SALE AND SERVICING AGREEMENT among LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 20__-_ Issuer LONG BEACH ACCEPTANCE RECEIVABLES CORP. Transferor LONG BEACH ACCEPTANCE CORP. Originator and Servicer and [NAME OF INDENTURE TRUSTEE] Back- up Servicer,...
EXHIBIT
4.5
Β
Β
Β
Β
among
Β
LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 20__-_
Β
Issuer
Β
Β
Transferor
Β
LONG
BEACH ACCEPTANCE CORP.
Β
Originator
and Servicer
Β
and
Β
[NAME
OF
INDENTURE TRUSTEE]
Β
Back-up
Servicer, Custodian and Trust Collateral Agent
Β
Dated
as
of _________ , 20__
Β
Β
Β
Β
Β
Β
TABLE
OF
CONTENTS
Β
Page
ARTICLE
I DEFINITIONS
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1
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Β | Β | |
Β Β Β Β
SECTION 1.1.
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Definitions
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1
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Β Β Β Β
SECTION 1.2.
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Other
Definitional Provisions.
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1
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Β Β Β Β
SECTION 1.3.
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Calculations
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2
|
Β Β Β Β
SECTION 1.4.
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Action
by or Consent of Noteholders
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2
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Β Β Β Β
SECTION 1.5.
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Material
Adverse Effect
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2
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Β | Β | Β |
ARTICLE
II CONVEYANCE OF RECEIVABLES
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3
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|
Β | Β | |
Β Β Β Β
SECTION 2.1.
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Conveyance
of Receivables.
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3
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Β Β Β Β
SECTION 2.2.
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Transfer
Intended as Sale; Precautionary Security Interest
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4
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Β Β Β Β
SECTION 2.3.
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Assignment
by Transferor
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4
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Β Β Β Β
SECTION 2.4.
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The
Legal Files Are Not "Financial Assets"
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4
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Β Β Β Β
SECTION 2.5.
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Further
Encumbrance of Trust Assets.
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5
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Β | Β | Β |
ARTICLE
III THE RECEIVABLES
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5
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|
Β | Β | |
Β Β Β Β
SECTION 3.1.
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Representations
and Warranties of Transferor
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5
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Β Β Β Β
SECTION 3.2.
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Repurchase
upon Breach of Representations and Warranties of the
Transferor.
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6
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Β Β Β Β
SECTION 3.3.
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Delivery
of Legal Files and Receivable Files.
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6
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Β Β Β Β
SECTION 3.4.
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Acceptance
of Legal Files by Custodian
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7
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Β Β Β Β
SECTION 3.5.
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Access
to Receivable Files and Legal Files; Servicer's Duties with Respect
to
Receivable Files; Custodian's Duties with Respect to Legal
Files.
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8
|
Β Β Β Β
SECTION 3.6.
|
Covenants
of the Custodian.
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9
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Β Β Β Β
SECTION 3.7.
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Issuer's
Certificate
|
11
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Β | Β | Β |
ARTICLE
IV ADMINISTRATION AND SERVICING OF RECEIVABLES
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11
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|
Β | Β | |
Β Β Β Β
SECTION 4.1.
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Duties
of the Servicer
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11
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Β Β Β Β
SECTION 4.2.
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Collection
and Allocation of Receivable Payments
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12
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Β Β Β Β
SECTION 4.3.
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Realization
upon Receivables.
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13
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Β Β Β Β
SECTION 4.4.
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Physical
Damage Insurance; Other Insurance.
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14
|
Β Β Β Β
SECTION 4.5.
|
Maintenance
of Security Interests in Financed Vehicles.
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14
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Β Β Β Β
SECTION 4.6.
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Additional
Covenants of Servicer
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16
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Β Β Β Β
SECTION 4.7.
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Purchase
of Receivables Upon Breach
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16
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Β Β Β Β
SECTION 4.8.
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Servicing
Fee
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17
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Β Β Β Β
SECTION 4.9.
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Servicer's
Certificate.
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17
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Β Β Β Β
SECTION 4.10.
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Annual
Statement as to Compliance; Notice of Default.
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17
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Β Β Β Β
SECTION 4.11.
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Annual
Independent Certified Public Accountant's Report
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18
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Β Β Β Β
SECTION 4.12.
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Servicer
Expenses
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19
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Β Β Β Β
SECTION 4.13.
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Retention
and Termination of Servicer
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19
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Β
Β
i
Β
Β Β Β Β
SECTION 4.14.
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Access
to Certain Documentation and Information Regarding
Receivables
|
20
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Β Β Β Β
SECTION 4.15.
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Verification
of Servicer's Certificate.
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20
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Β Β Β Β
SECTION 4.16.
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Fidelity
Bond
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21
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Β Β Β Β
SECTION 4.17.
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Delegation
of Duties
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21
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Β Β Β Β
SECTION 4.18.
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Delivery
of Back-up Tapes of Back-up Servicer.
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22
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Β | Β | Β |
ARTICLE
V ACCOUNTS; PAYMENTS; STATEMENTS TO NOTEHOLDERS
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23
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Β | Β | |
Β Β Β Β
SECTION 5.1.
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Accounts;
Lock-Box Account.
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23
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Β Β Β Β
SECTION 5.2.
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Collections
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24
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Β Β Β Β
SECTION 5.3.
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Application
of Collections
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25
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Β Β Β Β
SECTION 5.4.
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Intentionally
Omitted.
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25
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Β Β Β Β
SECTION 5.5.
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Additional
Deposits
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25
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Β Β Β Β
SECTION 5.6.
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Payments;
[Policy Claims].
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25
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Β Β Β Β
SECTION 5.7.
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Statements
to Noteholders; Tax Returns.
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29
|
Β Β Β Β
SECTION 5.8.
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Reliance
on Information from the Servicer
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31
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Β Β Β Β
SECTION 5.9.
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[Optional
Deposits by the Note Insurer
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31
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Β Β Β Β
SECTION 5.10.
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[Spread
Account
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31
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Β Β Β Β
SECTION 5.11.
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[Withdrawals
from Spread Account.
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31
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Β Β Β Β
SECTION 5.12.
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Simple
Interest
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32
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Β Β Β Β
SECTION 5.13.
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Securities
Accounts
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32
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Β | Β | Β |
ARTICLE
VI [THE NOTE POLICY
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32
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Β | Β | |
Β Β Β Β
SECTION 6.1.
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[Note
Policy
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32
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Β Β Β Β
SECTION 6.2.
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[Claims
Under Note Policy.
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32
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Β Β Β Β
SECTION 6.3.
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[Preference
Claims; Direction of Proceedings.
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34
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Β Β Β Β
SECTION 6.4.
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[Surrender
of Note Policy
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34
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Β | Β | Β |
ARTICLE
VII THE TRANSFEROR
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35
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Β | Β | |
Β Β Β Β
SECTION 7.1.
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Representations
of the Transferor
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35
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Β Β Β Β
SECTION 7.2.
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Liability
of the Transferor
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36
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Β Β Β Β
SECTION 7.3.
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Merger
or Consolidation of, or Assumption of the Obligations of, the
Transferor
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37
|
Β Β Β Β
SECTION 7.4.
|
Limitation
on Liability of the Transferor and Others
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37
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Β Β Β Β
SECTION 7.5.
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Transferor
May Own Notes
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38
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Β | Β | Β |
ARTICLE
VIII THE SERVICER
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Β
|
38
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Β | Β | Β |
Β Β Β Β
SECTION 8.1.
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Representations
of Servicer
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38
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Β Β Β Β
SECTION 8.2.
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Indemnities
of Servicer.
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40
|
Β Β Β Β
SECTION 8.3.
|
Merger
or Consolidation of, or Assumption of the Obligations of, Servicer
or
Back-up Servicer.
|
42
|
Β Β Β Β
SECTION 8.4.
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Limitation
on Liability of Servicer and Others.
|
43
|
Β Β Β Β
SECTION 8.5.
|
Servicer
and Back-up Servicer Not to Resign
|
43
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Β
Β
ii
Β
Β | Β | Β |
ARTICLE
IX SERVICER TERMINATION EVENTS
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44
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|
Β | Β | |
Β Β Β Β
SECTION 9.1.
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Servicer
Termination Events
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44
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Β Β Β Β
SECTION 9.2.
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Appointment
of Successor.
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47
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Β Β Β Β
SECTION 9.3.
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Notification
to Noteholders
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48
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Β Β Β Β
SECTION 9.4.
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Action
Upon Certain Failures of the Servicer
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48
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Β | Β | Β |
ARTICLE
X THE TRUST COLLATERAL AGENT AND THE CUSTODIAN
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49
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|
Β | Β | |
Β Β Β Β
SECTION 10.1.
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Duties
of the Trust Collateral Agent and the Custodian.
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49
|
Β Β Β Β
SECTION 10.2.
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Trust
Collateral Agent to Act for the Noteholders [and Note
Insurer]
|
52
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Β Β Β Β
SECTION 10.3.
|
Certain
Matters Affecting the Trust Collateral Agent and the
Custodian
|
52
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Β Β Β Β
SECTION 10.4.
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Trust
Collateral Agent, Back-up Servicer and Custodian Not Liable for
Notes or
Receivables
|
54
|
Β Β Β Β
SECTION 10.5.
|
Trust
Collateral Agent, Back-up Servicer and Custodian May Own
Notes
|
55
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Β Β Β Β
SECTION 10.6.
|
Indemnity
of Trust Collateral Agent, Back-up Servicer and Custodian
|
55
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Β Β Β Β
SECTION 10.7.
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Eligibility
Requirements for Trust Collateral Agent and the Custodian
|
55
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Β Β Β Β
SECTION 10.8.
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Resignation
or Removal of Trust Collateral Agent or Custodian.
|
56
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Β Β Β Β
SECTION 10.9.
|
Successor
Trust Collateral Agent or Custodian
|
57
|
Β Β Β Β
SECTION 10.10.
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Merger
or Consolidation of Trust Collateral Agent or Custodian
|
58
|
Β Β Β Β
SECTION 10.11.
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Co-Trustee;
Separate Trustee.
|
58
|
Β Β Β Β
SECTION 10.12.
|
Representations
and Warranties of Trust Collateral Agent and the Custodian
|
59
|
Β Β Β Β
SECTION 10.13.
|
[Rights
of Note Insurer to Direct Trust Collateral Agent
|
60
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Β | Β | Β |
ARTICLE
XI TERMINATION
|
Β
|
60
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Β | Β | Β |
Β Β Β Β
SECTION 11.1.
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Termination.
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60
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Β | Β | Β |
ARTICLE
XII ADMINISTRATIVE DUTIES OF THE SERVICER
|
61
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|
Β | Β | |
Β Β Β Β
SECTION 12.1.
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Administrative
Duties.
|
61
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Β Β Β Β
SECTION 12.2.
|
Records
|
62
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Β Β Β Β
SECTION 12.3.
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Additional
Information to be Furnished to the Issuer
|
62
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Β Β Β Β
SECTION 12.4.
|
No
Additional Compensation
|
63
|
Β | Β | Β |
ARTICLE
XIII MISCELLANEOUS PROVISIONS
|
63
|
|
Β | Β | |
Β Β Β Β
SECTION 13.1.
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Amendment.
|
63
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Β Β Β Β
SECTION 13.2.
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Protection
of Title.
|
64
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Β Β Β Β
SECTION 13.3.
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Limitation
on Rights of Noteholders.
|
66
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Β Β Β Β
SECTION 13.4.
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Governing
Law
|
67
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Β Β Β Β
SECTION 13.5.
|
Notices.
|
67
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Β Β Β Β
SECTION 13.6.
|
Severability
of Provisions
|
68
|
Β Β Β Β
SECTION 13.7.
|
Assignment
to Indenture Trustee
|
68
|
Β
Β
iii
Β
Β Β Β Β
SECTION 13.8.
|
Limitation
of Liability of Owner Trustee, Custodian and Trust Collateral
Agent.
|
68
|
Β Β Β Β
SECTION 13.9.
|
Independence
of the Servicer
|
69
|
Β Β Β Β
SECTION 13.10.
|
No
Joint Venture
|
69
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Β Β Β Β
SECTION 13.11.
|
Nonpetition
Covenant
|
69
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Β Β Β Β
SECTION 13.12.
|
Third
Party Beneficiaries
|
69
|
Β Β Β Β
SECTION 13.13.
|
Consent
to Jurisdiction.
|
70
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Β Β Β Β
SECTION 13.14.
|
Headings
|
71
|
Β Β Β Β
SECTION 13.15.
|
Trial
by Jury Waived
|
71
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Β Β Β Β
SECTION 13.16.
|
Entire
Agreement
|
71
|
Β Β Β Β
SECTION 13.17.
|
[Effect
of Policy Expiration Date
|
71
|
Β
Β
ANNEXES
Annex
|
A
|
Defined
Terms
|
Β | Β | Β |
EXHIBITS
|
||
Β | Β | Β |
Exhibit
|
A-1
|
Form
of Issuer's Certificate
|
Exhibit
|
A-2
|
Form
of Issuer's Certificate
|
Exhibit
|
B-1
|
Form
of Servicer's Certificate
|
Exhibit
|
B-2
|
Form
of Loan Master File Layout
|
Exhibit
|
C
|
Intentionally
Omitted
|
Exhibit
|
D
|
Payment
Deferment and Due Date Change Policies
|
Exhibit
|
E
|
Documentation
Checklist
|
Exhibit
|
F
|
Form
of Request for Transfer of Possession
|
Exhibit
|
G
|
Form
of Custodial Letter
|
Β | Β | Β |
SCHEDULES
|
||
Β | Β | Β |
Schedule
|
A
|
Schedule
of Receivables
|
Schedule
|
B
|
Location
of Receivable Files; Location of Legal Files
|
Schedule
|
C
|
Delivery
Requirements
|
Β
Β
iv
Β
SALE
AND
SERVICING AGREEMENT ("Agreement"), dated as of ____________, 20__, among LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 20__-_, a Delaware business trust,
as
issuer (the "Issuer"), LONG BEACH ACCEPTANCE RECEIVABLES CORP., a Delaware
corporation, as transferor (the "Transferor"), LONG BEACH ACCEPTANCE CORP.,
a
Delaware corporation, as originator of the receivables ("LBAC") and as servicer
(in such capacity, the "Servicer") and [NAME OF INDENTURE TRUSTEE], a
___________________, as back-up servicer, custodian and trust collateral agent,
("Back-up Servicer", "Custodian" and "Trust Collateral Agent",
respectively).
Β
WHEREAS
the Issuer desires to acquire a portfolio of receivables arising in connection
with motor vehicle retail installment sale contracts acquired by LBAC through
motor vehicle dealers;
Β
WHEREAS
the Transferor has purchased such receivables from LBAC and is willing to convey
such receivables to the Issuer; and
Β
WHEREAS
the Servicer is willing to service all such receivables.
Β
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
Β
Β
ARTICLE
I
Β
DEFINITIONS
Β
SECTION
1.1. Β Β Definitions
Β
.
Whenever used in this Agreement, capitalized terms used and not otherwise
defined herein shall have the meanings set forth in Annex A attached
hereto.
Β
SECTION
1.2. Β Β Other
Definitional Provisions.
Β
(a)
Β Β All
terms
defined in this Agreement (including Annex A hereto) shall have the defined
meanings when used in any instrument governed hereby and in any certificate
or
other document made or delivered pursuant hereto unless otherwise defined
therein.
Β
(b)
Β Β As
used
in this Agreement, in any instrument governed hereby and in any certificate
or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement (including Annex A hereto) or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement (including Annex A hereto) or in any such instrument,
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting principles
as in effect on the date of this Agreement or any such instrument, certificate
or other document, as applicable. To the extent that the definitions of
accounting terms in this Agreement (including Annex A hereto) or in any such
instrument, certificate or other document are inconsistent with the meanings
of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement (including Annex A hereto) or in any such
instrument, certificate or other document shall control.
Β
Β
Β
Β
(c)
Β Β The
words
"hereof," "herein," "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; Section, Schedule and Exhibit references contained
in this Agreement are references to Sections, Schedules and Exhibits in or
to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
Β
(d)
Β Β With
respect to all terms in this Agreement, the singular includes the plural and
the
plural the singular; words importing any gender include the other genders;
references to "writing" include printing, typing, lithography, and other means
of reproducing words in a visible form; references to agreements and other
contractual instruments include all subsequent amendments thereto or changes
therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the term "including" means "including without
limitation."
Β
(e)
Β Β Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
Β
SECTION
1.3. Β Β Calculations
Β
.
All
calculations of the amount of the Servicing Fee, the Back-up Servicer Fee,
Custodian Fee and the Indenture Trustee Fee shall be made on the basis of [a
360-day year consisting of twelve 30-day months]. All references to the
Principal Balance of a Receivable as of the last day of a Collection Period
shall refer to the close of business on such day.
Β
SECTION
1.4. Β Β Action
by or Consent of Noteholders.
Whenever any provision of this Agreement refers to action to be taken, or
consented to, by Noteholders, such provision shall be deemed to refer to
Noteholders of record as of the Record Date immediately preceding the date
on
which such action is to be taken, or consent given, by Noteholders. Solely
for
the purposes of any action to be taken or consented to by Noteholders, any
Note
registered in the name of the Transferor, LBAC, the Servicer or any Affiliate
thereof shall be deemed not to be outstanding and shall not be taken into
account in determining whether the requisite interest necessary to effect any
such action or consent has been obtained; provided,
however,
that,
solely for the purpose of determining whether the Indenture Trustee or the
Trust
Collateral Agent is entitled to rely upon any such action or consent, only
Notes
which the Indenture Trustee or the Trust Collateral Agent actually knows to
be
so owned shall be so disregarded.
Β
SECTION
1.5. Β Β Material
Adverse Effect.
[Whenever a determination is to be made under this Agreement as to whether
a
given event, action, course of conduct or set of facts or circumstances could
or
would have a material adverse effect on the Issuer or Noteholders (or any
similar or analogous determination), such determination shall be made without
taking into account the insurance provided by the Note Policy.] Whenever a
determination is to be made under this Agreement whether a breach of a
representation, warranty or covenant has or could have a material adverse effect
on a Receivable or the interest therein of the Issuer, the Noteholders [or
the
Note Insurer] (or any similar or analogous determination), such determination
shall be made by the Controlling Party in its sole discretion.
Β
Β
2
Β
ARTICLE
II
Β
CONVEYANCE
OF RECEIVABLES
Β
SECTION
2.1. Β Β Conveyance
of Receivables.
Β
In
consideration of the Issuer's delivery of the Certificate to or upon the order
of the Transferor on the Closing Date and the net proceeds from the sale of
the
Notes and the other amounts to be distributed from time to time to, or upon
the
order of, the Transferor in accordance with the terms of this Agreement, the
Transferor does hereby transfer, assign, set over and otherwise convey to the
Issuer, without recourse, all right, title and interest of the Transferor in
and
to:
Β
(i)Β Β the
Receivables listed in Schedule A hereto, all monies received on the Receivables
after the Cutoff Date and, with respect to any Receivables which are Precomputed
Receivables, the related Payahead Amount, and all Liquidation Proceeds and
Recoveries received with respect to such Receivables;
Β
(ii)Β Β the
security interests in the related Financed Vehicles granted by the related
Obligors pursuant to the Receivables and any other interest of the Transferor
in
such Financed Vehicles, including, without limitation, the certificates of
title
and any other evidence of ownership with respect to such Financed
Vehicles;
Β
(iii)Β Β any
proceeds from claims on any physical damage, credit life and credit accident
and
health insurance policies or certificates or the VSI Policy, if any, relating
to
the related Financed Vehicles or the related Obligors, including any rebates
and
premiums;
Β
(iv)Β Β property
(including the right to receive future Liquidation Proceeds) that secures a
Receivable and that has been acquired by or on behalf of the Issuer pursuant
to
the liquidation of such Receivable;
Β
(v)Β Β the
Purchase Agreement and the Guarantee including, without limitation, a direct
right to cause LBAC to purchase Receivables from the Issuer upon the occurrence
of a breach of any of the representations and warranties contained in Section
3.2(b) of the Purchase Agreement or the failure of LBAC to timely comply with
its obligations pursuant to Section 5.5 of the Purchase Agreement;
Β
(vi)Β Β refunds
for the costs of extended service contracts with respect to the related Financed
Vehicles, refunds of unearned premiums with respect to credit life and credit
accident and health insurance policies or certificates covering a related
Obligor or Financed Vehicle or his or her obligations with respect to such
Financed Vehicle and any recourse to Dealers for any of the
foregoing;
Β
(vii)Β Β the
Legal
Files and the Receivable Files related to each Receivable and any and all other
documents that LBAC keeps on file in accordance with its customary procedures
relating to the Receivables, the related Obligors or the related Financed
Vehicles;
Β
Β
3
Β
(viii)Β Β all
amounts and property from time to time held in or credited to the Lock-Box
Account, to the extent such amounts and property relate to the
Receivables;
Β
(ix)Β Β any
proceeds from recourse against Dealers (other than any Chargeback Obligations),
including, without limitation, any Dealer Title Guaranties with respect to
the
Receivables, with respect to the sale of the Receivables; and
Β
(x)Β Β the
proceeds of any and all of the foregoing.
Β
SECTION
2.2. Β Β Transfer
Intended as Sale; Precautionary Security Interest
.
The
conveyance to the Issuer of the property set forth in Section 2.1 above is
intended as a sale (for certain non-tax purposes) free and clear of all Liens,
and it is intended that the property of the Issuer shall not be part of the
Transferor's estate in the event of the filing of a bankruptcy petition by
or
against the Transferor under any bankruptcy law. In the event, however, that
notwithstanding the intent of LBAC, the Transferor and the Issuer, the transfer
under this Agreement is held not to be a sale, this Agreement shall constitute
a
security agreement under the UCC (as defined in the UCC as in effect in the
State of New York) and applicable law, and the Transferor hereby grants a
security interest to the Issuer in, to and under the property described in
Section 2.1 above and all proceeds thereof, for the benefit of the Noteholders
[and the Note Insurer] as their interests may appear herein, for the purpose
of
securing the payment and performance of the Notes and the repayment of amounts
owed to the Issuer from the Transferor.
Β
SECTION
2.3. Β Β Assignment
by Transferor.
The
Transferor does hereby transfer, assign and otherwise convey unto the Issuer,
for the benefit of the Noteholders [and the Note Insurer,] its right to any
recourse to LBAC resulting from the occurrence of a breach of any of their
respective representations and warranties contained in Section 3.2 of the
Purchase Agreement or from the failure of LBAC to comply with its obligations
pursuant to Section 5.5 of the Purchase Agreement. The provisions of this
Section 2.3 are intended to grant the Issuer a direct right against LBAC to
demand performance under the terms of the Purchase Agreement.
Β
SECTION
2.4. Β Β The
Legal Files Are Not "Financial Assets".
The
parties (for themselves, their successors, trustees, receivers and assigns)
acknowledge and agree that the Legal Files held pursuant to this Agreement
are
not "financial assets" within the meaning of § 8-102(a)(9) of the Uniform
Commercial Code.
Β
SECTION
2.5. Β Β Further
Encumbrance of Trust Assets.
Β
(a)
Β Β Immediately
upon the conveyance to the Issuer by the Transferor of any item of the Trust
Assets pursuant to Section 2.1, all right, title and interest of the Transferor
in and to such item of Trust Assets shall terminate, and all such right, title
and interest shall vest in the Issuer, in accordance with the Trust Agreement
and Sections 3802 and 3805 of the Business Trust Statute (as defined in the
Trust Agreement).
Β
(b)
Β Β Immediately
upon the vesting of the Trust Assets in the Issuer, the Issuer shall have the
sole right to pledge or otherwise encumber, such Trust Assets. Pursuant to
the
Indenture, the Issuer shall grant a security interest in the Trust Assets to
the
Indenture Trustee to secure the repayment of the Notes. The Certificate shall
represent the beneficial ownership interest in the Trust Assets, and the
Noteholders shall be entitled to receive payments with respect thereto as set
forth herein and pursuant to the Indenture.
Β
Β
4
Β
(c)
Β Β Following
the payment in full of the Notes and the release and discharge of the Indenture,
all covenants of the Issuer under Article III of the Indenture shall, until
payment in full of the Certificate, remain as covenants of the Issuer for the
benefit of the Certificateholder, enforceable by the Certificateholder to the
same extent as such covenants were enforceable by the Noteholders prior to
the
discharge of the Indenture. Any rights of the Indenture Trustee under Article
III of the Indenture, following the discharge of the Indenture, shall vest
in
the Certificateholder.
Β
(d)
Β Β The
Trust
Collateral Agent shall, at such time as there are no Notes or Certificates
outstanding, [the Note Policy has expired in accordance with its terms] and
all
sums due to (i) [the Note Insurer hereunder or pursuant to the Insurance
Agreement, (ii)] the Indenture Trustee pursuant to the Indenture and [(iii)]
the
Trust Collateral Agent pursuant to this Agreement, have been paid, release
any
remaining portion of the Trust Assets to the Transferor.
Β
Β
ARTICLE
III
Β
THE
RECEIVABLES
Β
SECTION
3.1. Β Β Representations
and Warranties of Transferor.
The
Transferor hereby makes each of the representations and warranties made by
LBAC
in Section 3.2(b) of the Purchase Agreement with respect to the Receivables
to
the same extent as if such representations and warranties were fully set forth
herein. With respect to such representations and warranties, the Issuer is
deemed to have relied on such representations and warranties in acquiring the
Receivables, [the Note Insurer shall be deemed to have relied on such
representations and warranties in issuing the Note Policy], the Indenture
Trustee is deemed to have relied on such representations and warranties in
issuing the Notes, the Noteholders are deemed to have relied on such
representations and warranties in purchasing the Notes and the Owner Trustee
is
deemed to have relied on such representations and warranties in issuing the
Certificate. Such representations and warranties speak as of the execution
and
delivery of this Agreement and as of the Closing Date but shall survive the
transfer and assignment of the Receivables to the Issuer and the subsequent
pledge thereof to the Indenture Trustee pursuant to the Indenture.
Β
SECTION
3.2. Β Β Repurchase
upon Breach of Representations and Warranties of the Transferor.
Β
(a)
Β Β The
Transferor, the Servicer, [the Note Insurer,] the Custodian, the Trust
Collateral Agent or the Issuer, as the case may be, shall inform the other
parties to this Agreement promptly, by notice in writing, upon the discovery
of
any breach of the Transferor's representations and warranties made pursuant
to
Section 3.1. As of the last day of the second Collection Period following the
discovery by the Transferor or receipt by the Transferor of notice of such
breach, unless such breach is cured by such date, the Transferor shall have
an
obligation to repurchase any Receivable in which the interests of the
Noteholders [or the Note Insurer] are materially and adversely affected by
any
such breach as of such date. In consideration of and simultaneously with the
repurchase of the Receivable, the Transferor shall remit, or cause LBAC to
remit, to the Collection Account the Purchase Amount in the manner specified
in
Section 5.5 and the Issuer shall execute such assignments and other documents
reasonably requested by such person in order to effect such repurchase. The
sole
remedies of the Issuer, the Trust Collateral Agent, the Indenture Trustee or
the
Noteholders with respect to a breach of representations and warranties pursuant
to Section 3.1 shall be (i) the repurchase of Receivables pursuant to this
Section, subject to the conditions contained herein, or (ii) to enforce the
obligation of LBAC to the Transferor to repurchase such Receivables pursuant
to
the Purchase Agreement. Neither the Owner Trustee, the Custodian, the Trust
Collateral Agent nor the Indenture Trustee shall have a duty to conduct any
affirmative investigation as to the occurrence of any conditions requiring
the
repurchase of any Receivable pursuant to this Section.
Β
Β
5
Β
(b)
Β Β Pursuant
to Section 2.1, the Transferor conveys to the Issuer all of the Transferor's
right, title and interest in its rights and benefits, but none of its
obligations or burdens, under the Purchase Agreement including the Transferor's
rights under the Purchase Agreement and the delivery requirements,
representations and warranties and the cure or repurchase obligations of LBAC
thereunder. The Transferor hereby represents and warrants to the Issuer that
such assignment is valid, enforceable and effective to permit the Issuer to
enforce such obligations of LBAC and the Transferor under the Purchase
Agreement.
