EXHIBIT 10.1
------------
================================================================================
SALE AND SERVICING AGREEMENT
among
[_____________________] TRUST 200[_]-[_],
as Issuer,
ML ASSET BACKED CORPORATION,
as Depositor,
and
[_____________________],
as Master Servicer
Dated as of [ ], 200[_]
================================================================================
Table of Contents
Page
----
ARTICLE I DEFINITIONS AND USAGE.........................................1
ARTICLE II TRUST PROPERTY................................................1
SECTION 2.1 Conveyance of Trust Property; Intent of the Parties...........1
SECTION 2.2 Representations and Warranties of the Depositor regarding
the Receivables...............................................1
SECTION 2.3 Repurchase upon Breach........................................2
SECTION 2.4 Custody of Receivable Files...................................3
SECTION 2.5 Duties of Master Servicer as Custodian........................3
SECTION 2.6 Instructions; Authority to Act................................4
SECTION 2.7 Custodian's Indemnification...................................4
SECTION 2.8 Effective Period and Termination..............................5
SECTION 2.9 Representations and Warranties as to the Security Interest
of the Issuer in the Receivables..............................5
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES AND
TRUST PROPERTY................................................6
SECTION 3.1 Duties of Master Servicer.....................................6
SECTION 3.2 Collection of Receivable Payments.............................7
SECTION 3.3 Realization Upon Receivables..................................7
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles........8
SECTION 3.5 Covenants of Master Servicer..................................8
SECTION 3.6 Purchase of Receivables Upon Breach...........................9
SECTION 3.7 Servicer Fees.................................................9
SECTION 3.8 Investor Report...............................................9
SECTION 3.9 Annual Statement as to Compliance; Notice of Event of
Servicing Termination........................................10
SECTION 3.10 Annual Independent Certified Public Accountant's Report......10
SECTION 3.11 Access to Certain Documentation and Information Regarding
Receivables..................................................11
SECTION 3.12 Master Servicer Expenses.....................................11
SECTION 3.13 Insurance....................................................11
SECTION 3.14 Securities Exchange Act of 1934..............................11
SECTION 3.15 Licenses.....................................................12
ARTICLE IV DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS AND
CERTIFICATEHOLDERS...........................................12
SECTION 4.1 Accounts.....................................................12
SECTION 4.2 Collections..................................................13
SECTION 4.3 Application of Collections...................................14
SECTION 4.4 Additional Deposits..........................................14
SECTION 4.5 Distributions................................................14
SECTION 4.6 Net Deposits.................................................14
SECTION 4.7 Statements to Noteholders and Certificateholders.............14
ARTICLE V THE DEPOSITOR................................................16
SECTION 5.1 Representations, Warranties and Covenants of Depositor.......16
SECTION 5.2 Liability of Depositor; Indemnities..........................17
SECTION 5.3 Merger or Consolidation of, or Assumption of the
Obligations of Depositor.....................................17
SECTION 5.4 Limitation on Liability of Depositor and Others..............17
SECTION 5.5 Depositor May Own Notes or Certificates......................18
SECTION 5.6 Depositor Certificate of Incorporation.......................18
ARTICLE VI THE MASTER SERVICER..........................................18
SECTION 6.1 Representations of Master Servicer...........................18
SECTION 6.2 Indemnities of Master Servicer...............................19
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of Master Servicer...............................20
SECTION 6.4 Limitation on Liability of Master Servicer and Others........20
SECTION 6.5 Subservicing and Delegation of Duties........................23
SECTION 6.6 Master Servicer Not to Resign as Master Servicer;
Resignation and Termination of Receivables Servicers.........23
SECTION 6.7 Master Servicer May Own Notes or Certificates................24
ARTICLE VII SERVICING TERMINATION........................................24
SECTION 7.1 Events of Servicing Termination..............................24
SECTION 7.2 Appointment of Successor Master Servicer.....................26
SECTION 7.3 Notification to Noteholders and Certificateholders...........27
SECTION 7.4 Waiver of Past Events of Servicing Termination...............27
ARTICLE VIII TERMINATION..................................................27
SECTION 8.1 Optional Purchase of All Receivables.........................27
SECTION 8.2 Succession Upon Satisfaction and Discharge of Indenture......28
ARTICLE IX MISCELLANEOUS PROVISIONS.....................................28
SECTION 9.1 Amendment....................................................28
SECTION 9.2 Protection of Title to Trust Property........................30
SECTION 9.3 Governing Law................................................31
SECTION 9.4 Notices......................................................31
SECTION 9.5 Severability of Provisions...................................32
SECTION 9.6 Assignment...................................................32
SECTION 9.7 Further Assurances...........................................32
SECTION 9.8 No Waiver; Cumulative Remedies...............................33
SECTION 9.9 Third-Party Beneficiaries....................................33
SECTION 9.10 Actions by Noteholders or Certificateholders.................33
SECTION 9.11 Information to Be Provided by the Securities Administrator...33
SECTION 9.12 Additional Regulation AB Provisions..........................34
SECTION 9.13 Limitation of Liability of Owner Trustee, the
Indenture Trustee and the Securities Administrator...........34
SECTION 9.14 Savings Clause...............................................35
SECTION 9.15 No Petition..................................................35
Schedule A Schedule of Receivables.....................................A-1
Schedule B Location of Receivable Files................................B-1
Schedule C List of Receivables Servicers ..............................C-1
Schedule D Receivables Reporting.......................................D-1
Appendix A Definitions and Usage
Appendix B Form 10-K Certification
Appendix C Form of Servicing Criteria to be Addressed in
Assessment of Compliance Statement
SALE AND SERVICING AGREEMENT, dated as of [ ], 200[_] (as from time to time
amended, supplemented or otherwise modified and in effect, this "Agreement"),
among [_____________________] TRUST 200[_]-[_] (the "Issuer"), a Delaware
statutory trust, ML ASSET BACKED CORPORATION, a Delaware corporation (the
"Depositor") and [_____________________], a national banking association, as
master servicer (in such capacity, the "Master Servicer").
WHEREAS, the Issuer desires to purchase a portfolio of receivables and
related property consisting of motor vehicle retail installment sale contracts
and loans;
WHEREAS, the Master Servicer is willing to service such receivables on
behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property; Intent of the Parties. In
consideration of the Issuer's delivery to, or upon the order of, the Depositor
of the Notes and the Certificates, the Depositor does hereby irrevocably sell,
transfer, assign and otherwise convey to the Issuer without recourse (subject to
the obligations herein) all right, title and interest of the Depositor, whether
now owned or hereafter acquired, in and to the Trust Property. The sale,
transfer, assignment and conveyance made hereunder shall not constitute and is
not intended to result in an assumption by the Issuer of any obligation of the
Depositor to the Obligors or any other Person in connection with the Receivables
and the other Trust Property or any agreement, document or instrument related
thereto. The Depositor and the Issuer intend that the sale, transfer, assignment
and conveyance of the Trust Property pursuant to this Section 2.1 shall be a
sale and not a secured borrowing.
SECTION 2.2 Representations and Warranties of the Depositor regarding the
Receivables. The Depositor makes the following representations and warranties
with respect to the Receivables, on which the Issuer relies in purchasing the
Receivables and pledging the same to the Indenture Trustee. Such representations
and warranties speak as of the execution and delivery of this Agreement and as
of the Transfer Date, but shall survive the sale, transfer and
assignment of the Receivables by the Depositor to the Issuer and the pledge of
the Receivables by the Issuer to the Indenture Trustee pursuant to the
Indenture.
(i) Schedule of Receivables. No selection procedures adverse to the
Securityholders have been used in selecting the Receivables from all
receivables owned by the Depositor which meet the selection criteria
specified herein.
(ii) No Sale or Transfer. No Receivable has been sold, transferred,
assigned or pledged by the Depositor to any Person other than the
Issuer; provided that such Receivable has been previously assigned
and reacquired by the Depositor.
(iii) Good Title. Immediately prior to the transfer and assignment of the
Receivables to the Issuer herein contemplated, each Receivable was
free and clear of all Liens and rights of others to the extent
created by the Depositor; and, immediately upon the transfer
thereof, the Issuer has either (i) good and marketable title to each
Receivable, free and clear of all of all Liens and rights of others
to the extent created by the Depositor and the transfer has been
perfected under applicable law or (ii) a first priority perfected
security interest in the Depositor's rights in each Receivable.
SECTION 2.3 Repurchase upon Breach. Each of the Depositor, the Master
Servicer, the Issuer and the Owner Trustee shall inform the other parties to
this Agreement promptly, in writing, upon the discovery by it of any breach of
the Depositor's representations and warranties pursuant to Section 2.2. Unless
the breach shall have been cured by the last day of the second Collection Period
following written notice to the Indenture Trustee and the Securities
Administrator of such breach, the Securities Administrator shall enforce the
obligation of the Depositor under this Section 2.3 to repurchase any Receivable,
the Issuer's interest in which is materially and adversely affected by the
breach as of such last day (or, at the Depositor's option, the last day of the
first Collection Period following the discovery). In consideration of the
purchase of the Receivable, the Depositor shall remit the related Purchase
Amount (less any Liquidation Proceeds deposited, or to be deposited, in the
Collection Account with respect to such Receivable pursuant to Section 3.3), in
the manner specified in Section 4.4. The sole remedy of the Issuer, the Owner
Trustee, the Indenture Trustee, the Securities Administrator, the Noteholders or
the Certificateholders with respect to a breach of the Depositor's
representations and warranties pursuant to Section 2.2 shall be to require the
Depositor to repurchase such Receivables pursuant to this Section 2.3. The
obligation of the Depositor to repurchase under this Section 2.3 shall not be
solely dependent upon the actual knowledge of the Depositor of any breached
representation or warranty. None of the Owner Trustee, the Indenture Trustee or
the Securities Administrator shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section 2.3 or the eligibility of any Receivable
for purposes of this Agreement.
Each of the Depositor, the Master Servicer, the Issuer and the Owner
Trustee shall inform the other parties to this Agreement promptly, in writing,
upon the discovery by it of any breach of any of the representation and
warranties made with respect to the Receivables in any of the Purchase and Sale
Agreements. The Master Servicer shall notify the applicable Responsible
2
Party of its repurchase obligation. Unless the breach shall have been cured by
the last day of the second Collection Period following written notice to the
Master Servicer of such breach, the Master Servicer, on behalf of the Issuer,
shall enforce the obligation of Responsible Party to repurchase any applicable
Receivable, the Issuer's interest in which is materially and adversely affected
by the breach, as of such last day. The Purchase Amount (less any Liquidation
Proceeds deposited, or to be deposited, in the Collection Account with respect
to such Receivable pursuant to Section 3.3) from such purchase shall be remitted
in the manner specified in Section 4.4. None of the Owner Trustee, the
Depositor, the Master Servicer, the Issuer, the Indenture Trustee or the
Securities Administrator shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section 2.3 or the eligibility of any Receivable
for purposes of this Agreement.
SECTION 2.4 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer, upon
the execution and delivery of this Agreement, hereby revocably appoints the
Master Servicer, and the Master Servicer hereby accepts such appointment, to act
as the agent of the Issuer and the Indenture Trustee as custodian of the
following documents or instruments, which are hereby constructively delivered to
the Indenture Trustee, as pledgee of the Issuer pursuant to the Indenture, with
respect to each Receivable:
(i) The original executed Receivable or, if no such original exists, a
copy thereof.
(ii) The original credit application fully executed by the Obligor or
a photocopy thereof or a record thereof on a computer file, diskette or on
microfiche.
(iii) The original certificate of title or such documents that the
Master Servicer or the Depositor shall keep on file, in accordance with its
or the related Receivables Servicer's customary procedures, evidencing the
first priority perfected security interest of the related Seller in the
Financed Vehicle.
(iv) Any and all other documents (including any computer file,
diskette or microfiche) that the Master Servicer or the related Receivables
Servicer shall keep on file, in accordance with its or the related
Receivables Servicer's customary procedures, relating to a Receivable, an
Obligor (to the extent relating to a Receivable), or a Financed Vehicle.
The Master Servicer acknowledges that it holds the documents and
instruments relating to the Receivables for the benefit of the Issuer and the
Indenture Trustee. The Issuer and the Indenture Trustee shall have no
responsibility to monitor the Master Servicer's performance as custodian and
shall have no liability in connection with the Master Servicer's performance of
such duties hereunder.
SECTION 2.5 Duties of Master Servicer as Custodian.
(a) Safekeeping. The Master Servicer (or the related Receivables
Servicer on its behalf) shall hold the Receivable Files for the benefit of the
Issuer and the Indenture Trustee and shall maintain such accurate and complete
accounts, records and computer systems pertaining to
3
each Receivable File as shall enable the Master Servicer and the Issuer to
comply with the terms and conditions of this Agreement and the Indenture Trustee
to comply with the terms and conditions of the Indenture. In performing its
duties as custodian, the Master Servicer shall act with reasonable care, using
that degree of skill and attention that the Master Servicer (or the related
Receivables Servicer) exercises with respect to the receivable files relating to
all comparable automotive receivables that the Master Servicer (or such
Receivables Servicer) services for itself or others. The Master Servicer shall
enable the Issuer or the Indenture Trustee to identify all Receivables Files and
such related accounts, records and computer systems and verify the accuracy of
the Master Servicer's record keeping. The Master Servicer shall promptly report
to the Issuer and the Indenture Trustee in writing any failure on its part to
hold the Receivable Files and maintain its accounts, records, and computer
systems as herein provided and shall promptly take appropriate action to remedy
any such failure. Nothing herein shall be deemed to require an initial review or
any periodic review by the Issuer, the Owner Trustee or the Indenture Trustee of
the Receivable Files.
(b) Maintenance of and Access to Records. The Master Servicer shall
maintain each Receivable File at its (or the related Receivables Servicer's)
offices specified in Schedule B to this Agreement, or at such other office as
shall be specified to the Issuer and the Indenture Trustee by 30 days' prior
written notice. The Master Servicer shall make available to the Issuer and the
Indenture Trustee or their duly authorized representatives, attorneys, or
auditors, the Receivable Files and the related accounts, records and computer
systems maintained by the Master Servicer upon reasonable notice during normal
business hours as the Issuer or the Indenture Trustee shall reasonably request,
which does not unreasonably interfere with the Master Servicer's (or the related
Receivables Servicer's) normal operations.
(c) Release of Documents. Upon written instructions from the Indenture
Trustee, the Master Servicer shall release or cause to be released any document
in the Receivable Files to the Indenture Trustee, the Indenture Trustee's agent
or the Indenture Trustee's designee, as the case may be, at such place or places
as the Indenture Trustee may reasonably designate, as soon as is reasonably
practicable, to the extent it does not unreasonably interfere with the Master
Servicer's normal operations. The Master Servicer shall not be responsible for
any loss occasioned by the failure of the Indenture Trustee or its agent or
designee to return any document or any delay in doing so.
SECTION 2.6 Instructions; Authority to Act. All instructions from the
Indenture Trustee shall be in writing and signed by an Authorized Officer of the
Indenture Trustee, and the Master Servicer shall be deemed to have received
proper instructions with respect to the Receivable Files upon its receipt of
such written instructions.
SECTION 2.7 Custodian's Indemnification. The Master Servicer, as custodian,
shall indemnify the Issuer, the Owner Trustee and the Indenture Trustee for any
and all liabilities, obligations, losses, compensatory damages, payments, costs,
or expenses of any kind whatsoever that may be imposed on, incurred, or asserted
against the Issuer, the Owner Trustee or the Indenture Trustee as the result of
any improper act or omission in any way relating to the maintenance and custody
by the Master Servicer as custodian of the Receivable Files, subject to and in
accordance with Section 6.4 hereof; provided, however, that the Master Servicer
shall not
4
be liable (i) to the Issuer for any portion of any such amount resulting from
the willful misfeasance, bad faith, or negligence of the Indenture Trustee, the
Owner Trustee or the Issuer, (ii) to the Owner Trustee for any portion of any
such amount resulting from the willful misfeasance, bad faith, or negligence of
the Indenture Trustee, the Owner Trustee or the Issuer and (iii) to the
Indenture Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith, or negligence of the Indenture Trustee, the Owner
Trustee or the Issuer.
SECTION 2.8 Effective Period and Termination. The Master Servicer's
appointment as custodian shall become effective as of the Closing Date, and
shall continue in full force and effect until terminated pursuant to this
Section 2.8. If [_____________________], shall resign as Master Servicer in
accordance with the provisions of this Agreement or if all of the rights and
obligations of the Master Servicer shall have been terminated under Section 7.1,
the appointment of the Master Servicer as custodian hereunder may be terminated
by the Indenture Trustee or by the holders of Notes evidencing not less than a
majority of the principal amount of the Notes Outstanding (or if no Notes are
Outstanding, by holders of Certificates evidencing Certificate Percentage
Interests aggregating at least 51%), in the same manner as the Indenture Trustee
or such Securityholders may terminate the rights and obligations of the Master
Servicer under Section 7.1. As soon as practicable after any termination of such
appointment, the Master Servicer shall deliver to the Indenture Trustee or the
Indenture Trustee's agent any Receivable Files and the related accounts and
records maintained by the Master Servicer at such place or places as the
Indenture Trustee may reasonably designate. Notwithstanding the foregoing, after
any termination of the rights and obligations of the Master Servicer under this
Agreement, each Receivables Servicer, unless the rights and obligations of such
Receivables Servicer have been terminated pursuant to the terms and conditions
of its Receivables Servicing Agreement, shall maintain custody of the related
Receivables and the related accounts and records maintained by it pursuant to
the applicable Receivables Servicing Agreement(s).
SECTION 2.9 Representations and Warranties as to the Security Interest of
the Issuer in the Receivables. The Depositor makes the following representations
and warranties to the Issuer. The representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, and shall
survive the sale of the Trust Property to the Issuer and the pledge thereof to
the Indenture Trustee pursuant to the Indenture.
(a) This Agreement creates a valid and continuing security interest (as
defined in the UCC) in the Receivables in favor of the Issuer, which security
interest is prior to all other Liens, and is enforceable as such as against
creditors of and purchasers from the Depositor.
(b) The Receivables constitute "tangible chattel paper" within the meaning
of Article 9 of the UCC.
(c) Immediately prior to its transfer to the Issuer, the Depositor owned
and had good and marketable title to the Receivables free and clear of any lien,
claim or encumbrance of any Person.
