Exhibit 10.1
EXECUTION COPY
================================================================================
WACHOVIA AUTO OWNER TRUST 2004-B,
as Issuer,
POOLED AUTO SECURITIES SHELF LLC,
as Depositor,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Seller and Servicer
-------------------------------------
SALE AND SERVICING AGREEMENT
Dated as of September 1, 2004
-------------------------------------
================================================================================
Table of Contents
Page
ARTICLE ONE
DEFINITIONS
Section 1.01. General Definitions........................................................................... 1
Section 1.02. Other Definitional Provisions................................................................ 14
Section 1.03. Interpretive Provisions...................................................................... 14
ARTICLE TWO
CONVEYANCE OF TRUST PROPERTY
Section 2.01. Conveyance of Trust Property................................................................. 15
Section 2.02. Representations and Warranties of the Seller as to the Receivables........................... 16
Section 2.03. Representations and Warranties of the Depositor as to the Receivables........................ 17
Section 2.04. Repurchase of Receivables Upon Breach........................................................ 18
Section 2.05. Custody of Receivable Files.................................................................. 18
Section 2.06. Duties of Servicer as Custodian.............................................................. 19
Section 2.07. Instructions; Authority to Act............................................................... 20
Section 2.08. Indemnification by Custodian................................................................. 20
Section 2.09. Effective Period and Termination............................................................. 20
ARTICLE THREE
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.01. Duties of Servicer........................................................................... 22
Section 3.02. Subservicers................................................................................. 23
Section 3.03. Collection of Receivable Payments; Modification of Receivables............................... 24
Section 3.04. Realization Upon Receivables................................................................. 25
Section 3.05. Maintenance of Physical Damage Insurance Policies............................................ 26
Section 3.06. Maintenance of Security Interests in Financed Vehicles....................................... 26
Section 3.07. Covenants of Servicer........................................................................ 26
Section 3.08. Purchase of Receivables Upon Breach.......................................................... 26
Section 3.09. Servicing Compensation; Payment of Certain Expenses by Servicer.............................. 27
Section 3.10. Servicer's Certificate....................................................................... 27
Section 3.11. Annual Statement as to Compliance; Notice of Default......................................... 27
Section 3.12. Annual Accountants' Report................................................................... 28
Section 3.13. Access to Certain Documentation and Information Regarding Receivables........................ 28
Section 3.14. Reports to the Commission.................................................................... 29
i
Page
Section 3.15. Reports to Rating Agencies................................................................... 29
ARTICLE FOUR
DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS
Section 4.01. Establishment of Accounts.................................................................... 30
Section 4.02. Collections.................................................................................. 31
Section 4.03. Application of Collections................................................................... 31
Section 4.04. Advances..................................................................................... 32
Section 4.05. Additional Deposits.......................................................................... 32
Section 4.06. Determination Date Calculations; Application of Available Funds.............................. 33
Section 4.07. Reserve Fund................................................................................. 34
Section 4.08. Net Deposits................................................................................. 35
Section 4.09. Statements to Securityholders................................................................ 35
Section 4.10. Control of Accounts.......................................................................... 37
ARTICLE FIVE
THE DEPOSITOR
Section 5.01. Representations and Warranties of Depositor.................................................. 38
Section 5.02. Liability of Depositor; Indemnities.......................................................... 39
Section 5.03. Merger, Consolidation or Assumption of the Obligations of Depositor; Certain Limitations..... 40
Section 5.04. Limitation on Liability of Depositor and Others.............................................. 43
Section 5.05. Depositor Not to Resign...................................................................... 43
Section 5.06. Depositor May Own Securities................................................................. 43
ARTICLE SIX
THE SERVICER
Section 6.01. Representations and Warranties of Servicer................................................... 44
Section 6.02. Liability of Servicer; Indemnities........................................................... 45
Section 6.03. Merger, Consolidation or Assumption of the Obligations of Servicer........................... 47
Section 6.04. Limitation on Liability of Servicer and Others............................................... 47
Section 6.05. Wachovia Bank Not to Resign as Servicer...................................................... 48
Section 6.06. Servicer May Own Securities.................................................................. 48
ii
Page
ARTICLE SEVEN
SERVICER TERMINATION EVENTS
Section 7.01. Servicer Termination Events.................................................................. 49
Section 7.02. Appointment of Successor Servicer............................................................ 50
Section 7.03. Effect of Servicing Transfer................................................................. 51
Section 7.04. Notification to Noteholders, Certificateholders and Rating Agencies.......................... 52
Section 7.05. Waiver of Past Servicer Termination Events................................................... 52
Section 7.06. Repayment of Advances........................................................................ 52
ARTICLE EIGHT
TERMINATION
Section 8.01. Optional Purchase of All Receivables......................................................... 53
ARTICLE NINE
MISCELLANEOUS
Section 9.01. Amendment.................................................................................... 54
Section 9.02. Protection of Title to Issuer................................................................ 55
Section 9.03. Notices...................................................................................... 57
Section 9.04. Assignment................................................................................... 57
Section 9.05. Severability................................................................................. 58
Section 9.06. Further Assurances........................................................................... 58
Section 9.07. No Waiver; Cumulative Remedies............................................................... 58
Section 9.08. Third-Party Beneficiaries.................................................................... 58
Section 9.09. Actions by Noteholder or Certificateholders.................................................. 58
Section 9.10. Separate Counterparts........................................................................ 59
Section 9.11. Headings..................................................................................... 59
Section 9.12. GOVERNING LAW................................................................................ 59
Section 9.13. Nonpetition Covenants........................................................................ 59
Section 9.14. Limitation of Liability of Owner Trustee and Indenture Trustee............................... 59
SCHEDULES
Schedule A - Location of Receivable Files............................................................ SA-1
iii
Page
EXHIBITS
Exhibit A - Representations and Warranties as to the Receivables............................................ A-1
Exhibit B - Form of Distribution Statement.................................................................. B-1
Exhibit C - Form of Servicer's Certificate.................................................................. C-1
iv
This Sale and Servicing Agreement, dated as of September 1, 2004, is
among Pooled Auto Securities Shelf LLC, a Delaware limited liability company
("PASS"), as depositor (the "Depositor"), Wachovia Bank, National Association, a
national banking association ("Wachovia Bank"), as seller (in such capacity, the
"Seller") and as servicer (in such capacity, the "Servicer"), and Wachovia Auto
Owner Trust 2004-B, a Delaware statutory trust, as issuer (the "Issuer").