Β
SECTION
3.3. Β Β Delivery
of Legal Files and Receivable Files.
Β
(a)
Β Β On
or
prior to the Closing Date, the Transferor shall transfer and deliver to the
Custodian at the offices specified in Schedule B to this Agreement the Legal
Files with respect to each applicable Receivable.
Β
(b)Β Β
On
or
prior to the Closing Date, the Transferor shall transfer and deliver to the
Servicer with respect to each Receivable the following, either in hard copy
or
in an electronic format:
Β
(i)Β Β a
copy of
the fully executed original of the Receivable with a copy of the fully executed
assignment from the related Dealer to the Originator (together with copies
of
any agreements modifying the Receivable, including, without limitation, any
extension agreements);
Β
(ii)Β Β a
copy of
the original credit application fully executed by the Obligor;
Β
(iii)Β Β a
copy of
the Lien Certificate or Title Package, as applicable;
Β
(iv)Β Β all
other
documents listed on the Documentation Checklist in effect on the Cutoff Date
relating to such Receivable, except that the Receivable Files shall contain
a
copy of those documents the original of which constitutes a part of the Legal
File; and
Β
(v)Β Β any
and
all other documents that the Servicer or the Originator shall keep on file,
in
accordance with its customary procedures, relating to a Receivable, an Obligor
or a Financed Vehicle.
Β
Β
6
Β
SECTION
3.4. Β Β Acceptance
of Legal Files by Custodian.
The
Custodian acknowledges receipt of files which the Transferor has represented
are
the Legal Files relating to the Receivables. The Custodian shall hold the Legal
Files subject to the terms and conditions of this Agreement. The Custodian
may
perform its duties in respect of custody of the Legal Files by or through its
agents or employees. The Custodian has reviewed the Legal Files relating to
the
Receivables and hereby acknowledges that it has determined that it has received
a file for each Receivable identified in Schedule A to this Agreement. The
Custodian declares that it holds and will continue to hold such files, any
amendments, replacements or supplements thereto and all other Trust Assets
as
custodian, agent and bailee for the Trust Collateral Agent in trust for the
use
and benefit of all present and future Noteholders. The Custodian shall review
each Legal File delivered to it no later than the Closing Date to determine
whether such Legal Files contain the documents referred to in the definition
of
the term "Legal File" and shall certify on the Closing Date to such effect.
In
addition, in the case of any Legal File which does not contain either an
original Lien Certificate, an application for a certificate of title or a Dealer
Title Guaranty for the related Financed Vehicle, the Custodian shall certify
that the related Dealer is listed on the Dealer Title Addendum. If the Custodian
finds during its review of the Legal Files or at any time thereafter that a
Legal File for a Receivable has not been received or that any of the documents
referred to in the definition of the term "Legal File" are not contained in
a
Legal File or, if applicable, the related Dealer is not listed on the Dealer
Title Addendum, the Custodian shall promptly inform the Trust Collateral Agent
(if at such time the Trust Collateral Agent is not also the Custodian
hereunder), LBAC, the Transferor, the Back-up Servicer [and the Note Insurer]
promptly, in writing, of the failure to receive a Legal File with respect to
such Receivable (or of the failure of any of the aforementioned documents to
be
included in the Legal File or the failure of the related Dealer to be so listed)
(it being understood that the Custodian's obligation to review the contents
of
any Legal File and the Dealer Title Addendum shall be limited as set forth
in
the preceding sentence). Unless any such defect with respect to such Receivable
shall have been cured by the last day of the second Collection Period following
discovery thereof by the Custodian, LBAC shall repurchase any such Receivable
as
of such last day. In consideration of the purchase of the Receivable, LBAC
shall
remit the Purchase Amount, in the manner specified in Section 5.5. The sole
remedy of the Indenture Trustee, the Trust Collateral Agent, the Issuer or
the
Noteholders with respect to a breach pursuant to this Section 3.4 shall be
to
require LBAC to purchase the Receivables pursuant to this Section 3.4. Upon
receipt of the Purchase Amount and written instructions from the Servicer,
the
Trust Collateral Agent shall cause the Custodian to release to LBAC or its
designee the related Legal File and shall execute and deliver all reasonable
instruments of transfer or assignment, without recourse, as are prepared by
LBAC
and delivered to the Trust Collateral Agent and are necessary to vest in LBAC
or
such designee the Issuer's right, title and interest in the Receivable. The
Custodian shall make a list of Receivables for which an application for a
certificate of title or a Dealer Title Guaranty but not a Lien Certificate
is
included in the Legal File as of the date of its review of the Legal Files
and
deliver a copy of such list to the Servicer, the Trust Collateral Agent [and
the
Note Insurer]. On the date which is 90 days following the Closing Date, or,
if
such date is not a Business Day, on the next succeeding Business Day, the
Custodian shall inform LBAC and the other parties to this Agreement [and the
Note Insurer] of any Receivable for which the related Legal File on such date
does not include a Lien Certificate, and LBAC shall repurchase any such
Receivable as of the last day of the Collection Period in which the date, which
is 150 days following the Closing Date, if the related Legal File does not
include a Lien Certificate as of the close of business on such 150th day. In
consideration of the purchase of such Receivable, LBAC shall remit the Purchase
Amount in the manner specified in Section 5.5. The Transferor shall have no
obligation to repurchase any Receivable upon a breach pursuant to this Section
3.4. The Transferor shall have no liability for any action taken or omitted
to
be taken by LBAC pursuant to this Section 3.4.
Β
Β
7
Β
SECTION
3.5. Β Β Access
to Receivable Files and Legal Files; Servicer's Duties with Respect to
Receivable Files; Custodian's Duties with Respect to Legal Files.
Β
(a)
Β Β The
Servicer and the Custodian shall, upon reasonable notice, permit the Originator,
the Trust Collateral Agent, the Transferor, the Issuer [and the Note Insurer]
access to the Receivable Files and the Legal Files, respectively, at all
reasonable times, upon reasonable notice and during the Servicer's or the
Custodian's normal business hours, as the case may be. In addition, the Servicer
and the Custodian shall provide such access to any Noteholder upon reasonable
notice at all reasonable times during the Servicer's or the Custodian's normal
business hours, as the case may be, in cases where the Noteholders shall be
required by applicable statutes or regulations to review such documentation;
provided,
however,
that the
Servicer or the Custodian shall be entitled to rely upon an Opinion of Counsel
as to such fact. In each case, such access shall be afforded without charge
but
only upon reasonable request. Each Noteholder shall be deemed to have agreed
by
its acceptance of a Note to use its best efforts to hold in confidence all
Confidential Information in accordance with its then customary procedures;
provided
that
nothing herein shall prevent any Noteholder from delivering copies of any
financial statements and other documents whether or not constituting
Confidential Information, and disclosing other information, whether or not
Confidential Information, to (i) its directors, officers, employees, agents
and
professional consultants, (ii) any other institutional investor that holds
Notes, (iii) any prospective institutional investor transferee in connection
with the contemplated transfer of a Note or any part thereof or participation
therein who is subject to confidentiality arrangements at least substantially
similar hereto, (iv) any governmental authority, (v) the National Association
of
Insurance Commissioners or any similar organization, (vi) any nationally
recognized rating agency in connection with the rating of the Notes by such
agency or (vii) any other Person to which such delivery or disclosure may be
necessary or appropriate (a) in compliance with any applicable law, rule,
regulation or order, (b) in response to any subpoena or other legal process,
(c)
in connection with any litigation to which such Noteholder is a party or (d)
in
order to protect or enforce such Person's investment in any Note.
Β
(b)
Β Β Upon
instruction from the Trust Collateral Agent, the Servicer shall release any
Receivable Files to the Trust Collateral Agent, the Trust Collateral Agent's
agent or the Trust Collateral Agent's designee, as the case may be, at such
place or places as the Trust Collateral Agent may designate, as soon as
practicable; provided,
however,
that
such Receivable Files may be, at the discretion of the Servicer, in the form
of
electronic files or reproduced copies of such electronic files. The Servicer
shall not be responsible for the safekeeping of such Receivable Files following
such release to the Trust Collateral Agent unless and until such Receivable
Files are returned to the Servicer.
Β
(c)
Β Β The
Custodian shall, within two Business Days of the request of the Servicer, the
Trust Collateral Agent [or the Note Insurer], execute such documents and
instruments as are prepared by the Servicer, the Trust Collateral Agent [or
the
Note Insurer] and delivered to the Custodian, as the Servicer, the Trust
Collateral Agent [or the Note Insurer] deems necessary to permit the Servicer,
in accordance with its customary servicing procedures, to enforce the Receivable
on behalf of the Issuer and any related insurance policies (including the VSI
Policy, if any) covering the Obligor, the Receivable or Financed Vehicle. The
Custodian shall not be obligated to release any document from any Legal File
unless it receives a request for transfer of possession signed, or, if such
request is transmitted electronically, transmitted by a Servicing Officer in
the
form of Exhibit F to this Agreement and a custodial letter signed, or, if such
request is transmitted electronically, transmitted by a Servicing Officer in
the
form of Exhibit G to this Agreement (the "Custodial Letter"). Such Custodial
Letter shall obligate the Servicer to return such document(s) to the Custodian
when the need therefor no longer exists. At all times while any Legal File
is in
the Servicer's possession, the Servicer shall hold such Legal File in trust
on
behalf of the Issuer, the Indenture Trustee, the Trust Collateral Agent [and
the
Note Insurer].
Β
Β
8
Β
SECTION
3.6. Β Β Covenants
of the Custodian.
Β
(a)
Β Β The
Custodian, either directly or by acting through an agent or nominee (which
agent
shall not be the Originator or any Affiliate thereof, except as provided in
Section 10.8(e) hereof), shall hold the Legal File and all other documents
relating to any Receivable that comes into its possession for the exclusive
use
and benefit of the Issuer and shall make disposition thereof only in accordance
with the provisions of this Agreement. The Custodian shall maintain continuous
custody of the Legal File and such other documents received by it in secure
facilities in accordance with customary standards for such custody and shall
not
release such documents or transfer such documents to any other party, including
any subcustodian, except as otherwise expressly provided herein.
Β
(b)
Β Β The
Custodian covenants and warrants to the Issuer, the Trust Collateral Agent,
the
Servicer [and the Note Insurer] that to the knowledge of its Responsible
Officers, as of the related date on which the Custodian makes the certification
required under Section 3.4 with respect to the Legal Files, it holds no adverse
interest, by way of security or otherwise, in any Receivable.
Β
(c)
Β Β Instructions
to the Custodian relating to this Agreement will be carried out by the
Custodian, in accordance with the terms and provisions of this Agreement. The
Custodian is authorized to conclusively rely on any such instruction that it
believes in good faith to have been given by the Servicer pursuant to and in
accordance with the terms and provisions of this Agreement. The Custodian may
record any such instructions given by telephone, and any other telephone
discussions with respect to this Agreement.
Β
(d)
Β Β The
Custodian shall not by reason of this Agreement have a fiduciary relationship
in
respect of the Servicer or LBAC or any Affiliate thereof, and nothing in this
Agreement, express or implied, is intended to or shall be so construed so as
to
impose upon the Custodian any obligations in respect of this Agreement except
as
expressly set forth in it. The Custodian, acting as custodian, shall have no
responsibility for (i) ascertaining or taking action with respect to exchanges,
maturities, tenders or other matters relative to any Receivables, whether or
not
the Custodian has or is deemed to have knowledge of such matters or (ii) taking
any necessary steps to preserve rights against any parties with respect to
any
Receivables, except as otherwise expressly set forth herein in its capacity
as
Custodian. The Custodian does not assume and shall have no responsibility for,
and makes no representations as to, monitoring the value of the Receivables
and
the related Legal Files. The Custodian may rely upon the validity of documents
delivered to it, without investigation as to their authority or legal
effectiveness.
Β
Β
9
Β
(e)
Β Β Each
of
the Servicer, the Issuer, the Transferor and LBAC acknowledges and agrees that
the Custodian:
Β
(i)Β Β shall
not
be responsible for any of the agreements set forth in the Purchase Agreement
or
any other documents or instruments other than this Agreement, including its
Exhibits, but shall be obligated only for the performance of such duties as
are
specifically set forth in this Agreement;
Β
(ii)Β Β shall
not
be under any obligation to exercise any of the rights or powers vested in it
by
this Agreement, or to institute, conduct, or defend any litigation under this
Agreement or in relation to this Agreement, at the request, order or direction
of any of the Noteholders [or the Note Insurer] pursuant to the provisions
of
this Agreement, unless such Noteholders [or the Note Insurer] shall have offered
to the Custodian reasonable security or indemnity in form and substance
reasonably satisfactory to the Custodian, against the costs, expenses and
liabilities that may be incurred therein or thereby;
Β
(iii)Β Β may
rely
and shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, Servicer's Certificate, certificate of auditors, or
any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond, or other paper or document believed by it
to be
genuine and to have been signed or presented by the proper party or parties,
and
shall have no responsibility for determining the accuracy thereof (except
pursuant to Section 10.3(iv)); and
Β
(iv)Β Β may
consult with counsel, and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it under this Agreement in good faith and in accordance with such
Opinion of Counsel.
Β
(f)
Β Β If
the
Custodian shall request instructions from the Servicer or LBAC with respect
to
any act or action (including failure to act) in connection with this Agreement,
the Custodian shall be entitled to refrain from such act or taking such action
unless and until the Custodian shall have received instructions from such
Person; and the Custodian shall not incur liability to such Person or any other
Person by reason of so refraining. Without limiting the foregoing, neither
the
Servicer, nor LBAC, nor any other Person shall have any right of action
whatsoever against the Custodian as a result of the Custodian's acting or
refraining from acting in accordance with the Servicer's instructions hereunder,
other than any such action arising out of the Custodian's negligence, bad faith
or willful misconduct in so acting or refraining from acting.
Β
(g)
Β Β The
Custodian shall physically segregate the Legal Files for the Receivables from
all other instruments similar in nature to such Legal Files in its possession,
and shall hold the Legal Files so as to reflect the ownership of the Issuer.
The
Custodian shall xxxx its books, accounts and records to reflect such fact.
At
its own expense, the Custodian shall maintain at all times during which this
Agreement is in effect, fidelity insurance in amounts customary for similar
transactions. Such insurance may be maintained by the Custodian in the form
of
self-insurance.
Β
Β
10
Β
SECTION
3.7. Β Β Issuer's
Certificate.
Within
five Business Days after each Payment Date on which Receivables shall be
assigned to LBAC or the Servicer, as applicable, pursuant to this Agreement,
based on amounts deposited to the Collection Account, notices received pursuant
to this Agreement and the information contained in the Servicer's Certificate
for the related Collection Period, identifying the Receivables purchased by
LBAC
pursuant to Section 3.4 or purchased by the Servicer pursuant to Section 4.7,
the Issuer shall execute an Issuer's Certificate (in the form of Exhibit A-1
or
A-2, as applicable), and shall deliver such Issuer's Certificate, accompanied
by
a copy of the Servicer's Certificate for such Collection Period, to LBAC or
the
Servicer, as the case may be, [with a copy to the Note Insurer]. The Issuer's
Certificate submitted with respect to such Payment Date shall operate, as of
such Payment Date, as an assignment, without recourse, representation or
warranty, to LBAC or the Servicer, as the case may be, of all the Issuer's
right, title, and interest in and to such repurchased Receivable, and all
security and documents relating thereto, such assignment being an assignment
outright and not for security.
Β
Β
ARTICLE
IV
Β
ADMINISTRATION
AND SERVICING OF RECEIVABLES
Β
SECTION
4.1. Β Β Duties
of the Servicer.
The
Servicer, as agent for the Issuer (to the extent provided herein), and in such
capacity, shall manage, service, administer and make collections on the
Receivables with reasonable care, using that degree of skill and attention
customary and usual for institutions which service motor vehicle retail
installment contracts similar to the Receivables and, to the extent more
exacting, that the Servicer exercises with respect to all comparable automotive
receivables that it services for itself or others. The Servicer's duties shall
include collection and posting of all payments, responding to inquiries of
Obligors on such Receivables, investigating delinquencies, sending payment
statements to Obligors, reporting tax information to Obligors, accounting for
collections, furnishing monthly and annual statements to the Trust Collateral
Agent, the Indenture Trustee, the Back-up Servicer [and the Note Insurer] with
respect to payments and complying with the terms of the Lock-Box Agreement.
The
Servicer shall also administer and enforce all rights and responsibilities
of
the holders of the Receivables provided for in the Dealer Agreements to the
extent that such Dealer Agreements relate to the Receivables, the Financed
Vehicles or the Obligors. Without limiting the generality of the foregoing,
and
subject to the servicing standards set forth in this Agreement, the Servicer
is
authorized and empowered by the Trust Collateral Agent to execute and deliver,
on behalf of itself, the Issuer, the Noteholders 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 and/or the
certificates of title or other evidence of ownership with respect to such
Financed Vehicles; provided,
however,
that
notwithstanding the foregoing, the Servicer shall not release an Obligor from
payment of any unpaid amount under any Receivable or waive the right to collect
the unpaid balance of any Receivable from the Obligor, except (i) pursuant
to an
order from a court of competent jurisdiction, (ii) in accordance with its
customary procedures or (iii) in accordance with Section 4.2. If the Servicer
shall commence a legal proceeding to enforce a Receivable, the Issuer shall
thereupon be deemed to have automatically assigned, solely for the purpose
of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal
proceeding it shall be held that the 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 such Receivable, the Trust Collateral Agent shall, at the Servicer's
expense and direction, take steps to enforce such Receivable, including bringing
suit in its name or the name of the Noteholders. The Servicer shall prepare
and
furnish and the Trust Collateral Agent shall execute, any powers of attorney
and
other documents reasonably necessary or appropriate to enable the Servicer
to
carry out its servicing and administrative duties hereunder.
Β
Β
11
Β
SECTION
4.2. Β Β Collection
and Allocation of Receivable Payments
Β
.
Consistent with the standards, policies and procedures required by this
Agreement, the Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable automotive receivables that it services for
itself or others; provided,
however,
that the
Servicer shall notify each Obligor prior to the Closing Date to make all
payments with respect to the Receivables to the Lock-Box and shall make
reasonable efforts to cause Obligors to make all such payments to such Lock-Box.
The Servicer will provide each Obligor with a monthly statement in order to
notify such Obligors to make payments directly to the Lock-Box. The Servicer
shall allocate collections between principal and interest in accordance with
the
customary servicing procedures it follows with respect to all comparable
automotive receivables that it services for itself or others and in accordance
with the terms of this Agreement. The Servicer, for so long as LBAC is the
Servicer, may grant extensions, rebates or adjustments on a Receivable in
accordance with the customary servicing procedures it follows with respect
to
all comparable automotive receivables that it services for itself which shall
not modify the original due date of the Scheduled Receivable Payments on any
Receivable other than (a) in accordance with the Payment Deferment and Due
Date
Change Policies, (b) in connection with a Deficient Liquidated Receivable,
(c)
[with the prior written consent of the Note Insurer, with respect to any other
Liquidated Receivable or (d)] as otherwise required by applicable law.
Notwithstanding anything contained herein to the contrary, the Servicer may,
at
its option, repurchase up to 25 Receivables in a manner consistent with Section
5.5 hereof and any such repurchased Receivable (an "Optional Repurchase
Receivable") shall not be deemed to be a Defaulted Receivable or a Liquidated
Receivable. The Servicer shall not modify the Payment Deferment and Due Date
Change Policies without the prior written consent of [the Note Insurer]. The
Servicer shall notify Xxxxx'x of any modification to the Payment Deferment
and
Due Date Change Policies. [If the Servicer is not LBAC, the Servicer may not
make any extension on a Receivable without the prior written consent of the
Note
Insurer]. The Servicer may in its discretion waive any late payment charge
or
any other fees that may be collected in the ordinary course of servicing a
Receivable if it would forgo collection of such amount in accordance with its
customary procedures. Notwithstanding anything to the contrary contained herein,
the Servicer (i) shall not agree to any alteration of the interest rate on
any
Receivable or of the amount of any Scheduled Receivable Payment on any
Receivable, except (a) as otherwise required by applicable law, (b) with respect
to a Deficient Liquidated Receivable and [(c) with the prior written consent
of
the Note Insurer, with respect to any other Liquidated Receivable], and (ii)
shall not agree to any modification that would result in a material adverse
effect on a Receivable (other than a Deficient Liquidated Receivable [and,
with
the prior written consent of the Note Insurer, any other Liquidated Receivable])
or the interest therein of the Issuer, the Noteholders [or the Note Insurer]
other than a modification in accordance with the Payment Deferment and Due
Date
Change Policies.
Β
Β
12
Β
On
each
Business Day, the Servicer shall prepare and transmit to the Trust Collateral
Agent and the Back-up Servicer in a form acceptable to the Trust Collateral
Agent and the Back-up Servicer, a record setting forth the aggregate amount
of
collections on the Receivables processed by the Servicer on the second preceding
Business Day.
Β
SECTION
4.3. Β Β Realization
upon Receivables.
Β
(a)
Β Β On
behalf
of the Issuer, the Noteholders [and the Note Insurer,] the Servicer shall use
its best efforts, consistent with the servicing procedures set forth herein,
to
repossess or otherwise convert the ownership of the Financed Vehicle securing
any Receivable as to which the Servicer shall have determined eventual payment
in full is unlikely. The Servicer shall commence efforts to repossess or
otherwise convert the ownership of a Financed Vehicle on or prior to the date
that an Obligor has not paid at least 95% of a Scheduled Receivable Payment
thereon for 120 consecutive days or more; provided,
however,
that the
Servicer may elect not to commence such efforts within such time period if
in
its good faith judgment it determines either that it would be impracticable
to
do so or that the proceeds ultimately recoverable with respect to such
Receivable would be increased by forbearance. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, consistent with the
standards of care set forth in Section 4.1, which may include reasonable efforts
to realize upon any recourse to Dealers and selling the Financed Vehicle at
public or private sale. The foregoing shall be subject to the provision that,
in
any case in which the Financed Vehicle shall have suffered damage, the Servicer
shall not expend funds in connection with 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 proceeds ultimately recoverable with
respect to such Receivable by an amount greater than the amount of such
expenses. All Liquidation Proceeds and Recoveries received shall be remitted
directly by the Servicer to the Collection Account, without deposit into any
intervening account as soon as practicable, but in no event later than the
second Business Day after receipt thereof.
Β
(i)Β Β The
Servicer agrees that within 45 days from the Closing Date it shall make such
filings and effect such notices as are necessary under Section 9-114(1) of
the
New York UCC (or comparable section of the UCC of any applicable state) to
preserve its ownership interest (or security interest, as the case may be)
in
any repossessed Financed Vehicles delivered for sale to Dealers.
Β
(ii)Β Β The
Servicer agrees that at any time after 45 days from the Closing Date there
will
be (a) no more than 25 repossessed Financed Vehicles in the aggregate delivered
for sale to any Dealer and (b) no more than 50 repossessed Financed Vehicles
in
the aggregate delivered for the sale to all Dealers with respect to which the
actions referred to in (b)(1) above have not been effected. The Servicer agrees
that prior to delivering additional Financed Vehicles for sale to any such
Dealer, it shall make such filings and effect such notices as are necessary
under Section 9-114(1) of the New York UCC (or comparable section of the
applicable UCC) to preserve its ownership interest (or security interest, as
the
case may be) in any such repossessed Financed Vehicle.
Β
Β
13
Β
SECTION
4.4. Β Β Physical
Damage Insurance; Other Insurance.
Β
(a)
Β Β The
Servicer shall continue to maintain the VSI Policy or another collateral
protection insurance policy providing physical damage insurance coverage to
at
least the same extent as the VSI Policy with respect to all Financed Vehicles,
unless the Servicer shall have received the prior written consent of [the Note
Insurer] allowing the Servicer to no longer maintain any of such polices. The
Servicer, in accordance with the servicing procedures and standards set forth
herein, shall require that (i) each Obligor shall have obtained insurance
covering the Financed Vehicle, as of the date of the execution of the
Receivable, insuring against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and collision
coverage and each Receivable requires the Obligor to maintain such physical
loss
and damage insurance naming LBAC and its successors and assigns as an additional
insured, (ii) each Receivable that finances the cost of premiums for credit
life
and credit accident and health insurance is covered by an insurance policy
or
certificate naming LBAC as policyholder (creditor) and (iii) as to each
Receivable that finances the cost of an extended service contract, the
respective Financed Vehicle which secures the Receivable is covered by an
extended service contract.
Β
(b)
Β Β To
the
extent applicable, the Servicer shall not take any action which would result
in
noncoverage under any of the insurance policies referred to in Section 4.4(a)
which, but for the actions of the Servicer, would have been covered thereunder.
The Servicer, on behalf of the Trust Collateral Agent, shall take such
reasonable action as shall be necessary to permit recovery under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any
of
the foregoing insurance policies shall be deposited in the Collection Account
pursuant to Section 5.2. In the event of the cancellation or non-renewal of
the
insurance referred to in Section 4.4(a)(i) above with respect to any Financed
Vehicle, the Servicer will endeavor, in accordance with its customary servicing
standards and procedures, to cause the related Obligor to obtain a replacement
insurance policy. In no event shall the Servicer be required to force place
insurance on a Financed Vehicle.
Β
SECTION
4.5. Β Β Maintenance
of Security Interests in Financed Vehicles.
Β
(a)
Β Β Consistent
with the policies and procedures required by this Agreement, the Servicer shall
take such steps as are necessary to maintain perfection of the security interest
created in the name of LBAC by each Receivable in the related Financed Vehicle,
including, but not limited to, obtaining the execution by the Obligors and
the
recording, registering, filing, re-recording, re-registering and refiling of
all
security agreements, financing statements and continuation statements or
instruments as are necessary to maintain the security interest granted by
Obligors under the respective Receivables. The Trust Collateral Agent hereby
authorizes the Servicer to take such steps as are necessary to re-perfect or
continue the perfection of such security interest on behalf of the Issuer in
the
event of the relocation of a Financed Vehicle or for any other
reason.
Β
(b)
Β Β [Upon
the
occurrence of an Insurance Agreement Event of Default, the Note Insurer may
(so
long as a Note Insurer Default shall not have occurred and be continuing)
instruct the Trust Collateral Agent and the Servicer to take or cause to be
taken, or, if a Note Insurer Default shall have occurred and be continuing,
upon
the occurrence of a Servicer Termination Event, either the Trust Collateral
Agent or the Trust Collateral Agent acting at the direction of the
Majorityholders shall direct the Servicer to take and the Servicer shall take
or
cause to be taken such action as may, in the opinion of counsel to the Note
Insurer (or, if a Note Insurer Default shall have occurred and be continuing,
the Trust Collateral Agent), which opinion shall not be an expense of the Note
Insurer or the Trust Collateral Agent (as applicable), be necessary to perfect
or reperfect the security interests in the Financed Vehicles securing the
Receivables in the name of the Trust Collateral Agent on behalf of the Issuer
by
amending the title documents of such Financed Vehicles to reflect the security
interest of the Trust Collateral Agent in the related Financed Vehicles or
by
such other reasonable means as may, in the opinion of counsel to the Note
Insurer or the Trust Collateral Agent (as applicable), which opinion shall
not
be an expense of the Note Insurer or the Trust Collateral Agent, be necessary
or
prudent. The Servicer hereby agrees to pay all expenses related to such
perfection or reperfection and to take all action necessary therefor. In
addition, prior to the occurrence of an Insurance Agreement Event of Default,
the Note Insurer may (unless a Note Insurer Default shall have occurred and
be
continuing) instruct the Trust Collateral Agent and the Servicer to take or
cause to be taken such action as may, in the opinion of counsel to the Note
Insurer, be necessary to perfect or reperfect the security interest in the
Financed Vehicles securing the Receivables in the name of the Trust Collateral
Agent on behalf of the Issuer, including by amending the title documents of
such
Financed Vehicles to reflect the security interest of the Trust Collateral
Agent
in the related Financed Vehicle or by such other reasonable means as may, in
the
opinion of counsel to the Note Insurer, be necessary or prudent; provided,
however,
that if
the Note Insurer requests (unless a Note Insurer Default shall have occurred
and
be continuing) that the title documents be amended prior to the occurrence
of an
Insurance Agreement Event of Default, the out-of-pocket expenses of the Servicer
or the Trust Collateral Agent in connection with such action shall be reimbursed
to the Servicer or the Trust Collateral Agent, as applicable, by the Note
Insurer.]