(d) The Depositor has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Receivables granted to the Issuer
5
hereunder. Each such financing statement will contain a statement to the
following effect "A purchase of or security interest in any collateral described
in this financing statement will violate the rights of the Issuer and its
assigns."
(e) Other than the security interest granted to the Issuer pursuant to
this Agreement, the Depositor has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Receivables. The
Depositor has not authorized the filing of and is not aware of any financing
statements against the Depositor that include a description of collateral
covering the Receivables other than any financing statement relating to the
security interest granted to the Issuer hereunder or that has been terminated.
The Depositor is not aware of any judgment or tax lien filings against it.
(f) The Master Servicer (or the Receivables Servicers) as custodian for
the Issuer has in its possession all original copies of the contracts that
constitute or evidence the Receivables. The contracts that constitute or
evidence the Receivables do not have any marks or notations indicating that they
have been pledged, assigned or otherwise conveyed to any Person other than the
Issuer.
Each of the parties hereto agrees that it shall not waive any of the
foregoing representations and warranties.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Master Servicer. The Master Servicer shall manage,
service, administer and make collections on the Receivables with reasonable
care, using that degree of skill and attention that the Master Servicer (or the
related Receivables Servicer) exercises with respect to all comparable new and
used automobile, light-duty truck, sports utility vehicle and motorcycle
receivables that it (or such Receivables Servicer) services for itself. The
Master Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on such Receivables, investigating
delinquencies, reporting tax information to Obligors, accounting for
collections, furnishing (or causing to be furnished) monthly and annual
statements to the Owner Trustee, the Indenture Trustee and the Securities
Administrator with respect to distributions and preparing (or causing to be
prepared) the tax returns of the Trust in accordance with Section 5.06 of the
Trust Agreement. The Master Servicer shall follow its (or the related
Receivables Servicer's) customary standards, policies and procedures in
performing its duties as Master Servicer. Without limiting the generality of the
foregoing, the Master Servicer is hereby (and each Receivables Servicer pursuant
to its Receivables Servicing Agreement is thereby) authorized and empowered to
execute and deliver, on behalf of itself (the Master Servicer, in the case of a
Receivables Servicer), the Issuer, the Owner Trustee, the Indenture Trustee, the
Securities Administrator, the Noteholders, the Certificateholders, or any of
them, any and all instruments of satisfaction or cancellation, or partial or
full release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Vehicles securing such Receivables. If the
Master Servicer (or the related Receivables Servicer) shall commence a legal
proceeding to enforce a Receivable, the Issuer (in the case of a Receivable
other than a
6
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Master Servicer (or
the related Receivables Servicer). If in any enforcement suit or legal
proceeding it shall be held that the Master Servicer (or the related Receivables
Servicer) may not enforce a Receivable on the ground that it shall not be a real
party in interest or a holder entitled to enforce the Receivable, the Master
Servicer, on behalf of the Issuer, shall, at the Master Servicer's expense and
direction (or, to the extent permitted in the related Receivables Servicing
Agreement, the related Receivables Servicer's expense and direction), take steps
to enforce the Receivable, including bringing suit in its name or the names of
the Indenture Trustee, the Issuer, the Noteholders, the Certificateholders, or
any of them. The Issuer shall furnish the Master Servicer (or the related
Receivables Servicer) with any powers of attorney and other documents reasonably
necessary or appropriate to enable the Master Servicer to carry out its
servicing and administrative duties hereunder.
It is hereby acknowledged that the Master Servicer has engaged
[______________] as Receivables Servicer[s] under the Receivables Servicing
Agreement[s] and [_______] Administrator. The Master Servicer shall promptly
notify each Rating Agency of any material amendment to any Receivables Servicing
Agreement. The Master Servicer shall enforce the obligations of each Receivables
Servicer under the related Receivables Servicing Agreement in all material
respects until such Receivables Servicing Agreement has been terminated in
accordance with its terms.
SECTION 3.2 Collection of Receivable Payments. The Master Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
new and used automobiles, light-duty trucks, sports utility vehicles and
motorcycle receivables that it services for itself. The Master Servicer shall
not change the amount of, change the annual percentage rate of or extend any
Receivable or change any material term of a Receivable, except as provided by
the terms of the Receivable or of this Agreement or as required by law or court
order, except that the Master Servicer may permit a Receivables Servicer to
grant extensions, rebates or adjustments to the extent permitted in the related
Receivables Servicing Agreement; provided, however, that the Master Servicer may
extend any Receivable that is in default or with respect to which default is
reasonably foreseeable and that would be acceptable to the Master Servicer with
respect to comparable new and used automobiles, light-duty trucks, sports
utility vehicles and motorcycle receivables that it (or the related Receivables
Servicer) services for itself, if the maturity of such Receivable will not be
extended beyond [______], 20[__]. If, as a result of inadvertently rescheduling
or extending payments, such rescheduling or extension breaches any of the terms
of the proviso to the preceding sentence, then the Master Servicer shall be
obligated to purchase such Receivable pursuant to Section 3.6. For the purpose
of such purchases pursuant to Section 3.6, notice shall be deemed to have been
received by the Master Servicer at such time as shall make purchase mandatory as
of the last day of the Collection Period during which the discovery of such
breach occurred.
SECTION 3.3 Realization Upon Receivables. On behalf of the Issuer, the
Master Servicer shall use reasonable efforts, consistent with its (or the
related Receivables Servicer's) customary standards, policies and procedures, to
repossess or otherwise convert the ownership of
7
the Financed Vehicle securing any Receivable as to which the Master Servicer
shall have determined to be a Defaulted Receivable or otherwise (and shall
identify any such Defaulted Receivable in writing to the Indenture Trustee and
the Securities Administrator no later than the Determination Date following the
Collection Period in which the Master Servicer shall have made such
determination). The Master Servicer shall follow such customary standards,
policies and procedures as it (or the related Receivables Servicer) shall deem
necessary or advisable in its servicing of comparable receivables, which may
include selling the Financed Vehicle at public or private sale. The Master
Servicer shall be entitled to recover from proceeds all reasonable expenses
incurred by it in the course of converting the Financed Vehicle into cash
proceeds. The Liquidation Proceeds (net of such expenses) realized in connection
with any such action with respect to a Receivable shall be deposited by the
Master Servicer into the Collection Account in the manner specified in Section
4.2 and shall be applied to reduce (or to satisfy, as the case may be) the
Purchase Amount of the Receivable, if such Receivable is to be repurchased by
the Depositor or a Responsible Party pursuant to Section 2.3 or is to be
purchased by the Master Servicer pursuant to Section 3.6 [or by the
Administrator pursuant to Section [_____] of the Administration Agreement]. The
foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Master Servicer shall not be
required to expend funds in connection with the repair or the repossession of
such Financed Vehicle unless it shall determine in its discretion that such
repair and/or repossession will increase the Liquidation Proceeds by an amount
greater than the amount of such expenses.
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles. The
Master Servicer shall, in accordance with its (or the related Receivables
Servicer's) customary procedures, take such steps as are necessary to maintain
perfection of the security interest created by each Receivable in the related
Financed Vehicle. The Issuer hereby authorizes the Master Servicer to take such
steps as are necessary to re-perfect such security interest on behalf of the
Issuer and the Indenture Trustee in the event of the relocation of a Financed
Vehicle or for any other reason, in either case when the Master Servicer has
knowledge of the need for such re-perfection. In the event that the assignment
of a Receivable to the Issuer is insufficient, without a notation on the related
Financed Vehicle's certificate of title, or without fulfilling any additional
administrative requirements under the laws of the state in which the Financed
Vehicle is located, to transfer to the Issuer a perfected security interest in
the related Financed Vehicle, the Master Servicer hereby agrees that the
Receivables Servicer's listing as the secured party on the certificate of title
is deemed to be in its capacity as agent of the Issuer and the Indenture Trustee
and further agrees to hold such certificate of title as the agent and custodian
of the Issuer and the Indenture Trustee; provided that the Master Servicer shall
not, nor shall the Issuer or the Indenture Trustee have the right to require
that the Master Servicer, make any such notation on the related Financed
Vehicles' certificate of title or fulfill any such additional administrative
requirement of the laws of the state in which such Financed Vehicle is located.
SECTION 3.5 Covenants of Master Servicer. The Master Servicer shall not (i)
release the Financed Vehicle securing each such Receivable from the security
interest granted by such Receivable in whole or in part except in the event of
payment in full by or on behalf of the Obligor thereunder, (ii) impair the
rights of the Issuer in the Receivables or (iii) increase the number of payments
under a Receivable, increase the Amount Financed under a Receivable or extend or
forgive payments on a Receivable, except as provided in Section 3.2. In the
event that
8
at the end of the scheduled term of any Receivable the outstanding principal
amount thereof is such that the final payment to be made by the related Obligor
is larger than the regularly scheduled payment of principal and interest made by
such Obligor, the Master Servicer may permit such Obligor to pay such remaining
principal amount in more than one payment of principal and interest; provided
that the last such payment shall be due on or prior to the last Business Day of
the Collection Period immediately preceding the month in which the Class B Final
Scheduled Payment Date occurs.
SECTION 3.6 Purchase of Receivables Upon Breach. (a) The Master Servicer,
the Depositor or the Owner Trustee, as the case may be, promptly shall inform
the other parties to this Agreement, in writing, upon the discovery of any
breach pursuant to Section 3.2, 3.4 or 3.5. Unless the breach shall have been
cured by the last day of the second Collection Period following such discovery
(or, at the Master Servicer's election, the last day of the first following
Collection Period), the Master Servicer shall purchase any Receivable materially
and adversely affected by such breach (which shall include any Receivable as to
which a breach of Section 3.5 has occurred) at the related Purchase Amount (less
any Liquidation Proceeds deposited, or to be deposited, in the Collection
Account with respect to such Receivable pursuant to Section 3.3). In
consideration of the purchase of such Receivable, the Master Servicer shall
remit the Purchase Amount in the manner specified in Section 4.4. The sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the Securities
Administrator, the Noteholders or the Certificateholders with respect to a
breach pursuant to Section 3.2, 3.4 or 3.5 shall be to require the Master
Servicer to purchase Receivables pursuant to this Section 3.6. In addition, the
Master Servicer, consistent with the exercise of its duty to enforce the
obligations of the Receivables Servicers relating to the servicing of the
Receivables under the respective Receivables Servicing Agreements, shall enforce
the respective repurchase obligations of the Receivables Servicers under the
terms of the Receivables Servicing Agreements.
(b) With respect to all Receivables purchased pursuant to this Section
3.6, the Issuer shall assign to the Master Servicer, without recourse,
representation or warranty, all of the Issuer's right, title and interest in and
to such Receivables and all security and documents relating thereto.
SECTION 3.7 Servicer Fees. The Master Servicer shall be entitled to the
Servicing Fee, which shall be payable as provided in Section 8.2 of the
Indenture. It is acknowledged and agreed that (i) the Receivables Servicer
Servicing Fee will be paid to the Receivables Servicers (including any successor
sub-Servicer thereto) from the Collections on the related Receivables and (ii)
if the Master Servicer becomes a direct servicer of Receivables in place of any
Receivables Servicer (or any successor sub-Servicer thereto), the Master
Servicer shall receive the related Receivables Servicer Servicing Fee.
SECTION 3.8 Investor Report. The Master Servicer will compile the
information submitted by the Receivables Servicers as set forth on Schedule D,
and deliver such information to the Securities Administrator. On or prior to the
Determination Date for each Payment Date, the Securities Administrator shall
deliver to the Depositor, the Owner Trustee, each Note Paying Agent and
Certificate Paying Agent and the Indenture Trustee, with a copy to the Rating
Agencies, an investor report containing all information (including all specific
dollar amounts)
9
necessary to make the transfers and distributions pursuant to Section 8.2 of the
Indenture for the Collection Period preceding the date of such investor report
(the "Investor Report") and the written statements to be furnished by the Owner
Trustee to the Certificateholders pursuant to Section 4.7 hereof and by the
Securities Administrator to the Noteholders pursuant to Section 4.7 hereof and
Section 7.4 of the Indenture. Receivables purchased or to be purchased by the
Master Servicer, the Depositor, the Seller, the Administrator, a Responsible
Party or a Receivables Servicer shall be identified by the Master Servicer by
the Seller's account number with respect to such Receivable (as specified in the
Schedule of Receivables).
SECTION 3.9 Annual Statement as to Compliance; Notice of Event of Servicing
Termination. (a) The Master Servicer shall deliver to the Issuer on or before
March 15 of each year beginning March 15, 200[_], an Officer's Certificate
stating that (i) a review of the activities of the Master Servicer during the
preceding 12-month period (or such shorter period in the case of the first such
certificate) and of its performance under this Agreement has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Master Servicer or such has fulfilled all its
obligations under this Agreement throughout such period, or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof. The
Receivables Servicer shall deliver to the Issuer on or before March 15 of each
year beginning March 15, 200[_], an Officer's Certificate stating that (i) a
review of the activities of the Receivables Servicer during the preceding
12-month period (or such shorter period in the case of the first such
certificate) and of its performance under the Receivables Servicing Agreement
has been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, the Receivables Servicer has
fulfilled all its obligations under the Receivables Servicing Agreement
throughout such period, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status thereof.
(b) The Master Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency promptly after having obtained actual knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which with the giving of notice
or lapse of time, or both, would become an Event of Servicing Termination under
Section 7.1 or a default under any Receivables Servicing Agreement.
(c) The Master Servicer and each Receivables Servicer will deliver to the
Issuer, on or before March 15 of each year, beginning 200[_], a report regarding
such servicer's assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under paragraph (b) of Rule
13a-18 and Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
SECTION 3.10 Annual Independent Certified Public Accountant's Report. On or
before the 75th day following the end of each fiscal year, beginning with the
fiscal year ending 200[_], each of the Master Servicer and each Receivables
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Master Servicer, the
Receivables Servicer, the Depositor, the Seller or their respective Affiliates)
to furnish to the Issuer each attestation report on assessments of compliance
with the Servicing
10
Criteria with respect to such servicer or any Affiliate thereof during the
related fiscal year delivered by such accountants, as required pursuant to
paragraph (c) of Rule 13a-18 or Rule 15d-18 of the Exchange Act and Item 1122 of
Regulation AB.
SECTION 3.11 Access to Certain Documentation and Information Regarding
Receivables. In each case subject to the Master Servicer's rights to access
under the related Receivables Servicing Agreement, the Master Servicer shall
cause each Receivables Servicer, pursuant to the terms of the applicable
Receivables Servicing Agreement, to provide to the Certificateholders, the
Indenture Trustee and the Noteholders access to the Receivable Files without
charge, but only upon reasonable request and during the normal business hours at
the offices of the Master Servicer or the respective offices of the Receivables
Servicers, as applicable. Nothing in this Section 3.11 shall affect the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the Master
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section 3.11.
SECTION 3.12 Master Servicer Expenses. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees, expenses (including counsel fees and expenses) and
disbursements of the independent accountants, taxes imposed on the Master
Servicer, other than (i) out-of-pocket expenses incurred in connection with the
enforcement of any Receivables Servicing Agreement, (b) out-of-pocket expenses
incurred in connection with the termination of any Receivables Servicer and the
assumption of servicing obligations with respect to the related Receivables, (c)
out-of-pocket expenses incurred to correct servicing errors committed by a
terminated Receivables Servicer, and (d) out-of-pocket expenses incurred on
behalf of the Issuer, including the maintenance of licenses pursuant to Section
3.15 hereof and Section 3.6(b) of the Indenture.
SECTION 3.13 Insurance. The Master Servicer, in accordance with the
customary servicing procedures and underwriting standards, of the applicable
Receivables Servicer pursuant to the related Receivables Servicing Agreement,
shall cause each Receivables Servicer, pursuant to the terms of the applicable
Receivables Servicing Agreement, to require that each Obligor shall have
obtained and shall maintain comprehensive and collision insurance covering the
related Financed Vehicle as of the execution of the Receivable.
SECTION 3.14 Securities Exchange Act of 1934. Within 15 days after each
Payment Date, the Master Servicer shall, on behalf of the Issuer, file with the
Commission via the Electronic Data Gathering and Retrieval System (▇▇▇▇▇), a
report on Form 10-D prepared in accordance with Regulation AB and the
instructions to Form 10-D with respect to the Trust, with a copy of the Investor
Report for such Payment Date as an exhibit thereto. Prior to March 30, 200 [_]
(and, if applicable, prior to March 30 of each subsequent year), the Master
Servicer shall, on behalf of the Issuer, file with the Commission via ▇▇▇▇▇ a
report on Form 10-K (including all required exhibits) prepared in accordance
with Regulation AB and the instructions to Form 10-K with respect to the Trust.
In addition, the Master Servicer will cause its senior officer in charge of
securitization to execute the Form 10-K and the Section 302 ABS certification
required pursuant to Regulation AB and Rules 13a-18 and 15d-18 under the
Exchange Act, in the form attached hereto as Appendix B (the "Form 10-K
Certification") and to file the same with the
11
Commission prior to March 30, 200[_] (and, if applicable, prior to March 30 of
each subsequent year). To the extent any information or exhibits required to be
included in a report on Form 10-D or Form 10-K are not timely received by the
Master Servicer, the Master Servicer shall, on behalf of the Trust, file, as
applicable and in accordance with the instructions and the rules under the
Exchange Act with respect thereto, a Form 12b-25 and one or more amended reports
on Form 10-D or Form 10-K as appropriate, after consultation with the Depositor.
Promptly following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Master Servicer shall, on
behalf of the Trust and in accordance with industry standards, file with the
Commission via ▇▇▇▇▇ a Form 15 Suspension Notification with respect to the
Trust, if applicable. The Master Servicer shall indemnify and hold harmless the
Depositor, the Issuer, the Indenture Trustee, the Securities Administrator and
their respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the Master Servicer's obligations under this Section 3.14 or
the Master Servicer's negligence, bad faith or willful misconduct in connection
therewith.