WHEREAS, the Issuer desires to purchase from the Depositor a portfolio
of receivables arising in connection with motor vehicle retail installment sale
contracts (the "Receivables") purchased by Wachovia Bank in the ordinary course
of its business, which Receivables have been sold by Wachovia Bank to the
Depositor as of the date hereof;
WHEREAS, the Depositor is willing to sell the Receivables to the Issuer
pursuant to the terms hereof; and
WHEREAS, the Servicer is willing to service the Receivables pursuant to
the terms hereof.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. General Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Account Collateral" means, with respect to each Account, such Account,
together with all cash, securities, Financial Assets and investments and other
property from time to time deposited or credited to such Account and all
proceeds thereof, including, with respect to the Reserve Fund, the Reserve Fund
Initial Deposit.
"Accounts" means the Collection Account, the Note Payment Account and
the Reserve Fund.
"Administration Agreement" means the administration agreement, dated as
of September 1, 2004, among the Administrator, the Issuer, the Depositor and the
Indenture Trustee.
"Administrator" means Wachovia Bank, in its capacity as administrator
under the Administration Agreement, and its successors in such capacity.
"Advance" means, with respect to a Receivable, the amount which is
being advanced with respect to such Receivable as of the last day of a
Collection Period by the Servicer pursuant to Section 4.04.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under common
control with such specified Person. For purposes of this definition, "control",
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Sale and Servicing Agreement.
"Amount Financed" means, with respect to any Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the related
Financed Vehicle and any related costs, including accessories, insurance
premiums, service and warranty contracts and other items customarily financed as
part of a motor vehicle retail installment sale contract.
"Available Collections" means, for any Distribution Date and the
related Collection Period, (i) all payments received on or in respect of the
Receivables during such Collection Period (other than amounts comprising the
Supplemental Servicing Fee), (ii) all Liquidation Proceeds, Recoveries and
Dealer Recourse received with respect to the Receivables during such Collection
Period, (iii) in the event that collections on or in respect of the Receivables
are required to be deposited by the Servicer into the Collection Account on a
daily basis pursuant to Section 4.02, all investment earnings on funds on
deposit in the Collection Account, (iv) the aggregate Purchase Amount deposited
in the Collection Account on the related Deposit Date, (v) all Prepayments
received with respect to the Receivables during such Collection Period
attributable to any refunded item included in the Amount Financed (including
amounts received as a result of rebates of extended warranty contract costs and
insurance premiums and proceeds received under physical damage, theft, credit
life and credit disability insurance policies) and (vi) all Advances deposited
into the Collection Account by the Servicer on the related Deposit Date;
provided, however, that Available Collections shall not include any payments or
other amounts (including Liquidation Proceeds) received with respect to any (a)
Purchased Receivable, the Purchase Amount for which was included in Available
Collections for a previous Distribution Date and (b) Receivable to the extent
that the Servicer has made an unreimbursed Advance with respect to such
Receivable and is entitled to reimbursement from payments in respect of such
Receivables or other Receivables or other amounts pursuant to Section 4.04.
"Available Funds" means, with respect to any Distribution Date, the sum
of (i) Available Collections and (ii) the Reserve Fund Draw Amount, if any.
"Basic Documents" means this Agreement, the Administration Agreement,
the Indenture, the Note Depository Agreement, the Control Agreement, the
Receivables Purchase Agreement, the Trust Agreement and any other documents or
certificates delivered in connection herewith or therewith including, the Power
of Attorney pursuant to Section 1.02(c) of the Administration Agreement.
"Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C.
ss. 101 et seq.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in New York, New York,
Wilmington, Delaware,
2
St. ▇▇▇▇, Minnesota or Charlotte, North Carolina are authorized by law,
regulation or executive order to be closed.
"Certificate" has the meaning specified in the Trust Agreement.
"Certificate Payment Account" means the account established and
maintained pursuant to Section 4.01.
"Certificate Percentage Interest" means, with respect to a Certificate,
the percentage specified on such Certificate as the Certificate Percentage
Interest, which percentage represents the beneficial interest of the holder of
such Certificate in the Issuer. The initial Certificate Percentage Interest held
by PASS Holding LLC shall be 100%.
"Certificateholder" has the meaning specified in the Trust Agreement.
"Class" has the meaning specified in the Indenture.
"Class A Notes" has the meaning specified in the Indenture.
"Class A-1 Noteholder" has the meaning specified in the Indenture.
"Class A-2 Noteholder" has the meaning specified in the Indenture.
"Class A-3 Noteholder" has the meaning specified in the Indenture.
"Class A-4 Noteholder" has the meaning specified in the Indenture.
"Class B Noteholder" has the meaning specified in the Indenture.
"Class B Notes" has the meaning specified in the Indenture.
"Class C Final Scheduled Distribution Date" has the meaning specified
in the Indenture.
"Class C Noteholder" has the meaning specified in the Indenture.
"Class C Notes" has the meaning specified in the Indenture.
"Closing Date" has the meaning specified in the Indenture.
"Code" has the meaning specified in the Indenture.
"Collection Account" means the account designated as such, and
established and maintained pursuant to Section 4.01.
"Collection Period" has the meaning specified in the Indenture.
"Commission" means the Securities and Exchange Commission.
3
"Contract Rate" means, with respect to any Receivable, the annual
percentage rate of interest stated in such Receivable.
"Control" has the meaning specified in Section 8-106 of the UCC.
"Control Agreement" means the control agreement, dated as of September
1, 2004, among the Issuer, the Servicer, Wachovia Bank and the Indenture
Trustee, relating to the Accounts.
"Controlling Class" has the meaning specified in the Indenture.