Β
Β
14
Β
In
addition to the foregoing, in the event any of the Servicer Termination Events
described in Section 9.1(iii) or (iv) shall have occurred, or in the event
LBAC
shall have been removed or replaced as Servicer pursuant to Section 8.3, Section
8.5, or otherwise pursuant to Section 9.1, then LBAC and/or the Servicer shall
immediately cause each Lien Certificate for a Financed Vehicle to be marked
to
reflect the security interest of the Trust Collateral Agent in the Financed
Vehicle at the expense of LBAC.
Β
The
Servicer hereby makes, constitutes and appoints the Trust Collateral Agent
acting through its duly appointed officers or any of them, its true and lawful
attorney, for it and in its name and on its behalf, for the sole and exclusive
purpose of authorizing said attorney to execute and deliver 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 show the Trust
Collateral Agent as lienholder or secured party on the related Lien Certificates
relating to a Financed Vehicle.
Β
SECTION
4.6. Β Β Additional
Covenants of Servicer.
The
Servicer hereby makes the following covenants to the other parties hereto [and
the Note Insurer] on which the Trust Collateral Agent shall rely in accepting
the Receivables in trust [and on which the Note Insurer shall rely in issuing
the Note Policy]: (i) the Servicer shall not release the Financed Vehicle
securing any Receivable from the security interest granted by such Receivable
in
whole or in part except in the event of payment in full by the Obligor
thereunder or repossession or other liquidation of such Financed Vehicle, (ii)
the Servicer shall not impair the rights of the Noteholders, the Issuer [or
the
Note Insurer] in such Receivables, (iii) the Servicer shall not modify a
Receivable, except in accordance with Section 4.2, and (iv) the Servicer shall
service the Receivables as required by the terms of this Agreement and in
material compliance with its current servicing procedures for servicing of
all
its other comparable motor vehicle receivables.
Β
Β
15
Β
SECTION
4.7. Β Β Purchase
of Receivables Upon Breach.
The
Servicer, the Transferor, the Issuer, the Custodian or the Trust Collateral
Agent shall inform the other parties hereto [and the Note Insurer] promptly,
in
writing, upon the discovery by the Servicer, the Transferor, the Issuer or
a
Responsible Officer of the Trust Collateral Agent or the Custodian, as the
case
may be, of any breach of the provisions of Section 4.2 relating to modifications
of the Receivables, or any breach of Sections 4.4, 4.5 or 4.6; provided,
however,
that the
failure to give such notice shall not affect any obligation of the Servicer
hereunder. Unless the breach shall have been cured by the last day of the second
Collection Period following such discovery by or notice to the Servicer of
such
breach, the Servicer shall purchase any Receivable with respect to which such
breach has a material adverse effect on such Receivable or the interest therein
of the Issuer, the Noteholders [or the Note Insurer]. In consideration of the
purchase of such Receivable, the Servicer shall remit the Purchase Amount in
the
manner specified in Section 5.5. For purposes of this Section, the Purchase
Amount shall, whenever applicable, consist in part of a release by the Servicer
of all rights to receive Simple Interest Excess with respect to the related
Receivable. The sole remedy of the Trust Collateral Agent, the Issuer, [the
Note
Insurer] or the Noteholders with respect to a breach of the provisions of
Section 4.2 relating to modifications of the Receivables or any breach of
Sections 4.4, 4.5 or 4.6 shall be to require the Servicer to repurchase
Receivables pursuant to this Section 4.7; provided,
however,
that the
Servicer shall indemnify the Trust Collateral Agent, the Indenture Trustee,
[the
Collateral Agent], the Back-up Servicer, the Custodian, the Transferor, [the
Note Insurer], the Issuer and the Noteholders and each of their respective
officers, employees, directors, agents and representatives against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees
and
expenses of counsel, which may be asserted against or incurred by any of them
as
a result of third party claims arising out of the events or facts giving rise
to
such breach. The Transferor shall have no obligation to repurchase the
Receivables upon a breach of the provisions of Section 4.2 relating to
modifications of the Receivables, or any breach of Sections 4.4, 4.5 or 4.6.
The
Transferor shall have no liability for actions taken or omitted to be taken
by
the Servicer pursuant to this Section 4.7.
Β
SECTION
4.8. Β Β Servicing
Fee.
The
Servicing Fee for the initial Payment Date shall equal the product of (a)
[one-twelfth] of the Servicing Fee Rate and (b) the Original Pool Balance.
Thereafter, the Servicing Fee for a Payment Date shall equal the product of
(i)
one-twelfth of the Servicing Fee Rate and (ii) the Pool Balance as of the last
day of the second preceding Collection Period. The Servicing Fee shall in
addition include all late fees, prepayment charges including, in the case of
a
Precomputed Receivable that is prepaid in full, to the extent not required
by
law to be remitted to the related Obligor, the difference between the amounts
received upon prepayment in full of such Precomputed Receivable and the then
outstanding Principal Balance of such Precomputed Receivable and accrued
interest thereon (calculated pursuant to the Simple Interest Method) and other
administrative fees or similar charges allowed by applicable law with respect
to
Receivables, collected (from whatever source) on the Receivables.
Β
Β
16
Β
SECTION
4.9. Β Β Servicer's
Certificate.
Β
(a)
Β Β By
10:00
a.m., New York City time, on each Determination Date, the Servicer shall deliver
to the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Back-up
Servicer, [the Collateral Agent], the Transferor, [the Note Insurer,] GCFP
and
the Rating Agencies, a Servicer's Certificate containing all information
necessary to make the payments pursuant to Section 5.6 [(including, if required,
withdrawals from the Spread Account)], for the Collection Period preceding
the
date of such Servicer's Certificate and all information necessary for the Trust
Collateral Agent to send statements to Noteholders [and the Note Insurer]
pursuant to Section 5.7. Receivables to be purchased by the Servicer or to
be
purchased by LBAC shall be identified by the Servicer by account number with
respect to such Receivable (as specified in the Schedule of
Receivables).
Β
(b)
Β Β [In
addition to the information required by Section 4.9(a), the Servicer shall
include in the copy of the Servicer's Certificate delivered to the Note Insurer
(i) the Average Delinquency Ratio, the Cumulative Default Rate, and the
Cumulative Loss Rate (as such terms are defined in the Spread Account
Agreement), (ii) whether any Trigger Event (as such term is defined in the
Spread Account Agreement) has occurred as of such Determination Date, (iii)
whether any Trigger Event that may have occurred as of a prior Determination
Date is Deemed Cured (as defined in the Spread Account Agreement) as of such
Determination Date and (iv) whether to the knowledge of the Servicer an
Insurance Agreement Event of Default has occurred. The Servicer shall in
addition give notice of the occurrence of any Trigger Event or any Insurance
Agreement Event of Default to each Rating Agency.]
Β
SECTION
4.10. Β Β Annual
Statement as to Compliance; Notice of Default.
Β
(a)
Β Β To
the
extent required by Section 1123 of Regulation AB, the Servicer [or the Back-up
Servicer] shall deliver to the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Back-up Servicer, [the Collateral Agent], the Transferor, the
Issuer [and the Note Insurer], on or before March 31 of each year beginning
March 31, 20__, an Officer's Certificate, dated as of December 31 of the
preceding calendar year, stating that (i) a review of the activities of the
Servicer [or Back-up Servicer] during such preceding calendar year and of its
performance under this Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer [or Back-up Servicer] has fulfilled in all material respects all its
obligations under this Agreement throughout such year, or, if there has been
a
failure to fulfill any such obligation in any material respect, identifying
each
such failure known to such officer and the nature and status of such failure.
The Trust Collateral Agent shall send a copy of such certificate to the Rating
Agencies.
Β
(b)
Β Β The
Servicer shall deliver to the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Back-up Servicer, [the Collateral Agent], the Transferor, the
Issuer, [the Note Insurer] and the Rating Agencies, promptly after having
obtained knowledge thereof, but in no event later than two (2) Business Days
after having obtained such knowledge, written notice in an Officer's Certificate
of any event which with the giving of notice or lapse of time, or both, would
become a Servicer Termination Event under Section 9.1.
Β
Β
17
Β
(c)
Β Β The
Servicer will deliver to the Issuer, on or before March 31 of each year,
beginning on March 31, 20__, a report regarding the Servicer's assessment of
compliance with Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB.
Β
SECTION
4.11. Β Β Annual
Independent Certified Public Accountant's Reports.
Β
(a)
Β Β The
Servicer shall cause a firm of nationally recognized independent certified
public accountants, who may also render other services to the Servicer or to
the
Transferor, to deliver to the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Back-up Servicer, [the Collateral Agent], the Issuer, the
Noteholders, [the Note Insurer] and each Rating Agency on or before March 31
of
each year beginning March 31, 20__, a report dated as of December 31 of the
preceding calendar year and reviewing the Servicer's activities during such
preceding calendar year, addressed to the Board of Directors of the Servicer,
providing such information as is required under Item 1122(b) of Regulation
AB.
Β
(b)
Β Β The
Servicer shall cause a firm of nationally recognized independent certified
public accountants, who may also render other services to the Servicer or to
the
Transferor, to deliver to the Trust Collateral Agent, the Back-up Servicer,
[the
Collateral Agent], the Issuer, the Transferor [and the Note Insurer], on or
before March 31 of each year beginning March 31, 20__, a report dated as of
December 31 of the preceding calendar year, to the effect that such firm has
audited the financial statements of the Servicer and issued its report therefor
and that such audit (a) was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances; (b) included tests relating to automotive loans serviced for
others in accordance with the requirements of the Uniform Single Attestation
Program for Mortgage Bankers (the "Program"), to the extent the procedures
in
the Program are applicable to the servicing obligations set forth in this
Agreement; (c) included an examination of the delinquency and loss statistics
relating to the Servicer's portfolio of automobile, van, sport utility vehicle
and light duty truck installment sales contracts; and (d) except as described
in
the report, disclosed no exceptions or errors in the records relating to
automobile, van, sport utility vehicle and light duty truck loans serviced
for
others that, in the firm's opinion, the Program requires such firm to report.
The accountant's report shall further state that (1) a review in accordance
with
agreed upon procedures was made of three randomly selected Servicer's
Certificates; (2) except as disclosed in the report, no exceptions or errors
in
the Servicer's Certificates were found; and (3) the delinquency and loss
information relating to the Receivables contained in the Servicer's Certificates
were found to be accurate.
Β
The
report will also indicate that the firm is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
Β
SECTION
4.12. Β Β Servicer
Expenses.
The
Servicer shall be required to pay all expenses incurred by it in connection
with
its activities under this Agreement (including taxes imposed on the Servicer,
expenses incurred by the Servicer in connection with payments and reports to
Noteholders, the Trust Collateral Agent [and the Note Insurer] and all other
fees and expenses of the Issuer including taxes levied or assessed against
the
Issuer, and claims against the Issuer in respect of indemnification not
expressly stated under this agreement to be for the account of the
Issuer).
Β
Β
18
Β
SECTION
4.13. Β Β Retention
and Termination of Servicer.
The
Servicer hereby covenants and agrees to act as such under this Agreement for
an
initial term, commencing on the Closing Date and ending on _______________
which
term shall be extendible by [the Note Insurer] for successive quarterly terms
ending on each successive June 30, September 30, December 31, and March 31
(or,
pursuant to revocable written standing instructions from time to time to the
Servicer and the Trust Collateral Agent, for any specified number of terms
greater than one), until the termination of the Issuer. Each such notice
(including each notice pursuant to standing instructions, which shall be deemed
delivered at the end of successive quarterly terms for so long as such
instructions are in effect) (a "Servicer Extension Notice") shall be delivered
by [the Note Insurer] to the Trust Collateral Agent and the Servicer. The
Servicer hereby agrees that, as of the date hereof and upon its receipt of
any
such Servicer Extension Notice, the Servicer shall become bound, for the initial
term beginning on the date hereof and for the duration of the term covered
by
such Servicer Extension Notice, to continue as the Servicer subject to and
in
accordance with the other provisions of this Agreement. [Until such time as
a
Note Insurer Default shall have occurred and be continuing,] the Trust
Collateral Agent agrees that if as of the fifteenth day prior to the last day
of
any term of the Servicer, the Trust Collateral Agent shall not have received
any
Servicer Extension Notice from [the Note Insurer], the Trust Collateral Agent
will, within five days thereafter, give written notice of such non-receipt
[to
the Note Insurer], the Back-up Servicer (or any alternate successor servicer
appointed by the Note Insurer pursuant to Section 8.5) and the Servicer and
the
Servicer's terms shall not be extended unless a Servicer Extension Notice is
received on or before the last day of such term.
Β
SECTION
4.14. Β Β Access
to Certain Documentation and Information Regarding Receivables.
The
Servicer shall provide to representatives of the Indenture Trustee, the Trust
Collateral Agent, [the Collateral Agent], the Back-up Servicer, the Transferor,
the Issuer [and the Note Insurer] reasonable access to documentation and
computer systems and information regarding the Receivables and shall provide
such access to Noteholders in such cases where the Noteholders are required
by
applicable law or regulation to review such documentation. In each case, such
access shall be afforded without charge but only upon reasonable request and
during normal business hours. Nothing in this Section 4.14 shall derogate from
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access as provided in this Section 4.14 as a result of
such
obligation shall not constitute a breach of this Section 4.14.
Β
SECTION
4.15. Β Β Verification
of Servicer's Certificate.
Β
(a)
Β Β On
or
before the fifth Business Day of each month, the Servicer will deliver to the
Trust Collateral Agent and the Back-up Servicer a computer diskette (or other
electronic transmission) in a format acceptable to the Trust Collateral Agent
and the Back-up Servicer containing such information with respect to the
Receivables as of the close of business on the last day of the preceding
Collection Period as is necessary for preparation of the Servicer's Certificate.
The Back-up Servicer shall use such computer diskette (or other electronic
transmission) to verify the information specified in Section 4.15(b)(iii)
contained in the Servicer's Certificate delivered by the Servicer, and the
Back-up Servicer shall certify to [the Note Insurer] that it has verified the
Servicer's Certificate in accordance with this Section 4.15 and shall notify
the
Servicer, [the Note Insurer] and the Trust Collateral Agent of any
discrepancies, in each case, on or before the related [Deficiency Claim Date].
In the event that the Back-up Servicer reports any discrepancies, the Servicer
and the Back-up Servicer shall attempt to reconcile such discrepancies prior
to
the related Deficiency Claim Date, but in the absence of a reconciliation,
the
Servicer's Certificate shall control for the purpose of calculations and
payments with respect to the related Payment Date. In the event that the Back-up
Servicer and the Servicer are unable to reconcile discrepancies with respect
to
a Servicer's Certificate by the related Payment Date, (i) the Back-up Servicer
will notify [the Note Insurer] and the Trust Collateral Agent, and (ii) the
Servicer shall cause a firm of independent certified public accountants, at
the
Servicer's expense, to audit the Servicer's Certificate and, prior to the fifth
calendar day of the following month, reconcile the discrepancies. The effect,
if
any, of such reconciliation shall be reflected in the Servicer's Certificate
for
such next succeeding Determination Date. In addition, the Servicer shall, [if
so
requested by the Note Insurer (unless a Note Insurer Default shall have occurred
and be continuing)] deliver to the Back-up Servicer (i) within five (5) Business
Days of demand therefor a computer tape containing as of the close of business
on the date of demand all of the data maintained by the Servicer in computer
format in connection with servicing the Receivables and (ii) within fifteen
(15)
Business Days of demand therefor a copy of such other information as is
reasonably requested by [the Note Insurer] for the purpose of reconciling such
discrepancies. Other than the duties specifically set forth in this Agreement,
the Back-up Servicer shall have no obligations hereunder, including, without
limitation, to supervise, verify, monitor or administer the performance of
the
Servicer. The Back-up Servicer shall have no liability for any actions taken
or
omitted by the Servicer. The duties and obligations of the Back-up Servicer
shall be determined solely by the express provisions of this Agreement and
no
implied covenants or obligations shall be read into this Agreement against
the
Back-up Servicer.
Β
Β
19
Β
(b)
Β Β The
Back-up Servicer shall review each Servicer's Certificate delivered pursuant
to
Section 4.15(a) and shall, based upon the information provided from the Servicer
under Section 4.15(a):
Β
(i)Β Β confirm
that such Servicer's Certificate is complete on its face;
Β
(ii)Β Β load
the
computer diskette (which shall be in a format acceptable to the Back-up
Servicer) received from the Servicer pursuant to Section 4.15(a) hereof, confirm
that such computer diskette is in a readable form and calculate the Principal
Balance of each Receivable based on the Principal Balance of such Receivable
as
of the preceding Payment Date (as set forth in such Servicer's Certificate)
and
the current principal payment for such Receivable (as set forth in such
Servicer's Certificate) and compare such calculation to that set forth in the
Servicer's Certificate (and give notice of any discrepancy to [the Note
Insurer]); and
Β
(iii)Β Β recalculate
the Available Funds, the Payment Amount, the Principal Payment Amount, the
Interest Payment Amount, the Back-up Servicer Fee, the Servicing Fee, the
Indenture Trustee Fee, the Custodian Fee, [the amount on deposit in the Spread
Account and the Premium] in the Servicer's Certificate based solely on the
balances and calculations specifically set forth in the Servicer's Certificate,
compare such calculations to those set forth in the Servicer's Certificate.
To
the extent of any discrepancy, the Back-up Servicer shall give notice thereof
to
[the Note Insurer]. The Back-up Servicer's obligation shall be limited to the
mathematical recalculation of the amounts set forth in this Section 4.15(b)(iii)
based on the Servicer's Certificate.
Β
Β
20
Β
SECTION
4.16. Β Β Fidelity
Bond.
The
Servicer shall maintain a fidelity bond in such form and amount as is customary
for entities acting as custodian of funds and documents in respect of consumer
contracts on behalf of institutional investors.
Β
SECTION
4.17. Β Β Delegation
of Duties.
The
Servicer may at any time delegate duties under this Agreement to sub-contractors
who are in the business of servicing automotive receivables with the prior
written consent of the Controlling Party; provided,
however,
that no
such delegation or sub-contracting of duties by the Servicer shall relieve
the
Servicer of its responsibility with respect to such duties. In the event the
Servicer shall for any reason no longer be the servicer of the Receivables
(including by reason of a Servicer Termination Event), the Back-up Servicer,
its
designee or any successor Servicer shall assume all of the rights and
obligations of the predecessor Servicer under one or more subservicing
agreements that may have been entered into by the predecessor Servicer by giving
notice of such assumption to the related subservicer or subservicers within
ten
(10) Business Days of the termination of the Servicer as servicer of the
Receivables; provided,
however,
that
the Back-up Servicer may elect to terminate a subservicing agreement with the
prior written consent of [the Note Insurer, so long as no Note Insurer Default
is then continuing.] If the Back-up Servicer does not elect to assume any
subservicing agreement, any and all costs of termination shall be at the
predecessor Servicer's expense. Upon the giving of such notice, the Back-up
Servicer, its designee or the successor Servicer shall be deemed to have assumed
all of the predecessor Servicer's interest therein and to have replaced the
predecessor Servicer as a party to the subservicing agreement to the same extent
as if the subservicing agreement had been assigned to the assuming party except
that the predecessor Servicer and the subservicer, if any, shall not thereby
be
relieved of any liability or obligations accrued up to the date of the
replacement of the Servicer under the subservicing agreement and the
subservicer, if any, shall not be relieved of any liability or obligation to
the
predecessor Servicer that survives the assignment or termination of the
subservicing agreement. The Back-up Servicer shall notify each Rating Agency
[and the Note Insurer] if any subservicing agreement is assumed by the Back-up
Servicer, its designee or the successor Servicer. The predecessor Servicer
shall, upon request of the Trust Collateral Agent, the Back-up Servicer or
any
successor Servicer, but at the expense of the predecessor Servicer, deliver
to
the assuming party all documents and records relating to the subservicing
agreement and the Receivables then being serviced and an accounting of amounts
collected and held by it and otherwise use its reasonable efforts to effect
the
orderly and efficient transfer of the subservicing agreement to the assuming
party.
Β
SECTION
4.18. Β Β Delivery
of Back-up Tapes of Back-up Servicer.
Β
(a)
Β Β In
addition to the information to be delivered by the Servicer to the Back-up
Servicer on or before the fifth Business Day of each month pursuant to Section
4.15(a), the Servicer shall deliver to the Back-up Servicer, or its designated
agent, a computer diskette (or other electronic transmission), in a format
acceptable to the Back-up Servicer or its designated agent, as the case may
be,
with the loan master file and history information in the form attached hereto
as
Exhibit B-2 on or prior to the Closing Date, which loan master file and history
information shall be sufficiently detailed to enable the Back-up Servicer to
maintain records sufficient to assume the role of successor Servicer pursuant
to
this Agreement.
Β
Β
21
Β
(b)
Β Β In
addition to the information required to be delivered by the Servicer to the
Back-up Servicer or its designated agent on or before the fifth Business Day
of
each month pursuant to Section 4.15(a) and on or prior to the Closing Date
pursuant to Section 4.18(a), the Servicer shall deliver the loan master file
and
history information to the Back-up Servicer or its designated agent on the
Determination Date occurring in ________ (with respect to the period from and
including the Cutoff Date to the last day of the related Collection Period)
and
on the Determination Date occurring every six months thereafter in the form
attached hereto as Exhibit B-2 in writing and on a computer diskette (or other
electronic transmission) in a format acceptable to the Back-up Servicer or
its
designated agent, as the case may be, and as at such other times as may be
requested by [the Note Insurer or] the Back-up Servicer upon prior written
notice to the Servicer, provided that the Back-up Servicer shall deliver a
copy
of any such notice by the Back-up Servicer to [the Note Insurer] simultaneously
with its delivery of such notice to the Servicer.
Β
ARTICLE
V
Β
ACCOUNTS;
PAYMENTS;
Β
STATEMENTS
TO NOTEHOLDERS
Β
SECTION
5.1. Β Β Accounts;
Lock-Box Account.
Β
(a)
Β Β The
Servicer has established the Lock-Box Account as three Eligible Accounts, one
established with [Name of indenture trustee] entitled "____________", account
number ________________, one established with [Name of bank] entitled
"____________," account number __________, and one established with [Name of
indenture trustee] entitled "____________," account number ___________;
provided,
that
the
Servicer, [with the prior written consent of the Note Insurer], may from time
to
time (a) establish additional or substitute Lock-Box Accounts, each of which
shall be an Eligible Account, and (b) close or terminate the use of any of
the
aforementioned accounts or any subsequently established accounts, each of which
accounts, at such time, shall no longer be deemed to be a Lock-Box Account;
provided,
further,
that
pursuant to the Lock-Box Agreement, the Lock-Box Processor and no other person,
save the Trust Collateral Agent or the Servicer, has authority to direct
disposition of funds related to the Receivables on deposit in the Lock-Box
Account consistent with the provisions of this Agreement and the Lock-Box
Agreement. The Trust Collateral Agent shall have no liability or responsibility
with respect to the Lock-Box Processor's or the Servicer's directions or
activities as set forth in the preceding sentence. The Lock-Box Account shall
be
established pursuant to and maintained in accordance with the Lock-Box Agreement
and shall be a demand deposit account which shall at all times be an Eligible
Account, initially established and maintained with [Name of indenture trustee]
or, [at the request of the Note Insurer], an Eligible Account satisfying clause
(i) of the definition thereof. The Servicer has established and shall maintain
the Lock-Box at a United States Post Office Branch. Notwithstanding the Lock-Box
Agreement or any of the provisions of this Agreement relating to the Lock-Box
and the Lock-Box Agreement, the Servicer shall remain obligated and liable
to
the Trust Collateral Agent and the Noteholders for servicing and administering
the Receivables and the other Trust Assets in accordance with provisions of
this
Agreement without diminution of such obligation or liability by virtue
thereof.
Β
Β
22
Β
In
the
event the Servicer shall for any reason no longer be acting as such, the
Lock-Box Agreement shall terminate in accordance with its terms and funds on
deposit in the Lock-Box Account shall be distributed by [Name of indenture
trustee], as agent for the beneficial owners of funds in the Lock-Box Account
at
such time (including the Issuer), and [Name of indenture trustee] shall deposit
any such funds relating to the Receivables to such other account as shall be
identified by the Back-up Servicer or successor Servicer for deposit therein;
provided,
however,
that the
outgoing Servicer shall not thereby be relieved of any liability or obligations
on the part of the outgoing Servicer to the Lock-Box Bank under such Lock-Box
Agreement. The outgoing Servicer shall, upon request of the Trust Collateral
Agent, but at the expense of the outgoing Servicer, deliver to the successor
Servicer all documents and records relating to the Lock-Box Agreement and an
accounting of amounts collected and held in the Lock-Box Account or held by
the
Lock-Box Processor in respect of the Receivables and otherwise use its best
efforts to effect the orderly and efficient transfer of any Lock-Box Agreement
to the successor Servicer. In the event that the Lock-Box Account fails at
any
time to qualify as an Eligible Account, the Servicer, at its expense, shall
cause the Lock-Box Bank to deliver, at the direction of the Controlling Party
to
the Trust Collateral Agent or a successor Lock-Box Bank, all documents and
records relating to the Receivables and all amounts held (or thereafter
received) on deposit in the Lock Box Account or held by the Lock-Box Processor
in respect of the Receivables (together with an accounting of such amounts)
and
shall otherwise use its best efforts to effect the orderly and efficient
transfer of the lock-box arrangements, and the Servicer shall promptly notify
the Obligors to make payments to any new Lock-Box.
Β
(b)
Β Β In
addition to the Lock-Box Account, the Trust Collateral Agent shall establish,
with itself, the Collection Account and the Note Account in the name of the
Issuer for the benefit of the Noteholders [and the Note Insurer], [and the
Policy Payments Account in the name of the Issuer for the benefit of the
Noteholders]. The Collection Account, the Note Account [and the Policy Payments
Account] shall be Eligible Accounts initially established with the Trust
Collateral Agent; provided,
however,
if any
of such accounts shall cease to be an Eligible Account, the Servicer, [with
the
consent of the Note Insurer (so long as no Note Insurer Default has occurred
and
is continuing),] within five (5) Business Days shall, cause such accounts to
be
moved to an institution so that such account meets the definition of Eligible
Account. The Servicer shall promptly notify the Rating Agencies and the
Transferor of any change in the location of any of the aforementioned
accounts.
Β
All
amounts held in the Collection Account shall be invested by the Trust Collateral
Agent at the written direction of the Transferor in Eligible Investments in
the
name of the Trust Collateral Agent on behalf of the Issuer and shall mature
no
later than one Business Day immediately preceding the Payment Date next
succeeding the date of such investment. In no event shall the Trust Collateral
Agent be liable for any insufficiency in the Collection Account resulting from
any investment loss in any Eligible Account. Such written direction shall
certify that any such investment is authorized by this Section. No investment
may be sold prior to its maturity. Amounts in the Note Account [and the Policy
Payments Account] shall not be invested. The amount of earnings on investments
of funds in the Collection Account during the Collection Period related to
each
Payment Date shall be deposited into the Note Account on each Payment Date,
and
shall be available for payment pursuant to Section 5.6(c). For purposes of
this
paragraph, the Trust Collateral Agent will take delivery of the Eligible
Investments in accordance with Schedule C.
Β
Β
23
Β
(c)
Β Β The
Trust
Collateral Agent, pursuant to the Servicer's written instruction, shall on
or
prior to each Payment Date (and prior to the transfer from the Collection
Account to the Note Account described in Section 5.6(a)(i)) transfer from the
Collection Account to the Servicer, as additional servicing compensation, the
amount, if any, required to be paid to the Servicer pursuant to Section
5.12.
Β
SECTION
5.2. Β Β Collections.
