustee, the Securities
Administrator, the Owner Trustee, each Counterparty and the Rating Agencies at
least 10 days, but not more than 30 days, prior to the Payment Date on which
such purchase shall occur (and the Indenture Trustee shall cause the Securities
Administrator to promptly furnish such notice to the Noteholders).
In addition, if any Certificateholder is a Person who is not an Affiliate
of the Depositor (as certified in writing to the Master Servicer by such
Certificateholder), the Master Servicer shall exercise the option to purchase
the Receivables in accordance with this Section 8.1 only if directed to do so,
or consented to in writing by each such non-Affiliated Certificateholder. The
Master Servicer shall have no responsibility to determine whether any
Certificateholder is or is not an Affiliate of the Depositor.
SECTION 8.2 Succession Upon Satisfaction and Discharge of Indenture.
Following the satisfaction and discharge of the Indenture and the payment in
full of the principal of and interest on the Notes, to the extent permitted by
applicable law, the Securities Administrator will continue to carry out its
obligations hereunder as agent for the Owner Trustee, including making
distributions from the Collection Account in accordance with Section 4.5.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment. (a) This Agreement may be amended by the Depositor,
the Master Servicer and the Issuer, with the consent of the Indenture Trustee,
the Securities Administrator and the Owner Trustee to the extent that their
respective rights or obligations may be affected thereby (which consent may not
be unreasonably withheld), but without the consent of any of the Noteholders or
the Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement that may be inconsistent with any other provision
of this Agreement, the Prospectus Supplement or the Prospectus or to add any
provisions to or change or eliminate any provisions or to modify the rights of
the Noteholders or Certificateholders; provided, however, that such action shall
not, as evidenced by either (i) an Opinion of Counsel or (ii) satisfaction of
the Rating Agency Condition, together with an Officer's Certificate of the
Master Servicer delivered to the Owner Trustee, the Securities Administrator and
the Indenture Trustee, materially and adversely affect the interests of any
Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Issuer, with the consent of the Indenture Trustee,
the Securities Administrator and the Owner Trustee to the extent that their
respective rights or obligations may be affected thereby (which consent may not
be unreasonably withheld) and with the consent of (i) the Noteholders of Notes
evidencing not less than a majority of the Outstanding Amount of
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each Class of Notes, and (ii) the Certificateholders of Certificates evidencing
Certificate Percentage Interests aggregating at least 51% (which consent of any
holder of a Note or holder of a Certificate given pursuant to this Section 9.1
or pursuant to any other provision of this Agreement shall be conclusive and
binding on such Note or Certificate, as the case may be, and on all future
holders of such Note or holders of such Certificate, as the case may be, and of
any Note or Certificate, as applicable, issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such consent is
made upon such Note or the Certificate), for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall (A)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, or change the allocation or priority of, collections of payments on
Receivables or distributions that shall be required to be made on any Note or
Certificate or change any Note Interest Rate, without the consent of all
Noteholders or Certificateholders or (B) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the holders of
all Notes affected thereby and holders of all Certificates affected thereby.
(c) Prior to the execution of any such amendment the Master Servicer will
provide written notification of the substance of such amendment to each Rating
Agency.
(d) Promptly after the execution of any such amendment, the Master Servicer
shall furnish written notification of the substance of such amendment to the
Owner Trustee, the Indenture Trustee, the Securities Administrator and each
Rating Agency. The Owner Trustee shall provide notification of the substance of
the amendment to each Certificateholder, and the Indenture Trustee will cause
the Securities Administrator to provide notification of the substance of such
amendment to each Noteholder. It shall not be necessary for the consent of
Noteholders or the Certificateholders pursuant to this Section 9.1 to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Noteholders and
Certificateholders provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Noteholders and Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee, the
Indenture Trustee and the Securities Administrator may prescribe, including the
establishment of record dates pursuant to the Note Depository Agreement.
(e) Prior to the execution of any amendment to this Agreement, the Owner
Trustee, the Indenture Trustee and the Securities Administrator shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement. The
Owner Trustee, the Indenture Trustee or the Securities Administrator may, but
shall not be obligated to, enter into any such amendment which affects such
Owner Trustee's, Indenture Trustee's or Securities Administrator's own rights,
duties or immunities under this Agreement or otherwise.