"Corporate Trust Office" has the meaning specified in the Indenture or
the Trust Agreement, depending on whether reference is made to the Indenture
Trustee or the Owner Trustee.
"Cumulative Net Loss Percentage" has the meaning specified in the
Indenture.
"Cutoff Date" means the close of business on August 31, 2004.
"Dealer" means the dealer of motor vehicles who sold a Financed Vehicle
and who originated and assigned the Receivable relating to such Financed Vehicle
to the Seller under an existing agreement between such dealer and the Seller.
"Dealer Agreement" means an agreement between the Seller and a Dealer,
entered into by the Seller in the ordinary course of its business, providing for
the sale of Receivables by the Dealer to the Seller.
"Dealer Recourse" means, with respect to a Receivable, all recourse
rights against the Dealer which originated the Receivable, and any successor to
such Dealer.
"Defaulted Receivable" means a Receivable as to which, the earlier of
(i) any payment, or any part of any payment, due under such Receivable has
become 120 days or more delinquent (whether or not the Servicer has repossessed
the related Financed Vehicle), (ii) the Servicer has repossessed and sold the
related Financed Vehicle or (iii) the Servicer has determined in accordance with
its customary practices that such Receivable is uncollectible; provided,
however, that (a) a Receivable will not become a Defaulted Receivable until the
last day of the Collection Period during which one of the foregoing events first
occurs and (b) a Purchased Receivable will not be deemed to be a Defaulted
Receivable.
"Deposit Date" means, with respect to any Distribution Date and the
related Collection Period, the Business Day immediately preceding such
Distribution Date.
"Depositor" has the meaning specified in the Trust Agreement.
"Determination Date" means, with respect to any Distribution Date, the
third Business Day preceding such Distribution Date, commencing on October 15,
2004.
"Distribution Date" has the meaning specified in the Indenture.
4
"Dollars" or "$" mean the lawful currency of the United States.
"Eligible Account" means either (i) a segregated deposit account over
which the Indenture Trustee or the Owner Trustee, as the case may be, and the
Paying Agent have sole signature authority, maintained with an Eligible
Institution meeting the requirements of clause (i) of the definition of the term
"Eligible Institution" or (ii) a segregated trust account maintained with the
trust department of an Eligible Institution meeting the requirements of clause
(ii) of the definition of the term "Eligible Institution", in each case bearing
a designation clearly indicating that the funds deposited therein are held for
the benefit of the Securityholders, the Noteholders or the Certificateholders,
as the case may be.
"Eligible Institution" means (i) Wachovia Bank, the corporate trust
department of the Indenture Trustee or the corporate trust department of the
Owner Trustee or (ii) any other depository institution organized under the laws
of the United States or any State or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United States or any State
qualified to take deposits and subject to supervision and examination by federal
or state banking authorities which at all times has either a long-term unsecured
debt rating of at least "Baa3" from Moody's or a long-term unsecured debt
rating, a short-term unsecured debt rating or a certificate of deposit rating
acceptable to Moody's and whose deposits are insured by the Federal Deposit
Insurance Corporation; provided, however, that (a) the commercial paper,
short-term debt obligations or other short-term deposits of the depository
institution described in clause (ii) above must be rated at least "Prime-1" by
Moody's and at least "A-1+" by Standard & Poor's if deposits are to be held in
an account maintained with such depository institution pursuant to this
Agreement for fewer than 30 days and (b) the long-term unsecured debt
obligations of the depository institution described in clause (ii) above must be
rated at least "AA-" by Standard & Poor's if deposits are to be held in an
account maintained with such depository institution pursuant to this Agreement
for more than 30 days.
"Eligible Servicer" means a Person which, at the time of its
appointment as Servicer, (i) has a net worth of not less than $50,000,000, (ii)
is servicing a portfolio of motor vehicle retail installment sale contracts or
motor vehicle loans, (iii) is legally qualified, and has the capacity, to
service the Receivables, (iv) has demonstrated the ability to service a
portfolio of motor vehicle retail installment sale contracts or motor vehicle
loans similar to the Receivables professionally and competently in accordance
with standards of skill and care that are consistent with prudent industry
standards and (v) is qualified and entitled to use pursuant to a license or
other written agreement, and agrees to maintain the confidentiality of, the
software which the Servicer uses in connection with performing its duties and
responsibilities under this Agreement or obtains rights to use, or develops at
its own expense, software which is adequate to perform its duties and
responsibilities under this Agreement.
"Entitlement Holder" has the meaning specified in Section 8-102 of the
UCC.
"Entitlement Order" has the meaning specified in Section 8-102 of the
UCC.
"Excess Collections" has the meaning specified in the Indenture.
"Exchange Act" has the meaning specified in the Indenture.
5
"FDIC Rule" has the meaning specified in the Receivables Purchase
Agreement.
"Final Scheduled Distribution Date" means the Class C Final Scheduled
Distribution Date.
"Financed Vehicle" means, with respect to any Receivable, the related
new or used motor vehicle, together with all accessions thereto, securing the
related Obligor's indebtedness under such Receivable.
"Financial Asset" has the meaning specified in Section 8-102(a)(9) of
the UCC.
"Holders" has the meaning specified in the Indenture.
"Indenture" means the indenture, dated as of September 1, 2004, between
the Issuer and the Indenture Trustee.
"Indenture Trustee" has the meaning specified in the Indenture.
"Independent" has the meaning specified in the Indenture.
"Initial Note Balance" means, as the context may require, with respect
to (i) all of the Notes, $1,000,000,000 or (ii) any Note, an amount equal to the
initial denomination of such Note.
"Interest Distributable Amount" has the meaning specified in the
Indenture.
"Interest Period" has the meaning specified in the Indenture.
"Interest Rate" has the meaning specified in the Indenture.
"Issuer" has the meaning specified in the Indenture.
"Lien" means any security interest, lien, claim, charge, pledge, equity
or encumbrance of any kind other than tax liens, mechanics' or materialmen's
liens, judicial liens and any liens that may attach to a Financed Vehicle by
operation of law.