The
Servicer shall use reasonable efforts to cause the Lock-Box Processor to
transfer any payments in respect of the Receivables from or on behalf of
Obligors received in the Lock-Box to the Lock-Box Account on the Business Day
on
which such payments are received, pursuant to the Lock-Box Agreement. Within
two
Business Days of receipt of such funds into the Lock-Box Account, the Servicer
shall cause the Lock-Box Bank to transfer available funds related to the
Receivables from the Lock-Box Account to the Collection Account, and if such
funds are not available funds, as soon thereafter as they clear (i.e., become
available for withdrawal from the Lock-Box Account). In addition, the Servicer
shall remit all payments by or on behalf of the Obligors received by the
Servicer with respect to the Receivables (other than Purchased Receivables),
and
all Liquidation Proceeds no later than the second Business Day following receipt
into the Lock-Box Account or the Collection Account.
Β
SECTION
5.3. Β Β Application
of Collections.
All
collections for each Collection Period shall be applied by the Servicer as
follows:
Β
With
respect to each Receivable (other than a Purchased Receivable), payments
actually received from or on behalf of the Obligor shall be applied hereunder,
first, to interest and principal in accordance with the Simple Interest Method
to the extent necessary to bring such Receivable current, second, in connection
with the redemption of a defaulted Receivable, to reimburse the Servicer for
reasonable and customary out-of-pocket expenses incurred by the Servicer in
connection with such Receivable, third, to late fees and fourth, to principal
in
accordance with the Simple Interest Method. Notwithstanding anything herein
to
the contrary, no amount applied as interest accrued on any Precomputed
Receivable for any single Collection Period will exceed 30 days' interest
accrued thereon assuming a 360-day year of twelve 30-day months.
Β
SECTION
5.4. Β Β Intentionally
Omitted.
Β
SECTION
5.5. Β Β Additional
Deposits.
The
following additional deposits shall be made in immediately available funds
on
the dates indicated: (i) on the Business Day immediately preceding each
Determination Date, the Servicer or LBAC, as the case may be, shall deposit
or
cause to be deposited in the Collection Account the aggregate Purchase Amount
with respect to Purchased Receivables, (ii) on the Business Day immediately
preceding each Determination Date, the Trust Collateral Agent shall deposit
in
the Collection Account all amounts to be paid under Section 11.1, [and (iii)
on
or before each Draw Date, the Trust Collateral Agent shall transfer to the
Collection Account any amounts transferred to the Trust Collateral Agent by
[the
Collateral Agent] from the Spread Account].
Β
Β
24
Β
SECTION
5.6. Β Β Payments;
[Policy Claims].
Β
(a)
Β Β The
Trust
Collateral Agent (based solely on the information set forth in the Servicer's
Certificate for the related Payment Date upon which the Trust Collateral Agent
may conclusively rely) shall transfer on each Payment Date, from the Collection
Account to the Note Account, in immediately available funds, an amount equal
to
the excess of the sum of (a) all funds that were deposited in the Collection
Account, plus (b) earnings on investments of funds in the Collection Account
pursuant to Section 5.1(b), for the related Collection Period over all funds
transferred from the Collection Account with respect to such Collection Period
pursuant to Section 5.1(c).
Β
(b)
Β Β Prior
to
each Payment Date, the Servicer shall on the related Determination Date
calculate the Available Funds, the Principal Payment Amount, the Payment Amount,
the Interest Payment Amount, the Monthly Dealer Participation Fee Payment
Amount, the amount, if any, required to be withdrawn from the Collection Account
and paid to the Servicer as additional servicing compensation [or contributed
to
the Spread Account on behalf of the Servicer], in each case pursuant to Section
5.12 and, based on the Available Funds and the other amounts available for
payment on such Payment Date, determine the amount payable to the
Noteholders.
Β
(c)
Β Β On
each
Payment Date, the Trust Collateral Agent shall [(x) distribute all amounts
delivered by the Note Insurer to the Trust Collateral Agent for deposit into
the
Collection Account pursuant to Section 5.9 for payment in the amounts and
priority as directed by the Note Insurer, and (y)] (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 4.9 upon which the Trust Collateral Agent may
conclusively rely) subject to subsection (e) hereof, make the following payments
from the Available Funds withdrawn from the Note Account and from the other
sources described below in the following order of priority:
Β
(i)Β Β first,
to
LBAC, from the Available Funds, the Monthly Dealer Participation Fee Payment
Amount and all unpaid Monthly Dealer Participation Fee Payment Amounts from
prior Collection Periods, and second,
to the
Servicer, from the Available Funds (as such Available Funds have been reduced
by
payments made pursuant to subclause first
of this
clause (i)), the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods [and, if the Available Funds are insufficient to pay such
Servicing Fee and such unpaid Servicing Fees from prior Collection Periods,
the
Servicer will receive such deficiency from the Deficiency Claim Amount with
respect to such Payment Date, if any, to the extent such Deficiency Claim Amount
is received by the Trust Collateral Agent from [the Collateral
Agent]];
Β
(ii)Β Β to
the
Indenture Trustee, the Custodian and the Back-up Servicer from the Available
Funds (as such Available Funds have been reduced by payments made pursuant
to
clause (i) above), the Indenture Trustee Fee, the Custodian Fee and the Back-up
Servicer Fee, respectively, and all unpaid Indenture Trustee Fees, Custodian
Fees and Back-up Servicer Fees from prior Collection Periods [and, if the
Available Funds are insufficient to pay such amounts, the Indenture Trustee,
the
Custodian and the Back-up Servicer will receive such deficiency from the
remaining portion of the Deficiency Claim Amount with respect to such Payment
Date, if any, to the extent such Deficiency Claim Amount is received by the
Trust Collateral Agent from [the Collateral Agent], after application thereof
pursuant to clause (i) above];
Β
Β
25
Β
(iii)Β Β to
the
Noteholders, proΒ rata
based on
the Note Interest due on each such class of Notes, from the Available Funds
(as
such Available Funds have been reduced by payments made pursuant to clauses
(i)
and (ii) above), an amount equal to the Class A-1 Note Interest, with respect
to
such Payment Date (plus (without duplication) interest on any outstanding
Interest Carryover Shortfall, if any, to the extent permitted by applicable
law,
at the Note Rate, for the related Accrual Period (calculated (i) with respect
to
the Class A-1 Notes, on the basis of [the actual number of days elapsed during
such Accrual Period based on a 360 day year or a 360-day year consisting of
twelve 30-day months)] [and, if the Available Funds are insufficient to pay
such
amounts, the Noteholders will receive such deficiency from the following sources
in the following order of priority: (A) from the remaining portion of the
Deficiency Claim Amount with respect to such Payment Date, if any, to the extent
such Deficiency Claim Amount is received by the Trust Collateral Agent from
[the
Collateral Agent], after application thereof pursuant to clauses (i) and (ii)
above and (B) from the Policy Claim Amount with respect to such Payment Date,
if
any, received by the Trust Collateral Agent from the Note Insurer];
Β
(iv)Β Β from
the
Available Funds (as such Available Funds have been reduced by payments made
pursuant to clauses (i) through (iii) above) to the Noteholders, until the
Note
Balance has been reduced to zero, an amount equal to the sum of the Principal
Payment Amount with respect to such Payment Date and any Principal Carryover
Shortfall as of the close of business on the preceding Payment Date, [and,
if
the Available Funds are insufficient to pay such amounts, the Noteholders will
receive such deficiency from the following sources in the following order of
priority: (A) from the remaining portion of the Deficiency Claim Amount with
respect to such Payment Date, if any, after application thereof pursuant to
clauses (i) through (iii) above, plus (B) the remaining portion of the Policy
Claim Amount with respect to such Payment Date, if any, after application
thereof pursuant to clause (iii) above];
Β
(v)Β Β first,
[to the
Note Insurer, from the Available Funds (as such Available Funds have been
reduced by payments made pursuant to clauses (i) through (iv) above), an amount
equal to the Reimbursement Obligations and, if the Available Funds are
insufficient to pay such Reimbursement Obligations, the Note Insurer shall
receive such deficiency from the remaining portion of the Deficiency Claim
Amount with respect to such Payment Date, if any, to the extent received by
the
Trust Collateral Agent from [the Collateral Agent], after application thereof
pursuant to clauses (i) through (iv) above, second,]
to the
Trust Collateral Agent, the Indenture Trustee, the Back-up Servicer and the
Custodian, as applicable, from the Available Funds (as such Available Funds
have
been reduced by payments made pursuant to clauses (i) through (iv) above and
subclause first
of this
clause (v)), all reasonable out-of-pocket expenses of the Trust Collateral
Agent, the Indenture Trustee, the Back-up Servicer and the Custodian (including
reasonable counsel fees and expenses), including, without limitation, costs
and
expenses required to be paid by the Servicer to the Back-up Servicer under
Section 9.2(a), to the extent not paid by the Servicer, and all unpaid
reasonable out-of-pocket expenses of the Trust Collateral Agent, the Indenture
Trustee, the Back-up Servicer and the Custodian (including reasonable counsel
fees and expenses) from prior Collection Periods; provided,
however,
that
unless an Event of Default shall have occurred and be continuing, expenses
payable to the Trust Collateral Agent, the Indenture Trustee, the Back-up
Servicer and the Custodian pursuant to this subclause second
of
clause (v) shall be limited to a combined aggregate amount of $__________ per
annum, and third
to the
Back-up Servicer, from the Available Funds (as such Available Funds have been
reduced by payments made pursuant to clauses (i) through (iv) above and
subclauses first
and
second
of this
clause (v)), in the event that the Back-up Servicer shall have assumed the
obligations of Servicer pursuant to Section 9.2(a) and the Servicer fails to
pay
the Back-up Servicer for system conversion expenses as required by said section,
an aggregate amount not to exceed $_______________ in payment of such system
conversion expenses; and
Β
Β
26
Β
(vi)Β Β to
[[the
Collateral Agent], for deposit in the Spread Account] [the Certificateholder],
the remaining Available Funds (as such Available Funds have been reduced by
payments pursuant to clauses (i) through [(v)] above ), if any, [for application
in accordance with provisions of the Spread Account Agreement].
Β
(d)
Β Β [In
addition, on each Payment Date, after giving effect to the payments specified
in
clauses (i) through [(vi)] above, the Trust Collateral Agent shall (based on
the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 4.9 upon which the Trust Collateral
Agent
may conclusively rely) shall pay to the Certificateholder the amount, if any,
to
be released to the Certificateholder pursuant to the terms of the Spread Account
Agreement.]
Β
(e)
Β Β Each
Noteholder, by its acceptance of its Note, will be deemed to have consented
to
the provisions of Sections 5.6(c) and 5.6(d) relating to the priority of
payments, and will be further deemed to have acknowledged that no property
rights in any amount or the proceeds of any such amount shall vest in such
Noteholder until such amounts have been distributed to such Noteholder pursuant
to such provisions; provided,
that the
foregoing shall not restrict the right of any Noteholder, upon compliance with
the provisions hereof from seeking to compel the performance of the provisions
hereof by the parties hereto. [Each Noteholder, by its acceptance of its Note,
will be deemed to have further agreed that withdrawals of funds by [the
Collateral Agent] from the Spread Account for application hereunder, shall
be
made in accordance with the provisions of the Spread Account
Agreement.]
Β
(f)
Β Β In
furtherance of and not in limitation of the foregoing, the Certificateholder
by
acceptance of the Certificate, specifically acknowledges that no amounts shall
be received by it, nor shall it have any right to receive any amounts, unless
and until such amounts have been distributed pursuant to Section 5.6(d) above
for payment to the Certificateholder. [Notwithstanding the foregoing, in the
event that it is ever determined that any property held in the Spread Account
constitute a pledge of collateral, then the provisions of this Agreement and
the
Spread Account Agreement shall be considered to constitute a security agreement
and the Transferor and the Certificateholder hereby grant to [the Collateral
Agent] and to the Trust Collateral Agent, respectively, a first priority
perfected security interest in such amounts, to be applied as set forth in
Section 3.03(b) of the Spread Account Agreement. In addition, the
Certificateholder, by acceptance of its Certificate, hereby appoints the
Transferor as its agent to pledge a first priority perfected security interest
in the Spread Account, and any property held therein from time to time to [the
Collateral Agent] for the benefit of the Trust Collateral Agent [and the Note
Insurer] pursuant to the Spread Account Agreement and agrees to execute and
deliver such instruments of conveyance, assignment, grant, confirmation, etc.,
as well as any financing statements, in each case as [the Note Insurer] shall
consider reasonably necessary in order to perfect [the Collateral Agent]'s
Security Interest in the Collateral (as such terms are defined in the Spread
Account Agreement).]
Β
Β
27
Β
(g)
Β Β Subject
to Section 11.1 respecting the final payment upon retirement of each Note,
the
Servicer shall on each Payment Date instruct the Trust Collateral Agent to
distribute to each Noteholder of record on the preceding Record Date either
(i)
by wire transfer, in immediately available funds to the account of such Holder
at a bank or other entity having appropriate facilities therefor, if such
Noteholder is the Clearing Agency or such Holder's Notes in the aggregate
evidence an original Note Balance of at least $1,000,000, and if such Noteholder
shall have provided to the Trust Collateral Agent appropriate instructions
prior
to the Record Date for such Payment Date, or (ii) by check mailed to such
Noteholder at the address of such Holder appearing in the Note Register, such
Holder's proΒ rata
share
(based on the outstanding Note Balance) of the Payment Amount, to be paid to
such Notes in accordance with the Servicer's Certificate.
Β
SECTION
5.7. Β Β Statements
to Noteholders; Tax Returns.
Β
(a)
Β Β With
each
payment from the Note Account to the Noteholders made on a Payment Date, the
Servicer shall provide to [the Note Insurer], the Transferor, the Indenture
Trustee, each Rating Agency and the Trust Collateral Agent (the Trust Collateral
Agent to forward to each Noteholder of record) the Servicer's Certificate
substantially in the form of Exhibit B-1 hereto, setting forth, among at least
the following information as to the Notes, to the extent
applicable:
Β
(i)Β Β the
amount of the payment allocable to principal of the Notes;
Β
(ii)Β Β the
amount of the payment allocable to interest on the Notes;
Β
(iii)Β Β the
number of Receivables, the weighted average APR of the Receivables, the weighted
average maturity of the Receivables, the Pool Balance, and the Pool Factor,
as
of the close of business on the last day of the preceding Collection
Period;
Β
(iv)Β Β the
Note
Balance, as of the close of business on the last day of the preceding Collection
Period, after giving effect to payments allocated to principal reported under
clause (i) above;
Β
(v)Β Β the
amount of the Monthly Dealer Participation Fee Payment
Amount
paid to
LBAC, the amount of the Servicing Fee paid to the Servicer and the amount of
the
Back-up Servicer Fee paid to the Back-up Servicer with respect to the related
Collection Period, the amount of any unpaid Servicing Fees and any unpaid
Back-up Servicer Fees and the change in such amounts from the prior Payment
Date;
Β
Β
28
Β
(vi)Β Β the
amount of the Interest Carryover Shortfall, if applicable, and the Principal
Carryover Shortfall, if applicable, on such Payment Date and the change in
such
amounts from the prior Payment Date;
Β
(vii)Β Β [the
amount paid, if any, to the Noteholders under the Policy for such Payment
Date;]
Β
(viii)Β Β [the
amount paid to the Note Insurer on such Payment Date;]
Β
(ix)Β Β [the
amount in the Spread Account;]
Β
(x)Β Β the
number of Receivables and the aggregate outstanding principal amount scheduled
to be paid thereon, for which the related Obligors are delinquent in making
Scheduled Receivable Payments between 30 and 59 days, 60 and 89 days, 90 and
119
days and 120 days or more (in each case calculated on the basis of a 360-day
year consisting of twelve 30-day months), and the percentage of the aggregate
principal amount which such delinquencies represent;
Β
(xi)Β Β the
number and the aggregate Purchase Amount of Receivables repurchased by the
Originator or purchased by the Servicer during the related Collection
Period;
Β
(xii)Β Β the
cumulative number and amount of Liquidated Receivables, the cumulative amount
of
any Liquidation Proceeds and Recoveries, since the Cutoff Date to the last
day
of the related Collection Period, the number and amount of Liquidated
Receivables for the related Collection Period and the amount of Recoveries
in
the related Collection Period;
Β
(xiii)Β Β [the
Average Delinquency Ratio, the Cumulative Default Rate and the Cumulative Loss
Rate (as such terms are defined in the Spread Account Agreement) for such
Payment Date;]
Β
(xiv)Β Β [whether
any Trigger Event has occurred as of such Determination Date;]
Β
(xv)Β Β [whether
any Trigger Event that may have occurred as of a prior Determination Date is
Deemed Cured (as such term is defined in the Spread Account Agreement) or
otherwise waived as of such Determination Date;]
Β
(xvi)Β Β [whether
an Insurance Agreement Event of Default has occurred; and]
Β
(xvii)Β Β the
number and amount of Cram Down Losses, the number and dollar amount of
repossessions, the aging of repossession inventory and the dollar amount of
Recoveries.
Β
Each
amount set forth pursuant to subclauses (i), (ii), (v) and (vi) above shall
be
expressed in the aggregate and as a dollar amount per $1,000 of original
principal balance of a Note.
Β
Β
29
Β
(b)
Β Β No
later
than January 31 of each calendar year, commencing January 31, 20__, the Servicer
shall send to the Indenture Trustee and the Trust Collateral Agent, and the
Trust Collateral Agent shall, provided it has received the necessary information
from the Servicer, promptly thereafter furnish to each Person who at any time
during the preceding calendar year was a Noteholder of record and received
any
payment thereon (a) a report (prepared by the Servicer) as to the aggregate
of
amounts reported pursuant to subclauses (i), (ii), (v) and (vi) of Section
5.7(a) for such preceding calendar year or applicable portion thereof during
which such person was a Noteholder, and (b) such information as may be
reasonably requested by the Noteholders or required by the Code and regulations
thereunder, to enable such Holders to prepare their Federal and State income
tax
returns. The obligation of the Trust Collateral Agent set forth in this
paragraph shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Servicer pursuant
to any requirements of the Code.
Β
(c)
Β Β The
Servicer, at its own expense, shall cause a firm of nationally recognized
accountants to prepare any tax returns required to be filed by the Issuer,
and
the Issuer shall execute and file such returns if requested to do so by the
Servicer. The Trust Collateral Agent, upon request, will furnish the Servicer
with all such information actually known to the Trust Collateral Agent as may
be
reasonably requested by the Servicer in connection with the preparation of
all
tax returns of the Issuer.
Β
SECTION
5.8. Β Β Reliance
on Information from the Servicer.
Notwithstanding anything to the contrary contained in this Agreement, all
payments from any of the accounts described in this Article V and any transfer
of amounts between such accounts shall be made by the Trust Collateral Agent
based on the information provided to the Trust Collateral Agent by the Servicer
in writing, whether by way of a Servicer's Certificate or otherwise (upon which
the Trust Collateral Agent may conclusively rely).
Β
SECTION
5.9. Β Β [Optional
Deposits by the Note Insurer.
The
Note Insurer shall at any time, and from time to time, with respect to a Payment
Date, have the option to deliver amounts to the Trust Collateral Agent for
deposit into the Collection Account for any of the following purposes: (i)
to
provide funds in respect of the payment of fees or expenses of any provider
of
services to the Issuer with respect to such Payment Date, (ii) to distribute
as
a component of the Principal Payment Amount to the extent that the Note Balance
as of the Determination Date preceding such Payment Date exceeds the Pool
Balance as of such Determination Date or (iii) to include such amount as part
of
the Payment Amount for such Payment Date to the extent that without such amount
a draw would be required to be made on the Note Policy.]
Β
SECTION
5.10. Β Β [Spread
Account.
The Transferor agrees, simultaneously with the execution and delivery of this
Agreement, to execute and deliver the Spread Account Agreement and, pursuant
to
the terms thereof, to deposit the Initial Spread Account Deposit in the Spread
Account on the Closing Date. Although the Transferor as Certificateholder,
has
pledged the Spread Account to [the Collateral Agent], pursuant to the Spread
Account Agreement, the Spread Account shall not under any circumstances be
deemed to be a part of or otherwise includible in the Issuer or the Trust
Assets.]
Β
Β
30
Β
SECTION
5.11. Β Β [Withdrawals
from Spread Account.
Β
(a)
Β Β In
the
event that the Servicer's Certificate with respect to any Determination Date
shall state that the amount of the Available Funds with respect to such
Determination Date are less than the sum of the amounts payable on the related
Payment Date pursuant to clauses (i) through (iv) and subclause first
of
clause (v) of Section 5.6(c) (such deficiency being a "Deficiency Claim Amount")
then on the Deficiency Claim Date immediately preceding such Payment Date,
the
Trust Collateral Agent shall deliver to [the Collateral Agent], the Note
Insurer, the Fiscal Agent (as such term is defined in the Insurance Agreement),
if any, the Servicer, by hand delivery, telex or facsimile transmission, a
written notice (a "Deficiency Notice") specifying the Deficiency Claim Amount
for such Payment Date. Such Deficiency Notice shall direct [the Collateral
Agent] to remit such Deficiency Claim Amount (to the extent of the funds
available to be distributed pursuant to the Spread Account Agreement) to the
Trust Collateral Agent for deposit in the Collection Account.
Β
Any
Deficiency Notice shall be delivered by 10:00 a.m., New York City time, on
the
related Deficiency Claim Date. The amounts distributed by [the Collateral Agent]
to the Trust Collateral Agent pursuant to a Deficiency Notice shall be deposited
by the Trust Collateral Agent into the Collection Account pursuant to Section
5.5.]
Β
SECTION
5.12. Β Β Simple
Interest.
On each
Determination Date, the Servicer shall determine the amount, if any, of any
Simple Interest Shortfall or Simple Interest Excess for the related Collection
Period. If the Servicer determines that there is a Simple Interest Shortfall
for
such related Collection Period, the Servicer shall make an advance (a "Simple
Interest Advance") in the amount of such Simple Interest Shortfall and deposit
such Simple Interest Advance into the Collection Account on or before the
Business Day immediately preceding the next succeeding Payment Date. If,
however, the Servicer determines that there is a Simple Interest Excess for
such
Collection Period, the Trust Collateral Agent shall withdraw the amount of
such
Simple Interest Excess from the Collection Account on the next Payment Date
and
pay the amount of such Simple Interest Excess to the Servicer as additional
servicing compensation. [Notwithstanding the immediately preceding sentence,
to
the extent that the aggregate amount of Simple Interest Advances made by the
Servicer with respect to all prior Collection Periods does not exceed the
aggregate amount of all Simple Interest Excesses with respect to such prior
Collection Periods, such excess shall be deposited pursuant to Section 5.6(b)
into the Spread Account and shall be treated as a contribution to the Spread
Account by the Servicer for the benefit of the Certificateholder for federal
income tax purposes.] All references in this Section 5.12 to the Servicer shall
be deemed to refer to the Servicer only so long as LBAC is acting in such
capacity hereunder.
Β
SECTION
5.13. Β Β Securities
Accounts.
The
Trust Collateral Agent acknowledges that any account held by it hereunder is
a
"securities account" as defined in the Uniform Commercial Code as in effect
in
New York (the "New
York UCC"),
and
that it shall be acting as a "securities intermediary" of the Indenture Trustee
with respect to each such account held by it.
Β
Β
31
Β
Β
ARTICLE
VI
Β
[THE
NOTE
POLICY
Β
SECTION
6.1. Β Β [Note
Policy.
The
Originator agrees, simultaneously with the execution and delivery of this
Agreement, to cause the Note Insurer to issue the Note Policy for the benefit
of
the Noteholders in accordance with the terms thereof.]
Β
SECTION
6.2. Β Β [Claims
Under Note Policy.
Β
(a)
Β Β In
the
event that the Trust Collateral Agent has delivered a Deficiency Notice with
respect to any Determination Date, the Trust Collateral Agent shall determine
on
the related Draw Date whether the sum of (i) the amount of Available Funds
with
respect to such Determination Date (as stated in the Servicer's Certificate
with
respect to such Determination Date) plus (ii) the amount of the Deficiency
Claim
Amount, if any, available to be distributed pursuant to the Spread Account
Agreement by [the Collateral Agent] to the Trust Collateral Agent pursuant
to a
Deficiency Notice delivered with respect to such Payment Date (as stated in
the
certificate delivered on the immediately preceding Deficiency Claim Date by
[the
Collateral Agent] pursuant to Section 3.03(a) of the Spread Account Agreement)
would be insufficient, after giving effect to the payments required by Section
5.6(c)(i) and (ii), to pay the Scheduled Payments for the related Payment Date,
then in such event the Trust Collateral Agent shall furnish to the Note Insurer
no later than 12:00 noon New York City time on the related Draw Date a completed
Notice of Claim in the amount of the shortfall in amounts so available to pay
the Scheduled Payments with respect to such Payment Date (the amount of any
such
shortfall being hereinafter referred to as the "Policy Claim Amount"). Amounts
paid by the Note Insurer under the Note Policy shall be deposited by the Trust
Collateral Agent into the Policy Payments Account and thereafter into the Note
Account for payment to Noteholders on the related Payment Date (or promptly
following payment on a later date as set forth in the Note Policy).
Β
(b)
Β Β Any
notice delivered by the Trust Collateral Agent to the Note Insurer pursuant
to
Section 6.2(a) shall specify the Policy Claim Amount claimed under the Note
Policy and shall constitute a "Notice of Claim" under the Note Policy. In
accordance with the provisions of the Note Policy, the Note Insurer is required
to pay to the Trust Collateral Agent the Policy Claim Amount properly claimed
thereunder by 12:00 noon, New York City time, on the later of (i) the second
Business Day (as defined in the Note Policy) following receipt on a Business
Day
(as defined in the Note Policy) of the Notice of Claim, and (ii) the applicable
Payment Date. Any payment made by the Note Insurer under the Note Policy shall
be applied solely to the payment of the Notes, and for no other
purpose.
Β
(c)
Β Β The
Trust
Collateral Agent shall (i) receive as attorney-in-fact of each Noteholder any
Policy Claim Amount from the Note Insurer and (ii) deposit the same in the
Policy Payments Account for disbursement to the Noteholders as set forth in
clauses (iii) and (iv) of Section 5.6(c). Any and all Policy Claim Amounts
disbursed by the Trust Collateral Agent from claims made under the Note Policy
shall not be considered payment by the Issuer or from the Spread Account with
respect to such Notes, and shall not discharge the obligations of the Issuer
with respect thereto. The Note Insurer shall, to the extent it makes any payment
with respect to the Notes, become subrogated to the rights of the recipients
of
such payments to the extent of such payments. Subject to and conditioned upon
any payment with respect to the Notes by or on behalf of the Note Insurer,
each
Noteholder shall be deemed, without further action, to have directed the Trust
Collateral Agent to assign to the Note Insurer all rights to the payment of
interest or principal with respect to the Notes which are then due for payment
to the extent of all payments made by the Note Insurer and the Note Insurer
may
exercise any option, vote, right, power or the like with respect to the Notes
to
the extent that it has made payment pursuant to the Note Policy. Notwithstanding
the foregoing, the order of priority of payments to be made pursuant to Section
5.6(c) shall not be modified by this clause (c). To evidence such subrogation,
the Note Registrar shall note the Note Insurer's rights as subrogee upon the
register of Noteholders upon receipt from the Note Insurer of proof of payment
by the Note Insurer of any Interest Payment Amount or Principal Payment
Amount.
Β
Β
32
Β
(d)
Β Β The
Trust
Collateral Agent shall be entitled, but not obligated, to enforce on behalf
of
the Noteholders the obligations of the Note Insurer under the Note Policy.
Notwithstanding any other provision of this Agreement, the Noteholders are
not
entitled to institute proceedings directly against the Note
Insurer.]
Β
SECTION
6.3. Β Β [Preference
Claims; Direction of Proceedings.
Β
(a)
Β Β In
the
event that the Trust Collateral Agent has received a certified copy of an order
of the appropriate court that any Scheduled Payment paid on a Note has been
avoided in whole or in part as a preference payment under applicable bankruptcy
law, the Trust Collateral Agent shall so notify the Note Insurer, shall comply
with the provisions of the Note Policy to obtain payment by the Note Insurer
of
such avoided payment, and shall, at the time it provides notice to the Note
Insurer, comply with the provisions of the Note Policy to obtain payment by
the
Note Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Note Policy. Pursuant to the terms of
the
Note Policy, the Note Insurer will make such payment on behalf of the Noteholder
to the receiver, conservator, debtor-in-possession or trustee in bankruptcy
named in the Order (as defined in the Note Policy) and not to the Trust
Collateral Agent or any Noteholder directly (unless a Noteholder has previously
paid such payment to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy, in which case the Note Insurer will make such payment to the
Trust Collateral Agent for payment, in accordance with the instructions to
be
provided by the Note Insurer, to such Noteholder upon proof of such payment
reasonably satisfactory to the Note Insurer).