(f) Notwithstanding anything in this Agreement to the contrary, no
amendment to this Agreement shall be effective, and the Depositor further
covenants that it shall not agree to any amendment to any other Basic Document,
without in each case the prior written consent of
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each Counterparty, if any such amendment would (a) adversely affect the
Counterparty's rights or obligations under any Interest Rate Swap Agreement or
any Basic Document or (b) adversely modify the obligations of, or adversely
impact the ability of the Issuer to fully perform any of its obligations under
any Interest Rate Swap Agreement to which the Counterparty is subject.
SECTION 9.2 Protection of Title to Trust Property. (a) The Depositor shall
file such financing statements and cause to be filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain, and protect the interest of the Issuer and the
Indenture Trustee for the benefit of the Noteholders in the Receivables and in
the proceeds thereof. The Depositor shall deliver (or cause to be delivered) to
the Owner Trustee, the Indenture Trustee and the Securities Administrator
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) The Depositor shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any financing statement
or continuation statement filed by the Depositor in accordance with paragraph
(a) above seriously misleading within the meaning of ss. 9-506 of the UCC,
unless it shall have given the Owner Trustee, the Indenture Trustee and the
Securities Administrator at least 10 days' prior written notice thereof, with a
copy to the Rating Agencies, and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Depositor shall give the Owner Trustee, the Indenture Trustee and
the Securities Administrator at least ten (10) days' prior written notice of any
relocation of its principal executive office or change in the jurisdiction under
whose laws it is formed if, as a result of such relocation or change, 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 Master Servicer shall at all times maintain each office from which it shall
service Receivables, and its principal executive office, within the United
States of America.
(d) The Master Servicer shall cause the Receivables Servicer, to the extent
provided pursuant to the Receivables Servicing Agreement, to maintain accounts
and records as to each Receivable accurately and in sufficient detail to permit
(i) the reader thereof to know at any time the status of such Receivable,
including payments and recoveries made and payments owing (and the nature of
each) and (ii) reconciliation between payments or recoveries on (or with respect
to) each Receivable and the amounts from time to time deposited in the
Collection Account in respect of such Receivable.
(e) The Master Servicer shall cause the Receivables Servicer, to the extent
provided pursuant to the Receivables Servicing Agreement, to maintain its
computer systems so that, from and after the time of conveyance under this
Agreement of the Receivables to the Issuer, the Master Servicer's master
computer records (including any back-up archives) that refer to a Receivable
shall indicate clearly, by numerical code or otherwise, that such Receivable is
owned by the Issuer and has been pledged to the Indenture Trustee pursuant to
the Indenture. Indication of the Issuer's and the Indenture Trustee's interest
in a Receivable shall not be deleted from or
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modified on the Master Servicer's computer systems until, and only until, the
Receivable shall have been paid in full or repurchased.
(f) The Master Servicer shall cause the Receivables Servicer, to the extent
provided pursuant to the Receivables Servicing Agreement, to, upon receipt of
reasonable prior notice, shall permit the Depositor, the Owner Trustee, the
Indenture Trustee, the Securities Administrator and their respective agents at
any time during normal business hours at the Master Servicer's expense to
inspect, audit, and make copies of and to obtain abstracts from the Master
Servicer's records regarding any Receivable.
(g) The Master Servicer shall cause the Receivables Servicer, pursuant to
the Receivables Servicing Agreement, to furnish to the Owner Trustee, the
Indenture Trustee and the Securities Administrator, within five (5) Business
Days, a list of all Receivables (by contract number and name of Obligor) then
owned by the Issuer, together with a reconciliation of such list to the Schedule
of Receivables and to each of the Investor Reports furnished before such request
indicating removal of Receivables from the Trust.