SECTION 3.15 Licenses. The Master Servicer shall maintain, on behalf of the
Issuer, the Issuer's license as a sales finance company in the states of
Maryland and Pennsylvania as set forth in Section 3.4 of the Indenture.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.1 Accounts. (a) The Master Servicer shall, prior to the Closing
Date, cause to be established and maintained an Eligible Deposit Account in the
name "[_____________________], on behalf of [_____________] as Indenture Trustee
and as secured party with respect to [_____________________] TRUST 200[_]-[_]",
initially at the corporate trust department of the Securities Administrator,
which shall be designated as the "Collection Account". The Collection Account
shall be under the sole dominion and control of the Indenture Trustee; provided,
that the Master Servicer and/or relevant Depository Institution may make
deposits to, and the Indenture Trustee and the Securities Administrator may
(following written instruction of the Master Servicer) make withdrawals from,
the Collection Account in accordance with the terms of the Basic Documents. In
addition, the Collection Account shall be established and maintained at an
institution which agrees in writing that for so long as the Notes are
outstanding it will comply with entitlement orders (as defined in Article 8 of
the UCC) originated by the Indenture Trustee without further consent of the
Issuer. All monies deposited from time to time in the Collection Account shall
be held by the Securities Administrator on behalf of the Indenture Trustee as
secured party for the benefit of the Noteholders and, after payment in full of
the Notes, as agent of the Issuer and as part of the Trust Property. All
deposits to and withdrawals from the Collection Account shall be made only upon
the terms and conditions of the Basic Documents.
All amounts held in the Collection Account shall, to the extent permitted
by applicable law, rules and regulations, be invested, as directed in writing by
the Master Servicer, by the depository institution or trust company then
maintaining the Collection Account in specified
12
Permitted Investments that mature not later than the Business Day immediately
prior to the Payment Date (or if the Rating Agency Condition is satisfied, not
later than such Payment Date) for the Collection Period to which such amounts
relate and such Permitted Investments shall be held to maturity. Neither the
Indenture Trustee nor the Securities Administrator shall be liable for
investment losses in Permitted Investments made in accordance with directions
from the Master Servicer. In the event that the Collection Account is no longer
to be maintained at the corporate trust department of the Securities
Administrator, the Master Servicer shall, with the Indenture Trustee's or
Issuer's assistance as necessary, cause an Eligible Deposit Account to be
established as the Collection Account within ten (10) Business Days (or such
longer period not to exceed thirty (30) calendar days as to which each Rating
Agency may consent). The Master Servicer shall not be required to invest amounts
representing Available Collections for a Payment Date that are deposited into
the Collection Account on or after the Business Day immediately preceding the
related Payment Date.
(b) The Master Servicer shall, prior to the Closing Date, establish and
maintain an administrative subaccount within the Collection Account, which
subaccount shall be designated as the "Principal Distribution Account". The
Principal Distribution Account is established and maintained solely for
administrative purposes.
(c) The Master Servicer shall, prior to the Closing Date, cause an
Eligible Deposit Account to be established and maintained, in the name
"[_____________________] TRUST 200[_]-[_] Certificate Distribution Account",
initially at the corporate trust department of the Securities Administrator,
which shall be designated as the "Certificate Distribution Account". The
Certificate Distribution Account shall be under the sole dominion and control of
the Owner Trustee. All monies deposited from time to time in the Certificate
Distribution Account pursuant to this Agreement and the Indenture shall be held
by the Owner Trustee as part of the Trust Property and shall be applied as
provided in the Basic Documents. In the event that the Certificate Distribution
Account is no longer to be maintained at the corporate trust department of the
Securities Administrator, the Master Servicer shall cause an Eligible Deposit
Account to be established as the Certificate Distribution Account within ten
(10) Business Days (or such longer period not to exceed thirty (30) calendar
days as to which each Rating Agency may consent) and shall give written notice
of the location and account number of such account to the Owner Trustee.
SECTION 4.2 Collections. (a) With respect to each Receivables Servicer, the
Receivables Servicer is obligated, subject to the terms of the related
Receivables Servicing Agreement, to remit to the Collection Account (i) all
payments by or on behalf of the Obligors on the related Receivables (but
excluding Purchased Receivables) and (ii) all Liquidation Proceeds in respect of
the related Receivables, both as collected during the Collection Period within
two Business Days of receipt and identification thereof.
(b) None of the Owner Trustee, the Indenture Trustee or the Securities
Administrator shall be deemed to have knowledge of any event or circumstance in
the definition of Monthly Remittance Condition that would require remittance by
a Receivables Servicer to such deposit account within two Business Days of
receipt as aforesaid unless the Owner Trustee, the Indenture Trustee or the
Securities Administrator has received written notice of such event or
13
circumstance from the Master Servicer in an Officer's Certificate, or from the
holders of Notes evidencing not less than 25% of the principal amount of the
Notes Outstanding, or from the holders of Certificates evidencing Certificate
Percentage Interests aggregating at least 51%, or an Authorized Officer in the
Corporate Trust Office with knowledge hereof or familiarity herewith has actual
knowledge of such event or circumstance. For purposes of this Article IV the
phrase "payments by or on behalf of Obligors" shall mean payments made by
Persons other than the Master Servicer or by other means.
SECTION 4.3 Application of Collections. For the purposes of this Agreement,
as of the close of business on the last day of each Collection Period, all
collections for the Collection Period with respect to each Receivable (other
than a Purchased Receivable) shall be applied in accordance with the customary
practices of the related Receivables Servicer or, if such Receivables Servicer
is no longer engaged by the Master Servicer, the customary practice of the
Master Servicer.
SECTION 4.4 Additional Deposits. The Depositor and the Master Servicer
shall deposit in the Collection Account the aggregate Purchase Amount with
respect to Purchased Receivables pursuant to Sections 2.3 and 3.6, respectively,
the Administrator shall deposit in the Collection Account the aggregate Purchase
Amount with respect to Purchased Receivables pursuant to Section [__] of the
Administration Agreement and the Master Servicer shall deposit therein all
amounts to be paid under Section 8.1. All such deposits with respect to a
Collection Period shall be made, in immediately available funds, on the Business
Day preceding the Payment Date related to such Collection Period.
SECTION 4.5 Distributions. On each Payment Date, the Securities
Administrator shall make withdrawals from the Collection Account and make
deposits, distributions and payments, to the extent of Available Collections for
such Payment Date, in the manner and order of priority set forth in Section 8.2
of the Indenture.
SECTION 4.6 Net Deposits. Remittances pursuant to Sections 4.2 and 4.4 may
be made net of the Aggregate Servicing Fee. Nonetheless, the Master Servicer
shall account for all of the above described remittances and distributions in
the Investor Report as if the amounts were deposited and/or transferred
separately.
SECTION 4.7 Statements to Noteholders and Certificateholders. No later than
five Business Days prior to each Payment Date, the Master Servicer shall provide
to the Securities Administrator the information necessary to create the Investor
Report. On the Payment Date the Securities Administrator shall provide to the
Indenture Trustee, the Rating Agencies, the Counterparties and each Note Paying
Agent and make available to each Noteholder of record as of the most recent
Record Date and to the Owner Trustee for the Owner Trustee to make available to
each Certificateholder of record as of the most recent Record Date the Investor
Report, setting forth for the Collection Period relating to such Payment Date
the following information as to the Notes and the Certificates to the extent
applicable:
(i) the amount of such distribution allocable to principal allocable
to each Class of Notes and to the Certificates;
14
(ii) the amount of such distribution allocable to interest allocable
to each Class of Notes and the Certificates;
(iii) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(iv) the amount of the Servicing Fee paid to the Master Servicer with
respect to the related Collection Period and the amount of any unpaid
Servicing Fees and the change in such amount from that of the prior Payment
Date;
(v) the aggregate Receivables Servicing Fee Rate for the related
Collection Period for all Receivables;
(vi) the amounts of the Class A Noteholders' Interest Carryover
Shortfall and the Class B Noteholders' Interest Carryover Shortfall, if
any, on such Payment Date and the change in such amounts from the preceding
Payment Date;
(vii) the aggregate outstanding principal amount of each Class of
Notes and the Note Pool Factor for each Class of Notes;
(viii) the amount of any previously due and unpaid payment of
principal of each Class of Notes, and the change in such amount from that
of the prior Payment Date;
(ix) Annualized Average Monthly Net Loss Rate;
(x) the aggregate Purchase Amount of Receivables repurchased by the
Depositor, the Seller, the Administrator, a Responsible Party or a
Receivables Servicer, or purchased by the Master Servicer, if any, with
respect to the related Collection Period;
(xi) the aggregate amount of Defaulted Receivables;
(xii) the Available Collections for the related Collection Period
(with each of the separate components as set forth in clauses (i) though
(viii) of the definition of "Available Collections" separately stated);
(xiii) the Class A-[__] Rate and the Class [__] Rate for the related
Payment Date and, to the extent it has been determined at the time such
report is issued, for the following Payment Date; and
(xiv) [any Net Swap Receipt payable by the Issuer on such Payment Date
and any Net Swap Payment due on such Payment Date].
In addition, such statements may be posted by the Securities Administrator
on its website at www.[_______].
Each amount set forth on the Payment Date statement pursuant to clauses
(i), (ii), (iv), (v) and (vii) above shall be expressed as a dollar amount per
$1,000 of original principal amount of a Note or original Certificate Balance of
a Certificate, as applicable.
15
ARTICLE V
THE DEPOSITOR
SECTION 5.1 Representations, Warranties and Covenants of Depositor. The
Depositor makes the following representations and warranties on which the Issuer
is deemed to have relied in acquiring the Trust Property. The representations
and warranties speak as of the execution and delivery of this Agreement and
shall survive the conveyance of the Trust Property by the Depositor to the
Issuer and the pledge thereof by the Issuer to the Indenture Trustee pursuant to
the Indenture:
(a) Organization and Good Standing. The Depositor is a duly formed,
validly existing and in good standing under the laws of the State of Delaware,
with all corporate power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, power, authority, and legal
right to acquire and own the Receivables.
(b) Power and Authority. The Depositor has all corporate power and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their terms; the Depositor has full power
and authority to sell and assign the property to be sold, and assigned to and
deposited, with the Issuer, and the Depositor shall have duly authorized such
sale and assignment to the Issuer by all necessary corporate action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which the Depositor is a party have been duly authorized, executed
and delivered by the Depositor by all necessary corporate action.
(c) Binding Obligations. This Agreement, when duly executed and delivered
by the other parties hereto, constitutes a legal, valid, and binding obligation
of the Depositor enforceable against the Depositor in accordance with its terms,
except as the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting creditors' rights in general and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(d) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents to which the Depositor is a party
and the fulfillment of the terms hereof and thereof do not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Depositor, or conflict with or breach any of the
material terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement, or other instrument to which
the Depositor is a party or by which it is bound, (ii) result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of any
such indenture, agreement, or other instrument, or (iii) violate any law or, to
the best of the Depositor's knowledge, any order, rule, or regulation applicable
to the Depositor of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over the Depositor or its properties.
16
(e) No Proceedings. There are no proceedings or investigations pending,
or, to the best of the Depositor's knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Depositor or its properties (i) asserting the
invalidity of this Agreement, any of the other Basic Documents or the
Securities, (ii) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by this Agreement or the
other Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement, any of
the other Basic Documents or the Securities or (iv) relating to the Depositor
and which might adversely affect the federal income tax attributes of the
Securities.
SECTION 5.2 Liability of Depositor; Indemnities. The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Depositor under this Agreement, and hereby agrees to the
following:
(a) The Depositor shall indemnify, defend, and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Securities Administrator, the
Noteholders and the Certificateholders from and against any loss, liability or
expense incurred by reason of (i) the Depositor's willful misfeasance, bad
faith, or negligence in the performance of its duties under this Agreement, or
by reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Depositor's violation of federal or State securities laws
in connection with the registration or the sale of the Notes or the
Certificates.
(b) Indemnification under this Section 5.2 shall survive the resignation
or removal of the Owner Trustee, the Indenture Trustee or the Securities
Administrator and the termination of this Agreement and shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Depositor shall have made any indemnity payments pursuant to this Section
5.2 and the Person to or on behalf of whom such payments are made thereafter
shall collect any of such amounts from others, such Person shall promptly repay
such amounts to the Depositor, without interest.
SECTION 5.3 Merger or Consolidation of, or Assumption of the Obligations of
Depositor. Any Person (i) into which the Depositor may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Depositor shall be a party, or (iii) succeeding to the business of the
Depositor, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Depositor under this Agreement,
will be the successor to the Depositor under this Agreement without the
execution or filing of any document or any further act on the part of any of the
parties to this Agreement. The Depositor shall provide notice of any merger,
conversion, consolidation, or succession pursuant to this Section 5.3 to the
Rating Agencies, the Owner Trustee, the Indenture Trustee and the Securities
Administrator.
SECTION 5.4 Limitation on Liability of Depositor and Others. The Depositor
and any officer or employee or agent of the Depositor may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor shall not be under any obligation to
17
appear in, prosecute, or defend any legal action that shall not be incidental to
its obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
SECTION 5.5 Depositor May Own Notes or Certificates. The Depositor, and any
Affiliate of the Depositor, may in its individual or any other capacity become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Depositor or an Affiliate thereof, except as otherwise
expressly provided herein or in the other Basic Documents. Except as set forth
herein or in the other Basic Documents, Notes and Certificates so owned by or
pledged to the Depositor or any such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement and the other Basic
Documents, without preference, priority, or distinction as among all of the
Notes and Certificates.
SECTION 5.6 Depositor Certificate of Incorporation. The Depositor shall not
amend its certificate of incorporation unless the Rating Agency Condition is
satisfied.
ARTICLE VI
THE MASTER SERVICER
SECTION 6.1 Representations of Master Servicer. The Master Servicer makes
the following representations on which the Issuer is deemed to have relied in
acquiring the Trust Property. The representations speak as of the execution and
delivery of this Agreement and shall survive the conveyance of the Trust
Property to the Issuer and the pledge thereof by the Issuer pursuant to the
Indenture:
(a) Organization and Good Standing. The Master Servicer is duly formed,
validly existing and in good standing under the laws of the United States, with
all power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted,
and had at all relevant times, and has, power, authority and legal right to
acquire, own, sell, and service the Receivables and to hold the Receivable Files
as custodian on behalf of the Indenture Trustee.
(b) Power and Authority. The Master Servicer has the power and authority
to execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their terms; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is a
party shall have duly authorized, executed and delivered by the Master Servicer
by all necessary corporate action.
(c) Binding Obligations. This Agreement constitutes a legal, valid, and
binding obligation of the Master Servicer enforceable in accordance with their
terms subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization, liquidation or other similar laws and equitable principles
relating to or affecting the enforcement of creditors' rights in general and by
general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or law.
(d) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents to which the Master Servicer is a
party and the
18
fulfillment of the terms hereof do not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (i) (with or without notice
or lapse of time) a default under, the articles of incorporation or bylaws of
the Master Servicer, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of time) a default
under, any indenture, agreement, or other instrument to which the Master
Servicer is a party or by which it shall be bound, (ii) result in the creation
or imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement, or other instrument or (iii) violate any law or,
to the best of the Master Servicer's knowledge, any order, rule, or regulation
applicable to the Master Servicer of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Master Servicer or its properties.
(e) No Proceedings. There are no proceedings or investigations pending, or
to the best of the Master Servicer's knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Master Servicer or its properties (i) asserting the
invalidity of this Agreement, any of the other Basic Documents or the
Securities, (ii) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by this Agreement and the
other Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Master Servicer of its
obligations under, or the validity or enforceability of, this Agreement, any of
the other Basic Documents or the Securities, or (iv) relating to the Master
Servicer and which might adversely affect the federal income tax attributes of
the Securities.
(f) Fidelity Bond. The Master Servicer maintains a fidelity bond in such
form and amount as is customary for Master Servicers acting as custodian of
funds and documents in respect of retail automotive installment sales contracts
and loans.
SECTION 6.2 Indemnities of Master Servicer. The Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Master Servicer under this Agreement, and hereby agrees to the
following:
(a) The Master Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Securities Administrator,
the Noteholders, the Certificateholders and the Depositor from and against any
and all costs, expenses, losses, damages, claims and liabilities, arising out of
or resulting from the use, ownership or operation by the Master Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Master Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Securities Administrator,
the Noteholders, the Certificateholders and the Depositor from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the extent
that such cost, expense, loss, claim, damage, or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance, or
bad faith of the Master Servicer in the performance of its duties under this
Agreement or any other Basic Document to which it is a party, or by reason of
reckless disregard of its obligations and duties under this Agreement or any
other Basic Document to which it is a party.
19
(c) Indemnification under this Section 6.2 by [_____________________] (or
any successor thereto pursuant to Section 7.2) as Master Servicer, with respect
to the period such Person was the Master Servicer, shall survive the termination
of such Person as Master Servicer or a resignation by such Person as Master
Servicer as well as the termination of this Agreement or the resignation or
removal of the Owner Trustee, the Indenture Trustee or the Securities
Administrator and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Master Servicer shall have made any indemnity
payments pursuant to this Section 6.2 and the Person to or on behalf of whom
such payments are made thereafter shall collect any of such amounts from others,
such Person shall promptly repay such amounts to the Master Servicer, without
interest.
SECTION 6.3 Merger or Consolidation of, or Assumption of the Obligations of
Master Servicer. Any Person (i) into which the Master Servicer may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Master Servicer shall be a party or (iii) succeeding to the business
of the Master Servicer, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Master Servicer under
this Agreement, will be the successor to the Master Servicer under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement. The Master Servicer shall provide
notice of any merger, conversion, consolidation or succession pursuant to this
Section 6.3 to the Rating Agencies, the Indenture Trustee and the Securities
Administrator.
SECTION 6.4 Limitation on Liability of Master Servicer and Others. (a)
Neither the Master Servicer nor any of the directors or officers or employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
Noteholders or the Certificateholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
that would otherwise be imposed by reason of willful misfeasance or bad faith in
the performance of duties or by reason of reckless disregard of its obligations
and duties under this Agreement, or by reason of negligence in the performance
of its duties under this Agreement. The Master Servicer and any director,
officer or employee or agent of the Master Servicer may rely in good faith on
any Opinion of Counsel or on any Officer's Certificate of the Depositor or
certificate of auditors believed to be genuine and to have been signed by the
proper party in respect of any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Master Servicer shall not be
under any obligation to appear in, prosecute, or defend any legal action that
shall not be incidental to its duties under this Agreement, and that in its
opinion may cause it to incur any expense or liability; provided, however, that
the Master Servicer may undertake any reasonable action that it may deem
necessary or desirable in respect of this Agreement, the rights and duties of
the parties to this Agreement and the interests of the Noteholders and
Certificateholders under this Agreement. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Issuer, and the Master Servicer shall be entitled
to be reimbursed therefor. Any amounts due the Master Servicer pursuant to this
subsection shall be payable on a Payment Date from the Available Collections on
deposit in the Collection
20
Account only after all payments required to be made on such date to the
Noteholders, the Certificateholders, the Owner Trustee, the Indenture Trustee,
the Securities Administrator and the Master Servicer have been made.