Β
(b)
Β Β Each
Notice of Claim shall provide that the Trust Collateral Agent, on its behalf
and
on behalf of the Noteholders, thereby appoints the Note Insurer as agent and
attorney-in-fact for the Trust Collateral Agent and each Noteholder in any
legal
proceeding with respect to the Notes. The Trust Collateral Agent shall promptly
notify the Note Insurer of any proceeding or the institution of any action
(of
which a Responsible Officer of the Trust Collateral Agent has actual knowledge)
seeking the avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (a "Preference Claim")
of any payment made with respect to the Notes. Each Holder of Notes, by its
purchase of Notes, and the Trust Collateral Agent hereby agree that so long
as a
Note Insurer Default shall not have occurred and be continuing, the Note Insurer
may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim including,
without limitation, (i) the direction of any appeal of any order relating to
any
Preference Claim and (ii) the posting of any surety, supersedeas or performance
bond pending any such appeal at the expense of the Note Insurer, but subject
to
reimbursement as provided in the Insurance Agreement. In addition, and without
limitation of the foregoing, as set forth in Section 6.2(c), the Note Insurer
shall be subrogated to, and each Noteholder and the Trust Collateral Agent
hereby delegate and assign, to the fullest extent permitted by law, the rights
of the Trust Collateral Agent and each Noteholder in the conduct of any
proceeding with respect to a Preference Claim, including, without limitation,
all rights of any party to an adversary proceeding action with respect to any
court order issued in connection with any such Preference Claim.]
Β
Β
33
Β
SECTION
6.4. Β Β [Surrender
of Note Policy.
The
Trust Collateral Agent shall surrender the Note Policy to the Note Insurer
for
cancellation upon its expiration in accordance with the terms
thereof.]
Β
Β
ARTICLE
VII
Β
THE
TRANSFEROR
Β
SECTION
7.1. Β Β Representations
of the Transferor.
The
Transferor makes the following representations on which [the Note Insurer shall
be deemed to have relied in executing and delivering the Note Policy and on
which] the Issuer is deemed to have relied in acquiring the Receivables and
on
which the Indenture Trustee, the Owner Trustee, [the Collateral Agent], Trust
Collateral Agent and Back-up Servicer may rely. The representations speak as
of
the execution and delivery of this Agreement and as of the Closing Date and
shall survive the conveyance of the Receivables to the Issuer and the subsequent
pledge thereof to the Indenture Trustee pursuant to the Indenture.
Β
(a)
Β Β Organization
and Good Standing.
The
Transferor has been duly organized and is validly existing as a corporation
in
good standing under the laws of the State of Delaware, with the corporate power
and authority to conduct its business as such business is presently conducted
and to execute, deliver and perform its obligations under this Agreement and
the
other Basic Documents to which it is a party.
Β
(b)
Β Β Due
Qualification.
The
Transferor is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals in all
jurisdictions required for the performance of its obligations under this
Agreement and the other Basic Documents to which it is a party other than where
the failure to obtain such license or approval or qualification would not have
a
material adverse effect on the ability of the Transferor to perform such
obligations or on any Receivable or on the interest therein of the Issuer,
the
Noteholders [or the Note Insurer].
Β
(c)
Β Β Power
and Authority.
The
Transferor has the 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 respective terms; the Transferor has full corporate power and authority
to
sell and assign the property sold and assigned to and deposited with the Issuer
and has duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery, and performance of this Agreement
and the other Basic Documents to which it is a party have been duly authorized
by the Transferor by all necessary corporate action.
Β
Β
34
Β
(d)
Β Β Valid
Sale; Binding Obligation.
This
Agreement effects a valid sale, transfer and assignment of the Receivables
and
the other property conveyed to the Issuer pursuant to Section 2.1, enforceable
against creditors of and purchasers from the Transferor; and this Agreement
and
the other Basic Documents to which the Transferor is a party shall constitute
legal, valid and binding obligations of the Transferor enforceable in accordance
with their respective terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on
the
availability of specific remedies, regardless of whether such enforceability
is
considered in a proceeding in equity or at law.
Β
(e)
Β Β No
Violation.
The
execution, delivery and performance by the Transferor of this Agreement and
the
other Basic Documents to which the Transferor is a party and the consummation
of
the transactions contemplated hereby and thereby and the fulfillment of the
terms hereof and thereof do not conflict with, result in any breach of any
of
the terms and provisions of, nor constitute (with or without notice or lapse
of
time) a default under, the certificate of incorporation or by-laws of the
Transferor, or any material indenture, agreement, mortgage, deed of trust,
or
other instrument to which the Transferor is a party or by which it is bound
or
any of its properties are subject; nor result in the creation or imposition
of
any material lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust, or other instrument (other than
the Basic Documents); nor violate any law, order, rule, or regulation applicable
to the Transferor of any court or of any Federal or State regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over the Transferor or its properties.
Β
(f)
Β Β No
Proceedings.
There
are no proceedings or investigations pending, or to the Transferor's best
knowledge, threatened, before any court, regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over the Transferor
or
its properties: (A) asserting the invalidity of this Agreement or the other
Basic Documents to which the Transferor is a party or the Notes, (B) seeking
to
prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or the other Basic Documents to which the
Transferor is a party, (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Transferor of its
obligations under, or the validity or enforceability of, this Agreement or
the
other Basic Documents to which the Transferor is a party or the Notes, (D)
relating to the Transferor and which might adversely affect the Federal or
State
income, excise, franchise or similar tax attributes of the Notes or (E) that
could have a material adverse effect on the Receivables.
Β
(g)
Β Β No
Consents.
No
consent, approval, authorization or order of or declaration or filing with
any
governmental authority is required to be obtained by the Transferor for the
issuance or sale of the Notes or the consummation of the other transactions
contemplated by this Agreement and the other Basic Documents to which the
Transferor is a party, except such as have been duly made or obtained or where
the failure to obtain such consent, approval, authorization, order or
declaration, or to make such filing, would not have a material adverse effect
on
the ability of the Transferor to perform its obligation under the Basic
Documents to which it is a party and would not have a material adverse effect
on
any Receivable or the interest therein of the Issuer, the Noteholders [or the
Note Insurer].
Β
Β
35
Β
(h)
Β Β Chief
Executive Office.
The
Transferor hereby represents and warrants to the Trust Collateral Agent that
the
Transferor's principal place of business and chief executive office is, and
for
the four months preceding the date of this Agreement, has been, located at
Xxx
Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000.
Β
(i)
Β Β Transferor's
Intention.
The
Receivables and other Transferred Property are being transferred, with the
intention of removing them from the Transferor's estate pursuant to Xxxxxxx
000
xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as the same may be amended from time
to
time.
Β
SECTION
7.2. Β Β Liability
of the Transferor.
The
Transferor shall be liable only to the extent of the obligations specifically
undertaken by the Transferor under this Agreement and the representations made
by the Transferor in this Agreement.
Β
SECTION
7.3. Β Β Merger
or Consolidation of, or Assumption of the Obligations of, the
Transferor.
Any
Person (a) into which the Transferor may be merged or consolidated, (b) which
may result from any merger or consolidation to which the Transferor shall be
a
party or (c) which may succeed to the properties and assets of the Transferor
substantially as a whole, which person in any of the foregoing cases executes
an
agreement of assumption to perform every obligation of the Transferor under
this
Agreement, shall be the successor to the Transferor hereunder without the
execution or filing of any document or any further act by any of the parties
to
this Agreement; provided,
however,
as a
condition to the consummation of any of the transactions referred to in clauses
(a), (b) or (c) above, (i) immediately after giving effect to such transaction,
(x) no representation or warranty made pursuant to Section 7.1 would have been
breached (for purposes hereof, such representations and warranties shall speak
as of the date of the consummation of such transaction) and (y) no event that,
after notice or lapse of time, or both, would become a Servicer Termination
Event shall have happened and be continuing, (ii) the Transferor shall have
delivered to [the Note Insurer,] the Indenture Trustee, the Trust Collateral
Agent and the Issuer an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger, or succession and such agreement or
assumption comply with this Section 7.3 and that all conditions precedent,
if
any, provided for in this Agreement relating to such transaction have been
complied with, (iii) the Transferor shall have delivered to [the Note Insurer],
the Indenture Trustee, the Trust Collateral Agent and the Issuer an Opinion
of
Counsel either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of
the
Issuer in the Receivables, and reciting the details of such filings, or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest, [(iv) immediately after giving effect
to
such transaction, no Insurance Agreement Event of Default and no event that,
after notice or lapse of time, or both, would become an Insurance Agreement
Event of Default shall have happened and be continuing,] (v) the organizational
documents of the Person surviving or resulting from such transaction shall
contain provisions similar to those of the Transferor's certificate of
incorporation in respect of the issuance of debt, independent directors and
bankruptcy remoteness and (vi) the Transferor shall have received confirmation
from each Rating Agency that the then current rating of the Notes will not
be
downgraded as a result of such merger, consolidation or succession. A copy
of
such confirmation shall be provided to the Trust Collateral Agent.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clause (i), (ii), (iii) or (iv)
above shall be conditions to the consummation of the transactions referred
to in
clause (a), (b) or (c) above.
Β
Β
36
Β
SECTION
7.4. Β Β Limitation
on Liability of the Transferor and Others.
The
Transferor and any director or officer or employee or agent of the Transferor
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 Transferor 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.
Β
SECTION
7.5. Β Β Transferor
May Own Notes.
The
Transferor and any Person controlling, controlled by, or under common control
with the Transferor may in its individual or any other capacity become the
owner
or pledgee of Notes with the same rights as it would have if it were not the
Transferor or an affiliate thereof, except as otherwise provided in the
definition of "Noteholder" set forth in Annex A hereto and as specified in
Section 1.4. Notes so owned by or pledged to the Transferor or such controlling
or commonly controlled Person shall have an equal and proportionate benefit
under the provisions of this Agreement, without preference, priority, or
distinction as among all of the Notes except as otherwise provided herein or
by
the definition of Noteholder.
Β
Β
ARTICLE
VIII
Β
THE
SERVICER
Β
SECTION
8.1. Β Β Representations
of Servicer.
The
Servicer makes the following representations [on which the Note Insurer shall
be
deemed to have relied in executing and delivering the Note Policy and] on which
the Issuer is deemed to have relied in acquiring the Receivables and on which
the Indenture Trustee is deemed to have relied on in accepting the pledge of
the
Receivables. The representations speak as of the execution and delivery of
this
Agreement and as of the Closing Date and shall survive the conveyance of the
Receivables to the Issuer and the subsequent pledge thereof to the Indenture
Trustee pursuant to the Indenture.
Β
(i)Β Β Organization
and Good Standing.
The
Servicer is duly organized and validly existing as a corporation in good
standing under the laws of the State of Delaware, with the corporate power
and
authority to own its properties and to conduct its business as such properties
shall be currently owned and such business is presently conducted, and had
at
all relevant times, and has, the corporate power, authority, and legal right
to
acquire, own, sell and service the Receivables and to hold the Receivable Files
as custodian.
Β
(ii)Β Β Due
Qualification.
The
Servicer is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of
its
business (including the servicing of the Receivables as required by this
Agreement and the performance of its other obligations under this Agreement
and
the other Basic Documents to which it is a party) shall require such
qualifications.
Β
Β
37
Β
(iii)Β Β Power
and Authority.
The
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
respective terms; and the execution, delivery, and performance of this Agreement
and the other Basic Documents to which it is a party have been duly authorized
by the Servicer by all necessary corporate action.
Β
(iv)Β Β Binding
Obligation.
This
Agreement and the other Basic Documents to which it is a party constitute legal,
valid and binding obligations of the Servicer enforceable in accordance with
their respective terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of
creditors' rights generally and by equitable limitations on the availability
of
specific remedies, regardless of whether such enforceability is considered
a
proceeding in equity or at law.
Β
(v)Β Β No
Violation.
The
execution, delivery and performance by the Servicer of this Agreement and the
other Basic Documents to which the Servicer is a party and the consummation
of
the transactions contemplated hereby and thereby and the fulfillment of the
terms hereof and thereof do not conflict with, result in any breach of any
of
the terms and provisions of, or constitute (with or without notice or lapse
of
time) a default under, the certificate of incorporation or by-laws of the
Servicer, or any material indenture, agreement, mortgage, deed of trust, or
other instrument to which the Servicer is a party or by which it is bound or
any
of its properties are subject; or result in the creation or imposition of any
material lien upon any of its properties pursuant to the terms of any indenture,
agreement, mortgage, deed of trust, or other instrument (other than this
Agreement); or violate any law, order, rule, or regulation applicable to the
Servicer of any court or of any Federal or State regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction over the
Servicer or its properties.
Β
(vi)Β Β No
Proceedings.
There
are no proceedings or investigations pending, or to the Servicer's best
knowledge, threatened, before any court, regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over the Servicer
or
its properties: (A) asserting the invalidity of this Agreement or the other
Basic Documents to which the Servicer is a party, the Notes or the Certificate,
(B) seeking to prevent the issuance of the Notes or the Certificate or the
consummation of any of the transactions contemplated by this Agreement, the
Notes, the Certificate, or the other Basic Documents to which the Servicer
is a
party, (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Servicer of its obligations under,
or
the validity or enforceability of, this Agreement, the Notes, the Certificate
or
the other Basic Documents to which the Servicer is a party, (D) relating to
the
Servicer and which might adversely affect the Federal or State income, excise,
franchise or similar tax attributes of the Notes or the Certificate or (E)
that
could have a material adverse effect on the Receivables.
Β
(vii)Β Β No
Consents.
No
consent, approval, authorization or order of or declaration or filing with
any
governmental authority is required to be obtained by the Servicer for the
issuance or sale of the Notes or the consummation of the other transactions
contemplated by this Agreement and the other Basic Documents to which the
Servicer is a party, except such as have been duly made or
obtained.
Β
Β
38
Β
(viii)Β Β Taxes.
The
Servicer has filed on a timely basis all tax returns required to be filed by
it
and paid all taxes, to the extent that such taxes have become due.
Β
(ix)Β Β Chief
Executive Office.
The
Servicer hereby represents and warrants to the Trust Collateral Agent that
the
Servicer's principal place of business and chief executive office is, and for
the four months preceding the date of this Agreement, has been, located at
Xxx
Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000.
Β
SECTION
8.2. Β Β Indemnities
of Servicer.
Β
(a)
Β Β The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this Agreement and
the
representations made by the Servicer herein.
Β
(i)Β Β The
Servicer shall defend, indemnify and hold harmless the Indenture Trustee, the
Trust Collateral Agent, the Owner Trustee, [the Collateral Agent], the Back-up
Servicer, the Custodian, the Issuer, the Certificateholder, [the Note Insurer,]
the Noteholders and the Transferor, and their respective officers, directors,
agents and employees from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising out of or resulting from the use,
ownership or operation by the Servicer or any affiliate thereof of a Financed
Vehicle.
Β
(ii)Β Β The
Servicer shall indemnify, defend and hold harmless the Indenture Trustee, the
Trust Collateral Agent, the Owner Trustee, [the Collateral Agent], the Back-up
Servicer, the Custodian, the Issuer, [the Note Insurer] and the Transferor,
and
their respective officers, directors, agents and employees from and against
any
taxes (other than net income, gross receipts, franchise or other similar taxes)
that may at any time be asserted against the Indenture Trustee, the Trust
Collateral Agent, the Owner Trustee, [the Collateral Agent], the Back-up
Servicer, the Custodian, the Issuer, [the Note Insurer] or the Transferor,
with
respect to the transactions contemplated herein, including, without limitation,
any sales, general corporation, tangible personal property, privilege, or
license taxes and costs and expenses in defending against the same.
Β
(iii)Β Β The
Servicer shall indemnify, defend and hold harmless the Indenture Trustee, the
Trust Collateral Agent, the Owner Trustee, [the Collateral Agent], the
Custodian, the Back-up Servicer, the Transferor, [the Note Insurer,] the Issuer,
the Certificateholder and the Noteholders, and their respective officers,
directors, agents and employees 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 the Indenture
Trustee, the Trust Collateral Agent, the Owner Trustee, [the Collateral Agent],
the Back-up Servicer, the Custodian, the Issuer, the Transferor, [the Note
Insurer,] the Issuer or the Noteholders, and their respective officers,
directors, agents and employees through the negligence, willful misfeasance
or
bad faith of the 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.
Β
Β
39
Β
(iv)Β Β The
Servicer shall indemnify, defend and hold harmless the Indenture Trustee, the
Trust Collateral Agent, the Owner Trustee, [the Collateral Agent], the Back-up
Servicer, the Transferor, the Issuer, the Custodian, [the Note Insurer] and
their respective officers, directors, agents and employees from and against
all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties contained herein or in any other Basic Document to which it is a party,
if any, except to the extent that such cost, expense, loss, claim, damage or
liability: (a) shall be due to the willful misfeasance, bad faith, or negligence
of the Indenture Trustee, the Trust Collateral Agent, the Owner Trustee, [the
Collateral Agent], the Back-up Servicer, the Transferor, the Issuer, the
Custodian or [the Note Insurer,] as applicable; (b) relates to any tax other
than the taxes with respect to which the Servicer shall be required to indemnify
the Indenture Trustee, the Trust Collateral Agent, the Owner Trustee, [the
Collateral Agent], the Back-up Servicer, the Transferor, the Issuer, the
Custodian [or the Note Insurer]; or (c) shall arise from the Trust Collateral
Agent's breach of any of its representations or warranties set forth in Section
10.12.
Β
(v)Β Β The
Servicer shall indemnify the Owner Trustee and [NAME OF OWNER TRUSTEE IN ITS
INDIVIDUAL CAPACITY] (as defined in the Trust Agreement) and its officers,
directors, successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee, [NAME
OF
OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY] or any Indemnified Party in any way
relating to or arising out of this Agreement, the Basic Documents, the Owner
Trust Estate (as defined in the Trust Agreement), the administration of the
Owner Trust Estate or the action or inaction of the Owner Trustee under the
Trust Agreement, except only that the Servicer shall not be liable for or
required to indemnify the Owner Trustee from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
6.1
of the Trust Agreement. The indemnities contained in this Section shall survive
the resignation or termination of the Owner Trustee or the termination of the
Trust Agreement. In any event of any claim, action or proceeding for which
indemnity will be sought pursuant to this Section, the Owner Trustee's choice
of
legal counsel shall be subject to the approval of the Transferor which approval
shall not be unreasonably withheld.
Β
(vi)Β Β Notwithstanding
the foregoing, the Servicer shall not be obligated to defend, indemnify, and
hold harmless any Noteholder for any losses, claims, damages or liabilities
incurred by any Noteholders arising out of claims, complaints, actions and
allegations relating to Section 406 of ERISA or Section 4975 of the Code as
a
result of the purchase or holding of a Note by such Noteholder with the assets
of a plan subject to such provisions of ERISA or the Code or the servicing,
management and operation of the Issuer.
Β
Β
40
Β
(b)
Β Β For
purposes of this Section, in the event of the termination of the rights and
obligations of a Servicer (or any successor thereto pursuant to Section 8.3)
as
Servicer pursuant to Section 9.1, or a resignation by such Servicer pursuant
to
this Agreement, such Servicer shall be deemed to be the Servicer pending
appointment of a successor Servicer pursuant to Section 9.2. The provisions
of
this Section 8.2(b) shall in no way affect the survival pursuant to Section
8.2(c) of the indemnification by the outgoing Servicer provided by Section
8.2(a).
Β
(c)
Β Β Indemnification
under this Section 8.2 shall survive the termination of this Agreement and
any
resignation or removal of LBAC as Servicer and shall include reasonable fees
and
expenses of counsel and expenses of litigation. If the Servicer shall have
made
any indemnity payments pursuant to this Section 8.2 and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest.
Β
(d)
Β Β In
no
event shall the Servicer be liable under this Agreement to any Person for the
acts or omissions of any successor Servicer, nor shall any successor Servicer
be
liable under this Agreement to any Person for any acts or omissions of a
predecessor Servicer.
Β
SECTION
8.3. Β Β Merger
or Consolidation of, or Assumption of the Obligations of, Servicer or Back-up
Servicer.
Β
(a)
Β Β The
Servicer shall not merge or consolidate with any other Person, convey, transfer
or lease substantially all its assets as an entirety to another Person, or
permit any other Person to become the successor to the Servicer's business
unless, after the merger, consolidation, conveyance, transfer, lease or
succession, the successor or surviving entity shall be an Eligible Servicer
and
shall be capable of fulfilling the duties of the Servicer contained in this
Agreement and the other Basic Documents to which the Servicer is a party. Any
Person (a) into which the Servicer may be merged or consolidated, (b) which
may
result from any merger or consolidation to which the Servicer shall be a party,
(c) which may succeed to the properties and assets of the Servicer substantially
as a whole or (d) or succeeding to the business of the Servicer shall execute
an
agreement of assumption to perform every obligation of the Servicer hereunder,
and whether or not such assumption agreement is executed, shall be the successor
to the Servicer under this Agreement without further act on the part of any
of
the parties to this Agreement; provided,
however,
that
nothing contained herein shall be deemed to release the Servicer from any
obligation hereunder; provided,
further, however,
that (i)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 8.1 hereof or made by the Servicer in the
Purchase Agreement shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation
of
such transaction), no Servicer Termination Event [or Insurance Agreement Event
of Default], and no event which, after notice or lapse of time, or both, would
become a Servicer Termination Event [or Insurance Agreement Event of Default]
shall have occurred and be continuing, (ii) the Servicer shall have delivered
to
the Indenture Trustee, the Trust Collateral Agent [and the Note Insurer] an
Officer's Certificate and an Opinion of Counsel in form and substance
satisfactory to the Indenture Trustee, the Trust Collateral Agent [and the
Note
Insurer] each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 8.3 and that all conditions
precedent provided for in this Agreement relating to such transaction have
been
complied with, (iii) the Servicer shall have delivered to the Indenture Trustee,
the Trust Collateral Agent [and the Note Insurer] an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements
and
continuation statements and amendments thereto have been executed and filed
that
are necessary fully to preserve and protect the interest of the Issuer in the
Receivables and reciting the details of such filings or (B) stating that, in
the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest and (iv) nothing herein shall be deemed to release the
Servicer from any obligation. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 8.3(a) to the Indenture
Trustee, the Trust Collateral Agent, the Issuer, the Back-up Servicer, [the
Collateral Agent], [the Note Insurer,] the Noteholders and each Rating Agency.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii) or (iii) above
shall be conditions to the consummation of the transactions referred to in
clause (a), (b) or (c) above.
Β
Β
41
Β
(b)
Β Β Any
Person (a) into which the Back-up Servicer may be merged or consolidated, (b)
which may result from any merger or consolidation to which the Back-up Servicer
shall be a party, (c) which may succeed to the properties and assets of the
Back-up Servicer substantially as a whole or (d) succeeding to the business
of
the Back-up Servicer, shall execute an agreement of assumption to perform every
obligation of the Back-up Servicer hereunder, and whether or not such assumption
agreement is executed, shall be the successor to the Back-up Servicer under
this
Agreement without further act on the part of any of the parties to this
Agreement; provided,
however,
that
nothing herein shall be deemed to release the Back-up Servicer from any
obligation.
Β
SECTION
8.4. Β Β Limitation
on Liability of Servicer and Others.
Β
(a)
Β Β Neither
the Servicer nor any of the directors or officers or employees or agents of
the
Servicer shall be under any liability to the Indenture Trustee, the Trust
Collateral Agent, the Owner Trustee, [the Collateral Agent], the Back-up
Servicer, the Custodian, the Issuer, [the Note Insurer,] the Transferor or
the
Noteholders, except as provided under this Agreement, for any action taken
or
for refraining from the taking of any action pursuant to this Agreement;
provided,
however,
that
this provision shall not protect the Servicer or any such person against any
liability that would otherwise be imposed by reason of a breach of this
Agreement or willful misfeasance, bad faith, or negligence in the performance
of
duties or by reason of reckless disregard of obligations and duties under this
Agreement. The Servicer and any director or officer or employee or agent of
the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement.
Β
(b)
Β Β Except
as
provided in this Agreement, the Servicer shall not be under any obligation
to
appear in, prosecute or defend any legal action that shall not be incidental
to
its duties to service the Receivables in accordance with this Agreement, and
that in its opinion may involve it in any expense or liability.
Β
Β
42
Β
SECTION
8.5. Β Β Servicer
and Back-up Servicer Not to Resign.
Subject
to the provisions of Section 8.3, neither the Servicer nor the Back-up Servicer
may resign from the obligations and duties hereby imposed on it as Servicer
or
Back-up Servicer, as the case may be, under this Agreement except upon
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would result in a material adverse effect
on the Servicer or Back-up Servicer, as the case may be, and [the Note Insurer]
does not elect to waive the obligations of the Servicer or Back-up Servicer,
as
the case may be, to perform the duties which render it legally unable to act
or
does not elect to delegate those duties to another Person. Notice of any such
determination permitting the resignation of the Servicer or Back-up Servicer,
as
the case may be, shall be communicated to the Transferor, the Indenture Trustee,
the Trust Collateral Agent, the Issuer, [the Note Insurer,] and each Rating
Agency 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 by the Servicer or Back-up Servicer, as the case may be,
shall be evidenced by an Opinion of Counsel to such effect delivered to and
satisfactory to the Transferor, the Indenture Trustee, the Trust Collateral
Agent, the Issuer [and the Note Insurer] concurrently with or promptly after
such notice. No such resignation of the Servicer shall become effective until
a
successor servicer shall have assumed the responsibilities and obligations
of
LBAC in accordance with Section 9.2 and the Servicing Assumption Agreement,
if
applicable. No such resignation of the Back-up Servicer shall become effective
until an entity [acceptable to the Note Insurer] shall have assumed the
responsibilities and obligations of the Back-up Servicer; provided,
however,
that if
no such entity shall have assumed such responsibilities and obligations of
the
Back-up Servicer within 120 days of the resignation of the Back-up Servicer,
the
Back-up Servicer may petition a court of competent jurisdiction for the
appointment of a successor to the Back-up Servicer.
Β
Β
ARTICLE
IX
Β
SERVICER
TERMINATION EVENTS
Β
SECTION
9.1. Β Β Servicer
Termination Events.