(h) For the purpose of facilitating the execution of this Agreement and for
other purposes, this Agreement may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
SECTION 9.3 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THAT WOULD APPLY THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK, AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.4 Notices. All demands, notices, and communications under this
Agreement shall be in writing, personally delivered, sent by telecopier, over
night courier or mailed by certified mail, return receipt requested, and shall
be deemed to have been duly given upon receipt (a) in the case of the Master
Servicer, at U.S. Bank National Association, 00 Xxxxxxxxxx Xxxxxx, Mailcode:
XX-XX-XX00, Xx., Xxxx, Xxxxxxxxx 00000-0000, facsimile (000) 000-0000 Attention:
Xxx Xxxxxx, with a copy to U.S. Bank Portfolio Services, 0000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxx 00000, facsimile (000) 000-0000 Attention: Xxx Xxxxxxx, or
at such other address as shall be designated by the Seller or the Master
Servicer in a written notice to the Owner Trustee, the Indenture Trustee and the
Securities Administrator, (b) in the case of the Depositor, at 4 World Financial
Center, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile (000) 000-0000,
Attention: Xxx Xxxxx, (c) in the case of the Owner Trustee, at the Corporate
Trust Office of the Owner Trustee, (d) in the case of the Indenture Trustee, at
the Corporate Trust Office of the Indenture Trustee, (e) in the case of the
Securities Administrator, at the Corporate Trust Office of the Securities
Administrator, (f) in the case of Fitch, Inc., at the following address: Fitch,
Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (g) in the case of
Xxxxx'x Investors Service, Inc., at the following address: Xxxxx'x Investors
Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (h) in the case of
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Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., at the following address: Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Asset Backed Surveillance Department. Any notice required or
permitted to be mailed to a Noteholder or Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Person as shown in the
Note Register or the Certificate Register, as applicable. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
SECTION 9.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Notes, the
Certificates or the rights of the holders thereof.
SECTION 9.6 Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Sections 6.3 and 7.2 and as provided in the
provisions of this Agreement concerning the resignation of the Master Servicer,
this Agreement may not be assigned by the Depositor or the Master Servicer
unless (i)(A) the Rating Agency Condition is satisfied and (B) the Indenture
Trustee, the Securities Administrator and the Owner Trustee have consented
thereto, which consent shall not be unreasonably withheld or (ii) the Owner
Trustee, the Indenture Trustee, the Securities Administrator, the Noteholders of
Notes evidencing not less than 66 2/3% of the principal amount of the Notes
Outstanding and the holders of Certificates evidencing Certificate Percentage
Interests aggregating at least 51% consent thereto. Any transfer or assignment
with respect to the Master Servicer of all its rights, obligations and duties
will not become effective until a successor Master Servicer has assumed the
Master Servicer's rights, duties and obligations under this Agreement. In the
event of a transfer or assignment pursuant to clause (ii) above, the Rating
Agencies shall be provided with notice of such transfer or assignment.
SECTION 9.7 Further Assurances. The Depositor and the Master Servicer agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Owner Trustee,
the Indenture Trustee or the Securities Administrator more fully to effect the
purposes of this Agreement.
SECTION 9.8 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Owner Trustee, the Indenture Trustee,
the Securities Administrator, the Noteholders or the Certificateholders, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges therein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
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SECTION 9.9 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Administrator, the
Indenture Trustee, the Securities Administrator and the Owner Trustee and their
each of their respective successors and permitted assigns and each of the
Administrator, the Indenture Trustee, the Securities Administrator and the Owner
Trustee may enforce the provisions hereof as if they were parties thereto.
Except as otherwise provided in this Article IX, no other Person will have any
right or obligation hereunder. The parties hereto hereby acknowledge and consent
to the pledge of this Agreement by the Issuer to the Indenture Trustee for the
benefit of the Noteholders and the Counterparties pursuant to the Indenture.
SECTION 9.10 Actions by Noteholders or Certificateholders. (a) Wherever in
this Agreement a provision is made that an action may be taken or a notice,
demand, or instruction given by Noteholders or Certificateholders, such action,
notice, or instruction may be taken or given by any Noteholder or
Certificateholder, as applicable, unless such provision requires a specific
percentage of Noteholders or Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent, waiver,
or other act by a Noteholder or Certificateholder shall bind such Noteholder or
Certificateholder and every subsequent holder of such Note or Certificate issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done or omitted to be done by the Owner Trustee,
the Indenture Trustee, the Securities Administrator or the Master Servicer in
reliance thereon, whether or not notation of such action is made upon such Note
or Certificate.