(c) The Master Servicer and any director or officer or employee or agent
of the Master Servicer shall be indemnified by the Trust and held harmless
against any loss, liability, or expense including reasonable attorneys' fees and
expenses incurred in connection with any legal action relating to the
performance of the Master Servicer's duties under this Agreement, other than (i)
any loss or liability otherwise reimbursable pursuant to this Agreement; (ii)
any loss, liability, or expense incurred solely by reason of the Master
Servicer's willful misfeasance, negligence, or bad faith in the performance of
its duties hereunder or by reason of reckless disregard of its obligations and
duties under this Agreement; and (iii) any loss, liability, or expense for which
the Issuer is to be indemnified by the Master Servicer under this Agreement. Any
amounts due the Master Servicer pursuant to this subsection shall be payable on
a Payment Date from the Available Collections on deposit in the Collection
Account only after all payments required to be made on such date to the
Noteholders, the Certificateholders, the Owner Trustee, the Indenture Trustee
and the Securities Administrator have been made.
(d) The parties acknowledge that the direct servicing and custodianship of
the Receivables will initially be conducted by the Receivables Servicers, and
that the Master Servicer will not directly service or maintain custody of the
Receivables or become obligated to do so unless, with respect to any of the
Receivables, the related Receivables Servicer resigns or is terminated under the
related Receivables Servicing Agreement and no successor Receivables Servicer is
named thereunder. Neither the Master Servicer nor any of the directors or
officers or employees or agents of the Master Servicer shall be under any
liability to the Issuer, the Noteholders or the Certificateholders for any
action or inaction of the Receivables Servicers and shall not in any way be
responsible for the performance of the Receivables Servicers of their servicing
or other obligations. The Master Servicer shall, however, acting on behalf of
the Trust, enforce the obligations of the Receivables Servicers relating to the
servicing and custody of the Receivables under the respective Receivables
Servicing Agreements, and in so doing:
(i) If any Receivables Servicer Termination Event has occurred and is
continuing under the related Receivables Servicing Agreement, the Master
Servicer shall exercise the rights and powers vested in it by this
Agreement and the related Receivables Servicing Agreement and use the same
degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(ii) With respect to each Receivables Servicer and the related
Receivables Servicing Agreement, except during the continuance of a
Receivables Servicer Termination Event with respect to such Receivables
Servicer:
(A) the Master Servicer undertakes to perform such duties and
only such duties as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read
into this Agreement against the Master Servicer; and
21
(B) in the absence of bad faith on its part, the Master Servicer
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Master Servicer
and, if required by the terms of this Agreement, conforming
to the requirements of this Agreement; provided, however,
that the Master Servicer shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Agreement.
(iii) The Master Servicer may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(A) this paragraph does not limit the effect of paragraph (ii)
of this Section 6.4(d);
(B) the Master Servicer shall not be liable for any error of
judgment made in good faith by an Authorized Officer unless
it is proved that the Master Servicer was negligent in
ascertaining the pertinent facts; and
(C) the Master Servicer shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with an Issuer Request given in accordance with the terms of
this Agreement or the Indenture.
(iv) The Master Servicer shall not be charged with knowledge of any
Receivables Servicer Termination Event unless either (1) an Authorized
Officer shall have actual knowledge of such Receivables Servicer
Termination Event or (2) written notice of such Receivables Servicer
Termination Event shall have been given to the Master Servicer in
accordance with the provisions of this Agreement.
(v) The Master Servicer may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper Person. The Master Servicer need not investigate any fact or matters
stated in any such document.
(vi) Before the Master Servicer acts or refrains from acting, it may
require an Officer's Certificate from the Issuer or an Opinion of Counsel.
The Master Servicer shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officer's Certificate or Opinion of
Counsel.
(vii) Neither the Master Servicer nor any of its officers, directors,
employees or agents shall be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights
or powers; provided, however, that such
22
action or omission by the Master Servicer does not constitute willful
misconduct, negligence or bad faith.
(viii) The right of the Master Servicer, with respect to its
enforcement of the related Receivables Servicing Agreement, to perform any
discretionary act enumerated in this Agreement shall not be construed as a
duty, and the Master Servicer shall not be answerable for other than its
negligence or willful misconduct in the performance of such act.
(ix) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Master Servicer be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Master Servicer has been advised of
the likelihood of such loss or damage and regardless of the form of action.
SECTION 6.5 Subservicing and Delegation of Duties. The Master Servicer may
engage a sub-Servicer to perform some or all of its duties hereunder and may at
any time perform specific duties as Master Servicer under this Agreement through
sub-contractors; provided that, except as provided in respect to the Receivables
Servicers pursuant to Section 6.4(d), no such subservicing, delegation or
subcontracting shall relieve the Master Servicer of its responsibilities with
respect to such duties, as to all of which the Master Servicer shall remain
primarily responsible and the Master Servicer shall be solely responsible for
the fees of any such sub-Servicers and sub-contractors.
SECTION 6.6 Master Servicer Not to Resign as Master Servicer; Resignation
and Termination of Receivables Servicers. (a) Subject to the provisions of
Section 6.3, the Master Servicer shall not resign from its obligations and
duties under this Agreement except upon determination that the performance of
its duties under this Agreement shall no longer be permissible under applicable
law. Notice of any such determination permitting the resignation of the Master
Servicer shall be communicated to the Owner Trustee, the Indenture Trustee and
the Securities Administrator at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Owner Trustee, the Indenture Trustee and
the Securities Administrator concurrently with or promptly after such notice. No
such resignation shall become effective until the Securities Administrator (so
long as the Person serving as the Securities Administrator is not also the
Master Servicer), the Indenture Trustee or a Successor Master Servicer shall
have (i) taken the actions required by Section 7.1(b) and (ii) assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 7.2.
(b) The Master Servicer may terminate its Receivables Servicing Agreement
with any Receivables Servicer upon the terms and conditions set forth in such
agreement. Notwithstanding the foregoing, to the extent that a Receivables
Servicing Agreement permits the related Receivables Servicer to resign with the
express written consent of the Depositor, the Depositor and Master Servicer
hereby agree that they will not grant such consent unless the Rating Agency
Condition is satisfied. In the event the Master Servicer terminates Receivables
23
Servicing Agreement, the Master Servicer shall not be responsible for the acts
or inaction of the terminated Receivables Servicer, and the Master Servicer
shall be entitled to reimbursement for its out-of-pocket expenses incurred in
connection with enforcement of the Receivables Servicing Agreement, transition
of servicing responsibilities, and correction of servicing errors committed by
the terminated Receivables Servicer.
SECTION 6.7 Master Servicer May Own Notes or Certificates. The Master
Servicer, and any Affiliate of the Master Servicer, may, in its individual or
any other capacity, become the owner or pledgee of Notes or Certificates with
the same rights as it would have if it were not the Master Servicer or an
Affiliate thereof, except as otherwise expressly provided herein or in the other
Basic Documents. Except as set forth herein or in the other Basic Documents,
Notes and Certificates so owned by or pledged to the Master Servicer or such
Affiliate shall have an equal and proportionate benefit under the provisions of
this Agreement, without preference, priority or distinction as among all of the
Notes and Certificates.
ARTICLE VII
SERVICING TERMINATION
SECTION 7.1 Events of Servicing Termination. (a) If any one of the
following events ("Events of Servicing Termination") shall occur and be
continuing:
(i) Any failure by the Master Servicer to deliver to the Owner
Trustee, the Indenture Trustee or the Securities Administrator any proceeds
or payment required to be so delivered under the terms of the Notes and the
Certificates and this Agreement that shall continue unremedied for a period
of five (5) Business Days after written notice of such failure is received
by the Master Servicer from the Owner Trustee, the Indenture Trustee or the
Securities Administrator or after discovery of such failure by an officer
of the Master Servicer; or
(ii) Failure on the part of the Master Servicer duly to observe or to
perform in any material respect any other covenants or agreements, as the
case may be, set forth in the Notes, the Certificates or in this Agreement,
which failure shall (A) materially and adversely affect the rights of
Noteholders or Certificateholders and (B) continue unremedied for a period
of sixty (60) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (1) to the Master
Servicer by the Depositor or the Indenture Trustee or (2) to the Owner
Trustee, the Indenture Trustee, the Securities Administrator and the Master
Servicer by the Noteholders of Notes evidencing not less than 25% of the
principal amount of the Notes or, if no Notes are outstanding, by holders
of Certificates evidencing Certificate Percentage Interests aggregating at
least 25%; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the Master
Servicer in any insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings, or for the winding up or liquidation
of its
24
respective affairs, and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) consecutive days; or
(iv) The consent by the Master Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of or
relating to the Master Servicer of or relating to substantially all of its
property; or the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment
of its obligations or become insolvent;
then the Indenture Trustee shall cause the Securities Administrator to promptly
notify each Rating Agency, and in each and every case, so long as an Event of
Servicing Termination shall not have been remedied, either the Indenture Trustee
or the holders of Notes evidencing not less than 25% of the principal amount of
the Notes Outstanding (or, if no Notes are Outstanding, Certificates evidencing
Certificate Percentage Interests aggregating at least 51%), by notice then given
in writing to the Master Servicer (and to the Indenture Trustee, the Securities
Administrator and the Owner Trustee if given by the Noteholders and to the Owner
Trustee if given by the Certificateholders and in each case with a copy to the
Rating Agencies) may terminate all of the rights and obligations of the Master
Servicer under this Agreement. On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Notes, the Certificates or the Trust
Property or otherwise, shall pass to and be vested in the Securities
Administrator (so long as the Person serving as the Securities Administrator is
not also the Master Servicer), and otherwise in the Indenture Trustee or such
Successor Master Servicer as may be appointed under Section 7.2; and, without
limitation, the Securities Administrator (so long as the Person serving as the
Securities Administrator is not also the Master Servicer), the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the
Receivables and related documents, or otherwise.
(b) Upon termination of the Master Servicer under Section 7.1(a), the
predecessor Master Servicer shall cooperate with the Securities Administrator,
the Indenture, the Owner Trustee and such Successor Master Servicer in effecting
the termination of the responsibilities and rights of the predecessor Master
Servicer under this Agreement, including the transfer to the Securities
Administrator (so long as the Person serving as the Securities Administrator is
not also the Master Servicer), and otherwise to the Indenture Trustee or such
Successor Master Servicer for administration of all cash amounts that shall at
the time be held by the predecessor Master Servicer, for deposit, or shall
thereafter be received with respect to a Receivable and the delivery of the
Receivable Files and the related accounts and records maintained by the Master
Servicer. All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Receivable Files to the Successor Master
Servicer and amending this Agreement to reflect such succession as Master
Servicer pursuant to this Section 7.1 shall be paid by the
25
predecessor Master Servicer upon presentation of reasonable documentation of
such costs and expenses.
(c) Upon termination of the Master Servicer under Section 7.1(a), the
Successor Master Servicer, by acceptance of its appointment, agrees that the
Receivables will continue to be serviced through their respective Receivables
Servicing Agreements, unless the applicable Receivables Servicing Agreement has
been terminated pursuant to the terms and conditions set forth therein.
SECTION 7.2 Appointment of Successor Master Servicer. (a) Upon the Master
Servicer's receipt of notice of termination pursuant to Section 7.1 or the
Master Servicer's resignation in accordance with the terms of this Agreement,
the predecessor Master Servicer shall continue to perform its functions as
Master Servicer under this Agreement, in the case of termination, only until the
date specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the date 45 days from the delivery to the
Indenture Trustee, the Securities Administrator and the Owner Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Master Servicer shall become unable to act as Master Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Master Servicer's resignation or termination hereunder, the
Issuer shall appoint a Successor Master Servicer, and the Successor Master
Servicer shall accept its appointment by a written assumption in form acceptable
to the Owner Trustee, the Securities Administrator and the Indenture Trustee
(with a copy to each Rating Agency). In the event that a Successor Master
Servicer has not been appointed at the time when the predecessor Master Servicer
has ceased to act as Master Servicer in accordance with this Section 7.2, the
Securities Administrator (so long as the Person serving as the Securities
Administrator is not also the Master Servicer), and otherwise the Indenture
Trustee, without further action shall automatically be appointed the Successor
Master Servicer. The Securities Administrator or the Indenture Trustee, as the
case may be, may resign as the Master Servicer by giving written notice of such
resignation to the Issuer and in such event shall be released from such duties
and obligations, such release not to be effective until the date a Successor
Master Servicer enters into a written assumption as provided in this Section.
Upon delivery of any such notice to the Issuer, the Issuer shall obtain a new
Master Servicer as the Successor Master Servicer in accordance with this
Section. Notwithstanding the above, if the Securities Administrator (so long as
the Person serving as the Securities Administrator is not also the Master
Servicer) and the Indenture Trustee shall be legally unable so to act or if,
within 30 days after the delivery of its notice of resignation, the Issuer shall
not have obtained a Successor Master Servicer, the Securities Administrator (so
long as the Person serving as the Securities Administrator is not also the
Master Servicer) or the Indenture Trustee, as appropriate, shall appoint, or
petition a court of competent jurisdiction to appoint, any established
institution, having a net worth of not less than $100,000,000 and whose regular
business shall include the servicing of automotive receivables, as the successor
to the Master Servicer under this Agreement; provided that the Rating Agency
Condition shall be satisfied in connection with such appointment.
26
(b) Upon appointment, the Successor Master Servicer shall be the successor
in all respects to the predecessor Master Servicer and shall be subject to all
the responsibilities, duties, and liabilities arising thereafter relating
thereto placed on the predecessor Master Servicer, by the terms and provisions
of this Agreement; provided, that (i) any failure of such Successor Master
Servicer to perform such responsibilities or duties that are caused by the
predecessor Master Servicer's failure to provide information or monies required
hereunder shall not be considered a default by such Successor Master Servicer
and (ii) such Successor Master Servicer shall have no liability for actions,
inactions or representations of the predecessor Master Servicer.
(c) In connection with such appointment, the Indenture Trustee may make
such arrangements for the compensation of such Successor Master Servicer out of
payments on Receivables as it and such Successor Master Servicer shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the predecessor Master Servicer under this Agreement. The Indenture
Trustee and such Successor Master Servicer shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(d) Notwithstanding anything herein or in the other Basic Documents to the
contrary, in no event shall the Securities Administrator or the Indenture
Trustee, should it be appointed Successor Master Servicer, be required to
purchase any Receivable pursuant to Section 3.6 herein or otherwise or indemnify
the Issuer, the Owner Trustee, the Noteholders, the Certificateholders, the
Depositor or any other Person pursuant to Section 3.13.
SECTION 7.3 Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, the Master Servicer pursuant
to this Article VII, the Indenture Trustee shall cause the Securities
Administrator to give prompt written notice thereof to Noteholders, and the
Owner Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses of record and to each Rating Agency.
SECTION 7.4 Waiver of Past Events of Servicing Termination. The holders of
Notes evidencing not less than a majority of the principal amount of the Notes
(or, if no Notes are outstanding, holders of Certificates evidencing Certificate
Percentage Interests aggregating at least 75%) may, on behalf of all Noteholders
and Certificateholders, waive any Event of Servicing Termination hereunder and
its consequences, except an event resulting from the failure to make any
required deposits to or payments from any of the Trust Accounts or the
Certificate Distribution Account in accordance with this Agreement, which shall
require the unanimous vote of all Holders of Outstanding Securities. Upon any
such waiver of a past Event of Servicing Termination, such Event of Servicing
Termination shall cease to exist, and shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other Event of Servicing Termination or impair any right consequent thereon.
The Issuer shall provide written notice of any such waiver to the Rating
Agencies.
ARTICLE VIII
TERMINATION
SECTION 8.1 Optional Purchase of All Receivables. As of the last day of any
Collection Period as of which the Pool Factor shall be equal to or less than the
Optional Purchase
27
Percentage, the Master Servicer shall have the option to purchase the Trust
Property from the Trust. To exercise such option, the Master Servicer shall
deposit pursuant to Section 4.4 in the Collection Account an amount equal to the
greater of (i) the aggregate Purchase Amount for the Receivables (as calculated
by the Administrator and reported to the Master Servicer) and (ii) the fair
market value of the Receivables, and shall succeed to all interests in and to
the Trust. To determine the fair market value of the Receivables, the Master
Servicer shall solicit bids from not less than three recognized purchasers of
whole loan pools of motor vehicle loans selected by the Master Servicer in its
sole discretion (one of which may be the Depositor or one of its Affiliates).
Notwithstanding the foregoing, the Master Servicer shall not be permitted to
exercise such option unless the amount to be deposited in the Collection Account
pursuant to the preceding sentence, together with the other amounts on deposit
in the Collection Account, is greater than or equal to the sum of the
outstanding principal amount of the Notes and all accrued but unpaid interest
(including any overdue interest) thereon plus any Net Swap Payments or Swap
Termination Payments due to the Counterparties under the Interest Rate Swap
Payments plus all amounts then due and payable by the Trust for fees or other
reimbursable amounts to the Receivables Servicers, the Master Servicer, the
Securities Administrator, the Administrator, the Owner Trustee and the Indenture
Trustee. The amount deposited in the Collection Account pursuant to this Section
8.1 shall be used on the next Payment Date to make payments in full to
Noteholders and Certificateholders in the manner set forth in Article IV. The
Master Servicer or the Issuer shall furnish written notice of the Master
Servicer's election to exercise such option to the Indenture Trustee, the
Securities Administrator, the Owner Trustee, each Counterparty and the Rating
Agencies at least 10 days, but not more than 30 days, prior to the Payment Date
on which such purchase shall occur (and the Indenture Trustee shall cause the
Securities Administrator to promptly furnish such notice to the Noteholders).