If any
one of the following events ("Servicer Termination Events") shall occur and
be
continuing:
Β
(i)Β Β Any
failure by the Servicer or, for so long as LBAC is the Servicer, the Transferor,
to deliver to the Trust Collateral Agent for payment to Noteholders or deposit
in the Spread Account any proceeds or payment required to be so delivered under
the terms of the Notes, the Purchase Agreement or this Agreement (including
deposits of Purchase Amounts) that shall continue unremedied for a period of
two
Business Days after written notice is received by the Servicer from the Trust
Collateral Agent [or the Note Insurer] or after discovery of such failure by
the
Servicer (but in no event later than the five Business Days after the Servicer
is required to make such delivery or deposit); or
Β
(ii)Β Β The
Servicer's Certificate required by Section 4.9 shall not have been delivered
to
the Trust Collateral Agent [and the Note Insurer] within one Business Day of
the
date such Servicer's Certificate is required to be delivered; or the statement
required by Section 4.10 or the report required by Section 4.11 shall not have
been delivered within five (5) days after the date such statement or report,
as
the case may be, is required to be delivered; or
Β
Β
43
Β
(iii)Β Β Failure
on the part of the Servicer to observe its covenants and agreements set forth
in
Section 8.3 or, for so long as LBAC is the Servicer, failure on the part of
the
Transferor to observe its covenants and agreements set forth in Section 7.3;
or
Β
(iv)Β Β Failure
on the part of LBAC, the Servicer or, for so long as LBAC is the Servicer,
the
Transferor, as the case may be, duly to observe or to perform in any material
respect any other covenants or agreements of LBAC, the Servicer or the
Transferor (as the case may be) set forth in the Notes, the Purchase Agreement
or in this Agreement, which failure shall continue unremedied for a period
of 30
days after the date on which written notice of such failure requiring the same
to be remedied, shall have been given (1) to LBAC, the Servicer or the
Transferor (as the case may be), by [the Note Insurer or] the Trust Collateral
Agent, or (2) to LBAC, the Servicer or the Transferor (as the case may be),
and
to the Trust Collateral Agent [and the Note Insurer] by the Noteholders
evidencing not less than 25% of the Note Balance; or
Β
(v)Β Β The
entry
of a decree or order for relief by a court or regulatory authority having
jurisdiction in respect of LBAC or the Servicer (or, so long as LBAC is the
Servicer, the Transferor, or any of the Servicer's other Affiliates, if the
Servicer's ability to service the Receivables is adversely affected thereby)
in
an involuntary case under the federal bankruptcy laws, as now or hereafter
in
effect, or another present or future, federal or state, bankruptcy, insolvency
or similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of LBAC, the Servicer (or
the
Transferor or any other Affiliate of LBAC, if applicable) or of any substantial
part of their respective properties or ordering the winding up or liquidation
of
the affairs of LBAC or the Servicer (or the Transferor or any other Affiliate
of
LBAC, if applicable) or the commencement of an involuntary case under the
federal or state bankruptcy, insolvency or similar laws, as now or hereafter
in
effect, or another present or future, federal or state bankruptcy, insolvency
or
similar law with respect to LBAC or the Servicer (or the Transferor or any
other
Affiliate of LBAC, if applicable) and such case is not dismissed within 60
days;
or
Β
(vi)Β Β The
commencement by LBAC or the Servicer (or, so long as LBAC is the Servicer,
the
Transferor or any of the Servicer's other Affiliates, if the Servicer's ability
to service the Receivables is adversely affected thereby) of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future, federal or state, bankruptcy, insolvency or similar law,
or
the consent by LBAC or the Servicer (or the Transferor or any other Affiliate
of
LBAC, if applicable) to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of LBAC or the Servicer (or the Transferor or any other Affiliate of LBAC,
if
applicable) or of any substantial part of its property or the making by LBAC
or
the Servicer (or the Transferor or any other Affiliate of LBAC, if applicable)
of an assignment for the benefit of creditors or the failure by LBAC or the
Servicer (or the Transferor or any other Affiliate of LBAC, if applicable)
generally to pay its debts as such debts become due or the taking of corporate
action by LBAC or the Servicer (or the Transferor or any other Affiliate of
LBAC, if applicable) in furtherance of any of the foregoing; or
Β
Β
44
Β
(vii)Β Β Any
representation, warranty or statement of LBAC or the Servicer or, for so long
as
LBAC is the Servicer, the Transferor, made in this Agreement and, with respect
to LBAC and the Transferor, the Purchase Agreement or in each case any
certificate, report or other writing delivered pursuant hereto shall prove
to be
incorrect as of the time when the same shall have been made (excluding, however,
any representation or warranty set forth in Section 3.2(b) of the Purchase
Agreement), and the incorrectness of such representation, warranty or statement
has a material adverse effect on the Issuer and, within 30 days after written
notice thereof shall have been given (1) to LBAC, the Servicer or the Transferor
(as the case may be) by the Trust Collateral Agent [or the Note Insurer] or
(2)
to LBAC, the Servicer or the Transferor (as the case may be), and to the Trust
Collateral Agent [and the Note Insurer] by the Noteholders evidencing not less
than 25% of the Note Balance, the circumstances or condition in respect of
which
such representation, warranty or statement was incorrect shall not have been
eliminated or otherwise cured; or
Β
(viii)Β Β [The
occurrence of an Insurance Agreement Event of Default; or]
Β
(ix)Β Β [A
claim
is made under the Note Policy; or]
Β
(x)Β Β [So
long
as a Note Insurer Default shall not have occurred and be continuing, the Note
Insurer shall not have delivered a Servicer Extension Notice pursuant to Section
4.13;]
Β
then,
and
in each and every case, so long as a Servicer Termination Event shall not have
been remedied; provided,
[(i) no
Note Insurer Default shall have occurred and be continuing, the Note Insurer
in
its sole and absolute discretion, or (ii) if a Note Insurer Default shall have
occurred and be continuing, then] either the Trust Collateral Agent or the
Trust
Collateral Agent acting at the direction of the Majorityholders, by notice
then
given in writing to the Servicer (and to the Trust Collateral Agent if given
by
[the Note Insurer or] by the Noteholders) [or by the Note Insurer's failure
to
deliver a Servicer Extension Notice pursuant to Section 4.13,] may terminate
all
of the rights and obligations of the Servicer under this Agreement. The Servicer
shall be entitled to its pro rata share of the Servicing Fee for the number
of
days in the Collection Period prior to the effective date of its termination.
On
or after the receipt by the Servicer of such written notice, all authority
and
power of the Servicer under this Agreement, whether with respect to the Notes
or
the Receivables or otherwise, shall without further action, pass to and be
vested in (i) the Back-up Servicer or (ii) such successor Servicer as may be
appointed under Section 9.2; provided,
however,
that the
successor Servicer shall have no liability with respect to any obligation which
was required to be performed by the predecessor Servicer prior to the date
the
successor Servicer becomes the Servicer or any claim of a third party (including
a Noteholder) based on any alleged action or inaction of the predecessor
Servicer as Servicer; and, without limitation, the Trust Collateral Agent is
hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. The predecessor Servicer shall cooperate with the
successor Servicer and the Trust Collateral Agent in effecting the termination
of the responsibilities and rights of the predecessor Servicer under this
Agreement, including the transfer to the successor Servicer for administration
by it of all cash amounts that shall at the time be held or should have been
held by the predecessor Servicer for deposit, or shall thereafter be received
with respect to a Receivable and the delivery to the successor Servicer of
all
files and records concerning the Receivables and a computer tape in readable
form containing all information necessary to enable the successor Servicer
to
service the Receivables and the other property of the Issuer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section 9.1
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. In addition, any successor Servicer
shall be entitled to payment from the immediate predecessor Servicer for
reasonable transition expenses incurred in connection with acting as successor
Servicer, and in connection with system conversion costs, an aggregate amount
not to exceed for such conversion costs of $__________, and to the extent not
so
paid, such payment shall be made pursuant to Section 5.6(c)(v) hereof. Upon
receipt of notice of the occurrence of a Servicer Termination Event, the Trust
Collateral Agent shall give notice thereof to the Rating Agencies, the Issuer
and the Transferor. The predecessor Servicer shall grant the Transferor, the
Trust Collateral Agent, the Back-up Servicer [and the Note Insurer] reasonable
access to the predecessor Servicer's premises, computer files, personnel,
records and equipment at the predecessor Servicer's expense. [If requested
by
the Note Insurer,] the Back-up Servicer or successor Servicer shall terminate
any arrangements relating to (i) the Lock-Box Account with the Lock-Box Bank,
(ii) the Lock-Box or (iii) the Lock-Box Agreement, and direct the Obligors
to
make all payments under the Receivables directly to the Servicer at the
predecessor Servicer's expense (in which event the successor Servicer shall
process such payments directly, or, through a Lock-Box Account with a Lock-Box
Bank at the direction of [the Note Insurer]). The Trust Collateral Agent shall
send copies of all notices given pursuant to this Section 9.1 [to the Note
Insurer so long as no Note Insurer Default shall have occurred and be
continuing, and] to the Noteholders [if a Note Insurer Default shall have
occurred and be continuing.]
Β
Β
45
Β
SECTION
9.2. Β Β Appointment
of Successor.
Β
(a)
Β Β Upon
the
Servicer's receipt of notice of termination pursuant to Section 9.1 or the
Servicer's resignation in accordance with the terms of this Agreement, the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is 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 Trust
Collateral Agent 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 Servicer shall become unable to act as Servicer,
as
specified in the notice of resignation and accompanying Opinion of Counsel.
In
the event of termination of the Servicer, the Back-up Servicer, shall assume
the
obligations of Servicer hereunder on the date specified in such written notice
(the "Assumption Date") pursuant to the Servicing Assumption Agreement [or,
in
the event that the Note Insurer shall have determined that a Person other than
the Back-up Servicer shall be the successor Servicer in accordance with Section
9.2(c), on the date of the execution of a written assumption agreement by such
Person to serve as successor Servicer]. In the event of assumption of the duties
of Servicer by the Back-up Servicer, the Back-up Servicer shall be entitled
to
be paid by the Servicer for the system conversion costs, an amount not to exceed
$__________. In the event that such amount shall not have been timely paid
by
the Servicer, such amount shall be paid under Section 5.6(c)(v) hereof;
provided,
however,
the
payment of such amount pursuant to Section 5.6(c)(v) shall not relieve the
Servicer of any obligation or liability to pay such amount. Notwithstanding
the
Back-up Servicer's assumption of, and its agreement to perform and observe,
all
duties, responsibilities and obligations of LBAC as Servicer under this
Agreement arising on and after the Assumption Date, the Back-up Servicer shall
not be deemed to have assumed or to become liable for, or otherwise have any
liability for, any duties, responsibilities, obligations or liabilities of
LBAC,
the Transferor or any predecessor Servicer arising on or before the Assumption
Date, whether provided for by the terms of this Agreement, arising by operation
of law or otherwise, including, without limitation, any liability for, any
duties, responsibilities, obligations or liabilities of LBAC, the Transferor
or
any predecessor Servicer arising on or before the Assumption Date under Sections
4.7 or 8.2 of this Agreement, regardless of when the liability, duty,
responsibility or obligation of LBAC, the Transferor or any predecessor Servicer
therefor arose, whether provided by the terms of this Agreement, arising by
operation of law or otherwise. In addition, if the Back-up Servicer shall be
legally unable to act as Servicer or shall have delivered a notice of
resignation pursuant to Section 8.5 hereof [and a Note Insurer Default shall
have occurred and be continuing], the Back-up Servicer, the Trust Collateral
Agent or the Noteholders evidencing not less than 66-2/3% of the Note Balance
may petition a court of competent jurisdiction to appoint any successor to
the
Servicer. Pending appointment pursuant to the preceding sentence, the Back-up
Servicer shall act as successor Servicer unless it is legally unable to do
so,
in which event the predecessor Servicer shall continue to act as Servicer until
a successor has been appointed and accepted such appointment. In the event
that
a successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section 9.2,
[then the Note Insurer, in accordance with Section 9.2(c) shall appoint, or
petition a court of competent jurisdiction to appoint a successor to the
Servicer under this Agreement].
Β
Β
46
Β
(b)
Β Β Upon
appointment, the successor Servicer shall be the successor in all respects
to
the predecessor Servicer and shall be subject to all the responsibilities,
duties, and liabilities arising thereafter relating thereto placed on the
predecessor Servicer, and shall be entitled to the Servicing Fee and all of
the
rights granted to the predecessor Servicer, by the terms and provisions of
this
Agreement.
Β
(c)
Β Β [So
long
as no Note Insurer Default has occurred and is continuing, the Note Insurer
may
exercise at any time its right to appoint as Back-up Servicer or as successor
Servicer a Person other than the Person serving as Back-up Servicer at the
time,
and shall have no liability to the Trust Collateral Agent, the Issuer, LBAC,
the
Transferor, the Person then serving as Back-up Servicer, any Noteholder or
any
other person if it does so. Subject to Section 8.5, no provision of this
Agreement shall be construed as relieving the Back-up Servicer of its obligation
to succeed as successor Servicer upon the termination of the Servicer pursuant
to Section 9.1 or resignation of the Servicer pursuant to Section 8.5. If upon
any such resignation or termination, the Note Insurer appoints a successor
Servicer other than the Back-up Servicer, the Back-up Servicer shall not be
relieved of its duties as Back-up Servicer hereunder.]
Β
Β
47
Β
SECTION
9.3. Β Β Notification
to Noteholders.
Upon
any termination of, or appointment of a successor to, the Servicer pursuant
to
this Article IX, the Trust Collateral Agent shall give prompt written notice
thereof to Noteholders at their respective addresses appearing in the Note
Register and to each of the Rating Agencies.
Β
SECTION
9.4. Β Β Action
Upon Certain Failures of the Servicer.
In the
event that a Responsible Officer of the Trust Collateral Agent shall have
knowledge of any failure of the Servicer specified in Section 9.1 which would
give rise to a right of termination under such Section upon the Servicer's
failure to remedy the same after notice, the Trust Collateral Agent shall give
notice thereof to the Transferor, the Servicer [and the Note Insurer]. For
all
purposes of this Agreement, the Trust Collateral Agent shall not be deemed
to
have knowledge of any failure of the Servicer as specified in Section 9.1 unless
notified thereof in writing by the Transferor, the Servicer, [the Note Insurer]
or by a Noteholder. The Trust Collateral Agent shall be under no duty or
obligation to investigate or inquire as to any potential failure of the Servicer
specified in Section 9.1.
Β
Β
ARTICLE
X
Β
THE
TRUST
COLLATERAL AGENT AND THE CUSTODIAN
Β
SECTION
10.1. Β Β Duties
of the Trust Collateral Agent and the Custodian.
Β
(a)
Β Β The
Trust
Collateral Agent and the Custodian, both prior to the occurrence of an Event
of
Default and after an Event of Default shall have been cured or waived, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default shall have occurred and shall
not have been cured or waived, the Trust Collateral Agent and the Custodian
may,
and at the direction of [the Note Insurer (or, if a Note Insurer Default shall
have occurred and is continuing,] the Majorityholders), shall exercise such
of
the rights and powers vested in it by this Agreement and shall 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 its own affairs.
Β
(b)
Β Β The
Trust
Collateral Agent and the Custodian, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trust Collateral Agent and the Custodian that
shall
be specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement; provided,
however,
that,
neither the Trust Collateral Agent nor the Custodian shall be responsible for
the accuracy or content of any such resolution, certificate, statement, opinion,
report, document, order or other instrument. If any such instrument is found
not
to conform in any material respect to the requirements of this Agreement, the
Trust Collateral Agent or the Custodian, as applicable, shall notify [the Note
Insurer and] the Noteholders of such instrument in the event that the Trust
Collateral Agent or the Custodian, after so requesting, does not receive a
satisfactorily corrected instrument.
Β
(c)
Β Β The
Trust
Collateral Agent shall take and maintain custody of the Schedule of Receivables
included as Schedule A to this Agreement and shall retain copies of all
Servicer's Certificates prepared hereunder.
Β
Β
48
Β
(d)
Β Β No
provision of this Agreement shall be construed to relieve the Trust Collateral
Agent or the Custodian from liability for its own negligent action, its own
negligent failure to act, or its own bad faith; provided,
however,
that:
Β
(i)Β Β Prior
to
the occurrence of an Event of Default and after the curing or waiving of all
such Events of Default that may have occurred, the duties and obligations of
the
Trust Collateral Agent and the Custodian shall be determined solely by the
express provisions of this Agreement, neither the Trust Collateral Agent nor
the
Custodian shall be liable except for the performance of such duties and
obligations as shall be specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the Trust
Collateral Agent or the Custodian and, in the absence of bad faith on the part
of the Trust Collateral Agent or the Custodian, the Trust Collateral Agent
and
the Custodian, as applicable, may conclusively rely on the truth of the
statements and the correctness of the opinions expressed in any certificates
or
opinions furnished to the Trust Collateral Agent or the Custodian and conforming
to the requirements of this Agreement;
Β
(ii)Β Β Neither
the Trust Collateral Agent nor the Custodian shall be liable for an error of
judgment made in good faith by a Responsible Officer or officer of the
Custodian, respectively, unless it shall be proved that the Trust Collateral
Agent or the Custodian, respectively shall have been negligent in ascertaining
the pertinent facts;
Β
(iii)Β Β Neither
the Trust Collateral Agent nor the Custodian shall be liable with respect to
any
action taken, suffered, or omitted to be taken in good faith in accordance
with
this Agreement or at the direction of [the Note Insurer or, after a Note Insurer
Default,] the Noteholders evidencing not less than 25% of the Note Balance,
relating to the time, method, and place of conducting any proceeding for any
remedy available to the Trust Collateral Agent or the Custodian, or exercising
any trust or power conferred upon the Trust Collateral Agent or the Custodian,
as applicable, under this Agreement;
Β
(iv)Β Β Neither
the Trust Collateral Agent nor the Custodian shall be charged with knowledge
of
any Servicer Termination Event or Event of Default, unless a Responsible Officer
assigned to the Trust Collateral Agent's Corporate Trust Office or an officer
of
the Custodian receives written notice of such Servicer Termination Event or
Event of Default from the Servicer, the Transferor, [the Note Insurer or, after
a Note Insurer Default,] the Noteholders evidencing not less than 25% of the
Note Balance (such notice shall constitute actual knowledge of a Servicer
Termination Event or Event of Default by the Trust Collateral Agent);
and
Β
(v)Β Β Neither
the Trust Collateral Agent nor the Custodian shall be liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by it
to
be authorized or within the discretion or rights or powers conferred upon it
by
this Agreement.
Β
(e)
Β Β The
Trust
Collateral Agent and the Custodian may, but shall not be required to, expend
or
risk its own funds or otherwise incur financial liability in the performance
of
any of its duties hereunder, or in the exercise of any of its rights or powers,
unless it shall have been provided with indemnity against such risk or liability
in form and substance satisfactory to the Trust Collateral Agent or Custodian,
as applicable, and none of the provisions contained in this Agreement shall
in
any event require the Trust Collateral Agent or Custodian to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer under this Agreement except during such time, if any, as the Trust
Collateral Agent, in its capacity as Back-up Servicer, shall be the successor
to, and be vested with the rights, duties, powers, and privileges of, the
Servicer in accordance with the terms of this Agreement.
Β
Β
49
Β
(f)
Β Β Except
for actions expressly authorized by this Agreement, neither the Trust Collateral
Agent nor the Custodian shall take action reasonably likely to impair the
security interests created or existing under any Receivable or Financed Vehicle
or to impair the value of any Receivable or Financed Vehicle.
Β
(g)
Β Β All
information obtained by the Trust Collateral Agent or the Custodian regarding
the Obligors and the Receivables, whether upon the exercise of its rights under
this Agreement or otherwise, shall be maintained by the Trust Collateral Agent
or Custodian, as applicable, in confidence and shall not be disclosed to any
other Person; provided
that,
nothing herein shall prevent the Trust Collateral Agent or Custodian from
delivering copies of such information whether or not constituting confidential
information, and disclosing other information, whether or not confidential
information to (i) its directors, officers, employees, agents and professional
consultants to the extent necessary to carry on the Trust Collateral Agent's
or
Custodian's business in the ordinary course, (ii) any Noteholder [or the Note
Insurer] to the extent that such Noteholder [or the Note Insurer] is entitled
to
such information under this Agreement, but not otherwise, (iii) any governmental
authority which specifically requests (or as to which applicable regulations
require) such information, (iv) any nationally recognized rating agency in
connection with the rating of the Notes by such agency, or (v) any other Person
to which such delivery or disclosure may be necessary or appropriate, (a) in
compliance with any applicable law, rule, regulation or order, (b) in response
to any subpoena or other legal process, (c) in connection with any litigation
to
which the Trust Collateral Agent or Custodian is a party or (d) in order to
protect or enforce the rights of the Noteholders [and the Note Insurer] under
the Issuer established hereunder.
Β
(h)
Β Β Money
held in trust by the Trust Collateral Agent or the Custodian need not be
segregated from other funds except to the extent required by law or the terms
of
this Agreement or the Indenture.
Β
(i)
Β Β Every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Trust Collateral Agent or the Custodian shall
be subject to the provisions of this Section 10.1.
Β
(j)
Β Β The
Trust
Collateral Agent and the Custodian each shall, and each hereby agrees that
it
will, perform all of the obligations and duties required of it under the Sale
and Servicing Agreement.
Β
(k)
Β Β [The
Trust Collateral Agent shall, and hereby agrees that it will, hold the Note
Policy in trust, and will hold any proceeds of any claim on the Note Policy
in
trust, solely for the use and benefit of the Noteholders.]
Β
Β
50
Β
(l)
Β Β Without
limiting the generality of this Section 10.1, the Trust Collateral Agent and
the
Custodian each shall have no duty (i) to see to any recording, filing or
depositing of this Agreement or any agreement referred to herein or any
financing statement evidencing a security interest in the Financed Vehicles,
or
to see to the maintenance of any such recording or filing or depositing or
to
any recording, refiling or redepositing of any thereof, (ii) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain any
such
insurance, (iii) to see to the payment or discharge of any tax, assessment
or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the Pledged Property, (iv)
to
confirm or verify the contents of any reports or certificates delivered to
the
Trust Collateral Agent or the Servicer pursuant to this Agreement or the Trust
Agreement believed by the Trust Collateral Agent or the Custodian, as
applicable, to be genuine and to have been signed or presented by the proper
party or parties, or (v) to inspect the Financed Vehicles at any time or
ascertain or inquire as to the performance of observance of any of the Issuer's,
the Transferor's or the Servicer's representations, warranties or covenants
or
the Servicer's duties and obligations as servicer and as custodian of the
Receivable Files under the Sale and Servicing Agreement.
Β
(m)
Β Β In
no
event shall [Name of indenture trustee], in any of its capacities hereunder,
be
deemed to have assumed any duties of the Owner Trustee under the Delaware
Business Trust Statute, common law, or the Trust Agreement.
Β
(n)
Β Β Neither
the Trust Collateral Agent nor the Custodian shall be required to give any
bond
or surety in respect of the powers granted to it under this
Agreement.
Β
SECTION
10.2. Β Β Trust
Collateral Agent to Act for the Noteholders [and Note Insurer].
Prior
to the payment in full of the Notes and the Reimbursement Obligations [and
the
expiration of the term of the Note Policy], the Trust Collateral Agent shall
act
solely for the benefit of the Noteholders [and the Note Insurer], as their
interests may appear herein.
Β
SECTION
10.3. Β Β Certain
Matters Affecting the Trust Collateral Agent and the Custodian.
Except
as otherwise provided in the second paragraph of Section 10.1:
Β
(i)Β Β The
Trust
Collateral Agent and the Custodian may rely and shall be protected in acting
or
refraining from acting upon any resolution, Officer's Certificate, Servicer's
Certificate, certificate of auditors, or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond,
or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
Β
(ii)Β Β The
Trust
Collateral Agent and the Custodian may consult with counsel, and any written
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it under
this Agreement in good faith and in accordance with such written advice or
Opinion of Counsel.
Β
(iii)Β Β Neither
the Trust Collateral Agent nor the Custodian shall be under any obligation
to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct, or defend any litigation under this Agreement or in relation
to this Agreement, at the request, order or direction of any of the Noteholders
[or the Note Insurer] pursuant to the provisions of this Agreement, unless
such
Noteholders [or the Note Insurer] shall have offered to the Trust Collateral
Agent or the Custodian, as applicable, reasonable security or indemnity in
form
and substance reasonably satisfactory to the Trust Collateral Agent or the
Custodian, as applicable, against the costs, expenses and liabilities that
may
be incurred therein or thereby. Nothing contained in this Agreement, however,
shall relieve the Trust Collateral Agent or the Custodian of the obligations,
upon the occurrence of a Servicer Termination Event or Event of Default (that
shall not have been cured or waived), to exercise such of the rights and powers
vested in it by this Agreement, and to 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 its own affairs.
Β
Β
51
Β
(iv)Β Β Neither
the Trust Collateral Agent nor the Custodian shall be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, or other paper or document (other than for the duties of the
Custodian pursuant to Section 3.4), unless requested in writing to do so by
[the
Note Insurer (if no Note Insurer Default shall have occurred or be continuing),]
the Transferor or the Noteholders evidencing not less than 25% of the Note
Balance; provided,
however,
that, if
the payment within a reasonable time to the Trust Collateral Agent or the
Custodian of the costs, expenses or liabilities likely to be incurred by it
in
the making of such investigation shall be, in the opinion of the Trust
Collateral Agent or the Custodian, not reasonably assured to the Trust
Collateral Agent or the Custodian by the security afforded to it by the terms
of
this Agreement, the Trust Collateral Agent or the Custodian, as applicable,
may
require indemnity in form and substance satisfactory to it against such cost,
expense or liability as a condition to so proceeding. The reasonable expense
of
every such examination shall be paid by the Person making such request or,
if
paid by the Trust Collateral Agent or the Custodian, shall be reimbursed by
the
Person making such request upon demand.
Β
(v)Β Β The
Trust
Collateral Agent and the Custodian may execute any of the trusts or powers
hereunder or perform any duties under this Agreement either directly or by
or
through agents or attorneys. Neither the Trust Collateral Agent nor the
Custodian shall be responsible for any misconduct or negligence of any such
agent appointed with due care by it hereunder, or of any agent of the Servicer
in its capacity as Servicer or custodian or otherwise.
Β
(vi)Β Β Except
as
may be expressly required by Sections 3.4, subsequent to the sale of the
Receivables by the Transferor to the Issuer, neither the Trust Collateral Agent
nor the Custodian shall have any duty of independent inquiry, and the Trust
Collateral Agent and the Custodian may rely upon the representations and
warranties and covenants of the Transferor and the Servicer contained in this
Agreement with respect to the Receivables and the Receivable Files.
Β
Β
52
Β
(vii)Β Β The
Trust
Collateral Agent and the Custodian may rely, as to factual matters relating
to
the Transferor or the Servicer, on an Officer's Certificate of the Transferor
or
Servicer, respectively.
Β
(viii)Β Β Neither
the Trust Collateral Agent nor the Custodian shall be required to take any
action or refrain from taking any action under this Agreement, or any related
documents referred to herein, nor shall any provision of this Agreement, or
any
such related document be deemed to impose a duty on the Trust Collateral Agent
or the Custodian to take action, if the Trust Collateral Agent or the Custodian
shall have been advised by counsel that such action is contrary to (i) the
terms
of this Agreement, (ii) any such related document or (iii) law.
Β
SECTION
10.4. Β Β Trust
Collateral Agent, Back-up Servicer and Custodian Not Liable for Notes or
Receivables.
The
recitals contained herein shall be taken as the statements of the Issuer, the
Transferor or the Servicer, as the case may be, and neither the Trust Collateral
Agent, the Back-up Servicer nor the Custodian assumes any responsibility for
the
correctness thereof. Neither the Trust Collateral Agent, the Back-up Servicer
nor the Custodian shall make any representations as to the validity or
sufficiency of this Agreement or of the Notes, or of any Receivable or related
document. Neither the Trust Collateral Agent, the Back-up Servicer nor the
Custodian shall at any time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any security interest
in
any Financed Vehicle or any Receivable, or the perfection and priority of such
a
security interest or the maintenance of any such perfection and priority, or
for
or with respect to the efficacy of the Issuer or its ability to generate the
payments to be distributed to Noteholders under this Agreement, including,
without limitation: the existence, condition, location, and ownership of any
Financed Vehicle; the existence and enforceability of any physical damage
insurance thereon; except as required by Section 3.4, the existence, contents
and completeness of any Receivable or any Receivable Files or any computer
or
other record thereof; the validity of the assignment of any Receivable to the
Issuer or of any intervening assignment; except as required by Section 3.4,
the
performance or enforcement of any Receivable; the compliance by the Transferor
or the Servicer with any warranty or representation made under this Agreement
or
in any related document and the accuracy of any such warranty or representation
prior to the Trust Collateral Agent's, the Back-up Servicer's or Custodian's
receipt of notice or other actual knowledge by a Responsible Officer of any
noncompliance therewith or any breach thereof; any investment of monies by
or at
the direction of the Servicer [or the Note Insurer] or any loss resulting
therefrom (it being understood that the Trust Collateral Agent, the Back-up
Servicer and the Custodian shall each remain responsible for any Trust Assets
that it may hold); the acts or omissions of the Issuer, the Transferor, the
Servicer, or any Obligor; any action of the Servicer taken in the name of the
Trust Collateral Agent or the Custodian; or any action by the Trust Collateral
Agent or the Custodian taken at the instruction of the Servicer; provided,
however,
that the
foregoing shall not relieve either the Trust Collateral Agent, the Back-up
Servicer or the Custodian of its obligation to perform its duties under this
Agreement. Except with respect to a claim based on the failure of the Trust
Collateral Agent, the Back-up Servicer or the Custodian to perform its duties
under this Agreement or based on the Trust Collateral Agent's, the Back-up
Servicer's or the Custodian's negligence or willful misconduct, no recourse
shall be had for any claim based on any provision of this Agreement, the Notes,
or any Receivable or assignment thereof against the Trust Collateral Agent,
the
Back-up Servicer or Custodian in their respective individual capacities, neither
the Trust Collateral Agent, the Back-up Servicer nor the Custodian shall have
any personal obligation, liability, or duty whatsoever to any Noteholder or
any
other Person with respect to any such claim, and any such claim shall be
asserted solely against the Issuer or any indemnitor who shall furnish indemnity
as provided in this Agreement. Neither the Trust Collateral Agent, the Back-up
Servicer nor the Custodian shall be accountable for the use or application
by
the Issuer of any of the Notes or of the proceeds of such Notes, or for the
use
or application of any funds paid to the Servicer in respect of the Receivables.