"Liquidation Proceeds" means all amounts received by the Servicer with
respect to any Defaulted Receivable during the Collection Period in which such
Receivable became a Defaulted Receivable, net of the sum of (i) any amount
required by law to be remitted to the related Obligor and (ii) any expenses
incurred by the Servicer in connection with collection of such Receivable and
the disposition of the related Financed Vehicle (to the extent not previously
reimbursed).
"Monthly Payment" means, with respect to any Receivable, the amount of
each fixed monthly payment payable to the obligee under such Receivable in
accordance with the terms thereof, net of any portion of such monthly payment
that represents late payment charges, extension fees or similar items.
6
"Monthly Remittance Condition" means that (i) (a) Wachovia Bank is the
Servicer, (b) Wachovia Bank's short-term unsecured debt is rated at least
"Prime-1" by Moody's and "A-1" by Standard & Poor's and (c) no Servicer
Termination Event shall have occurred and be continuing or (ii) each Rating
Agency has agreed that the deposit of collections on or in respect of the
Receivables into the Collection Account may be made by the Servicer on a
monthly, rather than a daily, basis.
"Monthly Servicing Fee" means, for any Collection Period, the fee
payable to the Servicer on the related Distribution Date for services rendered
during such Collection Period as determined pursuant to Section 3.09.
"Monthly Trustee Fees" has the meaning specified in the Indenture.
"Moody's" has the meaning specified in the Indenture.
"Motor Vehicle Receivables" has the meaning specified in Section
5.03(b)(ii)(A).
"Motor Vehicle Securities" has the meaning specified in Section
5.03(b)(ii)(B).
"Net Losses" means, with respect to any Collection Period, the excess,
if any, of (i) the aggregate Principal Balance of all Receivables that became
Defaulted Receivables during such Collection Period over (ii) the aggregate
Liquidation Proceeds and Recoveries received by the Servicer during such
Collection Period.
"Nonrecoverable Advance" means an Advance which the Servicer determines
in its sole discretion is not recoverable from payments made on or in respect of
the related Receivable.
"Note Balance" has the meaning specified in the Indenture.
"Note Depository Agreement" has the meaning specified in the Indenture.
"Note Owner" has the meaning specified in the Indenture.
"Note Payment Account" means the account designated as such, and
established and maintained pursuant to Section 4.01.
"Note Pool Factor" means, with respect to each Class of Notes as of any
Distribution Date, a seven-digit decimal figure equal to the Note Balance of
such Class of Notes as of such Distribution Date (after giving effect to any
reductions thereof to be made on such Distribution Date) divided by the original
principal amount of such Class of Notes.
"Noteholder" has the meaning specified in the Indenture.
"Notes" has the meaning specified in the Indenture.
"Obligor" means, with respect to any Receivable, the purchaser or
co-purchasers of the related Financed Vehicle purchased in part or in whole by
the execution and delivery of a Receivable or any other Person who owes or may
be liable for payments under a Receivable.
7
"Officer's Certificate" means a certificate signed by the chairman, the
president, any Vice President, the treasurer or the secretary of the Depositor
or the Servicer, as the case may be, and delivered to the Indenture Trustee or
the Owner Trustee.
"Opinion of Counsel" means a written opinion of counsel (who may be an
employee of or outside counsel to the Depositor or the Servicer), which counsel
shall be acceptable to the related Trustee or the Rating Agencies, as the case
may be.
"Outstanding" has the meaning specified in the Indenture.
"Overcollateralization Target Amount" has the meaning specified in the
Indenture.
"Owner Trust Estate" has the meaning specified in the Trust Agreement.
"Owner Trustee" has the meaning specified in the Trust Agreement.
"PASS" has the meaning specified in the Receivables Purchase Agreement.
"Paying Agent" has the meaning specified in the Indenture.
"Permitted Investments" means, at any time, any one or more of the
following obligations, instruments, investments and securities:
(i) direct obligations of, and obligations fully guaranteed
by, the United States or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the
United States;
(ii) demand deposits, time deposits, bankers' acceptances or
certificates of deposit, having maturities of not more than 365 days,
of any depository institution or trust company incorporated under the
laws of the United States or any State (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 (a) such investment shall not have an `r' highlighter affixed to
its rating and its terms shall have a predetermined fixed dollar amount
of principal due at maturity that cannot vary or change and (b) at the
time of the investment, 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) of such depository institution or trust
company shall have a rating from Standard & Poor's of at least "A-1+"
and from Moody's of at least "Prime-1";
(iii) repurchase obligations, having maturities of not more
than 365 days, with respect to any security that is a direct obligation
of, or fully guaranteed by, the United States or any agency or
instrumentality thereof the obligations of which are backed by the full
faith and credit of the United States, in either case entered into with
a depository institution or trust company (acting as principal)
described in clause (ii) above;
(iv) short-term corporate securities bearing interest or sold
at a discount issued by any corporation incorporated under the laws of
the United States or any State thereof;
8
provided, however, that (a) such investment shall not have an `r'
highlighter affixed to its rating and its terms shall have a
predetermined fixed dollar amount of principal due at maturity that
cannot vary or change and (b) at the time of the investment, the
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such
corporation) of such corporation shall have a rating from Standard &
Poor's of at least "AAA" and from Moody's of at least "Aaa";
(v) commercial paper having, maturities of not more than 365
days, at the time of the investment, a rating from Standard & Poor's of
at least "A-1+" and from Moody's of at least "Prime-1"; provided,
however, that such investment shall not have an `r' highlighter affixed
to its rating and its terms shall have a predetermined fixed dollar
amount of principal due at maturity that cannot vary or change;
(vi) guaranteed investment contracts issued by an insurance
company or other corporation as to which the Rating Agency Condition
shall have been satisfied;
(vii) investments in money market funds having a rating from
Standard & Poor's of at least "AAA-m" or "AAAm-G" and from Moody's of
"Aaa" (including funds for which the Indenture Trustee, the Owner
Trustee or the Paying Agent or any of their respective Affiliates is
investment manager or advisor); and
(viii) any other investment as to which the Rating Agency
Condition shall have been satisfied; provided, however, that in no
event shall any such investment have a long-term rating of less than
"AA" by Standard & Poor's or "Aa3" by Moody's or a short-term rating of
less than "A-1" by Standard & Poor's or "Prime-1" by Moody's;
provided, that, except as otherwise provided in Section 4.07(b), each of the
foregoing investments shall mature no later than the Deposit Date immediately
following the Collection Period in which such investment was made (other than in
the case of the investment of monies in instruments of which the entity at which
the related Account, as the case may be, is located is the obligor, which may
mature on the related Distribution Date following the Collection Period in which
such investment was made), and shall be required to be held to such maturity.