In addition, if any Certificateholder is a Person who is not an Affiliate
of the Depositor (as certified in writing to the Master Servicer by such
Certificateholder), the Master Servicer shall exercise the option to purchase
the Receivables in accordance with this Section 8.1 only if directed to do so,
or consented to in writing by each such non-Affiliated Certificateholder. The
Master Servicer shall have no responsibility to determine whether any
Certificateholder is or is not an Affiliate of the Depositor.
SECTION 8.2 Succession Upon Satisfaction and Discharge of Indenture.
Following the satisfaction and discharge of the Indenture and the payment in
full of the principal of and interest on the Notes, to the extent permitted by
applicable law, the Securities Administrator will continue to carry out its
obligations hereunder as agent for the Owner Trustee, including without
limitation making distributions from the Collection Account in accordance with
Section 4.5.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment. (a) This Agreement may be amended by the Depositor,
the Master Servicer and the Issuer, with the consent of the Indenture Trustee,
the Securities Administrator and the Owner Trustee to the extent that their
respective rights or obligations may be affected thereby (which consent may not
be unreasonably withheld), but without the consent
28
of any of the Noteholders or the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions in this Agreement that may be inconsistent
with any other provision of this Agreement, the Prospectus Supplement or the
Prospectus or to add any provisions to or change or eliminate any provisions or
to modify the rights of the Noteholders or Certificateholders; provided,
however, that such action shall not, as evidenced by either (i) an Opinion of
Counsel or (ii) satisfaction of the Rating Agency Condition, together with an
Officer's Certificate of the Master Servicer delivered to the Owner Trustee, the
Securities Administrator and the Indenture Trustee, materially and adversely
affect the interests of any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Issuer, with the consent of the Indenture Trustee,
the Securities Administrator and the Owner Trustee to the extent that their
respective rights or obligations may be affected thereby (which consent may not
be unreasonably withheld) and with the consent of (i) the Noteholders of Notes
evidencing not less than a majority of the principal amount of each Class of
Notes, and (ii) the Certificateholders of Certificates evidencing Certificate
Percentage Interests aggregating at least 51% (which consent of any holder of a
Note or holder of a Certificate given pursuant to this Section 9.1 or pursuant
to any other provision of this Agreement shall be conclusive and binding on such
Note or Certificate, as the case may be, and on all future holders of such Note
or holders of such Certificate, as the case may be, and of any Note or
Certificate, as applicable, issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
such Note or the Certificate), for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (A) increase
or reduce in any manner the amount of, or accelerate or delay the timing of, or
change the allocation or priority of, collections of payments on Receivables or
distributions that shall be required to be made on any Note or Certificate or
change any Note Interest Rate, without the consent of all Noteholders or
Certificateholders or (B) reduce the aforesaid percentage required to consent to
any such amendment, without the consent of the holders of all Notes affected
thereby and holders of all Certificates affected thereby.
(c) Prior to the execution of any such amendment the Master Servicer will
provide written notification of the substance of such amendment to each Rating
Agency.
(d) Promptly after the execution of any such amendment, the Master
Servicer shall furnish written notification of the substance of such amendment
to the Owner Trustee, the Indenture Trustee, the Securities Administrator and
each Rating Agency. The Owner Trustee shall provide notification of the
substance of the amendment to each Certificateholder, and the Indenture Trustee
will cause the Securities Administrator to provide notification of the substance
of such amendment to each Noteholder. It shall not be necessary for the consent
of Noteholders or the Certificateholders pursuant to this Section 9.1 to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Noteholders and
Certificateholders provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Noteholders and Certificateholders
shall be subject to
29
such reasonable requirements as the Owner Trustee, the Indenture Trustee and the
Securities Administrator may prescribe, including the establishment of record
dates pursuant to the Note Depository Agreement.
(e) Prior to the execution of any amendment to this Agreement, the Owner
Trustee, the Indenture Trustee and the Securities Administrator shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement. The
Owner Trustee, the Indenture Trustee or the Securities Administrator may, but
shall not be obligated to, enter into any such amendment which affects such
Owner Trustee's, Indenture Trustee's or Securities Administrator's own rights,
duties or immunities under this Agreement or otherwise.
(f) Notwithstanding anything in this Agreement to the contrary, no
amendment to this Agreement shall be effective, and the Depositor further
covenants that it shall not agree to any amendment to any other Basic Document,
without in each case the prior written consent of each Counterparty, if any such
amendment would (a) adversely affect the Counterparty's rights or obligations
under any Interest Rate Swap Agreement or any Basic Document or (b) adversely
modify the obligations of, or adversely impact the ability of the Issuer to
fully perform any of its obligations under any Interest Rate Swap Agreement to
which the Counterparty is subject.
SECTION 9.2 Protection of Title to Trust Property. (a) The Depositor shall
file such financing statements and cause to be filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain, and protect the interest of the Issuer and the
Indenture Trustee for the benefit of the Noteholders and the Counterparties in
the Receivables and in the proceeds thereof. The Depositor shall deliver (or
cause to be delivered) to the Owner Trustee, the Indenture Trustee and the
Securities Administrator file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) The Depositor shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any financing statement
or continuation statement filed by the Depositor in accordance with paragraph
(a) above seriously misleading within the meaning of ss. 9-506 of the UCC,
unless it shall have given the Owner Trustee, the Indenture Trustee and the
Securities Administrator at least 10 days' prior written notice thereof, with a
copy to the Rating Agencies, and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Depositor shall give the Owner Trustee, the Indenture Trustee and
the Securities Administrator at least ten (10) days' prior written notice of any
relocation of its principal executive office or change in the jurisdiction under
whose laws it is formed if, as a result of such relocation or change, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new financing
statement and shall promptly file any such amendment or new financing statement.
The Master Servicer shall at all times maintain each office from which it shall
service Receivables, and its principal executive office, within the United
States of America.
30
(d) The Master Servicer shall cause each Receivables Servicer, to the
extent provided pursuant to the applicable Receivables Servicing Agreement, to
maintain accounts and records as to each Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time the status of such
Receivable, including payments and recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable and the amounts from time to time deposited in
the Collection Account in respect of such Receivable.
(e) The Master Servicer shall cause each Receivables Servicer, to the
extent provided pursuant to the applicable Receivables Servicing Agreement, to
maintain its computer systems so that, from and after the time of conveyance
under this Agreement of the Receivables to the Issuer, the Master Servicer's
master computer records (including any back-up archives) that refer to a
Receivable shall indicate clearly, by numerical code or otherwise, that such
Receivable is owned by the Issuer and has been pledged to the Indenture Trustee
pursuant to the Indenture. Indication of the Issuer's and the Indenture
Trustee's interest in a Receivable shall not be deleted from or modified on the
Master Servicer's computer systems until, and only until, the Receivable shall
have been paid in full or repurchased.
(f) The Master Servicer shall cause each Receivables Servicer, to the
extent provided pursuant to the applicable Receivables Servicing Agreement, to,
upon receipt of reasonable prior notice, shall permit the Depositor, the Owner
Trustee, the Indenture Trustee, the Securities Administrator and their
respective agents at any time during normal business hours at the Master
Servicer's expense to inspect, audit, and make copies of and to obtain abstracts
from the Master Servicer's records regarding any Receivable.
(g) The Master Servicer shall cause each Receivables Servicer, pursuant to
the applicable Receivables Servicing Agreement, to furnish to the Owner Trustee,
the Indenture Trustee and the Securities Administrator, within five (5) Business
Days, a list of all Receivables (by contract number and name of Obligor) then
owned by the Issuer, together with a reconciliation of such list to the Schedule
of Receivables and to each of the Investor Reports furnished before such request
indicating removal of Receivables from the Trust.
(h) For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
SECTION 9.3 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THAT WOULD APPLY THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK, AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.4 Notices. All demands, notices, and communications under this
Agreement shall be in writing, personally delivered, sent by telecopier, over
night courier or mailed by certified mail, return receipt requested, and shall
be deemed to have been duly given
31
upon receipt (a) in the case of the Master Servicer, at [_____________________],
[________________________________], facsimile ( ) - Attention: [________], with
a copy to the Owner Trustee, the Indenture Trustee and the Securities
Administrator, (b) in the case of the Depositor, at 4 World Financial Center,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇
▇▇▇▇▇, (c) in the case of the Owner Trustee, at the Corporate Trust Office of
the Owner Trustee, (d) in the case of the Indenture Trustee, at the Corporate
Trust Office of the Indenture Trustee, (e) in the case of the Securities
Administrator, at the Corporate Trust Office of the Securities Administrator,
(f) in the case of Fitch, Inc., at the following address: Fitch, Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (g) in the case of ▇▇▇▇▇'▇ Investors
Service, Inc., at the following address: ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (h) in the
case of Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., at the following address: Standard & Poor's Rating Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance Department. Any
notice required or permitted to be mailed to a Noteholder or Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Person as shown in the Note Register or the Certificate Register, as applicable.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder or
Certificateholder shall receive such notice.
SECTION 9.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Notes, the
Certificates or the rights of the holders thereof.
SECTION 9.6 Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Sections 6.3 and 7.2 and as provided in the
provisions of this Agreement concerning the resignation of the Master Servicer,
this Agreement may not be assigned by the Depositor or the Master Servicer
unless (i)(A) the Rating Agency Condition is satisfied and (B) the Indenture
Trustee, the Securities Administrator and the Owner Trustee have consented
thereto, which consent shall not be unreasonably withheld or (ii) the Owner
Trustee, the Indenture Trustee, the Securities Administrator, the Noteholders of
Notes evidencing not less than 66 2/3% of the principal amount of the Notes
Outstanding and the holders of Certificates evidencing Certificate Percentage
Interests aggregating at least 51% consent thereto. Any transfer or assignment
with respect to the Master Servicer of all its rights, obligations and duties
will not become effective until a successor Master Servicer has assumed the
Master Servicer's rights, duties and obligations under this Agreement. In the
event of a transfer or assignment pursuant to clause (ii) above, the Rating
Agencies shall be provided with notice of such transfer or assignment.
SECTION 9.7 Further Assurances. The Depositor and the Master Servicer agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Owner Trustee,
the Indenture Trustee or the Securities Administrator more fully to effect the
purposes of this Agreement.
32
SECTION 9.8 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Owner Trustee, the Indenture Trustee,
the Securities Administrator, the Noteholders or the Certificateholders, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges therein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
SECTION 9.9 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Administrator, the
Indenture Trustee, the Securities Administrator and the Owner Trustee and their
each of their respective successors and permitted assigns and each of the
Administrator, the Indenture Trustee, the Securities Administrator and the Owner
Trustee may enforce the provisions hereof as if they were parties thereto.
Except as otherwise provided in this Article IX, no other Person will have any
right or obligation hereunder. The parties hereto hereby acknowledge and consent
to the pledge of this Agreement by the Issuer to the Indenture Trustee for the
benefit of the Noteholders and the Counterparties pursuant to the Indenture.
SECTION 9.10 Actions by Noteholders or Certificateholders. (a) Wherever in
this Agreement a provision is made that an action may be taken or a notice,
demand, or instruction given by Noteholders or Certificateholders, such action,
notice, or instruction may be taken or given by any Noteholder or
Certificateholder, as applicable, unless such provision requires a specific
percentage of Noteholders or Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver, or other act by a Noteholder or Certificateholder shall bind such
Noteholder or Certificateholder and every subsequent holder of such Note or
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to be done by
the Owner Trustee, the Indenture Trustee, the Securities Administrator or the
Master Servicer in reliance thereon, whether or not notation of such action is
made upon such Note or Certificate.
SECTION 9.11 Information to Be Provided by the Securities Administrator. As
soon as available but no later than March 15 of each calendar year for so long
as the Issuer is required to report under the Exchange Act, commencing in
200[_], the Securities Administrator shall:
(i) deliver to the Depositor a report regarding the Securities
Administrator's assessment of compliance with the Servicing Criteria
during the immediately preceding calendar year, as required under
paragraph (b) of Rule 13a-18, Rule 15d-18 of the Exchange Act and
Item 1122 of Regulation AB. Such report shall be signed by an
authorized officer of the Securities Administrator, and shall
address each of the Servicing Criteria specified in Exhibit [_] or
such criteria as mutually agreed upon by the Depositor and the
Securities Administrator;
(ii) deliver to the Depositor a report of a registered public accounting
firm that attests to, and reports on, the assessment of compliance
made by the Securities
33
Administrator and delivered pursuant to the preceding paragraph.
Such attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act; and
(iii) deliver to the Master Servicer and any other Person that will be
responsible for signing the certification required by Rules
13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section
302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) (a "Sarbanes Certification")
on behalf of the Issuer or the Depositor a certification
substantially in the form attached hereto as Exhibit [__] or such
form as mutually agreed upon by the Depositor and the Securities
Administrator.
The Securities Administrator acknowledges that the parties identified in clause
(iii) above may rely on the certification provided by the Securities
Administrator pursuant to such clause in signing a Section 302 Certification and
filing such with the Commission.
SECTION 9.12 Additional Regulation AB Provisions. The Depositor, Master
Servicer, Securities Administrator, Owner Trustee, Indenture Trustee and each
Receivables Servicer acknowledge and agree that the purpose of this Section is
to facilitate compliance by the Depositor with the provisions of Regulation AB
and related rules and regulations of the Commission. The Depositor shall not
exercise its right to request delivery of information or other performance under
these provisions other than in good faith, or for purposes other than compliance
with the Securities Act, the Exchange Act and the rules and regulations of the
Commission under the Securities Act and the Exchange Act. The Depositor, Master
Servicer, Securities Administrator, Owner Trustee, Indenture Trustee and each
Receivables Servicer acknowledge that interpretations of the requirements of
Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
asset-backed securities markets, advice of counsel, or otherwise, and agrees to
comply with requests made by the Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. The Master Servicer, Securities Administrator, Owner Trustee,
Indenture Trustee and each Receivables Servicer shall cooperate fully with the
Depositor and the Issuer to deliver to the Depositor and the Issuer (including
any of its assignees or designees) any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Depositor or the Issuer to permit the Depositor to comply
with the provisions of Regulation AB, together with such disclosures relating to
the Depositor, Master Servicer, Securities Administrator, Owner Trustee,
Indenture Trustee and each Receivables Servicer and the Receivables, or the
servicing of the Receivables, reasonably believed by the Depositor or the Master
Servicer to be necessary in order to effect such compliance.
SECTION 9.13 Limitation of Liability of Owner Trustee, the Indenture
Trustee and the Securities Administrator. (a) Notwithstanding anything contained
herein to the contrary, this Agreement has been countersigned by
[____________________] not in its individual capacity but solely in its capacity
as Owner Trustee of the Issuer and [_____________________] not in its individual
capacity but solely in its capacity as Securities Administrator, and in no event
shall [_____________________] or [_____________________], in their individual
capacity or, except as expressly provided in the Trust Agreement, as Owner
Trustee of the Issuer or as
34
Securities Administrator respectively, have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI and VII of
the Trust Agreement. For all purposes of this Agreement, in the performance of
its duties and obligations hereunder (other than Successor Master Servicer), the
Indenture Trustee shall be afforded all of the rights, protections, immunities
and indemnities provided it under the Indenture. For all purposes of this
Agreement, in the performance of its duties and obligations hereunder (other
than Successor Master Servicer), the Securities Administrator shall be afforded
all of the rights, protections, immunities and indemnities provided it under the
Indenture.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by [_______________________], not in its individual
capacity but solely as Indenture Trustee, 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 delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
SECTION 9.14 Savings Clause. It is the intention of the Depositor and the
Issuer that the transfer of the Trust Property contemplated herein constitute an
absolute transfer of the Trust Property, conveying good title to the Trust
Property from the Depositor to the Issuer. However, in the event that such
transfer is deemed to be a transfer for security, the Depositor hereby grants to
the Issuer a first priority security interest in all of the Depositor's right,
title and interest in, to and under the Trust Property, whether now owned or
existing or hereafter acquired or arising, and all proceeds thereof (including,
without limitation, "proceeds" as defined in the Uniform Commercial Code as in
effect from time to time in the State of New York) and all other rights and
property transferred hereunder to secure a loan in an amount equal to all
amounts payable under the Notes and the Certificates, and in such event, this
Agreement shall constitute a security agreement under applicable law. The
Depositor hereby authorizes the Issuer or its agents to file such financing
statements and continuation statements as the Issuer may deem advisable in
connection with the security interest granted by the Depositor pursuant to the
preceding sentence.
SECTION 9.15 No Petition. The Master Servicer, by entering into this
Agreement, hereby covenants and agrees that prior to the end of the period that
is one year and one day after there has been paid in full all debt issued by any
securitization vehicle in respect of which the Depositor holds any interest, it
will not institute against the Issuer, or join in, or assist or encourage others
to institute any institution against the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or State bankruptcy or similar law
in connection with any obligations relating to the Notes, this Agreement or any
of the other Basic Documents.
35
IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
[_____________________] TRUST 200[_]-[_],
as Issuer
By: [____________________],
not in its individual capacity but
solely as Owner Trustee
By:________________________________________
Name:
Title:
[______________________],
as Master Servicer
By: ____________________________________________
Name:
Title:
ML ASSET BACKED CORPORATION,
as Depositor
By: ____________________________________________
Name:
Title:
Accepted and agreed:
[________________________________]
not in its individual capacity
but solely as Indenture Trustee
By: ______________________________
Name:
Title:
[________________________________]
not in its individual capacity
but solely as Owner Trustee
By: ______________________________
Name:
Title:
[________________________________]
not in its individual capacity
but solely as Securities Administrator
By: ______________________________
Name:
Title:
[________________________________]
as Receivables Servicer
By: ______________________________
Name:
Title:
SCHEDULE A
SCHEDULE OF RECEIVABLES
[On File with the Master Servicer]
A-1
SCHEDULE B
Location of Receivable Files
B-1
SCHEDULE C
List of Receivables Servicers
C-1
SCHEDULE D
[Receivables Reporting- Insert Reporting Fields]
D-1
APPENDIX A
DEFINITIONS AND USAGE
The following rules of construction and usage shall be applicable to any
agreement, instrument, certificate or document that is governed by this
Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any agreement or instrument governed hereby and in any certificate
or other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any agreement or instrument governed hereby and in
any certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such agreement, instrument,
certificate or other document, and accounting terms partly defined in this
Appendix or in any such agreement, 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 such
agreement or instrument. To the extent that the definitions of accounting terms
in this Appendix or in any such agreement, instrument, certificate or other
document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Appendix or in
any such instrument, certificate or other document shall control.