The Issuer hereby certifies to the Trust Collateral Agent, the Back-up Servicer
and the Custodian that the Rating Agencies rating the Notes are Standard &
Poor's and Moody's and that their addresses are as set forth in Section 13.5.
The Trust Collateral Agent, the Back-up Servicer and the Custodian may rely
on
the accuracy of such certification until it receives from the Issuer an
Officer's Certificate superseding such certification. All references above
to
the Back-up Servicer shall be deemed to refer to the Back-up Servicer only
so
long as it is acting in such capacity hereunder.
Β
Β
53
Β
SECTION
10.5. Β Β Trust
Collateral Agent, Back-up Servicer and Custodian May Own Notes.
The
Trust Collateral Agent, the Back-up Servicer and the Custodian in their
respective individual or any other capacities may become the owner or pledgee
of
Notes and may deal with the Transferor and the Servicer in banking transactions
with the same rights as it would have if it were not Trust Collateral Agent,
Back-up Servicer or Custodian, as applicable.
Β
SECTION
10.6. Β Β Indemnity
of Trust Collateral Agent, Back-up Servicer and Custodian.
The
Servicer shall indemnify the Trust Collateral Agent, the Back-up Servicer,
the
Custodian and each officer, director and employee of the Trust Collateral Agent,
the Back-up Servicer and the Custodian for, and hold each such Person harmless
against, any loss, liability, or expense incurred without willful misfeasance,
negligence, or bad faith on its part, arising out of or in connection with
the
acceptance or administration of this Agreement, the performance of duties as
Custodian of the Legal Files including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties under this Agreement. The provisions
of this Section 10.6 shall survive the termination of this Agreement or any
resignation or removal of LBAC as Servicer.
Β
SECTION
10.7. Β Β Eligibility
Requirements for Trust Collateral Agent and the Custodian.
The
Trust Collateral Agent and the Custodian under this Agreement shall at all
times
be organized and doing business under the laws of the United States of America,
with respect to the Trust Collateral Agent or the laws of the State of New
York,
with respect to the Custodian; authorized under such laws to exercise corporate
trust powers; having a combined capital and surplus of at least $50,000,000
and
subject to supervision or examination by Federal or State authorities
satisfactory to [the Note Insurer]; and having a rating, both with respect
to
long-term and short-term unsecured obligations, of not less than investment
grade by each Rating Agency. If such corporation shall publish reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.7, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trust Collateral
Agent
or the Custodian shall cease to be eligible in accordance with the provisions
of
this Section 10.7, the Trust Collateral Agent or the Custodian shall resign
immediately in the manner and with the effect specified in Section
10.8.
Β
Β
54
Β
SECTION
10.8. Β Β Resignation
or Removal of Trust Collateral Agent or Custodian.
Β
(a)
Β Β The
Trust
Collateral Agent and the Custodian may at any time resign and be discharged
from
the trusts hereby created by giving 30 days' prior written notice thereof to
the
Servicer. To the extent that the Trust Collateral Agent and the Custodian resign
hereunder, the Indenture Trustee shall also resign under the Indenture and
[the
Collateral Agent] shall resign under the Spread Account Agreement. Upon
receiving such notice of resignation, with the prior written consent of [the
Note Insurer (or, if a Note Insurer Default shall have occurred or is
continuing,] the Noteholders evidencing not less than 25% of the Note Balance),
the Servicer shall promptly appoint a successor Trust Collateral Agent or
Custodian, as applicable, by written instrument, in duplicate, one copy of
which
instrument shall be delivered to the resigning Trust Collateral Agent or
Custodian, as applicable, and one copy to the successor Trust Collateral Agent
or successor Custodian. [If no successor Trust Collateral Agent or successor
Custodian shall have been so appointed and have accepted appointment within
30
days after the giving of such notice of resignation, the Note Insurer may
appoint a successor Trust Collateral Agent or Custodian, as applicable, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trust Collateral Agent or Custodian and one copy
to
the successor Trust Collateral Agent or Custodian.] If no successor Trust
Collateral Agent or Custodian shall have been so appointed and have accepted
appointment within 60 days after the giving of such notice of resignation,
the
resigning Trust Collateral Agent or Custodian may petition any court of
competent jurisdiction for the appointment of a successor Trust Collateral
Agent
or Custodian, as applicable. [The Trust Collateral Agent or the Custodian may
be
removed at any time by written demand of the Note Insurer delivered to the
Trust
Collateral Agent or the Custodian, as applicable, and the
Servicer.]
Β
(b)
Β Β If
at any
time (i) the Trust Collateral Agent or the Custodian shall cease to be eligible
in accordance with the provisions of Section 10.7 and shall fail to resign
after
written request therefor by the Servicer, (ii) the Trust Collateral Agent or
the
Custodian, as applicable, shall be legally unable to act, (iii) the Trust
Collateral Agent and the Indenture Trustee shall be the same Person and the
Indenture Trustee shall have resigned or been removed pursuant to Section 6.8
of
the Indenture, or (iv) the Trust Collateral Agent or the Custodian shall be
adjudged bankrupt or insolvent, or a receiver, conservator or liquidator of
the
Trust Collateral Agent, the Custodian or of any of their respective property
shall be appointed, or any public officer shall take charge or control of the
Trust Collateral Agent or Custodian or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then [the Note Insurer
shall (so long as no Note Insurer Default shall have occurred and be
continuing), or] the Servicer may [(if a Note Insurer Default shall have
occurred and be continuing)] remove the Trust Collateral Agent or Custodian.
If
[the Note Insurer or] the Servicer shall remove the Trust Collateral Agent
or
Custodian under the authority of the immediately preceding sentence, the
Servicer [or the Note Insurer, as the case may be,] shall promptly appoint
a
successor Trust Collateral Agent or Custodian, as applicable, by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the
Trust Collateral Agent or Custodian so removed and one copy to the successor
Trust Collateral Agent or successor Custodian, and pay all fees and expenses
owed to the outgoing Trustee[, provided that any successor Trust Collateral
Agent or any successor Custodian appointed by the Servicer shall be acceptable
to the Note Insurer].
Β
Β
55
Β
(c)
Β Β Any
resignation or removal of the Trust Collateral Agent or the Custodian and
appointment of a successor Trust Collateral Agent or Custodian pursuant to
any
of the provisions of this Section 10.8 shall not become effective until
acceptance of appointment by the successor Trust Collateral Agent or Custodian,
as applicable, pursuant to Section 10.9 and payment of all fees and expenses
owed to the outgoing Trustee. The Servicer shall provide notice of such
resignation or removal of the Trust Collateral Agent or Custodian to each of
the
Rating Agencies and the Transferor.
Β
(d)
Β Β If
the
Trust Collateral Agent and the Back-up Servicer shall be the same Person and
the
rights and obligations of the Back-up Servicer shall have been terminated
pursuant to this Section 10.8, then [the Note Insurer (or, if a Note Insurer
Default shall have occurred and be continuing,] the Majorityholders) shall
have
the option, by 60 days' prior notice in writing to the Servicer and the Trust
Collateral Agent, to remove the Trust Collateral Agent[, and the Note Insurer
shall not have any liability to the Trust Collateral Agent, LBAC, the
Transferor, the Servicer, the Issuer or any Noteholder in connection with such
removal].
Β
(e)
Β Β At
any
time following the Closing Date the Servicer may assume the duties of Custodian
under this Agreement; provided,
that
[(i) the Note Insurer provides its prior written consent to the Trust Collateral
Agent (which consent shall be granted or withheld by the Note Insurer in its
sole discretion) and (ii)] the Rating Agency Condition has been
satisfied.
Β
SECTION
10.9. Β Β Successor
Trust Collateral Agent or Custodian.
Any
successor Trust Collateral Agent or Custodian appointed pursuant to Section
10.8
shall execute, acknowledge and deliver to the Transferor, the Servicer, [the
Note Insurer] and to its predecessor Trust Collateral Agent or predecessor
Custodian, as applicable, an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Trust
Collateral Agent or predecessor Custodian shall become effective and such
successor Trust Collateral Agent or successor Custodian, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties, and obligations of its predecessor under this Agreement, with like
effect as if originally named as Trust Collateral Agent or Custodian. The
predecessor Trust Collateral Agent or predecessor Custodian shall upon payment
of its fees and expenses deliver to the successor Trust Collateral Agent or
successor Custodian all documents and statements and monies held by it under
this Agreement; and the Servicer, [the Note Insurer] and the predecessor Trust
Collateral Agent or predecessor Custodian shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and
certainly vesting and confirming in the successor Trust Collateral Agent or
successor Custodian all such rights, powers, duties, and
obligations.
Β
No
successor Trust Collateral Agent or successor Custodian shall accept appointment
as provided in this Section 10.9 unless at the time of such acceptance such
successor Trust Collateral Agent or successor Custodian shall be eligible
pursuant to Section 10.7.
Β
Upon
acceptance of appointment by a successor Trust Collateral Agent or successor
Custodian pursuant to this Section 10.9, the Servicer shall mail notice of
the
successor of such Trust Collateral Agent or Custodian under this Agreement
to
all Holders of Notes at their addresses as shown in the Note Register, the
Transferor, and to the Rating Agencies. If the Servicer shall fail to mail
such
notice within ten (10) days after acceptance of appointment by the successor
Trust Collateral Agent, the successor Trust Collateral Agent or successor
Custodian shall cause such notice to be mailed at the expense of the
Servicer.
Β
Β
56
Β
SECTION
10.10. Β Β Merger
or Consolidation of Trust Collateral Agent or Custodian.
Any
corporation into which the Trust Collateral Agent or the Custodian may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trust Collateral
Agent
or the Custodian shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trust Collateral Agent
or the Custodian, shall be the successor of the Trust Collateral Agent or
Custodian, as applicable, hereunder, provided such corporation shall be eligible
pursuant to Section 10.7, without the execution or filing of any instrument
or
any further act on the part of any of the parties hereto, anything herein to
the
contrary notwithstanding.
Β
SECTION
10.11. Β Β Co-Trustee;
Separate Trustee.
Β
(a)
Β Β Notwithstanding
any other provisions of this Agreement, at any time, for the purpose of meeting
any legal requirements of any jurisdiction in which any part of the Issuer
or
any Financed Vehicle may at the time be located, the Servicer, [the Note Insurer
(provided a Note Insurer Default shall not have occurred and be continuing)]
and
the Trust Collateral Agent acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more persons approved by the
Trust
Collateral Agent to act as co-trustee, jointly with the Trust Collateral Agent,
or separate trustee or separate trustees, of all or any part of the Issuer,
and
to vest in such Person, in such capacity and for the benefit of the Noteholders,
such title to the Issuer, or any part thereof, and, subject to the other
provisions of this Section 10.11, such powers, duties, obligations, rights,
and
trusts as the Servicer, [the Note Insurer] and the Trust Collateral Agent may
consider necessary or desirable. If the Servicer [and the Note Insurer] shall
not have joined in such appointment within fifteen (15) days after the receipt
by it of a request so to do, or in the case an Event of Default shall have
occurred and be continuing, the Trust Collateral Agent alone shall have the
power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
Trust Collateral Agent pursuant to Section 10.7, except that the co-trustee
or
its parent shall comply with the rating requirements set forth therein, and
no
notice of a successor Trust Collateral Agent pursuant to Section 10.9 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 10.9.
Β
(b)
Β Β Each
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
Β
(i)Β Β All
rights, powers, duties, and obligations conferred or imposed upon the Trust
Collateral Agent shall be conferred upon and exercised or performed by the
Trust
Collateral Agent and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Trust Collateral Agent joining in such act), except
to
the extent that under any law of any jurisdiction in which any particular act
or
acts are to be performed (whether as Trust Collateral Agent under this Agreement
or, in its capacity as Back-up Servicer, as successor to the Servicer under
this
Agreement), the Trust Collateral Agent shall be incompetent or unqualified
to
perform such act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Issuer or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Trust
Collateral Agent;
Β
Β
57
Β
(ii)Β Β No
trustee under this Agreement shall be personally liable by reason of any act
or
omission of any other trustee under this Agreement; and
Β
(iii)Β Β [Provided
no Note Insurer Default shall have occurred and be continuing, the Note Insurer
may, and, in the event a Note Insurer Default shall have occurred and be
continuing, then,] the Servicer and the Trust Collateral Agent acting jointly
may, at any time accept the resignation of or remove any separate trustee or
co-trustee.
Β
(c)
Β Β Any
notice, request or other writing given to the Trust Collateral Agent shall
be
deemed to have been given to each of the other then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and
the conditions of this Article X. Each separate trustee and co-trustee, upon
its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trust
Collateral Agent or separately, as may be provided therein, subject to all
the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trust Collateral Agent. Each such instrument shall be filed
with the Trust Collateral Agent and a copy thereof given to the
Servicer.
Β
(d)
Β Β Any
separate trustee or co-trustee may at any time appoint the Trust Collateral
Agent, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trust Collateral Agent, to the extent permitted by law, without the appointment
of a new or successor Trust Collateral Agent.
Β
SECTION
10.12. Β Β Representations
and Warranties of Trust Collateral Agent and the Custodian.
The
Custodian and the Trust Collateral Agent shall make the following
representations and warranties with respect to itself on which the Transferor,
the Servicer, the Originator, the Issuer[, the Note Insurer] and Noteholders
shall rely:
Β
(i)Β Β The
Custodian and the Trust Collateral Agent are a [type of entity], duly organized,
validly existing, and in good standing under the laws of the State of
_______________ and have the corporate power, authority and legal right to
hold
the Legal Files.
Β
(ii)Β Β The
Custodian and the Trust Collateral Agent have full corporate power authority
and
legal right to execute, deliver, and perform this Agreement and shall have
taken
all necessary action to authorize the execution, delivery and performance by
it
of this Agreement.
Β
Β
58
Β
(iii)Β Β This
Agreement has been duly executed and delivered by the Trust Collateral Agent
and
the Custodian and constitutes a legal, valid and binding obligation of the
Trust
Collateral Agent and the Custodian, enforceable in accordance with its terms,
subject to (x) applicable bankruptcy, insolvency, reorganization, moratorium
and
other similar laws affection creditor's rights generally and (y) general
principals of equity.
Β
SECTION
10.13. Β Β [Rights
of Note Insurer to Direct Trust Collateral Agent
Β
.
Subject
to clause (iii) of Section 10.3, unless a Note Insurer Default shall have
occurred and be continuing, the Note Insurer, after giving written notice to
the
Trust Collateral Agent, shall have the right to direct the time, method and
place at or by which the Trust Collateral Agent conducts any proceeding for
any
remedy available to the Trust Collateral Agent, or exercises any such trust
or
power conferred upon the Trust Collateral Agent; provided,
however,
that
subject to Section 10.1, the Trust Collateral Agent shall have the right to
decline to follow any such direction of the Note Insurer if the Trust Collateral
Agent, being advised by counsel, determines that the action so directed may
not
lawfully be taken, or if the Trust Collateral Agent in good faith shall, by
a
Responsible Officer of the Trust Collateral Agent, determine that the
proceedings so directed would be in violation of any Basic Document or involve
it in personal liability against which its has not been provided indemnity
in
form and substance satisfactory to it or be unduly prejudicial to the rights
of
Noteholders; provided,
that
nothing in this Agreement shall impair the right of the Trust Collateral Agent
to take any action deemed proper by the Trust Collateral Agent and which is
not
inconsistent with such direction of the Note Insurer.]
Β
Β
ARTICLE
XI
Β
TERMINATION
Β
SECTION
11.1. Β Β Termination.
Β
(a)
Β Β The
respective obligations and responsibilities of LBAC, the Transferor, the Issuer,
the Servicer, the Custodian and the Trust Collateral Agent created hereby shall
terminate upon the payment to Noteholders and the Certificateholder of all
amounts required to be paid to them pursuant to this Agreement, the Indenture
and the Trust Agreement, satisfaction of all Reimbursement Obligations, and
the
expiration of any preference period related thereto and the disposition of
all
property held as part of the Trust Assets; provided,
however,
in any
case there shall be delivered to the Trust Collateral Agent [and the Note
Insurer] an Opinion of Counsel that all applicable preference periods under
federal, state and local bankruptcy, insolvency and similar laws have expired
with respect to the payments pursuant to this Section 11.1. The Servicer shall
promptly notify the Trust Collateral Agent, the Transferor, the Issuer, each
Rating Agency [and the Note Insurer] of any prospective termination pursuant
to
this Section 11.1.
Β
(b)
Β Β Upon
any
sale of the assets of the Issuer pursuant to Section 8.1 of the Trust Agreement,
the Servicer shall instruct the Trust Collateral Agent to deposit the proceeds
from such sale after all payments and reserves therefrom (including the expenses
of such sale) have been made (the "Insolvency Proceeds") in the Collection
Account.
Β
(c)
Β Β Notice
of
any termination of the Issuer shall be given by the Servicer to the Owner
Trustee, the Trust Collateral Agent, [the Collateral Agent], the Back-up
Servicer, the Indenture Trustee[, the Note Insurer] and the Rating Agencies
as
soon as practicable after the Servicer has received notice thereof.
Β
Β
59
Β
(d)
Β Β Following
the satisfaction and discharge of the Indenture and the payment in full of
the
principal of and interest on the Notes, the Certificateholders will succeed
to
the rights of the Noteholders hereunder.
Β
Β
ARTICLE
XII
Β
ADMINISTRATIVE
DUTIES OF THE SERVICER
Β
SECTION
12.1. Β Β Administrative
Duties.
Β
(a)
Β Β Duties
with Respect to the Indenture.
The
Servicer shall take all necessary action that is the duty of the Issuer to
take
pursuant to the Indenture, pursuant to Sections 2.9 (with respect to the notice
provisions contained therein), 3.4, 3.5, 3.6, 3.7, 3.9, 3.10, 3.17, 8.3, 9.1,
9.2, 9.3, 11.1 and 11.13 of the Indenture (in each case, excluding any duty
to
make payments to the Noteholders [and the Note Insurer]). In addition, the
Servicer shall consult with the Owner Trustee as the Servicer deems appropriate
regarding the duties of the Issuer under the Indenture. The Servicer shall
monitor the performance of the Issuer and shall advise the Owner Trustee when
action is necessary to comply with the Issuer's duties under the Indenture.
The
Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of
the
Issuer to prepare, file or deliver pursuant to the Indenture.
Β
(b)
Β Β Duties
with Respect to the Issuer.
Β
(i)Β Β In
addition to the duties of the Servicer set forth in this Agreement or any of
the
Basic Documents, the Servicer shall perform such calculations and shall prepare
for execution by the Issuer or the Owner Trustee or shall cause the preparation
by other appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Issuer
or
the Owner Trustee to prepare, file or deliver pursuant to this Agreement or
any
of the Basic Documents or under state and federal tax and securities laws,
and
at the request of the Owner Trustee shall take all appropriate action that
it is
the duty of the Issuer to take pursuant to this Agreement. In accordance with
the directions of the Issuer or the Owner Trustee, the Servicer shall
administer, perform or supervise the performance of such other activities in
connection with the Trust Assets (including the Basic Documents) as are not
covered by any of the foregoing provisions and as are expressly requested by
the
Issuer or the Owner Trustee and are reasonably within the capability of the
Servicer.
Β
(ii)Β Β In
carrying out the foregoing duties or any of its other obligations under this
Agreement, the Servicer may enter into transactions with or otherwise deal
with
any of its Affiliates; provided,
however,
that the
terms of any such transactions or dealings shall be in accordance with any
directions received from the Issuer and shall be, in the Servicer's opinion,
no
less favorable to the Issuer in any material respect.
Β
(c)
Β Β Non-Ministerial
Matters.
With
respect to matters that in the reasonable judgment of the Servicer are
non-ministerial, the Servicer shall not take any action pursuant to this Article
XII unless within a reasonable time before the taking of such action, the
Servicer shall have notified the Owner Trustee , [the Note Insurer] and the
Trust Collateral Agent of the proposed action and the Owner Trustee and, with
respect to items (i), (ii), (iii) and (iv) below, the Trust Collateral Agent
shall not have withheld consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters" shall
include:
Β
Β
60
Β
(i)Β Β the
amendment of or any supplement to the Indenture;
Β
(ii)Β Β the
initiation of any claim or lawsuit by the Issuer and the compromise of any
action, claim or lawsuit brought by or against the Issuer (other than in
connection with the collection of the Receivables);
Β
(iii)Β Β the
amendment, change or modification of this Agreement or any of the Basic
Documents;
Β
(iv)Β Β the
appointment of successor Note Registrars, successor Note Paying Agents and
successor Indenture Trustees pursuant to the Indenture or the appointment of
Successor Servicers or the consent to the assignment by the Note Registrar,
Paying Agent or Trustee of its obligations under the Indenture; and
Β
(v)Β Β the
removal of the Trust Collateral Agent or the Indenture Trustee.
Β
(d)
Β Β Exceptions.
Notwithstanding anything to the contrary in this Agreement, except as expressly
provided herein or in the other Basic Documents, the Servicer, in its capacity
hereunder, shall not be obligated to, and shall not, (1) make any payments
to
the Noteholders under the Basic Documents, (2) sell the Pledged Property
pursuant to Section 5.5 of the Indenture, (3) take any other action that the
Issuer directs the Servicer not to take on its behalf or (4) in connection
with
its duties hereunder assume any indemnification obligation of any other
Person.
Β
SECTION
12.2. Β Β Records.
The
Servicer shall maintain appropriate books of account and records relating to
services performed under this Agreement, which books of account and records
shall be accessible for inspection by the Issuer at any time during normal
business hours.
Β
SECTION
12.3. Β Β Additional
Information to be Furnished to the Issuer.
The
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Trust Assets as the Issuer shall reasonably
request.
Β
SECTION
12.4. Β Β No
Additional Compensation.
The
Servicing Fee payable to the Servicer pursuant to Section 5.6(c)(i) and the
Simple Interest Excess, if any, payable to the Servicer, so long as LBAC is
the
Servicer, pursuant to Section 5.12 shall be the only amounts payable to the
Servicer for its services hereunder.
Β
Β
Β
61
Β
ARTICLE
XIII
Β
MISCELLANEOUS
PROVISIONS
Β
SECTION
13.1. Β Β Amendment.
Β
(a)
Β Β This
Agreement may be amended from time to time by the Issuer, the Transferor, the
Originator, the Servicer, the Trust Collateral Agent, the Back-up Servicer
and
the Custodian and, [(i) so long as no Note Insurer Default has occurred and
is
continuing or the Policy Expiration Date has not occurred, with the prior
written consent of the Note Insurer and, (ii) if a Note Insurer Default has
occurred and is continuing or the Policy Expiration Date has occurred] with
the
consent of the Majorityholders, which consent given pursuant to this Section
or
pursuant to any other provision of this Agreement shall be conclusive and
binding on all Holders and on all future Holders of Notes and of any Notes
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Notes, for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the
provisions of this Agreement, or of modifying in any manner the rights of the
Holders of Notes; provided,
however,
that,
[in the case of either clause (i) or (ii) above,] 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 payments that shall be required to be made on any Note or the
Certificate or change the applicable Note Rate without the consent of each
Noteholder and Certificateholder affected thereby, (b) reduce the aforesaid
percentage of the Note Balance required to consent to any such amendment,
without the consent of the Holders of all Notes then outstanding or eliminate
the right of the Noteholder or the Certificateholder to consent to any change
described in clause (a) affecting the Noteholder or the Certificateholder
without the consent of the Noteholder or the Certificateholder, as applicable,
or (c) result in a downgrade or withdrawal of the then current rating of the
Notes by either of the Rating Agencies without the consent of all the
Noteholders; provided,
further
that [in
the case of clause (ii) above,] this Agreement may be amended from time to
time
by the Issuer, the Transferor, the Originator, the Servicer, the Trust
Collateral Agent, the Back-up Servicer and the Custodian, for any of the
following purposes:
Β
(x)Β to
correct or amplify the description of any property at any time conveyed to
the
Issuer hereunder, or better to assure, convey and confirm unto the property
conveyed pursuant hereto;
Β
(y)Β to
add to
the covenants of the Transferor, the Originator or the Servicer, for the benefit
of the Holders of the Notes [and the Note Insurer]; or
Β
(z)Β to
cure
any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under this Agreement; provided
that
such action pursuant to this subclause (z) shall not adversely affect in any
material respect the interests of the Holders of the Notes, as evidenced by
satisfaction of the Rating Agency Condition with respect to such
amendment.
Β
(b)
Β Β The
Trust
Collateral Agent shall furnish prior notice of any such proposed amendment
to
each Rating Agency and promptly after the execution of any such amendment or
consent, the Trust Collateral Agent shall furnish a copy of such amendment
and/or consent, if applicable, to each Noteholder, each of the Rating Agencies
and the Lock-Box Processor.
Β
Β
62
Β
(c)
Β Β Prior
to
the execution of any amendment to this Agreement, the Trust Collateral Agent
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
and
the Opinion of Counsel referred to in Section 13.2(i)(1). The Trust Collateral
Agent may, but shall not be obligated to, enter into any such amendment which
affects the Trust Collateral Agent's own rights, duties or immunities under
this
Agreement or otherwise.
Β
SECTION
13.2. Β Β Protection
of Title.
Β
(a)
Β Β Each
of
the Transferor, as to itself, and the Servicer, as to itself, shall execute
and
file such financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Indenture Trustee on behalf of the Noteholders, the Trust Collateral Agent
[and
the Note Insurer] in its interest in the Receivables and the other Trust Assets
and in the proceeds thereof. Each of the Transferor, as to itself, and the
Servicer, as to itself, shall deliver (or cause to be delivered) to the Trust
Collateral Agent, the Owner Trustee [and the Note Insurer] file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
Β
(b)
Β Β Neither
the Transferor nor the Servicer shall change its name, identity or corporate
structure in any manner that would, could, or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Β§ 9-402(7) of the UCC, unless it shall have
given the Trust Collateral Agent, the Owner Trustee, [the Note Insurer] and
the
other party at least thirty days' prior written notice thereof, shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements and shall have delivered an Opinion of
Counsel (A) stating that, in the opinion of such counsel, all amendments to
all
previously filed financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the interest
of the Trust Collateral Agent in the Receivables and the other Trust Assets,
and
reciting the details of such filings or (B) stating that, in the opinion of
such
counsel, no such action shall be necessary to preserve and protect such
interest.
Β
(c)
Β Β Each
of
the Transferor and the Servicer shall have an obligation to give the Trust
Collateral Agent, the Owner Trustee, [the Note Insurer] and the other party
at
least thirty days' prior written notice of any relocation of its principal
executive office or change in its state of incorporation 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, shall promptly file any such
amendment and shall deliver an Opinion of Counsel (A) stating that, in the
opinion of such counsel, all amendments to all previously filed financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Trust Collateral
Agent in the Receivables, and reciting the details of such filings or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest. The 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.
Β
Β
63
Β
(d)
Β Β The
Servicer shall maintain accounts and records as to each Receivable accurately
and in sufficient detail to permit (i) the reader thereof to know at any time
the status of such Receivable, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Receivable and the amounts from
time
to time deposited in the Collection Account in respect of such
Receivable.
Β
(e)
Β Β The
Servicer shall maintain its computer systems so that, from and after the time
of
conveyance under this Agreement of the Receivables to the Issuer, the Servicer's
master computer records (including any back-up archives) that refer to a
Receivable shall indicate clearly the interest of Long Beach Acceptance Auto
Receivables Trust 20__-_ in such Receivable and that such Receivable is owned
by
the Issuer. Indication of the Issuer's ownership of a Receivable shall be
deleted from or modified on the Servicer's computer systems when, and only
when,
such Receivable shall have been paid in full or repurchased.