SECTION 9.11 Information to Be Provided by the Securities Administrator. As
soon as available but no later than March 15 of each calendar year for so long
as the Issuer is subject to the reporting requirements under the Exchange Act,
commencing in 2008, the Securities Administrator shall:
(a) deliver to the Depositor a report regarding the Securities
Administrator's assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under paragraph (b) of Rule
13a-18, Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such
report shall be signed by an authorized officer of the Securities Administrator,
and shall address each of the Servicing Criteria specified in Appendix D or such
criteria as mutually agreed upon by the Depositor and the Securities
Administrator;
(b) deliver to the Depositor a report of a registered public accounting
firm addressed to the board of directors of the Securities Administrator,
providing its assessment of compliance with the Servicing Criteria during the
preceding fiscal year, including disclosure of any material instance of
non-compliance, as required by Rule 13a-18 or Rule 15d-18 under the Exchange Act
and Item 1122(b) of Regulation AB. 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; and
(c) deliver to the Master Servicer and any other Person that will be
responsible for signing the 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) (a "Sarbanes Certification") on
36
behalf of the Issuer a certification substantially in the form attached hereto
as Appendix E or such form as mutually agreed upon by the Master Servicer and
the Securities Administrator.
The Securities Administrator acknowledges that the parties identified in clause
(c) above may rely on the certification provided by the Securities Administrator
pursuant to such clause in signing a Section 302 Certification and filing such
with the Commission.
SECTION 9.12 Form 8-K Filings. So long as the Depositor is required to file
Exchange Act Reports with respect to the Issuer, each of the Indenture Trustee,
the Owner Trustee, the Receivables Servicer and the Master Servicer shall
promptly notify the Depositor, but in no event later than one (1) Business Day
after its occurrence, of any Reportable Event (in the case of the Owner Trustee,
only an event in clause (d) of the definition of "Reportable Event") of which
such Person (or in the case of the Owner Trustee and the Indenture Trustee, a
Responsible Officer of such Person) has actual knowledge. Each Person shall be
deemed to have actual knowledge of any such event to the extent that it relates
to such Person or any action or failure to act by such Person.
SECTION 9.13 Additional Regulation AB Provisions.
(a) The Depositor, Master Servicer, Securities Administrator, Owner Trustee
and Indenture Trustee acknowledge and agree that the purpose of this Section is
to facilitate compliance by the Depositor with the provisions of Regulation AB
and related rules and regulations of the Commission. The Depositor shall not
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 under the Securities Act and the Exchange Act. The Depositor, Master
Servicer, Securities Administrator, Owner Trustee and Indenture Trustee
acknowledge 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 reasonable requests
made by the Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. The Master
Servicer, Securities Administrator, Owner Trustee and Indenture Trustee shall
cooperate fully with the Depositor and the Issuer to deliver to the Depositor
and the Issuer (including any of its assignees or designees) any and all
statements, reports, certifications, records and any other information
reasonably necessary in the good faith determination of the Depositor or the
Issuer to permit the Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Depositor, Master Servicer,
Securities Administrator, Owner Trustee and Indenture Trustee and the
Receivables, or the servicing of the Receivables, reasonably believed by the
Depositor or the Master Servicer to be necessary in order to effect such
compliance.
(b) In the event the Master Servicer, the Securities Administrator, the
Owner Trustee or the Indenture Trustee is terminated or resigns during the term
of this Agreement, such Person shall provide the documents and information
pursuant to Section 9.11 and Section 9.12 with respect to the period of time it
was subject to this Agreement or provided services with respect to the Issuer or
the Receivables.
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SECTION 9.14 Representations and Warranties. Each of the Securities
Administrator, the Indenture Trustee and the Owner Trustee represents that (i)
there are no affiliations, relating to such Person with respect to any 1119
Party, (ii) there are no relationships or transactions with respect to any 1119
Party and such Person that are outside the ordinary course of business or on
terms other than would be obtained in an arm's length transaction with an
unrelated third party, apart from the transactions contemplated under the Basic
Documents, and that are material to the investors' understanding of the Notes
and (iii) there are no legal proceedings pending, or known to be contemplated by
governmental authorities, against such Person, or of which the property of such
Person is subject, that is material to the Noteholders.