Notwithstanding anything to the contrary contained in this definition,
(a) no Permitted Investment may be purchased at a premium and (b) no obligation
or security shall be a "Permitted Investment" unless (i) the Indenture Trustee
has Control over such obligation or security and (ii) at the time such
obligation or security was delivered to the Indenture Trustee or the Indenture
Trustee became the related Entitlement Holder, the Indenture Trustee did not
have notice of any adverse claim with respect thereto within the meaning of
Section 8-102 of the UCC.
For purposes of this definition, any reference to the highest available
credit rating of an obligation means the highest available credit rating for
such obligation, or such lower credit rating (as approved in writing by each
Rating Agency) as will not result in the qualification, downgrading or
withdrawal of the rating then assigned to any Securities by such Rating Agency.
"Person" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, limited
9
liability partnership, trust, unincorporated organization or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Pool Balance" means, as of the first or last day of any Collection
Period, the aggregate Principal Balance of the Receivables as of such first or
last day, as the case may be; provided, however, that if the Receivables are
purchased by the Servicer pursuant to Section 8.01(a) or are sold or otherwise
liquidated by the Indenture Trustee following an Event of Default pursuant to
Section 5.04 of the Indenture, the Pool Balance shall be deemed to be zero as of
the last day of the Collection Period during which such purchase, sale or other
liquidation occurs.
"Prepayment" means any prepayment, whether in part or in full, in
respect of such Receivable.
"Principal Balance" means, with respect to any Receivable as of any
date, the Amount Financed under such Receivable minus the sum of (i) that
portion of all Monthly Payments actually received on or prior to such date
allocable to principal using the Simple Interest Method, (ii) any rebates of
extended warranty contract costs or physical damage, theft, credit life or
credit disability insurance premiums included in the Amount Financed and (iii)
any Prepayment applied to reduce the unpaid principal balance of such
Receivable; provided, however, that the Principal Balance of a (a) Defaulted
Receivable shall be zero as of the last day of the Collection Period during
which it became a Defaulted Receivable and (b) Purchased Receivable shall be
zero as of the last day of the Collection Period during which it became a
Purchased Receivable.
"Priority Principal Distributable Amount" has the meaning specified in
the Indenture.
"Purchase Amount" means the price at which the Seller must repurchase
or the Servicer must purchase a Receivable in an amount equal to the sum of (i)
the Principal Balance of such Receivable plus (ii) the amount of accrued but
unpaid interest on such Principal Balance at the related Contract Rate to the
last day of the month of repurchase.
"Purchased Receivable" means a Receivable repurchased as of the last
day of a Collection Period as to which payment of the Purchase Amount has been
made by the Seller pursuant to Section 2.04 or by the Servicer pursuant to
Section 3.08 or 8.01.
"Rating Agency" has the meaning specified in the Indenture.
"Rating Agency Condition" has the meaning specified in the Indenture.
"Receivable" has the meaning specified in the Receivables Purchase
Agreement.
"Receivable Files" has the meaning specified in Section 2.05.
"Receivables Purchase Agreement" means the receivables purchase
agreement, dated as of September 1, 2004, between the Seller and PASS.
"Receivables Schedule" means the schedule of Receivables attached as
Schedule A to the Receivables Purchase Agreement.
10
"Recoveries" means, with respect to any Collection Period following the
Collection Period in which a Receivable became a Defaulted Receivable, all
amounts received by the Servicer with respect to such Defaulted Receivable
during such Collection Period, net of the sum of (i) any amount required by law
to be remitted to the related Obligor and (ii) any expenses incurred by the
Servicer in connection with collection of such Receivable and the disposition of
the related Financed Vehicle (to the extent not previously reimbursed).
"Registrar of Titles" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.
"Regular Principal Distributable Amount" has the meaning specified in
the Indenture.
"Representative" means Wachovia Capital Markets, LLC, as representative
of the Underwriters.
"Required Payment Amount" has, with respect to each Distribution Date,
the meaning specified in Section 4.06(a)(x).
"Required Rating" means, with respect to any entity, the short-term
credit rating of the related entity is at least equal to "Prime-1" by Moody's
and "A-1+" by Standard & Poor's.
"Required Reserve Fund Amount" means, for any Distribution Date,
$5,037,783.38; provided, however, that the Required Reserve Fund Amount (i) may
not exceed the Note Balance and (ii) will be zero if the Pool Balance as of the
last day of the related Collection Period is zero.
"Reserve Fund" means the account designated as such, and established
and maintained pursuant to Section 4.07.
"Reserve Fund Amount" means, with respect to any Distribution Date, the
amount on deposit in and available for withdrawal from the Reserve Fund on such
Distribution Date (after giving effect to all deposits to and withdrawals from
the Reserve Fund on such Distribution Date), including all interest and other
investment earnings (net of losses and investment expenses) earned on such
amount during the related Collection Period.
"Reserve Fund Deficiency" has the meaning specified in Section
4.06(b)(iii).
"Reserve Fund Draw Amount" has the meaning specified in Section
4.06(b)(i).
"Reserve Fund Initial Deposit" means $5,037,783.38.
"Reserve Fund Property" has the meaning specified in Section 4.07(a).
"Responsible Officer" means, in the case of (i) the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any principal, managing director, president, Vice President, assistant
treasurer, assistant secretary or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the
11
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 (ii) the Owner
Trustee, any officer in the Corporate Trust Administration department of the
Owner Trustee with direct responsibility for the administration of the Issuer
and, with respect to a particular corporate trust matter, any other officer of
the Owner Trustee to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Secondary Principal Distributable Amount" has the meaning specified in
the Indenture.