The words "hereof," "herein," "hereunder" and words of similar import when
used in an agreement or instrument refer to such agreement or instrument as a
whole and not to any particular provision or subdivision thereof; references in
an agreement or instrument to "Article," "Section" or another subdivision or to
an attachment are, unless the context otherwise requires, to an article, section
or subdivision of or an attachment to such agreement or instrument; and the term
"including" and its variations shall be deemed to be followed by "without
limitation."
The definitions contained in this Appendix are equally applicable to both
the singular and plural forms of such terms and to the masculine as well as to
the feminine and neuter genders of such terms.
Any agreement, instrument or statute defined or referred to below or in any
agreement or instrument that is governed by this Appendix means such agreement
or instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein. References to a Person
are also to its permitted successors and assigns.
A-1
Definitions
"Accrued Class A Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class A Noteholders' Monthly Accrued Interest for such
Payment Date and the Class A Noteholders' Interest Carryover Shortfall for such
Payment Date.
"Accrued Class B Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class B Noteholders' Monthly Accrued Interest for such
Payment Date and the Class B Noteholders' Interest Carryover Shortfall for such
Payment Date.
"Acknowledgment" shall mean the acknowledgement executed by a Receivables
Servicer to service the related Receivables purchased by the Depositor pursuant
to the Receivables Purchase Agreement on behalf of the Master Servicer.
"Adjusted Principal Balance" shall mean, as of any date of determination,
(i) if the interest rate per annum set forth in the Receivable is at least equal
to the Minimum Required APR, the Principal Balance of such Receivable and (ii)
if the interest rate per annum set forth in the Receivable is less than the
Minimum Required APR, the present value of all remaining Scheduled Payments on
such Receivable discounted from the due date on a monthly basis at the Minimum
Required APR.
"Administration Agreement" shall mean the Administration Agreement, dated
as of [_______], 200[_], among the Administrator, the Issuer and the Indenture
Trustee, as amended.
"Administrator" shall mean [____________], a [____________], and its
successors.
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Aggregate Cut-off Date Principal Balance" shall mean $ [____________].
"Aggregate Servicing Fee" shall mean the aggregate of the Receivables
Servicer Servicing Fees and the Servicing Fee payable to the Receivables
Servicers and the Master Servicer, respectively.
"Amount Financed" shall mean, with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and any related costs.
"Annualized Average Monthly Net Loss Rate" shall mean, with respect to any
date of determination, the product of (x) twelve and (y) the average of the
Monthly Net Loss Rates for each of the three preceding Collection Periods. For
the purpose of this definition, the "Monthly
A-2
Net Loss Rate" means, for the last day of any Collection Period, a fraction
expressed as a percentage, the numerator of which is equal to the sum of all net
losses reported by the Receivables Servicers for that Collection Period and the
denominator of which is equal to the aggregate principal balance of the
Receivables as of the first day of that Collection Period.
"Annual Percentage Rate" or "APR" of a Receivable shall mean the annual
rate of finance charges stated in the Receivable.
"Applicable Tax State" shall mean, as of any date of determination, the
State in which the Owner Trustee maintains its Corporate Trust Office.
"Authenticating Agent" shall have the meaning specified in Section 2.14 of
the Indenture or 3.11 of the Trust Agreement, as applicable.
"Authorized Officer" shall mean, (i) with respect to the Issuer, any
officer within the Corporate Trust Office of the Owner Trustee, including any
vice president, assistant vice president, secretary, assistant secretary or any
other officer of the Owner Trustee customarily performing functions similar to
those performed by any of the above designated officers; (ii) with respect to
the Indenture Trustee, the Securities Administrator or the Owner Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, the
Securities Administrator or the Owner Trustee, as the case may be, including any
vice president, assistant vice president, secretary, assistant secretary, trust
officer or any other officer of the Indenture Trustee, the Securities
Administrator or the Owner Trustee, as the case may be, customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject and (iii) with respect to the Master Servicer, any designated
servicing officer whose name and title has been provided to the Securities
Administrator in writing as being an Authorized Officer for purposes of the Sale
and Servicing Agreement.
"Available Collections" shall mean, for any Payment Date, the sum of the
following amounts with respect to the Collection Period preceding such Payment
Date: (i) all payments collected on the Receivables (other than the portion of
any Obligor payment related to the interest accrued on each Receivable up to its
last scheduled payment date prior to [_______], 200[_]); (ii) all Liquidation
Proceeds attributable to Receivables which were designated as Defaulted
Receivables in the related Collection Period in accordance with the related
Receivables Servicer's customary servicing procedures; (iii) all Recoveries;
(iv) payments under physical damage and other insurance policies relating to the
Obligors or the Financed Vehicles to the extent not released to the related
Receivables Servicer under the related Receivables Servicing Agreement; (v) the
Purchase Amount received with respect to each Receivable that became a Purchased
Receivable during such Collection Period; [(vi) any Net Swap Receipt and any
termination payment received from the Counterparties that is not used to enter
into a replacement Interest Rate Swap Agreement]; (vii) investment earnings, if
any, on funds on deposit in the Trust Accounts established in connection with
the Trust, to the extent allocated to the Trust and (viii) partial prepayments
of any refunded item included in the Principal Balance of
A-3
a Receivable, such as extended warranty protection plan costs, or physical
damage, credit life, disability insurance premiums, or any partial prepayment
which causes a reduction in the Obligor's periodic payment to an amount below
the Scheduled Payment as of the Cut-off Date; provided, however, that in
calculating the Available Collections the following will be excluded: (a) the
Receivables Servicer Servicing Fee payable to each Receivables Servicer from
Collections in respect of the respective Receivables serviced by it; (b) all
payments and proceeds (including Liquidation Proceeds) of any Receivables the
Purchase Amount of which has been included in Available Collections in a prior
Collection Period; and (c) any late fees, prepayment charges or other
administrative fees or similar charges allowed by applicable law, collected or
retained by the related Receivables Servicer during the related Collection
Period.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, 11 U.S.C.
101 et seq., as amended.
"Basic Documents" shall mean the Certificate of Trust, the Trust Agreement,
the Sale and Servicing Agreement, the Receivables Purchase Agreement, the
Indenture, [the Interest Rate Swap Agreements], the Underwriting Agreement, the
Administration Agreement, the Note Depository Agreement and the other documents
and certificates delivered in connection therewith.
"Book-Entry Note" shall mean a beneficial interest in any of the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the
Class B Notes in each case issued in book-entry form.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in the State of New York, the
State of Delaware, the state in which the Corporate Trust Office of the
Indenture Trustee or the state in which the Corporate Trust Office of the
Securities Administrator are authorized by law, regulation or executive order to
be closed.
["Calculation Agent" means the Securities Administrator.]
"Certificate Distribution Account" shall mean the account established and
maintained as such pursuant to Section 4.1 of the Sale and Servicing Agreement.
"Certificateholder" or "Holder of a Certificate" shall mean a Person in
whose name a Certificate is registered in the Certificate Register.
"Certificate of Trust" shall mean the certificate of trust filed for the
Trust pursuant to Section 3810(a) of the Statutory Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.09 of the Trust Agreement and shall initially be
the Securities Administrator.
A-4
"Certificate Percentage Interest" shall mean, with respect to a
Certificate, the percentage specified on such Certificate as the Certificate
Percentage Interest, which percentage represents the beneficial interest of such
Certificate in the Issuer. The aggregate Certificate Percentage Interest shall
be 100%.
"Certificate Register" shall mean the certificate register maintained
pursuant to Section 3.04 of the Trust Agreement.
"Certificate Registrar" shall mean any certificate registrar acting in
accordance with Section 3.04 of the Trust Agreement and shall initially be the
Owner Trustee.
"Certificates" shall mean the certificates evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A to the Trust Agreement; provided, however, that the Owner Trust Estate
has been pledged to the Indenture Trustee to secure payment of the Notes and
that the rights of the Certificateholders to receive distributions on the
Certificates are subordinated to the rights of the Noteholders as described in
the Sale and Servicing Agreement, the Indenture and the Trust Agreement.
"Class" shall mean any one of the classes of Notes.
"Class A Interest Rate Swap Agreements" means each of the Class A-[__]
Interest Rate Swap Agreement.
"Class A Noteholders' Interest Carryover Shortfall" shall mean, with
respect to any Payment Date, the sum of the Class A-1 Noteholders' Interest
Carryover Shortfall for such Payment Date, the Class A-2 Noteholders' Interest
Carryover Shortfall for such Payment Date, the Class A-3 Noteholders' Interest
Carryover Shortfall for such Payment Date and the Class A-4 Noteholders'
Interest Carryover Shortfall for such Payment Date.
"Class A Noteholders' Monthly Accrued Interest" shall mean, with respect to
any Payment Date, the sum of the Class A-1 Noteholders' Monthly Accrued Interest
for such Payment Date, the Class A-2 Noteholders' Monthly Accrued Interest for
such Payment Date, the Class A-3 Noteholders' Monthly Accrued Interest for such
Payment Date and the Class A-4 Noteholders' Monthly Accrued Interest for such
Payment Date.
"Class A Notes" shall mean, collectively, the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A-1 Final Scheduled Payment Date" shall mean the [____________]
Payment Date.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1 Note
is registered in the Note Register.
A-5
"Class A-1 Noteholders' Interest Carryover Shortfall" shall mean, with
respect to the first Payment Date, zero, and with respect to any other Payment
Date, the amount, if any, by which the sum of the Class A-1 Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class A-1
Noteholders' Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-1 Notes actually paid to the
Class A-1 Notes on such preceding Payment Date, plus interest on the amount of
interest due but not paid to the Class A-1 Noteholders on such preceding Payment
Date, to the extent permitted by law, at the Class A-1 Rate.
"Class A-1 Noteholders' Monthly Accrued Interest" shall mean, with respect
to any Payment Date, interest accrued from and including the prior Payment Date
(or, in the case of the first Payment Date, from and including the Closing Date)
to and including the day immediately prior to such Payment Date, on the Class
A-1 Notes at the Class A-1 Rate on the Outstanding Amount of the Class A-1 Notes
on the immediately preceding Payment Date (or, in the case of the first Payment
Date, the Closing Date), after giving effect to all payments of principal on
such preceding Payment Date. For all purposes of the Basic Documents, interest
with respect to the Class A-1 Notes shall be computed on the basis of the actual
number of days in the related Interest Period and a 360-day year.
"Class A-1 Notes" shall mean the $ [____________] aggregate initial
principal amount Class A-1 [_]% Asset Backed Notes issued by the Trust pursuant
to the Indenture, substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" shall mean [___]% per annum.
"Class A-2 Final Scheduled Payment Date" shall mean the [____________]
Payment Date.
"Class A-2 Noteholder" shall mean the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-2 Noteholders' Interest Carryover Shortfall" shall mean, with
respect to the first Payment Date, zero, and with respect to any other Payment
Date, the amount, if any, by which the sum of the Class A-2 Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class A-2
Noteholders' Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-2 Notes actually paid to the
Class A-2 Noteholders on such preceding Payment Date, plus interest on the
amount of interest due but not paid to the Class A-2 Noteholders on such
preceding Payment Date, to the extent permitted by law, at the Class A-2 Rate.
"Class A-2 Noteholders' Monthly Accrued Interest" shall mean, with respect
to any Payment Date, interest accrued from and including the [__]th day of the
preceding calendar month (or in the case of the first Payment Date, from and
including the Closing Date) to but excluding the [__]th day of the month of such
Payment Date on the Class A-2 Notes at the Class A-2 Rate on the Outstanding
Amount of the Class A-2 Notes on the preceding Payment Date (or,
A-6
in the case of the first Payment Date, the Closing Date) after giving effect to
all payments of principal on such preceding Payment Date. For all purposes of
the Basic Documents, interest with respect to the Class A-2 Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
"Class A-2 Notes" shall mean the $ [____________] aggregate initial
principal amount Class A-2 [___]% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-2 to the
Indenture.
"Class A-2 Rate" shall mean [___]% per annum.
"Class A-3 Final Scheduled Payment Date" shall mean the [____________]
Payment Date.
"Class A-3 Noteholder" shall mean the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Class A-3 Noteholders' Interest Carryover Shortfall" shall mean, with
respect to the first Payment Date, zero, and with respect to any other Payment
Date, the amount, if any, by which the sum of the Class A-3 Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class A-3
Noteholders' Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-3 Notes actually paid to the
Class A-3 Noteholders on such preceding Payment Date, plus interest on the
amount of interest due but not paid to the Class A-3 Noteholders on such
preceding Payment Date, to the extent permitted by law, at the Class A-3 Rate.
"Class A-3 Noteholders' Monthly Accrued Interest" shall mean, with respect
to any Payment Date, interest accrued from and including the [__] day of the
preceding calendar month (or in the case of the first Payment Date, from and
including the Closing Date) to but excluding the [__] day of the month of such
Payment Date on the Class A-3 Notes at the Class A-3 Rate on the Outstanding
Amount of the Class A-3 Notes on the preceding Payment Date (or, in the case of
the first Payment Date, the Closing Date) after giving effect to all payments of
principal on such preceding Payment Date. For all purposes of the Basic
Documents, interest with respect to the Class A-3 Notes shall be computed on the
basis of a 360-day year consisting of twelve 30-day months.
"Class A-3 Notes" shall mean the $ [____________] aggregate initial
principal amount Class A-3 [___]% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-3 to the
Indenture.
"Class A-3 Rate" shall mean [___]% per annum.
"Class A-4 Final Scheduled Payment Date" shall mean the [____________]
Payment Date.
A-7
"Class A-4 Noteholder" shall mean the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Class A-4 Noteholders' Interest Carryover Shortfall" shall mean, with
respect to the first Payment Date, zero, and with respect to any other Payment
Date, the amount, if any, by which the sum of the Class A-4 Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class A-4
Noteholders' Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-4 Notes actually paid to the
Class A-4 Noteholders on such preceding Payment Date, plus interest on the
amount of interest due but not paid to the Class A-4 Noteholders on such
preceding Payment Date, to the extent permitted by law, at the Class A-4 Rate.
"Class A-4 Noteholders' Monthly Accrued Interest" shall mean, with respect
to any Payment Date, interest accrued from and including the [__] day of the
preceding calendar month (or in the case of the first Payment Date, from and
including the Closing Date) to but excluding the [__] day of the month of such
Payment Date on the Class A-4 Notes at the Class A-4 Rate on the Outstanding
Amount of the Class A-4 Notes on the preceding Payment Date (or, in the case of
the first Payment Date, the Closing Date) after giving effect to all payments of
principal on such preceding Payment Date. For all purposes of the Basic
Documents, interest with respect to the Class A-4 Notes shall be computed on the
basis of the actual number of days in the related Interest Period and a 360-day
year.
"Class A-4 Notes" shall mean the $ [____________] aggregate initial
principal amount Class A-4 [Floating Rate] Asset Backed Notes issued by the
Trust pursuant to the Indenture, substantially in the form of Exhibit A-4 to the
Indenture.
"Class A-4 Rate" shall [___]% per annum.
"Class B Final Scheduled Payment Date" shall mean the [____________]
Payment Date.
"Class B Noteholder" shall mean the Person in whose name a Class B Note is
registered in the Note Register.
"Class B Noteholders' Interest Carryover Shortfall" shall mean, with
respect to the first Payment Date, zero, and with respect to any other Payment
Date, the amount, if any, by which the sum of the Class B Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class B
Noteholders' Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class B Notes actually paid to the
Class B Noteholders on such preceding Payment Date, plus interest on the amount
of interest due but not paid to the Class B Noteholders on such preceding
Payment Date, to the extent permitted by law, at the Class B Rate.
"Class B Noteholders' Monthly Accrued Interest" shall mean, with respect to
any Payment Date, interest accrued from and including the [__] day of the
preceding calendar month (or in the case of the first Payment Date, from and
including the Closing Date) to but excluding
A-8
the [__] day of the month of such Payment Date on the Class B Notes at the Class
B Rate on the Outstanding Amount of the Class B Notes on the preceding Payment
Date (or, in the case of the first Payment Date, the Closing Date) after giving
effect to all payments of principal on such preceding Payment Date. For all
purposes of the Basic Documents, interest with respect to the Class B Notes
shall be computed on the basis of the actual number of days in the related
Interest Period and a 360-day year.
"Class B Notes" shall mean the $ [____________] aggregate initial principal
amount Class B Floating Rate Asset Backed Notes issued by the Trust pursuant to
the Indenture, substantially in the form of Exhibit B to the Indenture.
"Class B Rate" shall mean [__]% per annum.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" shall mean [___], 200[_].
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Collateral" shall have the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" shall mean, with respect to each Payment Date, the
account or accounts established and maintained as such pursuant to Section 4.1
of the Sale and Servicing Agreement.
"Collection Period" shall mean the calendar month preceding the calendar
month in which the Payment Date occurs.
"Collections" shall mean all amounts collected by the Master Servicer (from
whatever source) on or with respect to the Receivables.
"Commission" shall mean the Securities and Exchange Commission.
"Controlling Class" shall mean (i) if the Class A Notes have not been paid
in full, the Class A Notes and (ii) if the Class A Notes have been paid in full
and Class B Notes remain Outstanding, the Class B Notes.
"Corporate Trust Office" shall mean, (i) with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at
[____________], or at such other address as the Owner Trustee may designate from
time to time by notice to the Certificateholders and the
A-9
Depositor, or the principal corporate trust office of any successor Owner
Trustee (the address of which the successor Owner Trustee will notify the
Certificateholders and the Depositor); (ii) with respect to the Indenture
Trustee, the principal corporate trust office of the Indenture Trustee located
at [____________], Attention: [____________], or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Issuer, or the principal corporate trust office of any successor
Indenture Trustee (the address of which the successor Indenture Trustee will
notify the Noteholders and the Issuer); and (iii) with respect to the Securities
Administrator, the office of the Securities Administrator located at
[____________] Attn: Corporate Trust Structured Finance, Ref: [____________], or
at such other address as the Securities Administrator may designate from time to
time by notice to the Noteholders and the Issuer, or the office of any successor
Securities Administrator (the address of which the successor Securities
Administrator will notify the Noteholders and the Issuer).