SECTION 9.15 Limitation of Liability of Owner Trustee, the Indenture
Trustee and the Securities Administrator. (a) Notwithstanding anything contained
herein to the contrary, this Agreement has been countersigned by U.S. Bank Trust
National Association not in its individual capacity but solely in its capacity
as Owner Trustee of the Issuer and U.S. Bank National Association not in its
individual capacity but solely in its capacity as Securities Administrator, and
in no event shall U.S. Bank Trust National Association or U.S. Bank National
Association, in their individual capacity or, except as expressly provided in
the Trust Agreement, as Owner Trustee of the Issuer or as Securities
Administrator respectively, have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer. For
all purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI and VII of the Trust Agreement. For
all purposes of this Agreement, in the performance of its duties and obligations
hereunder (other than Successor Master Servicer), the Indenture Trustee shall be
afforded all of the rights, protections, immunities and indemnities provided it
under the Indenture. For all purposes of this Agreement, in the performance of
its duties and obligations hereunder (other than Successor Master Servicer), the
Securities Administrator shall be afforded all of the rights, protections,
immunities and indemnities provided it under the Indenture.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by HSBC Bank USA, National Association, not in its
individual capacity but solely as Indenture Trustee, and in no event shall HSBC
Bank USA, National Association, have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
SECTION 9.16 Savings Clause. It is the intention of the Depositor and the
Issuer that the transfer of the Trust Property contemplated herein constitute an
absolute transfer of the Trust Property, conveying good title to the Trust
Property from the Depositor to the Issuer. However, in the event that such
transfer is deemed to be a transfer for security, the Depositor hereby grants to
the Issuer a first priority security interest in all of the Depositor's right,
title and interest in, to and under the Trust Property, whether now owned or
existing or hereafter acquired or arising, and all proceeds thereof (including,
without limitation, "proceeds" as defined in the Uniform Commercial Code as in
effect from time to time in the State of New York) and all other rights
38
and property transferred hereunder to secure a loan in an amount equal to all
amounts payable under the Notes and the Certificates, and in such event, this
Agreement shall constitute a security agreement under applicable law. The
Depositor hereby authorizes the Issuer or its agents to file such financing
statements and continuation statements as the Issuer may deem advisable in
connection with the security interest granted by the Depositor pursuant to the
preceding sentence.
SECTION 9.17 No Petition. The Master Servicer, by entering into this
Agreement, hereby covenants and agrees that prior to the end of the period that
is one year and one day after there has been paid in full all debt issued by any
securitization vehicle in respect of which the Depositor holds any interest, it
will not institute against the Issuer, or join in, or assist or encourage others
to institute any institution against the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or State bankruptcy or similar law
in connection with any obligations relating to the Notes, this Agreement or any
of the other Basic Documents.
39
IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
MERRILL AUTO TRUST SECURITIZATION 2007-1,
as Issuer
By: U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, as
Master Servicer
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ML ASSET BACKED CORPORATION,
as Depositor
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
Accepted and agreed:
HSBC BANK USA, NATIONAL ASSOCIATION
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Officer
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity
but solely as Securities Administrator
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SCHEDULE A
SCHEDULE OF RECEIVABLES
[On File with the Master Servicer]
A-1
SCHEDULE B
Location of Receivable Files
As set forth in the Receivables Servicing Agreement
B-1
APPENDIX A
Definitions and Usage
Appendix A-1
APPENDIX B
EXHIBIT 31 Certification pursuant to Rules 13a-14 and 15d-14 of the Securities
Exchange Act of 1934, as amended
Certification
I, __________, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
10-D required to be filed in respect of period covered by this annual report on
Form 10-K, of Merrill Auto Trust Securitization 0000-0 (xxx "Xxxxxxxx Xxx
periodic reports");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the servicers
and based on my knowledge and the compliance reviews conducted in preparing the
servicer compliance statements required in this report under Item 1123 of
Regulation AB, and except as disclosed in the Exchange Act periodic reports, the
servicers have fulfilled their obligations under the servicing agreements in all
material respects; and
5. All of the reports on assessment of compliance with servicing criteria
for asset-backed securities and their related attestation reports on assessment
of compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: CenterOne Financial
Services LLC, as Receivables Servicer and Xxxxxxx Xxxxx Bank USA, as
Administrator.