"Securitization Trust" has the meaning specified in Section
5.03(b)(ii).
"Security" means a Note or a Certificate, as the case may be.
"Security Entitlement" has the meaning specified in Section
8-102(a)(17) of the UCC.
"Securityholders" means the Noteholders and the Certificateholders.
"Seller" has the meaning specified in the Receivables Purchase
Agreement.
"Sequential Payment Trigger" has the meaning specified in the
Indenture.
"Servicer" means Wachovia Bank, in its capacity as servicer of the
Receivables under this Agreement, and its successors in such capacity.
"Servicer's Certificate" means an Officer's Certificate signed by a
Servicing Officer of the Servicer delivered pursuant to Section 3.10,
substantially in the form of Exhibit C.
"Servicer Termination Event" has the meaning specified in Section 7.01.
"Servicer Termination Notice" has the meaning specified in Section
7.01.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers attached to an Officer's Certificate
furnished on the Closing Date to the Trustees by the Servicer, as such list may
be amended from time to time by the Servicer in writing.
"Servicing Rate" means 1.00% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment between principal and interest, pursuant to which a portion of such
payment is allocated to interest in an amount equal to the product of the
Contract Rate of the related Receivable multiplied by the unpaid Principal
Balance of such Receivable multiplied by the period of time (expressed as a
fraction of a year, based on the actual number of days in the applicable
calendar month and a 365-day year) elapsed since the preceding payment was made
and the remainder of such payment is allocated to principal.
12
"Simple Interest Receivable" means any Receivable under which each
payment is allocated between principal and interest in accordance with the
Simple Interest Method.
"Standard & Poor's" has the meaning specified in the Indenture.
"State" has the meaning specified in the Indenture.
"Statistical Calculation Date" has the meaning specified in the
Receivables Purchase Agreement.
"Statistical Calculation Date Principal Balance" has the meaning
specified in the Receivables Purchase Agreement.
"Successor Servicer" means any entity appointed as a successor to the
Servicer pursuant to Section 7.02.
"Supplemental Servicing Fee" means the sum of (i) all extension fees
charged in connection with extensions of Receivables, (ii) any administration
fees and charges and all late payment fees actually collected (from whatever
source) on the Receivables and (iii) in the event that collections on or in
respect of the Receivable are permitted to be deposited by the Servicer into the
Collection Account on a monthly basis pursuant to Section 4.02, all investment
earnings on funds on deposit in the Collection Account.
"Tertiary Principal Distributable Amount" has the meaning specified in
the Indenture.
"Total Servicing Fee" means, for any Collection Period and the related
Distribution Date, the sum of (i) the Monthly Servicing Fee for such Collection
Period and (ii) all accrued but unpaid Monthly Servicing Fees for one or more
prior Collection Periods.
"Total Trustee Fees" has the meaning specified in the Indenture.
"Transition Costs" means the reasonable costs and expenses (including
reasonable attorneys' fees) incurred or payable by the Successor Servicer in
connection with the transfer of servicing (whether due to termination,
resignation or otherwise), including allowable compensation of employees and
overhead costs incurred or payable in connection with the transfer of the
Receivable Files or any amendment to this Agreement required in connection with
the transfer of servicing.
"Trust Agreement" means the amended and restated trust agreement, dated
as of September 1, 2004, between the Depositor and the Owner Trustee.
"Trust Fees and Expenses" means all accrued and unpaid fees of the
Trustees and the Paying Agent, any amounts due to the Trustees or the Paying
Agent for reimbursement of expenses or in respect of indemnification and other
administrative fees of the Issuer.
"Trust Property" has the meaning specified in Section 2.01(a).
"Trustees" has the meaning specified in the Indenture.
13
"UCC" has the meaning specified in the Indenture.
"Underwriters" means the underwriters named in Schedule A to the
Underwriting Agreement.
"Underwriting Agreement" means the underwriting agreement, dated August
24, 2004, between PASS and the Representative, relating to the purchase of the
Class A Notes by the Underwriters from PASS.
"United States" has the meaning specified in the Indenture.
"Vice President" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President", who is a duly elected officer of such Person.
"Wachovia Bank" means Wachovia Bank, National Association.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein that are not otherwise defined
herein shall have the meanings ascribed thereto in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
Section 1.03. Interpretive Provisions. With respect to all terms in
this Agreement, unless the context otherwise requires: (i) a term has the
meaning assigned to it; (ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time in the United States; (iii) "or" is
not exclusive; (iv) "including" means including without limitation; (v) words in
the singular include the plural and words in the plural include the singular;
(vi) any agreement, instrument or statute defined or referred to herein or in
any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; (vii)
references to a Person are also to its successors and permitted assigns; (viii)
the words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; (ix) Section, subsection, Schedule and
Exhibit references in this Agreement are references to Sections, subsections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; (x)
references to "writing" include printing, typing, lithography and other means of
reproducing words in a visible form; and (xi) the term "proceeds" has the
meaning set forth in the applicable UCC.
14
ARTICLE TWO
CONVEYANCE OF TRUST PROPERTY
Section 2.01. Conveyance of Trust Property.