["Counterparty" shall mean each counterparty to the Trust under an Interest
Rate Swap Agreement, which initially for each Interest Rate Swap Agreement shall
be [____________] and its permitted successors and assigns.]
"Cut-off Date" shall mean [_______], 200[_].
"Dealer" shall mean a dealer who sold a Financed Vehicle and who originated
and sold the related Receivable.
"Default" shall mean any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" shall mean a Receivable that the related Receivable
Servicer determines is unlikely to be paid in full.
"Definitive Certificates" shall have the meaning specified in Section 3.10
of the Trust Agreement.
"Definitive Notes" shall have the meaning specified in Section 2.11 of the
Indenture.
"Depositor" shall mean ML Asset Backed Corporation, a Delaware corporation
and its successors and permitted assigns.
"Depository Institution" shall mean [____________] as the depository
institution.
"Determination Date" shall mean, with respect to any Collection Period, the
Business Day immediately preceding the Payment Date following such Collection
Period.
"Eligible Deposit Account" shall mean either (i) a segregated account with
an Eligible Institution or (ii) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
U.S. or any one of the States thereof (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
A-10
in such account, so long as any of the securities of such depository institution
have a credit rating from each Rating Agency in one of its generic rating
categories which signifies investment grade.
"Eligible Institution" shall mean either (i) the corporate trust department
of the Indenture Trustee or the related Trustee, as applicable; (ii) the
corporate trust department of the Securities Administrator; (iii) a depository
institution organized under the laws of the U.S. or any one of the States
thereof (or any domestic branch of a foreign bank), (1) which has either (A) a
long-term unsecured debt rating of at least "AA-" by Standard & Poor's and "Aa3"
by Moody's or (B) a short-term unsecured debt rating or certificate of deposit
rating of "A-1+" by Standard & Poor's and "Prime-1" by Moody's and (2) whose
deposits are insured by the Federal Deposit Insurance Corporation or (iv) any
depository institution or trust company in respect of which the Rating Agency
Condition is satisfied.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall have the meaning specified in Section 5.1 of the
Indenture.
"Event of Servicing Termination" shall mean an event specified in Section
7.1 of the Sale and Servicing Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Executive Officer" shall mean, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation and, with respect to any partnership, any general partner
thereof.
"Final Scheduled Payment Date" shall mean, with respect to (i) the Class
A-1 Notes, the Class A-1 Final Scheduled Payment Date, (ii) the Class A-2 Notes,
the Class A-2 Final Scheduled Payment Date, (iii) the Class A-3 Notes, the Class
A-3 Final Scheduled Payment Date and (iv) the Class A-4 Notes, the Class A-4
Final Scheduled Payment Date, (v) the Class B Notes, the Class B Final Scheduled
Payment Date.
"Financed Vehicle" shall mean a new or used automobile, light-duty truck,
sports utility vehicle or motorcycle, together with all accessions thereto,
securing an Obligor's indebtedness under the respective Receivable.
"Fitch" shall mean Fitch, Inc. or its successor in interest.
"Grant" shall mean to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and to ▇▇▇▇▇ ▇ ▇▇▇▇ upon and
a security interest in and right of set-off against, and to deposit, set over
and confirm pursuant to the Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options
A-11
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Indenture" shall mean the Indenture, dated as of [_______], 200[_], by and
among the Trust, the Indenture Trustee and the Securities Administrator.
"Indenture Trustee" shall mean [____________], a national banking
association, not in its individual capacity but solely as Indenture Trustee
under the Indenture, or any successor Indenture Trustee under the Indenture.
"Indenture Trust Estate" shall mean all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.
"Independent" shall mean, when used with respect to any specified Person,
that such Person (a) is in fact independent of the Issuer, any other obligor on
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Depositor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Depositor or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"Insolvency Event" shall mean, with respect to any Person, (i) the making
of a general assignment for the benefit of creditors, (ii) the filing of a
voluntary petition in bankruptcy, (iii) being adjudged a bankrupt or insolvent,
or having had entered against such Person an order for relief in any bankruptcy
or insolvency proceeding, (iv) the filing by such Person of a petition or answer
seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation, (v) the
filing by such Person of an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against such Person in any
proceeding specified in (vii) below, (vi) seeking, consent to or acquiescing in
the appointment of a trustee, receiver or liquidator of such Person or of all or
any
A-12
substantial part of the assets of such Person or (vii) the failure to obtain
dismissal within 60 days of the commencement of any proceeding against such
Person seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation,
or the entry of any order appointing a trustee, liquidator or receiver of such
Person or of such Person's assets or any substantial portion thereof.
"Interest Period" shall mean (1) for each of the Class [__] Notes, with
respect to any Payment Date, the period from and including the Closing Date (in
the case of the first Payment Date) or from and including the prior Payment Date
to and including the day immediately prior to such Payment Date and (2) for each
of the Class A-[__] Notes and Class A-[_] Notes, with respect to any Payment
Date, the period from and including the Closing Date (in the case of the first
Payment Date) or from and including the [__] day of the calendar month preceding
each Payment Date to but excluding the [__] day of the calendar month of such
Payment Date. Interest with respect to the Class A-[_] Notes and Class [__]
Notes will be computed on the basis of the actual number of days in the related
Interest Period and a 360-day year and interest with respect to each of the
Class A-[__] Notes and Class A-[__] Notes will be computed on the basis of a
360-day year consisting of twelve 30-day months.
["Interest Rate Swap Agreement" means the Interest Rate Swap Agreement
provided by the Counterparty with respect to the Class A-[_] Certificates.]
"Investor Report" shall mean the report prepared by the Master Servicer
pursuant to Section 3.8 of the Sale and Servicing Agreement containing, among
other things, the information set forth in Section 4.7 of the Sale and Servicing
Agreement.
"IRS" shall mean the Internal Revenue Service.
"ISDA Master Agreement" shall mean, with respect to a Counterparty, the
ISDA Master Agreement (Multicurrency-Cross Border) dated as of [___], 200[_],
together with the Schedule thereto and the Confirmations thereunder each dated
as of [___], 200[_], between the Issuer and Counterparty.
"Issuer" shall mean the Trust unless a successor replaces it and,
thereafter, shall mean the successor.
"Issuer Order" and "Issuer Request" shall mean a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee and the Securities Administrator.
"LIBOR Determination Date" means the day that is two London Banking Days
preceding the first day of an Interest Period and with respect to the first
LIBOR Determination Date, the day that is two London Banking Days preceding the
Closing Date.
A-13
"Lien" shall mean a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than, in respect of a Receivable, tax liens,
mechanics' liens, and any liens which attach to the respective Receivable by
operation of law.
"Liquidated Receivable" shall mean (i) any Receivable that, by its terms,
is in default and as to which the applicable Receivables Servicer has
determined, in accordance with its customary servicing procedures, that eventual
payment in full is unlikely or has repossessed and disposed of the related
Financed Vehicle and (ii) any Receivable with respect to which the related
Obligor has become a debtor in a bankruptcy proceeding.
"Liquidation Proceeds" shall mean with respect to any Receivable (a)
insurance proceeds received by the related Receivables Servicer and (b) monies
collected by the related Receivables Servicer from whatever source, including
but not limited to proceeds of Financed Vehicles after repossession, on a
Defaulted Receivable, net of the costs of liquidation and any payments required
by law to be remitted to the Obligor.
"London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Master Servicer" shall mean [_______________] as the master servicer of
the Receivables under the Sale and Servicing Agreement, and each successor to
thereto (in the same capacity) pursuant to Section 7.1 of the Sale and Servicing
Agreement.
"Minimum Required APR" shall mean a rate per annum equal to [___].
"Monthly Receivables Tape" shall mean a computer tape or disk containing
the information about the Receivables necessary to prepare the written
statements to be furnished by the Owner Trustee to the Certificateholders
pursuant to Section 3.8 of the Sale and Servicing Agreement and by the
Securities Administrator to the Noteholders pursuant to Section 3.8 of the Sale
and Servicing Agreement.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in
interest.
"Net Swap Payment" shall mean the amount owed by the Issuer to the
Counterparty following the netting of the Fixed Amounts and the Floating Amounts
(as such terms are defined in the related Interest Rate Swap Agreement) under
the Interest Rate Swap Agreement.
"Net Swap Receipt" shall mean the amount owed by the Counterparty to the
Issuer following the netting of the Fixed Amounts and the Floating Amounts (as
such terms are defined in the related Interest Rate Swap Agreement) under the
Interest Rate Swap Agreement.
"Note Depositary Agreement" shall mean the Letter of Representations, dated
as of [___], 200[_] among the Issuer, the Securities Administrator, as agent and
The Depository Trust Company regarding the Offered Notes.
A-14
"Note Depository" shall mean The Depository Trust Company or any successor
depository.
"Noteholder" or "holder of a Note" shall mean the Person in whose name a
Note is registered on the Note Register.
"Note Interest Rate" shall mean the Class A-1 Rate, the Class A-2 Rate, the
Class A-3 Rate, the Class A-4 Rate or the Class B Rate, as applicable.
"Note Owner" shall mean, with respect to any Book-Entry Note, the Person
who is the beneficial owner of such Book-Entry Note, as reflected on the books
of the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Paying Agent" shall mean the Securities Administrator or any other
Person that meets the eligibility standards for the Securities Administrator
specified in Section 6.21 of the Indenture and is authorized by the Issuer to
make payments to and distributions from the Collection Account (including the
Principal Distribution Account), including payment of principal of or interest
on the Notes on behalf of the Issuer.
"Note Pool Factor" shall mean, with respect to each Class of Notes as of
the close of business on the last day of a Collection Period, a nine-digit
decimal figure equal to the outstanding principal balance of such Class of Notes
(after giving effect to any reductions thereof to be made on the immediately
following Payment Date) divided by the original outstanding principal balance of
such Class of Notes. The Note Pool Factor will be 1.000000000 as of the Closing
Date; thereafter, the Note Pool Factor will decline to reflect reductions in the
outstanding principal amount of such Class of Notes.
"Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.5 of the Indenture.
"Notes" shall mean, collectively, the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes, the Class A-4 Notes and the Class B Notes.
"Obligor" on a Receivable shall mean the purchaser or co-purchasers of the
Financed Vehicle or any other Person who owes payments under the Receivable.
"Offered Notes" shall mean, collectively, the Class A Notes and the Class B
Notes.
"Officer's Certificate" shall mean (i) with respect to the Trust, a
certificate signed by any Authorized Officer of the Trust and (ii) with respect
to the Depositor or the Master Servicer, a certificate signed by the chairman of
the board, the president, any executive or senior vice president, any vice
president, the treasurer or the controller of the Depositor or the Master
Servicer, as applicable.
A-15
"One-Month LIBOR" means for each Interest Period, the rate for deposits in
U.S. dollars for a period of one month corresponding to such Interest Period
which appears on the Telerate Page 3750 as of 11:00 a.m., London Time, on the
related LIBOR Determination Date. If such rate does not appear on the Telerate
Page 3750, "One-Month LIBOR" for that Interest Period will the Reference Bank
Rate for the related Interest Period, or if the Reference Bank Rate cannot be
obtained by the Calculation Agent from the related Counterparty (as provided in
the definition of "Reference Bank Rate") for the related Interest Period,
"One-Month LIBOR" will be the rate for "One-Month LIBOR" from the prior Interest
Period.
"Opinion of Counsel" shall mean a written opinion of counsel which counsel
shall be acceptable to the Indenture Trustee, the Securities Administrator, the
Owner Trustee or the Rating Agencies, as applicable.
"Optional Purchase Percentage" shall mean 10% of the Aggregate Cut-off Date
Principal Balance.
"Original Pool Balance" shall mean an amount equal to the aggregate
Principal Balance, as of the Cut-off Date, of the Receivables, which shall be
$[_______________].
"Outstanding" shall mean with respect to the Notes, as of the date of
determination, all Notes theretofore authenticated and delivered under the
Indenture, as applicable, except:
(a) Notes theretofore cancelled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore irrevocably deposited with the
Indenture Trustee or any Note Paying Agent in trust for the Noteholders of
such Notes (provided, however, that if such Notes are to be prepaid, notice
of such prepayment has been duly given pursuant to the Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee); and
(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee or the Note Registrar, as applicable,
is presented that any such notes are held by a bona fide purchaser;
provided, that in determining whether the holders of Notes evidencing the
requisite Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent, or waiver under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Depositor, the
Master Servicer or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee or the Securities Administrator, shall be
protected in relying on any such request, demand, authorization, direction,
notice, consent, or waiver, only Notes that an Authorized Officer of the
Indenture Trustee or the Securities Administrator knows
A-16
to be so owned shall be so disregarded; provided, however, if the Issuer, any
other obligor upon the Notes, the Depositor, the Master Servicer or any
Affiliate of any of the foregoing Persons owns an entire Class of Notes, such
Notes shall be deemed to be Outstanding. Notes owned by the Issuer, any other
obligor upon the Notes, the Depositor, the Master Servicer or any Affiliate of
any of the foregoing Persons that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes and
that the pledgee is not the Issuer, any other obligor upon the Notes, the
Depositor, the Master Servicer or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" shall mean, as of any date of determination and as to
any Class or all Classes of Notes, as the context may require, the aggregate
principal amount of such Notes Outstanding as of such date of determination.
"Owner Trustee" shall mean [_______________], a national banking
association, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, or any successor Owner Trustee under the Trust Agreement.
"Owner Trust Estate" shall mean all right, title and interest of the Trust
in, to and under the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement.
"Participant" shall mean a participant in or member of the Note Depository.
"Payment Date" shall mean the twenty-fifth ([__]) day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day.
"Permitted Investments" shall mean, on any date of determination,
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form with maturities not exceeding the
Business Day preceding the next Payment Date which evidence:
(a) direct non-callable obligations of, and obligations fully
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by federal or State banking or depository institution
authorities; provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or
other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person
other than such depository institution or trust company) thereof shall
have a credit rating from each of the Rating Agencies in the highest
investment category granted thereby;
A-17
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
of the Rating Agencies in the highest investment category granted
thereby (including funds for which the Indenture Trustee, the
Securities Administrator or the Owner Trustee or any of their
respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct non-callable obligation of, or fully guaranteed by, the United
States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (b); and
(g) any other investment with respect to which the Rating Agency
Condition is satisfied.
"Person" shall mean any individual, corporation, estate, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof.
"Plan" shall mean an employee benefit plan (as defined in Section 3(3) of
ERISA) that is subject to Title I of ERISA, a plan (as defined in Section
4975(e)(1) of the Code) and any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity or otherwise.
"Pool Balance" shall mean, with respect to any Payment Date, an amount
equal to the aggregate Principal Balance of the Receivables at the end of the
related Collection Period, after giving effect to all payments of principal
received from Obligors and Purchase Amounts to be remitted for the related
Collection Period.
"Pool Factor" as of the last day of a Collection Period shall mean a
nine-digit decimal figure equal to the aggregate Principal Balance of the
Receivables at that time divided by the Original Pool Balance.
"Predecessor Note" shall mean, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note and, for purposes of this definition, any Note
authenticated and delivered under Section 2.6 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
A-18
"Prepayment Date" shall mean with respect to a prepayment of the Notes
pursuant to Section 10.1 of the Indenture, the Payment Date specified by the
Master Servicer or the Issuer pursuant to Section 10.1 of the Indenture.
"Prepayment Price" shall mean in the case of a Class of Notes to be
prepaid, an amount equal to the unpaid principal amount of such Class of Notes
plus accrued and unpaid interest thereon at the applicable Note Interest Rate
plus interest on any overdue interest at the applicable Note Interest Rate (to
the extent lawful) to but excluding the Prepayment Date.
"Principal Balance" shall mean, with respect to any Receivable, as of the
related date of determination, the Amount Financed minus an amount equal to, as
of the close of business on the last day of the related Collection Period, that
portion of all amounts received on or prior to such day with respect to such
Receivable and allocable to principal.
"Principal Distribution Account" shall mean the administrative sub-account
of the Collection Account established and maintained as such pursuant to Section
4.1 of the Sale and Servicing Agreement.
"Principal Distribution Amount" shall mean, with respect to any Payment
Date, the excess, if any, of the aggregate Outstanding Amount of the Notes as of
the day immediately preceding such Payment Date over the Pool Balance for such
Payment Date; provided that the Principal Distribution Amount shall not exceed
the aggregate Outstanding Amount of the Notes; provided further that the
Principal Distribution Amount on or after the Final Scheduled Payment Date of
any Class shall not be less than the amount that is necessary to reduce the
Outstanding Amount of such Class to zero.
"Proceeding" shall mean any suit in equity, action at law or other judicial
or administrative proceeding.
"Prospectus" shall have the meaning specified in the Underwriting
Agreement.
"Prospectus Supplement" shall have the meaning specified in the
Underwriting Agreement.
"Purchase Amount" shall mean, (i) with respect to a Purchased Receivable,
an amount equal to the Principal Balance of such Receivable on the date of
purchase plus accrued and unpaid interest thereon through the date of such
purchase and (ii) in the case of any purchase by the Master Servicer pursuant to
Section 8.1 of the Sale and Servicing Agreement, the "Purchase Amount" shall be
an amount that, together with the other amounts then on deposit in the
Collection Account, is at least equal to the outstanding principal amount of the
Notes plus all accrued but unpaid interest (including any overdue interest)
thereon, plus all amounts then due and payable by the Trust for fees or other
reimbursable amounts to the Receivables Servicer, the Master Servicer, the Note
Insurer, the Securities Administrator, the Administrator, the Owner Trustee and
the Indenture Trustee or any other party.
A-19
"Qualified Institutional Buyer" shall mean a qualified institutional buyer
within the meaning of Rule 144A under the Securities Act.
"Rating Agency" shall mean each of the nationally recognized statistical
rating organizations designated by the Depositor to provide a rating on the
Notes which is then rating such Notes. If no such organization or successor is
any longer in existence, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable Person designated by the
Depositor, notice of which designation shall be given to the Indenture Trustee,
the Securities Administrator, the Owner Trustee and the Master Servicer.
"Rating Agency Condition" shall mean, with respect to any action, that each
of the Rating Agencies shall have notified the Master Servicer, the Depositor,
the Owner Trustee, the Indenture Trustee or the Securities Administrator in
writing that such action will not result in a reduction or withdrawal of the
then current rating of any of the Notes.