Β
(f)
Β Β If
at any
time the Transferor or the Servicer shall propose to sell, grant a security
interest in, or otherwise transfer any interest in automotive receivables to
any
prospective purchaser, lender, or other transferee, the Servicer shall give
to
such prospective purchaser, lender, or other transferee computer tapes, records,
or printouts (including any restored from back-up archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate clearly that
such Receivable has been conveyed to and is owned by the Issuer.
Β
(g)
Β Β The
Servicer shall, upon reasonable notice, permit the Transferor, the Trust
Collateral Agent, the Back-up Servicer, the Owner Trustee [and the Note Insurer
and its agents] at any time during normal business hours to inspect, audit,
and
make copies of and abstracts from the Servicer's records regarding any
Receivable.
Β
(h)
Β Β Upon
request, the Servicer shall furnish to the Transferor, the Trust Collateral
Agent, the Back-up Servicer, the Owner Trustee [or to the Note Insurer,] within
five Business Days, a list of all Receivables (by contract number and name
of
Obligor) then held as part of the Issuer, together with a reconciliation of
such
list to the Schedule of Receivables and to each of the Servicer's Certificates
furnished before such request indicating removal of Receivables from the
Issuer.
Β
(i)
Β Β The
Servicer shall deliver to the Trust Collateral Agent, the Owner Trustee [and
the
Note Insurer]:
Β
(1)
Β Β promptly
after the execution and delivery of this Agreement and of each amendment hereto
and after the execution and delivery of each amendment to any financing
statement, an Opinion of Counsel either (A) stating that, in the opinion of
such
counsel, all financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the interest of
the
Trust Collateral Agent in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given or (B) stating that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest; and
Β
Β
64
Β
(2)
Β Β within
90
days after the beginning of each calendar year beginning with the first calendar
year beginning more than three months after the Cutoff Date, an Opinion of
Counsel, dated as of a date during such 90-day period either (A) stating that,
in the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to preserve
and
protect the interest of the Trust Collateral Agent in the Receivables, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest.
Β
Each
Opinion of Counsel referred to in clause (i) (1) or (i) (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
Β
(j)
Β Β For
the
purpose of facilitating the execution of this Agreement and for other purposes,
this Agreement may be executed simultaneously in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
Β
SECTION
13.3. Β Β Limitation
on Rights of Noteholders.
Β
(a)
Β Β The
death
or incapacity of any Noteholder shall not operate to terminate this Agreement
or
the Issuer, nor entitle such Noteholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Issuer, nor otherwise affect the
rights, obligations and liabilities of the parties to this Agreement or any
of
them.
Β
(b)
Β Β No
Noteholder shall have any right to vote (except as specifically provided herein
including in Section 13.1) or in any manner otherwise control the operation
and
management of the Issuer, or the obligations of the parties to this Agreement,
nor shall anything in this Agreement set forth, or contained in the terms of
the
Notes, be construed so as to constitute the Noteholders from time to time as
partners or members of an association; nor shall any Noteholder be under any
liability to any third person by reason of any action taken pursuant to any
provision of this Agreement.
Β
(c)
Β Β [So
long
as no Note Insurer Default has occurred and is continuing, except as otherwise
specifically provided herein, whenever Noteholder action, consent or approval
is
required under this Agreement, such action, consent or approval shall be deemed
to have been taken or given on behalf of, and shall be binding upon, all
Noteholders if the Note Insurer agrees to take such action or give such consent
or approval.]
Β
(d)
Β Β [If
a
Note Insurer Default shall have occurred and be continuing, no Noteholder shall
have any right by virtue or by availing itself of any provisions of this
Agreement to institute any suit, action, or proceeding in equity or at law
upon
or under or with respect to this Agreement, unless such Holder previously shall
have given to the Trust Collateral Agent a written notice of default and of
the
continuance thereof, and unless also the Noteholders evidencing not less than
25% of the Note Balance shall have made written request upon the Trust
Collateral Agent to institute such action, suit or proceeding in its own name
as
Trustee under this Agreement and shall have offered to the Trust Collateral
Agent such reasonable indemnity as it may require against the costs, expenses,
and liabilities to be incurred therein or thereby and the Trust Collateral
Agent, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit
or
proceeding and during such 30-day period no request or waiver inconsistent
with
such written request has been given to the Trust Collateral Agent pursuant
to
this Section or Section 8.4; no one or more Holders of Notes shall have any
right in any manner whatever by virtue or by availing itself or themselves
of
any provisions of this Agreement to affect, disturb, or prejudice the rights
of
the Holders of any other of the Notes, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce any right, under
this
Agreement except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Noteholders. For the protection and
enforcement of the provisions of this Section 13.3, each Noteholder and the
Trust Collateral Agent shall be entitled to such relief as can be given either
at law or in equity. Nothing in this Agreement shall be construed as giving
the
Noteholders any direct right to make a claim on the Note Policy.]
Β
Β
65
Β
SECTION
13.4. Β Β Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF 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 WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES (EXCEPT WITH REGARD TO THE UCC).
Β
SECTION
13.5. Β Β Notices.
Β
(a)
Β Β All
demands, notices and communications upon or to the Issuer, the Transferor,
the
Servicer, the Trust Collateral Agent, [the Note Insurer,] Standard & Poor's
or Moody's under this Agreement shall be in writing, and delivered (i)
personally, (ii) by certified mail, return receipt requested, (iii) by Federal
Express or similar overnight courier service or (iv) by telecopy, and shall
be
deemed to have been duly given upon receipt (a) in the case of the Issuer,
in
care of the Owner Trustee at the following address: ____________, __________,
Attention: (Telecopy: _____________), (b) in the case of the Transferor, at
the
following address: Xxx Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 (Telecopy:
(000) 000-0000), Attention: General Counsel, or at such other address as shall
be designated by the Transferor in a written notice to the Trust Collateral
Agent, (c) in the case of the Servicer, at the following address: Xxx Xxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 (Telecopy: (000) 000-0000), Attention:
General Counsel, (d) in the case of the Trust Collateral Agent, at the Corporate
Trust Office (Telecopy: __________), (e) in the case of the Custodian, at the
Corporate Trust Office (Telecopy: __________), (f) in the case of Standard
&
Poor's, via electronic delivery to xxxxxxxx_xxxxxxx@xxxxx.xxx, or, for any
information not available in electronic format, to Standard and Poor's Ratings
Services, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention:
ABS Surveillance Group, (g) in the case of Moody's, at the following address:
00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS Monitoring Department
and (h) [in the case of the Note Insurer, at the following address:
________________, Attention: ________________, Re: Long Beach Acceptance Auto
Receivables Trust 20__-_.] Any notice required or permitted to be mailed to
a
Noteholder shall be given by Federal Express or similar overnight courier
service, postage prepaid, at the address of such Holder as shown in the Note
Register. 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 shall receive such notice.
Β
Β
66
Β
(b)
Β Β The
Trust
Collateral Agent shall give prompt written notice to each of the Transferor,
the
Rating Agencies and each Noteholder of [(i) any amendments to the Insurance
Agreement or the Note Policy (upon receipt of written notice of any such
amendments from LBAC or the Servicer), (ii)] any change in the identity of
the
Note Paying Agent [and (iii) any failure to make payment under the Note
Policy].
Β
SECTION
13.6. Β Β 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 or the rights of the Holders thereof.
Β
SECTION
13.7. Β Β Assignment
to Indenture Trustee.
The
Transferor hereby acknowledges and consents to any mortgage, pledge, assignment
and grant of a security interest by the Issuer to the Indenture Trustee pursuant
to the Indenture for the benefit of the Noteholders [and the Note Insurer]
of
all right, title and interest of the Issuer in, to and under the Receivables
and/or the assignment of any or all of the Issuer's rights and obligations
hereunder to the Indenture Trustee.
Β
SECTION
13.8. Β Β Limitation
of Liability of Owner Trustee, Custodian and Trust Collateral
Agent.
Β
(a)
Β Β Notwithstanding
anything contained herein to the contrary, this Agreement has been countersigned
by [Name of owner trustee] not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall [Name of owner
trustee] in its individual capacity or, except as expressly provided in the
Trust Agreement, as Owner Trustee, have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements of the Issuer 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 the Trust
Agreement.
Β
(b)
Β Β Notwithstanding
anything contained herein to the contrary, this Agreement has been executed
and
delivered by ____________, not in its individual capacity but solely as Back-up
Servicer, Custodian and Trust Collateral Agent and in no event shall
____________ 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 of the Issuer delivered pursuant hereto,
as
to all of which recourse shall be had solely to the assets of the
Issuer.
Β
Β
67
Β
SECTION
13.9. Β Β Independence
of the Servicer.
For all
purposes of this Agreement, the Servicer shall be an independent contractor
and
shall not be subject to the supervision of the Issuer, the Trust Collateral
Agent, the Back-up Servicer or the Owner Trustee with respect to the manner
in
which it accomplishes the performance of its obligations hereunder. Unless
expressly authorized by this Agreement, the Servicer shall have no authority
to
act for or represent the Issuer or the Owner Trustee in any way and shall not
otherwise be deemed an agent of the Issuer or the Owner Trustee.
Β
SECTION
13.10. Β Β No
Joint Venture.
Nothing
contained in this Agreement (i) shall constitute the Servicer and either of
the
Issuer or the Owner Trustee as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
shall be construed to impose any liability as such on any of them or (iii)
shall
be deemed to confer on any of them any express, implied or apparent authority
to
incur any obligation or liability on behalf of the others.
Β
SECTION
13.11. Β Β Nonpetition
Covenant.
None of
the Transferor, the Servicer, the Trust Collateral Agent, the Custodian, the
Back-up Servicer or LBAC shall, prior to the date which is one year and one
day
after the termination of this Agreement with respect to the Issuer or the
Transferor, petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
or the Transferor under any Federal or State bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or the Transferor or any
substantial part of its property, or ordering the winding up or liquidation
of
the affairs of the Issuer or the Transferor.
Β
SECTION
13.12. Β Β Third
Party Beneficiaries.
Except
as otherwise specifically provided herein with respect to Noteholders and the
Certificateholder, the parties to this Agreement hereby manifest their intent
that no third party other than [the Note Insurer,] the Owner Trustee and the
Custodian with respect to the indemnification provisions set forth herein,
shall
be deemed a third party beneficiary of this Agreement, and specifically that
the
Obligors are not third party beneficiaries of this Agreement. [The Note Insurer
and its successors and assigns shall be a third-party beneficiary to the
provisions of this Agreement, and shall be entitled to rely upon and directly
enforce such provisions of this Agreement so long as no Note Insurer Default
shall have occurred and be continuing. Except as expressly stated otherwise
herein or in the Basic Documents, any right of the Note Insurer to direct,
appoint, consent to, approve of or take any action under this Agreement, shall
be a right exercised by the Note Insurer in its sole and absolute discretion.
The Note Insurer may disclaim any of its rights and powers under this Agreement
(but not its duties and obligations under the Note Policy) upon delivery of
a
written notice to the Trust Collateral Agent.]
Β
SECTION
13.13. Β Β Consent
to Jurisdiction.
Β
(a)
Β Β TO
THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR
THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW YORK LOCATED
IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF,
IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH
ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD OR DETERMINED IN SUCH NEW YORK STATE COURT OR IN SUCH
FEDERAL COURT. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH
ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND
AGREE NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
THE
JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT
IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER OR THAT THE RELATED DOCUMENTS OR THE SUBJECT MATTER THEREOF MAY NOT
BE
LITIGATED IN OR BY SUCH COURTS.
Β
Β
68
Β
(b)
Β Β To
the
extent permitted by applicable law, the parties hereto shall not seek and hereby
waive the right to any review of the judgment of any such court by any court
of
any other nation or jurisdiction which may be called upon to grant an
enforcement of such judgment.
Β
(c)
Β Β Each
of
LBAC and the Transferor hereby agree that until such time at the Notes and
the
Reimbursement Obligations have been paid in full [and the Note Policy has
expired in accordance with its terms], each of LBAC and the Transferor shall
have appointed[, with prior written notice to the Note Insurer], an agent
registered with the Secretary of State of the State of New York, with an office
in the County of New York in the State of New York, as its true and lawful
attorney and duly authorized agent for acceptance of service of legal process
(which as of the date hereof is [National Registered Agents, Inc., whose address
is 000 Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000]). Each of LBAC and the
Transferor agrees that service of such process upon such Person shall constitute
personal service of such process upon it.
Β
SECTION
13.14. Β Β Headings.
The
headings of articles and sections and the table of contents contained in this
Agreement are provided for convenience only. They form no part of this Agreement
and shall not affect its construction or interpretation. Unless otherwise
indicated, all references to articles and sections in this Agreement refer
to
the corresponding articles and sections of this Agreement.
Β
SECTION
13.15. Β Β Trial
by Jury Waived.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT
TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY
OUT
OF, UNDER OR IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS OR THE
TRANSACTION. EACH PARTY HERETO (A)Β CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
IT
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND
(B)Β ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS
WAIVER.
Β
Β
69
Β
SECTION
13.16. Β Β Entire
Agreement
Β
.
This
Agreement sets forth the entire agreement between the parties with respect
to
the subject matter hereof, and this Agreement supersedes and replaces any
agreement or understanding that may have existed between the parties prior
to
the date hereof in respect of such subject matter.
Β
SECTION
13.17. Β Β [Effect
of Policy Expiration Date
Β
.
Notwithstanding anything to the contrary set forth herein, all references to
any
right of the Note Insurer to direct, appoint, consent to, accept, approve of,
take or omit to take any action under this Agreement or any other Basic Document
shall be inapplicable at all times after the Policy Expiration Date, and (i)
if
such reference provides for another party or parties to take or omit to take
any
such action following a Note Insurer Default, such party or parties shall also
be entitled to take or omit to take such action following a the Policy
Expiration Date and (ii) if such reference does not provide for another party
or
parties to take or omit to take any such action following a Note Insurer
Default, then the Indenture Trustee acting at the direction of the
Majorityholders shall have the right to take or omit to take any such action
following the Policy Expiration Date. In addition, any other provision of this
Agreement or any other Basic Document which is operative based in whole or
in
part on whether a Note Insurer Default has or has not occurred shall, at all
times on or after the Policy Expiration Date, be deemed to refer to whether
or
not the Policy Expiration Date has occurred.]
Β
Β
Β
70
Β
IN
WITNESS WHEREOF, the Issuer, the Transferor, the Originator, the Servicer,
the
Trust Collateral Agent, the Back-up Servicer and the Custodian have caused
this
Sale and Servicing Agreement to be duly executed by their respective officers
as
of the day and year first above written.
Β
Β |
LONG
BEACH ACCEPTANCE RECEIVABLES CORP., as Transferor
Β
By:__________________________________
Name:
Title:
|
Β |
Β
LONG
BEACH ACCEPTANCE CORP.,
as
Originator and Servicer
Β
By:__________________________________
Name:
Title:
|
Β |
Β
[___________________________],
as
Back-up Servicer, Custodian and Trust Collateral Agent
Β
By:__________________________________
Name:
Title:
|
Β |
Β
LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 20__-_, as Issuer
Β
By:[Name
of owner trustee], not in its individual capacity, but solely as
Owner
Trustee
Β
By:__________________________________
Name:
Title:
|
Β
Β
Β
Β
ANNEX
A
DEFINED
TERMS
Annex
A
Β
Β
Β
EXHIBIT
A-1
Β
Issuer's
Certificate
pursuant
to Section 3.4
of
the
Sale and Servicing
Agreement
Β
Reference
is made to the Sale and Servicing Agreement (the "Agreement"), dated as of
__________, 20__, among Long Beach Acceptance Receivables Corp., Long Beach
Acceptance Corp., as originator and as servicer, ____________, as trust
collateral agent, custodian and back-up servicer and Long Beach Acceptance
Auto
Receivables Trust 20__-_, as issuer (the "Issuer"). The Issuer does hereby
sell,
transfer, assign, and otherwise convey to LBAC, without recourse,
representation, or warranty, all of the Issuer's right, title, and interest
in
and to all of the Receivables (as defined in the Agreement) identified in the
attached Servicer's Certificate as "Purchased Receivables," which are to be
repurchased by LBAC pursuant to Section 3.4 of the Agreement, and all security
and documents relating thereto.
Β
IN
WITNESS WHEREOF I have hereunto set my hand this __ day of ________________,
___.
Β
X-0-0
Β
Β
Β
XXXXXXX
X-0
Β
Issuer's
Certificate
Β
pursuant
to Section 4.7
Β
of
the
Sale and Servicing
Β
Agreement
Β
Reference
is made to the Sale and Servicing Agreement (the "Agreement"), dated as of
__________, 20__, among Long Beach Acceptance Receivables Corp., Long Beach
Acceptance Corp., as originator and as servicer, _______________, as trust
collateral agent, custodian and back-up servicer and Long Beach Acceptance
Auto
Receivables Trust 20__-_, as issuer (the "Issuer"). The Issuer does hereby
sell,
transfer, assign, and otherwise convey to the Servicer, without recourse,
representation, or warranty, all of the Issuer's right, title, and interest
in
and to all of the Receivables (as defined in the Agreement) identified in the
attached Servicer's Certificate as "Purchased Receivables," which are to be
purchased by the Servicer pursuant to Section 4.7 of the Agreement, and all
security and documents relating thereto.
Β
IN
WITNESS WHEREOF I have hereunto set my hand this __ day of ________________,
____.
Β
X-0-0
Β
Β
Β
XXXXXXX
X-0
Β
SERVICER'S
CERTIFICATE
Β
LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 20__-_
Β
_____%
ASSET-BACKED NOTES, CLASS A
Β
Β
B-1-1
Β
Β
Β
EXHIBIT
B-2
Β
Form
of
Loan Master File Layout
Β
B-2-1
Β
Β
Β
EXHIBIT
C
Β
Intentionally
Omitted
Β
C-1
Β
Β
Β
EXHIBIT
D
Β
PAYMENT
DEFERMENT POLICY
Β
Β
D-1
Β
Β
Β
DUE
DATE CHANGE POLICY
Β
Β
D-2
Β
Β
Β
EXHIBIT
E
Β
Documentation
Checklist
Β
CUSTOMER:
Β
ACCOUNT
NUMBER:
Β
This
funding package contains the following initialed items:
Β
Β 1.Β
|
Installment
contract with proper signatures and Dealer endorsements
|
1._____________
|
Β 2.Β
|
Copy
of signed credit application
|
2._____________
|
Β 3.Β
|
References
as described in the Program Guidelines
|
3._____________
|
Β 4.Β
|
Proof
of income as described in the Program Guidelines
|
4._____________
|
Β 5.Β
|
Copy
of driver's license for all licensed signors
|
5._____________
|
Β 6.Β
|
Title
information (application and copy of existing title, receipt of
registration, or title copy
already
received) with lien notation thereon, or Dealer Title
Guaranty
|
6._____________
|
Β 7.Β
|
Invoice
or copy of computer screen printout showing NADA value, NADA book
page,
Xxxxxx
printout
or Xxxxxx Blue Book page
|
7._____________
|
Β 8.Β
|
In
the case of a used Financed Vehicle, odometer statement (if not on
title
info)
|
8._____________
|
Β 9.Β
|
Signed
agreement to provide insurance and verification paper or other evidence
of
verification
of
insurance coverage
|
9._____________
|
Β 10.Β
|
Notice
to cosignor, if required
|
10.____________
|
Β 11.Β
|
Service
contract or warranty papers
|
11.____________
|
Β 12.Β
|
Life,
accident, health and GAP insurance policy copies, as
applicable
|
12.____________
|
Β 13.Β
|
Signed
purchase order from dealer to customer
|
13.____________
|
E-1
Β
Β
Β
EXHIBIT
F
Β
[Form
of
Request for Transfer of Possession]
Β
___________,
20__
Β
[Name
of
indenture trustee]
____________________
____________________
Attention:
____________________
Β
Attention:
__________
Telephone:
___________
Telecopy:
____________
Β
Ladies
and Gentlemen:
Β
Reference
is made to the Sale and Servicing Agreement, dated as of _______________, 20__
(the "Sale and Servicing Agreement"), among LONG BEACH ACCEPTANCE RECEIVABLES
CORP., a Delaware corporation, as transferor, LONG BEACH ACCEPTANCE CORP.,
a
Delaware corporation, as originator and servicer, LONG BEACH ACCEPTANCE AUTO
RECEIVABLES TRUST 20__-_, a Delaware business trust, as issuer (the "Issuer"),
____________________, a ____________________, as trust collateral agent, back-up
servicer and custodian (in such capacity, the "Custodian"). Capitalized terms
used but not defined in this letter have the meanings set forth in the Sale
and
Servicing Agreement.
Β
The
Servicer hereby requests that the Custodian transfer possession of the Legal
Files, or such portion of the Legal Files as is identified herein, relating
to
the Receivables listed in Annex A hereto to [the Servicer] [________________
as
subservicer (the "Subservicer") for the Servicer] [for purposes of collection
or
presentation, renewal or registration of transfer (unless the related
Receivables' Owner objects to this request to the Custodian (i) by 5:00 PM
on
the same Business Day this request is made if it is made by 1:00 PM or (ii)
by
11:00 AM on the next Business Day if this request is made after 1:00 PM] [for
purposes of correcting deficiencies in the Legal Files], the possession of
which
is transferred pursuant to this request will be transferred subject to a
Custodial Letter duly executed by [the Servicer] [the Subservicer] and a
Transfer Notice duly executed by the Custodian. [The portion of the Legal Files
requested for transfer of possession hereunder is ___________.]
Β
Very
truly yours,
LONG
BEACH ACCEPTANCE CORP.
By:__________________________________
Name:________________________________
Title:_________________________________
F-1
Β
Β
Β
EXHIBIT
G
Β
[Form
of
Custodial Letter]
Β
___________,
20__
Β
[Name
of
indenture trustee]
____________________
____________________
Attention:
____________________
Β
Attention:
__________
Telephone:
___________
Telecopy:
____________
Β
Ladies
and Gentlemen:
Β
Reference
is made to the Sale and Servicing Agreement, dated as of __________, 20__ (the
"Sale and Servicing Agreement"), among LONG BEACH ACCEPTANCE RECEIVABLES CORP.,
a Delaware corporation, as transferor, LONG BEACH ACCEPTANCE CORP., a Delaware
corporation, as originator and servicer, LONG BEACH ACCEPTANCE AUTO RECEIVABLES
TRUST 20__-_, a Delaware business trust, as issuer (the "Issuer"), ___________,
a ___________, as trust collateral agent, custodian and back-up servicer.
Capitalized terms used but not defined in this letter have the meanings set
forth in the Sale and Servicing Agreement.
Β
[The
Servicer] [_____________________, as Subservicer (the "Subservicer") for the
Servicer] acknowledges that the Issuer is owner of all Receivables (and their
proceeds). The Agreement provides that the Servicer, or the Subservicer, may
request from time to time that possession of all or a portion of the Legal
Files
delivered to and held by the Custodian pursuant to the Sale and Servicing
Agreement be transferred to [the Servicer] [the Subservicer] [for purposes
of
collection, or presentation, renewal or registration of transfer] [for purposes
of correcting deficiencies in the Legal Files]. Subject to the terms of the
Sale
and Servicing Agreement, the Custodian is authorized to so transfer possession
of such Legal Files, or portion thereof, such transfer of possession to be
accomplished pursuant to a Transfer Notice substantially in the form of Annex
A
to this Custodial Letter.
Β
[The
Servicer] [The Subservicer] hereby agrees as follows:
Β
(a)Β [The
Servicer] [The Subservicer] acknowledges that the possession of any such Legal
Files will be so transferred subject to this Custodial Letter and that they
are
and will continue to be the sole property of the Issuer.
Β
(b)Β [The
Servicer] [The Subservicer] agrees that such Legal Files will be returned to
the
Custodian immediately upon notice by the Custodian or the Trust Collateral
Agent
that sixty (60) days have elapsed from the date of such transfer; provided,
that
instead of sixty (60) days, the time limit applicable to any certificate of
title is one hundred twenty (120) days.
Β
G-1
Β
Β
Β
(c)Β The
Legal
Files will not be used for any purpose other than that for which [the Servicer]
[the Subservicer] hereby requests such transfer of possession.
Β
(d)Β At
all
times while the Legal Files are in [the Servicer's] [the Subservicer's]
possession, [the Servicer] [the Subservicer] will hold the Legal Files IN TRUST
for the Indenture Trustee, the Issuer, the Noteholders and the Note
Insurer.
Β
(e)Β [The
Servicer] [The Subservicer] will include this Custodial Letter and each Transfer
Notice in its business records.
Β
(f)Β [The
Servicer] [The Subservicer] will not deliver the Legal Files to any person
other
than the Custodian except with the prior written consent of the Trust Collateral
Agent.
Β
This
Custodial Letter shall be governed by and construed in accordance with the
laws
of the State of Texas.
Β
LONG
BEACH ACCEPTANCE CORP.
By:__________________________________
Name:________________________________
Title:_________________________________
Β
Β Β Β Β [SUBSERVICER'S
NAME]
Β Β Β Β By:__________________________________
Β Β Β Β Name:________________________________
Β Β Β Β Title:_________________________________
Β
Β
G-2
Β
Β
Β
EXHIBIT
G
- ANNEX A to Custodial Letter
Β
[Form
of
Transfer Notice]
Β
[Long
Beach Acceptance Corp.
Xxx
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
Telecopy:
(000) 000-0000]
Β
[Subservicer
(the "Subservicer")
Address
Address
Telecopy:_______________________]
Β
Ladies
and Gentlemen:
Β
Reference
is made to the Sale and Servicing Agreement, dated as of __________, 20__ (the
"Sale and Servicing Agreement"), among LONG BEACH ACCEPTANCE RECEIVABLES CORP.,
a Delaware corporation, as transferor, LONG BEACH ACCEPTANCE CORP., a Delaware
corporation, as originator and servicer, LONG BEACH ACCEPTANCE AUTO RECEIVABLES
TRUST 20__-_, a Delaware business trust, as issuer (the "Issuer"), ___________,
a ___________, as trust collateral agent, back-up servicer and custodian.
Capitalized terms used but not defined in this letter have the meanings set
forth in the Sale and Servicing Agreement.
Β
The
possession of the Legal Files relating to the Receivables listed in Annex A
is
transferred to you IN TRUST for the Issuer, the Indenture Trustee, the Note
Holders [and the Note Insurer], subject to the terms and provisions of the
Sale
and Servicing Agreement, and subject to the Custodial Letter you executed
pursuant to Section 3.5(c) of the Sale and Servicing Agreement.
Β
Β
Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Very
truly
yours,
Β
Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β [NAME
OF TRUST
COLLATERAL AGENT]
Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β By:__________________________________
Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Name:________________________________
Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Title:_________________________________
Β
Β
Β
Β
G-3
Β
Β
Β
EXHIBIT
G
- ANNEX A to Transfer Notice
Β
Receivable
Number
|
Β |
Amount
of
Receivable
|
Β |
Name
of
Receivable
Borrower
|
Β | Β | Β | Β | Β |
Β | Β | Β | Β | Β |
G-4
Β
Β
Β
SCHEDULE
A
Β
SCHEDULE
OF RECEIVABLES
Β
Schedule
A-1
Β
Β
Β
SCHEDULE
B
Β
Location
of Receivable Files
Β
Xxx
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
Location
of Legal Files
[Custodian
Address]
Attention:Β Β Β Β |
Loan
Document
Custody
- Long Beach Acceptance
Auto
Receivables Trust 20__-_
|
Schedule
B-1
Β
Β
Β
SCHEDULE
C
Β
Delivery
Requirements
Β
The
Trust
Collateral Agent shall have sole control over each such investment and the
income thereon, and any certificate or other instrument evidencing any such
investment, if any shall, except for clearing corporation securities, be
delivered directly to the Trust Collateral Agent or its agent, together with
each document of transfer, if any, necessary to transfer title to such
investment to the Trust Collateral Agent in a manner that complies with this
Agreement and the requirements of the definition of Eligible
Investments.
Β
Schedule
C-1
Β
Β
Β
Β