(a) In consideration of the Issuer's delivery to or upon the order of
the Depositor on the Closing Date of authenticated Notes, in authorized
denominations in an aggregate principal amount equal to the Initial Note
Balance, and authenticated Certificates, the Depositor hereby irrevocably sells,
transfers, assigns and otherwise conveys to the Issuer, without recourse
(subject to the obligations of the Depositor set forth herein), all right, title
and interest of the Depositor, whether now owned or hereafter acquired or
arising in, to and under the following (collectively, the "Trust Property"):
(i) the Receivables and all amounts due and collected on or in
respect of the Receivables (including proceeds of the repurchase of
Receivables by the Seller pursuant to Section 2.04 or the purchase of
Receivables by the Servicer pursuant to Section 3.08 or 8.01) after the
Cutoff Date;
(ii) the security interests in the Financed Vehicles granted
by the Obligors pursuant to the Receivables;
(iii) all proceeds from claims on or refunds of premiums with
respect to any physical damage or theft insurance policies and extended
warranties covering the Financed Vehicles and any proceeds of or
refunds of premiums of any credit life or credit disability insurance
policies relating to the Receivables, the Financed Vehicles or the
Obligors;
(iv) the Receivable Files;
(v) any proceeds of Dealer Recourse;
(vi) the Collection Account, the Note Payment Account, the
Certificate Payment Account and the Reserve Fund and all amounts,
securities, Financial Assets, investments and other property deposited
in or credited to any of the foregoing and all proceeds thereof;
(vii) all rights of the Depositor, but none of the
obligations, under the Receivables Purchase Agreement, including the
right to require the Seller to repurchase Receivables from the
Depositor;
(viii) the right to realize upon any property (including the
right to receive future Liquidation Proceeds and Recoveries) that shall
have secured a Receivable and have been repossessed by or on behalf of
the Issuer; and
(ix) all present and future claims, demands, causes of action
or 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
15
proceeds of the conversion thereof, voluntary or involuntary, into cash
or other liquid property, all accounts, general intangibles, chattel
paper, instruments, documents, money, investment property, deposit
accounts, letters of credit, letter of credit rights, insurance
proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and all other property which at any time
constitutes all or part of, or is included in, the proceeds of any of
the foregoing.
(b) The Depositor and the Issuer intend that the transfer of the Trust
Property contemplated by Section 2.01(a) constitute a sale of the Trust Property
from the Depositor to the Issuer, conveying good title to the Trust Property
free and clear of any Liens and, in the event of the filing of a bankruptcy
petition by or against the Depositor under any bankruptcy or similar law, that
the Trust Property shall not be part of the Depositor's estate. However, in the
event that such transfer is deemed to be a pledge, 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, and all proceeds
thereof, to secure the payment of the Notes, and in such event, this Agreement
shall constitute a security agreement under applicable law.
(c) The sale, transfer, assignment and conveyance of the Trust Property
made under Section 2.01(a) shall not constitute, and is not intended to result
in, an assumption by the Issuer of any obligation of the Depositor or the Seller
to the Obligors or any other Person in connection with the Receivables and the
other Trust Property or any obligation of the Depositor or the Seller under any
agreement, document or instrument related thereto.
(d) Each of the parties hereto intend that the (i) FDIC Rule shall
apply to the transactions contemplated by this Agreement and the other Basic
Documents and (ii) transactions contemplated by this Agreement and the other
Basic Documents, taken as a whole, constitute a "securitization" within the
meaning of the FDIC Rule.
Section 2.02. Representations and Warranties of the Seller as to the
Receivables. The Seller has made, under the Receivables Purchase Agreement, each
of the representations and warranties as to the Receivables set forth in Exhibit
A. The Issuer shall be deemed to have relied on such representations and
warranties in accepting the Receivables. The representations and warranties set
forth in Exhibit A speak as of the execution and delivery of this Agreement and
as of the Closing Date, except to the extent otherwise provided, but shall
survive the sale, transfer, assignment and conveyance of the Receivables to the
Issuer pursuant to this Agreement and the pledge of the Receivables to the
Indenture Trustee pursuant to the Indenture. Pursuant to Section 2.01(a), the
Depositor has sold, transferred, assigned and otherwise conveyed to the Issuer,
as part of the Trust Property, its rights under the Receivables Purchase
Agreement, including its right to require the Seller to repurchase Receivables
in accordance with the Receivables Purchase Agreement upon a breach of the
representations and warranties set forth in Exhibit A.
The Seller hereby agrees that the Issuer shall have the right to
enforce any and all rights under the Receivables Purchase Agreement assigned to
the Issuer under this Agreement, including the right to require the Seller to
repurchase Receivables in accordance with the Receivables Purchase Agreement
upon a breach of the representations and warranties set forth in Exhibit A,
directly against the Seller as though the Issuer were a party to the Receivables
16
Purchase Agreement and that the Issuer shall not be obligated to enforce any
such right indirectly through the Depositor.
Section 2.03. Representations and Warranties of the Depositor as to the
Receivables. The Depositor makes the following representations and warranties as
to the Receivables on which the Issuer shall be deemed to have relied in
accepting the Receivables. The representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, except to
the extent otherwise provided, but shall survive the sale, transfer, assignment
and conveyance of the Receivables to the Issuer pursuant to this Agreement and
the pledge of the Receivables to the Indenture Trustee pursuant to the
Indenture.
(a) Title. The Depositor has purchased the Receivables from the Seller.
The Depositor intends that the transfer of the Receivables contemplated by
Section 2.01(a) constitute a sale of the Receivables from the Depositor to the
Issuer and that the beneficial interest in, and title to, the Receivables not be
part of the Depositor's estate in the event of the filing of a bankruptcy
petition by or against the Depositor under any bankruptcy law. The Depositor has
not sold, transferred, assigned or pledged any Receivable to any Person other
than the Issuer. The Depositor has not created, incurred or suffered to exist
any Lien on any Receivable except for the Lien of (i) this Agreement and (ii)
Indenture.
(b) Security Interest Matters. 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.
The Receivables constitute "tangible chattel paper" (as defined in the UCC). The
Depositor owns and has good and marketable title to the Receivables free and
clear of any Lien of any Person. The Depositor has caused or will cause prior to
the Closing Date the filing of all appropriate financing statements in the
proper filing offices in the appropriate jurisdictions under applicable law
necessary to perfect the security interest in the Receivables granted to the
Issuer under this Agreement. Other than the security interest granted to the
Issuer under 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 under this Agreement or that has been
terminated. The Depositor is not aware of any judgment or tax lien filings
against the Depositor. The security interest of the Seller in each Financed
Vehicle has been validly assigned by the Depositor to the Issuer.
(c) Financing Statements. All financing statements filed or to be filed
against the Depositor in favor of the Indenture Trustee (as assignee of the
Issuer) contain a statement substantially to the following effect: "A purchase
of or security interest in any collateral described in this financing statement
will violate the rights of the Indenture Trustee".