"Receivables" shall mean the motor vehicle retail installment sales
contracts and loans listed on Schedule A to the Sale and Servicing Agreement and
all proceeds thereof and payments thereunder.
"Receivable Files" shall mean the documents specified in Section 2.4 of the
Sale and Servicing Agreement.
"Receivables Purchase Agreement" shall mean the receivables purchase
agreement dated as of [_______], 200[_], between the Seller and the Depositor,
as purchaser.
["Receivables Servicer" shall mean [_______________].]
"Receivables Servicer Servicing Fee" shall mean, with respect to a
Collection Period and a Receivables Servicer, the fee payable to such
Receivables Servicer for services rendered during such Collection Period, which
shall equal one-twelfth of the Receivables Servicing Fee Rate multiplied by the
aggregate Principal Balance of those Receivables serviced by such Receivables
Servicer as of the first day of such Collection Period.
"Receivables Servicer Termination Event" shall mean, with respect to any
Receivables Servicer, any default or other event for which, under the terms of
the related Receivables Servicing Agreement, the remedies provided include its
termination as servicer thereunder with respect to the related Receivables.
"Receivables Servicing Agreement" shall mean [_______________].
"Receivables Servicing Fee Rate" shall mean with respect to each
Receivables Servicer, the amount received for servicing functions performed
pursuant to the applicable Receivables Servicing Agreement.
A-20
"Record Date" shall mean, with respect to any Payment Date or Prepayment
Date and any Book-Entry Note, the close of business on the day prior to such
Payment Date or Prepayment Date or, with respect to any Definitive Note or
Definitive Certificate, the last day of the month preceding the month in which
such Payment Date or Prepayment Date occurs.
"Recoveries" shall mean, with respect to any Collection Period, all amounts
received by the Master Servicer with respect to any Defaulted Receivable during
any Collection Period following the Collection Period in which such Receivable
became a Defaulted Receivable, net of any fees, costs and expenses incurred by
the related Receivables Servicer and the Master Servicer in connection with the
collection of such Receivable and any payments required by law to be remitted to
the Obligor.
"Reference Banks" shall mean four major banks that are engaged in
transactions in the London interbank market, selected by the related
Counterparty.
"Reference Bank Rate" means, for each Interest Period, the rate determined
on the basis of the rates at which deposits in U.S. dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on the related LIBOR
Determination Date to prime banks in the London interbank market for a period of
one month commencing on the first day of the Interest Period for which such rate
is being determined and in a Representative Amount. The related Counterparty
will request the principal London office of each Reference Bank to provide a
quotation of its rate. If at least two such quotations are provided, the
"Reference Bank Rate" for that Interest Period will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the
"Reference Bank Rate" for that Interest Period will be the arithmetic mean of
the rates quoted by one or more major banks in New York City, selected by the
related Counterparty, at approximately 11:00 a.m., New York City time, on the
related LIBOR Determination Date for loans in U.S. dollars to leading European
banks for a period of one month commencing on the first day of the Interest
Period for which such rate is being determined and in a Representative Amount.
"Registered Noteholder" shall mean the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Registration Statement" shall mean Registration Statement No. 333-139130
filed by the Depositor with the Commission in the form in which it became
effective on [_________], 2007.
"Regulation AB" shall mean Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such regulation may be
amended from time to time and subject to such clarification and interpretation
as have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(January 7, 2005)) or by the staff of the Commission, or as may be provided in
writing by the Commission or its staff from time to time.
"Representative" shall mean ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, as representative of the several Underwriters.
A-21
"Representative Amount" means, on any LIBOR Determination Date, an amount
equal to the outstanding principal amount of the Class [__] Notes, as
applicable, on the immediately preceding Payment Date or the Closing Date, as
applicable.
"Responsible Party" shall mean [_______________].
"Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement,
dated as of [_______], 200[_], among the Trust, the Depositor, as seller, and
the Master Servicer.
"Scheduled Payment" shall mean, for any Receivable, the scheduled monthly
payment amount indicated in such Receivable as required to be paid by the
Obligor in such Collection Period (without giving effect to deferments of
payments pursuant to Section 3.2 of the Sale and Servicing Agreement or any
rescheduling in any insolvency or similar proceedings).
"Schedule of Receivables" shall mean the list of Receivables attached as
Schedule A to the Sale and Servicing Agreement and the Indenture (which
Schedules may be in the form of microfiche, disk or other means acceptable to
the Indenture Trustee).
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities" shall mean the Notes and the Certificates, collectively.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Administrator" shall mean [_______________], a national banking
association, not in its individual capacity but solely as Securities
Administrator under the Indenture, or any successor Securities Administrator
under the Indenture.
"Securities Administrator Officer" shall mean, with respect to the
Securities Administrator, any officer within the Corporate Trust Office of the
Securities Administrator with direct responsibility for the administration of
the Indenture and the other Basic Documents on behalf of the Securities
Administrator and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Security Holders" shall mean the Noteholders and the Certificateholders,
collectively.
"Seller" shall mean [_______________], a [_______________], and its
successors.
"Servicing Criteria" shall mean the "servicing criteria" set forth in Item
1122(d) of Regulation AB.
"Servicing Fee" shall mean, with respect to a Collection Period, the fee
payable to the Master Servicer for services rendered during such Collection
Period for administrative duties (for the avoidance of doubt, other than the
servicing duties which the Receivables Servicers are
A-22
performing), which shall be equal to one-twelfth of the Servicing Fee Rate
multiplied by the aggregate Principal Balance of the Receivables as of the first
day of the Collection Period.
"Servicing Fee Rate" shall mean [__]%.
"Similar Law" shall mean a federal, state, local or non-U.S. law with
provisions that are substantially similar to section 406 of ERISA or section
4975 of the Code.
"Simple Interest Method" shall mean the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the amount accrued from the date of
the preceding payment to the date of the current payment.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its successor in interest.
"State" shall mean any state or commonwealth of the United States of
America, or the District of Columbia.
"Statutory Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Delaware Code ss. 3801 et seq., as amended.
"Successor Master Servicer" shall mean an institution appointed as
successor Master Servicer pursuant to Section 7.1 of the Sale and Servicing
Agreement.
"Swap Termination Payments" shall mean any termination payment payable to
any Counterparty under the Interest Rate Swap Agreement on account of an ISDA
Event of Default or ISDA Termination Event (as such terms are defined in the
related ISDA Master Agreement).
"Transfer Date" shall mean the Closing Date.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean [_______________] Trust 200[_]-[_], a Delaware statutory
trust governed by the Trust Agreement.
"Trust Accounts" shall mean the accounts created and maintained in
accordance with Section 4.1(b), (c) and (d) of the Sale and Servicing Agreement.
"Trust Agreement" shall mean the Amended and Restated Trust Agreement of
the Trust dated as of [_______], 200[_], by and among the Depositor and the
Owner Trustee, as amended and/or restated from time to time.
A-23
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of 1939,
as amended, unless otherwise specifically provided.
"Trust Property" shall mean, collectively, (i) the Receivables; (ii) monies
received thereunder on or after the Cut-off Date (other than the portion of any
Obligor payment related to the interest accrued on each Receivable up to its
last scheduled payment date prior to [_______], 200[_]); (iii) the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in the Financed Vehicles; (iv)
proceeds with respect to the Receivables from claims on any theft, physical
damage, credit life, credit disability, or other insurance policies covering
Financed Vehicles or Obligors; (v) the Receivable Files; (vi) the Trust Accounts
and all amounts, securities, investments, investment property and other property
deposited in or credited to any of the foregoing, all security entitlements
relating to the foregoing and all proceeds thereof; (vii) payments and proceeds
with respect to the Receivables; (viii) the rights of the Depositor under the
Receivables Purchase Agreement, each Receivables Servicing Agreement and each
agreement with a Responsible Party relating to representations and warranties
and repurchase or other remedies for a breach thereof with respect to any of the
Receivables; (ix) all property (including the right to receive Liquidation
Proceeds) securing a Receivable (other than a Receivable purchased by the Master
Servicer or a Receivables Servicer or repurchased by the Depositor or the
Administrator); (x) rebates of premiums and other amounts relating to insurance
policies and other items financed under the Receivables in effect as of the
Cut-off Date; and (xi) all present and future claims, demands, causes of action
and choses in action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion thereof,
voluntary or involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing.
"Trustee Officer" shall mean, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee with direct
responsibility for the administration of the Indenture and the other Basic
Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject and,
with respect to the Owner Trustee, any officer within the Corporate Trust Office
of the Owner Trustee with direct responsibility for the administration of the
Trust Agreement and the other Basic Documents on behalf of the Owner Trustee.
"UCC" shall mean the Uniform Commercial Code as in effect in any relevant
jurisdiction.
"Underwriters" shall mean the underwriters named in the Underwriting
Agreement.
A-24
"Underwriting Agreement" shall mean the Underwriting Agreement, dated
[____], 200[_] between the Depositor and the Representative, including the Terms
Agreement as defined therein and with respect thereto.
"Underwritten Securities" shall mean the Class A Notes and Class B Notes.
A-25
APPENDIX B
EXHIBIT 31 Certification pursuant to Rules 13a-14 and 15d-14 of the Securities
Exchange Act of 1934, as amended
Certification
I, __________, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
10-D Required to be filed in respect of the period covered by this report on
Form 10-K of [_____________________] TRUST 200[_]-[_];
2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole,
do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this annual report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the servicer(s)
and based on my knowledge and the compliance review(s) conducted in preparing
the servicer compliance statement(s) required in this report under Item 1123 of
Regulation AB, and except as disclosed in the Exchange Act periodic reports, the
servicer(s) [has/have] fulfilled [its][their] obligations under the servicing
agreement(s); and
5. All of the reports on assessment of compliance with servicing criteria for
asset-backed securities and their related attestation reports on assessment of
compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties:
By: ______________
Name:
Title:
[_____________________]
B-1
APPENDIX C
FORM OF SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by the [Master Servicer]
[Securities Administrator] [Receivables Servicer] shall address, at a minimum,
the criteria identified as below as "Applicable Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- --------------------------------------------- --------------- --------------- --------------
General Servicing Considerations
--------------------- --------------------------------------------- --------------- --------------- --------------
Policies and procedures are instituted to
monitor any performance or other triggers
and events of default in accordance with [X] [X]
1122(d)(1)(i) the transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
If any material servicing activities are
outsourced to third parties, policies
and procedures are instituted to monitor [X] [X]
the third party's performance and [X]
1122(d)(1)(ii) compliance with such servicing activities.
--------------------- --------------------------------------------- --------------- --------------- --------------
Any requirements in the transaction
agreements to maintain a back-up servicer [X]
1122(d)(1)(iii) for the mortgage loans are maintained.
--------------------- --------------------------------------------- --------------- --------------- --------------
A fidelity bond and errors and omissions
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the [X]
amount of coverage required by and [X] [X]
otherwise in accordance with the terms
1122(d)(1)(iv) of the transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Cash Collection and Administration
--------------------- --------------------------------------------- --------------- --------------- --------------
Payments on pool assets are deposited
into the appropriate custodial bank
accounts and related bank clearing [X]
accounts no more than two business days [X] [X]
following receipt, or such other number
of days specified in the transaction
1122(d)(2)(i) agreements.
-----------------------------------------------------------------------------------------------------------------
C-1
-----------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- --------------------------------------------- --------------- --------------- --------------
Disbursements made via wire transfer on
behalf of an obligor or to an investor [X]
1122(d)(2)(ii) are made only by authorized personnel.
--------------------- --------------------------------------------- --------------- --------------- --------------
Advances of funds or guarantees regarding
collections, cash flows or distributions,
and any interest or other fees charged for [X] [X] [X]
such advances, are made, reviewed and
approved as specified in the transaction
1122(d)(2)(iii) agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
The related accounts for the transaction,
such as cash reserve accounts or accounts
established as a form of [X]
overcollateralization, are separately [X] [X]
maintained (e.g., with respect to
commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Each custodial account is maintained at a
federally insured depository institution as
set forth in the transaction agreements.
For purposes of this criterion, "federally
insured depository institution" with respect [X] [X] [X]
to a foreign financial institution means a
foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of
1122(d)(2)(v) the Securities Exchange Act.
--------------------- --------------------------------------------- --------------- --------------- --------------
Unissued checks are safeguarded so as to [X] [X]
1122(d)(2)(vi) prevent unauthorized access. [X]
-----------------------------------------------------------------------------------------------------------------
C-2
-----------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- --------------------------------------------- --------------- --------------- --------------
Reconciliations are prepared on a monthly
basis for all asset-backed securities
related bank accounts, including custodial
accounts and related bank clearing accounts.
These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date,
or such other number of days specified in [X]
the transaction agreements; (C) reviewed and [X] X
approved by someone other than the person
who prepared the reconciliation; and
(D) contain explanations for reconciling
items. These reconciling items are resolved
within 90 calendar days of their original
identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Investor Remittances and Reporting
--------------------- --------------------------------------------- --------------- --------------- --------------
Reports to investors, including those to be
filed with the Commission, are maintained
in accordance with the transaction
agreements and applicable Commission
requirements. Specifically, such reports
(A) are prepared in accordance with
timeframes and other terms set forth in the
transaction agreements; (B) provide [X]
information calculated in accordance with the [X] [X]
terms specified in the transaction
agreements; (C) are filed with the Commission
as required by its rules and regulations;
and (D) agree with investors' or the
trustee's records as to the total unpaid
principal balance and number of mortgage
1122(d)(3)(i) loans serviced by the Servicer.
--------------------- --------------------------------------------- --------------- --------------- --------------
Amounts due to investors are allocated
and remitted in accordance with
timeframes, distribution priority and [X] [X]
other terms set forth in the transaction
1122(d)(3)(ii) agreements.
-----------------------------------------------------------------------------------------------------------------
C-3
-----------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- --------------------------------------------- --------------- --------------- --------------
Disbursements made to an investor are
posted within two business days to the [X]
Servicer's investor records, or such [X] [X]
other number of days specified in the
1122(d)(3)(iii) transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Amounts remitted to investors per the
investor reports agree with cancelled [X]
checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Pool Asset Administration
--------------------- --------------------------------------------- --------------- --------------- --------------
Collateral or security on pool assets is
maintained as required by the transaction [X]
agreements or related mortgage loan
1122(d)(4)(i) documents.
--------------------- --------------------------------------------- --------------- --------------- --------------
Pool assets and related documents are
safeguarded as required by the [X]
1122(d)(4)(ii) transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Any additions, removals or substitutions
to the asset pool are made, reviewed and
approved in accordance with any conditions [X]
or requirements in the transaction
1122(d)(4)(iii) agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Payments on pool assets, including any
payoffs, made in accordance with the related
mortgage loan documents are posted to the
Servicer's obligor records maintained no
more than two business days after receipt, [X]
or such other number of days specified in
the transaction agreements, and allocated
to principal, interest or other items
(e.g., escrow) in accordance with the
1122(d)(4)(iv) related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------
C-4
-----------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- --------------------------------------------- --------------- --------------- --------------
The Servicer's records regarding the
pool assets agree with the Servicer's
records with respect to an obligor's [X]
1122(d)(4)(v) unpaid principal balance.
--------------------- --------------------------------------------- --------------- --------------- --------------
Changes with respect to the terms or
status of an obligor's pool assets
(e.g., loan modifications or re-agings)
are made, reviewed and approved by [X]
authorized personnel in accordance with
the transaction agreements and related
1122(d)(4)(vi) pool asset documents.
--------------------- --------------------------------------------- --------------- --------------- --------------
Loss mitigation or recovery actions
(e.g., forbearance plans, modifications
and deeds in lieu of foreclosure,
foreclosures and repossessions, as
applicable) are initiated, conducted and [X]
concluded in accordance with the timeframes
or other requirements established by the
1122(d)(4)(vii) transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Records documenting collection efforts are
maintained during the period a mortgage loan
is delinquent in accordance with the
transaction agreements. Such records are
maintained on at least a monthly basis, or
such other period specified in the
transaction agreements, and describe the [X]
entity's activities in monitoring delinquent
pool assets including, for example, phone
calls, letters and payment escheduling plans
in cases where delinquency is deemed
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
--------------------- --------------------------------------------- --------------- --------------- --------------
Adjustments to interest rates or rates
of return for pool assets with variable [X]
rates are computed based on the related
1122(d)(4)(ix) mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------
C-5
-----------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- --------------------------------------------- --------------- --------------- --------------
Regarding any funds held in trust for an
obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the
obligor's loan documents, on at least an
annual basis, or such other period specified
in the transaction agreements; (B) interest
on such funds is paid, or credited, to [X]
obligors in accordance with applicable loan
documents and state laws; and (C) such
funds are returned to the obligor within
30 calendar days of full repayment of
the related book assets, or such other
number of days specified in the
1122(d)(4)(x) transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Payments made on behalf of an obligor (such
as tax or insurance payments) are made on or
before the related penalty or expiration
dates, as indicated on the appropriate bills
or notices for such payments, provided that [X]
such support has been received by the
servicer at least 30 calendar days prior
to these dates, or such other number of days
1122(d)(4)(xi) specified in the transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Any late payment penalties in connection
with any payment to be made on behalf of an
obligor are paid from the servicer's funds [X]
and not charged to the obligor, unless the
late payment was due to the obligor's error
1122(d)(4)(xii) or omission.
--------------------- --------------------------------------------- --------------- --------------- --------------
Disbursements made on behalf of an obligor
are posted within two business days to the
obligor's records maintained by the [X]
servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
Delinquencies, charge-offs and uncollectible
accounts are recognized and recorded in [X]
1122(d)(4)(xiv) accordance with the transaction agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
1122(d)(4)(xv) Any external enhancement or other support,
-----------------------------------------------------------------------------------------------------------------
C-6
-----------------------------------------------------------------------------------------------------------------
Master Securities Receivables
Servicing Criteria Servicer Administrator Servicer
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- --------------------------------------------- --------------- --------------- --------------
identified in Item 1114(a)(1) through (3) [X]
or Item 1115 of Regulation AB, is
maintained as set forth in the transaction
agreements.
--------------------- --------------------------------------------- --------------- --------------- --------------
-----------------------------------------------------------------------------------------------------------------
C-7