By: ______________
Name:
Title:
U.S. Bank National Association
Appendix B-1
APPENDIX C
Item 1119 Parties
Center One Financial Services LLC
Appendix C-1
APPENDIX D
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE STATEMENT
The assessment of compliance to be delivered by the Master Servicer,
Securities Administrator, Receivables Servicer and the Administrator shall
address, at a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
------------------------------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer Administrator
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
General Servicing Considerations
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Policies and procedures are instituted to
monitor any performance or other triggers X X
and events of default in accordance with
1122(d)(1)(i) the transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
If any material servicing activities are
outsourced to third parties, policies and
procedures are instituted to monitor the X X
third party's performance and compliance
1122(d)(1)(ii) with such servicing activities.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Any requirements in the transaction
agreements to maintain a back-up servicer
1122(d)(1)(iii) for the mortgage loans are maintained.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
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 X X
amount of coverage required by and
otherwise in accordance with the terms of
1122(d)(1)(iv) the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Appendix D-1
------------------------------------------------------------------------------------------------------------------------------------
Servicing Criteria Master Securities Receivables Administrator
Servicer Administrator Servicer
------------------------------------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Cash Collection and Administration
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Payments on pool assets are deposited into
the appropriate custodial bank accounts and
related bank clearing accounts no more than X X X X
two business days following receipt, or such
other number of days specified in the
1122(d)(2)(i) transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Disbursements made via wire transfer on
behalf of an obligor or to an investor are X X X
1122(d)(2)(ii) made only by authorized personnel.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Advances of funds or guarantees regarding
collections, cash flows or distributions,
and any interest or other fees charged for X X
such advances, are made, reviewed and
approved as specified in the transaction
1122(d)(2)(iii) agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
The related accounts for the transaction,
such as cash reserve accounts or accounts
established as a form of
overcollateralization, are separately X X
maintained (e.g., with respect to
commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Each custodial account is maintained at a
federally insured depository institution
as set forth in the transaction
agreements. For purposes of this X X X X
criterion, "federally insured depository
institution" with respect to a foreign
financial institution means a foreign
1122(d)(2)(v) financial institution that
------------------------------------------------------------------------------------------------------------------------------------
Appendix D-2
------------------------------------------------------------------------------------------------------------------------------------
Servicing Criteria Master Securities Receivables Administrator
Servicer Administrator Servicer
------------------------------------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
meets the requirements of Rule 13k-1(b)(1)
of the Securities Exchange Act.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Unissued checks are safeguarded so as to X X
1122(d)(2)(vi) prevent unauthorized access.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
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 X X X
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
1122(d)(2)(vii) transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Investor Remittances and Reporting
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Reports to investors, including those to be
filed with the Commission, are maintained
in accordance with the transaction
agreements and applicable Commission X X
requirements. Specifically, such reports
(A) are prepared in accordance with
1122(d)(3)(i) timeframes and other terms set
------------------------------------------------------------------------------------------------------------------------------------
Appendix D-3
------------------------------------------------------------------------------------------------------------------------------------
Servicing Criteria Master Securities Receivables Administrator
Servicer Administrator Servicer
------------------------------------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
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
mortgage loans serviced by the Servicer.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Amounts due to investors are allocated and
remitted in accordance with timeframes,
distribution priority and other terms set X X
1122(d)(3)(ii) forth in the transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Disbursements made to an investor are
posted within two business days to the
Servicer's investor records, or such other X X
number of days specified in the
1122(d)(3)(iii) transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Amounts remitted to investors per the
investor reports agree with cancelled
checks, or other form of payment, or X X
1122(d)(3)(iv) custodial bank statements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Pool Asset Administration
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Collateral or security on pool assets is
maintained as required by the transaction
agreements or related mortgage loan X
1122(d)(4)(i) documents.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Pool assets and related documents are
safeguarded as required by the transaction X
1122(d)(4)(ii) agreements.
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx X-0
------------------------------------------------------------------------------------------------------------------------------------
Servicing Criteria Master Securities Receivables Administrator
Servicer Administrator Servicer
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Any additions, removals or substitutions
to the asset pool are made, reviewed and
approved in accordance with any conditions X
or requirements in the transaction
1122(d)(4)(iii) agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Payments on pool assets, including any
payoffs, made in accordance with the
related mortgage loan documents are posted
to the Servicer's obligor records maintained
no more than two business days after X
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
1122(d)(4)(iv) with the related mortgage loan documents.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
The Servicer's records regarding the pool
assets agree with the Servicer's records
with respect to an obligor's unpaid X
1122(d)(4)(v) principal balance.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Changes with respect to the terms or
status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are made,
reviewed and approved by authorized X
personnel in accordance with the
transaction agreements and related pool
1122(d)(4)(vi) asset documents.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds
in lieu of foreclosure, foreclosures and X
repossessions, as applicable) are
1122(d)(4)(vii) initiated, conducted and concluded
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx X-0
------------------------------------------------------------------------------------------------------------------------------------
Servicing Criteria Master Securities Receivables Administrator
Servicer Administrator Servicer
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
in accordance with the timeframes or other
requirements established by the
transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Records documenting collection efforts are
maintained during the period a mortgage loan
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 X
transaction agreements, and describe the
entity's activities in monitoring delinquent
pool assets including, for example, phone
calls, letters and payment rescheduling
plans in cases where delinquency is deemed
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Adjustments to interest rates or rates of return
for pool assets with variable rates are computed
based on the related mortgage
1122(d)(4)(ix) loan documents.
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx X-0
------------------------------------------------------------------------------------------------------------------------------------
Servicing Criteria Master Securities Receivables Administrator
Servicer Administrator Servicer
------------------------------------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Regarding any funds held in trust for an
obligor (such as escrow accounts): (A)
such funds are analyzed, in accordance
with the obligor's loan 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 loan documents
and state laws; and (C) such funds are
returned to the obligor within 30 calendar
days of full repayment of the related book
assets, or such other number of days
1122(d)(4)(x) specified in the transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
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
1122(d)(4)(xi) specified in the transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
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
1122(d)(4)(xii) or omission.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Disbursements made on behalf of an obligor
are posted within two business days to the
1122(d)(4)(xiii) obligor's
------------------------------------------------------------------------------------------------------------------------------------
Appendix D-7
------------------------------------------------------------------------------------------------------------------------------------
Master Securities Receivables Administrator
Servicing Criteria Servicer Administrator Servicer
------------------------------------------------------------------------- ------------- -------------- -------------- --------------
Reference Criteria
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
records maintained by the servicer, or such
other number of days specified in the
transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Delinquencies, charge-offs and
uncollectible accounts are recognized and
recorded in accordance with the X X
1122(d)(4)(xiv) transaction agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
Any external enhancement or other support,
identified in Item 1114(a)(1) through (3)
or Item 1115 of Regulation AB, is X X
maintained as set forth in the transaction
1122(d)(4)(xv) agreements.
---------------------------- -------------------------------------------- ------------- -------------- -------------- --------------
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx X-0
APPENDIX E
EXHIBIT 31 Certification pursuant to Rules 13a-14 and 15d-14 of the Securities
Exchange Act of 1934, as amended
Certification
I, ___________________, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
10-D Required to be filed in respect of the period covered by this report on
Form 10-K of XXXXXXX AUTO TRUST SECURITIZATION 2007-1;
2. Based on my knowledge, the Exchange Act periodic reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this annual report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its][their] obligations under the
servicing agreement(s) in all material respects; and
5. All of the reports on assessment of compliance with servicing criteria
for asset-backed securities and their related attestation reports on assessment
of compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties:
By: ______________
Name:
Title:
[_____________________]
Appendix G-1