(d) No Transfer Restrictions. The Depositor has not created, incurred
or suffered to exist any restriction on transferability of the Receivables
except for the restrictions on transferability imposed by this Agreement. The
transfer of the Receivables
17
and the Receivable Files by the Depositor to the Issuer pursuant to this
Agreement is not subject to the bulk transfer laws or any similar statutory
provisions in effect in any applicable jurisdiction.
Section 2.04. Repurchase of Receivables Upon Breach. The Depositor, the
Seller, the Servicer or the Owner Trustee, as the case may be, shall inform the
other parties to this Agreement and the Indenture Trustee promptly, in writing,
upon the discovery of any breach or failure to be true of the representations
and warranties set forth in Exhibit A. If such breach or failure shall not have
been cured by the close of business on the last day of the Collection Period
which includes the 30th day after the date on which the Seller becomes aware of,
or receives written notice from the Depositor, the Servicer or the Owner Trustee
of, such breach or failure, and such breach or failure materially and adversely
affects the interest of the Issuer in a Receivable, the Seller shall repurchase
such Receivable from the Issuer on the Distribution Date immediately following
such Collection Period. In consideration of the repurchase of a Receivable
hereunder, the Seller shall remit the Purchase Amount of such Receivable in the
manner specified in Section 4.05. The sole remedy of the Issuer, the Owner
Trustee, the Indenture Trustee, the Noteholders and the Certificateholders with
respect to a breach or failure to be true of the representations and warranties
set forth in Exhibit A shall be to require the Seller to repurchase Receivables
pursuant to this Section or Section 3.03(c) of the Receivables Purchase
Agreement. Neither the Owner Trustee nor the Indenture Trustee 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 or
the eligibility of any Receivable for purposes of this Agreement.
Section 2.05. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer as its agent, and the Servicer hereby accepts
such appointment, to act as custodian on behalf of the Issuer and the Indenture
Trustee of the following documents or instruments which are hereby
constructively delivered to the Indenture Trustee, as pledgee of the Trust
Property pursuant to the Indenture with respect to each Receivable
(collectively, a "Receivable File"):
(i) the fully executed original of the Receivable;
(ii) the original (or image of the original) credit
application with respect to such Receivable fully executed by the
related Obligor or a photocopy thereof or a record thereof on a
computer file or disc or on microfiche;
(iii) the original certificate of title for the related
Financed Vehicle (or evidence that such certificate of title has been
applied for) or such other documents that the Seller or the Servicer
shall keep on file, in accordance with its customary practices and
procedures, evidencing the security interest of the Seller in such
Financed Vehicle;
(iv) documents evidencing the commitment of the related
Obligor to maintain physical damage insurance covering the related
Financed Vehicle; and
(v) any and all other documents (including any computer file
or disc or microfiche) that the Seller or the Servicer shall keep on
file, in accordance with its
18
customary practices and procedures, relating to the Receivable, the
related Obligor or the related Financed Vehicle.
On the Closing Date, the Servicer shall deliver an Officer's
Certificate to the Issuer and the Indenture Trustee confirming that the Servicer
has received, on behalf of the Issuer and the Indenture Trustee, all the
documents and instruments necessary for the Servicer to act as the agent of the
Issuer and the Indenture Trustee for the purposes set forth in this Section,
including the documents referred to herein, and the Issuer and the Trustees are
hereby authorized to rely on such Officer's Certificate. In addition, within 180
days after the Closing Date, the Servicer shall deliver to the Issuer and the
Indenture Trustee an Officer's Certificate certifying that the Servicer has
received the original certificate of title for each Financed Vehicle except each
Financed Vehicle securing an outstanding Receivable for which the Servicer has
not received the original certificate of title as shall be identified in such
Officer's Certificate (and indicating whether such Financed Vehicle is subject
to a certificate of title statute or motor vehicle registration law that
requires that the original certificate of title for such Financed Vehicle be
delivered to the Seller).
Section 2.06. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files for the benefit of the Issuer and the Indenture Trustee and
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Servicer and the Issuer
to comply with this Agreement and the Indenture Trustee to comply with the
Indenture. In performing its duties as custodian, the Servicer shall act with
reasonable care, using that degree of skill and attention that it exercises with
respect to the files of comparable motor vehicle installment sale contracts that
the Servicer services for itself or others. The Servicer shall conduct, or cause
to be conducted, in accordance with its customary practices and procedures,
periodic examinations of the files of all receivables owned or serviced by it
which shall include the Receivable Files held by it under this Agreement, and of
the related accounts, records and computer systems, in such a manner as shall
enable the Issuer or the Indenture Trustee to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the Trustees
any failure on its part to hold the Receivable Files and to maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed to
require an initial review or any periodic review of the Receivable Files by the
Issuer or the Trustees, and none of the Issuer or either Trustee shall be liable
or responsible for any action or failure to act by the Servicer in its capacity
as custodian hereunder.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of the locations specified in Schedule A or at such
other location as shall be specified to the Issuer and the Indenture Trustee by
30 days' prior written notice. The Servicer may temporarily move individual
Receivable Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures. The Servicer shall make available to the Issuer and
the Indenture Trustee or its duly authorized representatives, attorneys or
auditors a list of locations of the Receivable Files, the Receivable Files and
the related accounts, records and computer systems maintained by the Servicer at
such times during normal business hours as the Issuer and the Indenture Trustee
shall reasonably request.
19
(c) Release of Documents. As soon as practicable after receiving
written instructions from the Indenture Trustee, the Servicer shall release any
document in the Receivable Files to the Indenture Trustee or its agent or
designee, as the case may be, at such place or places as the Indenture Trustee
may reasonably designate. The Servicer shall not be responsible for any loss
occasioned by the failure of the Indenture Trustee to return any document or any
delay in so doing.
(d) Title to Receivables. The Servicer shall not at any time have, or
in any way attempt to assert, any interest in any Receivable held by it as
custodian hereunder or in the related Receivable File, other than for collecting
or enforcing such Receivable for the benefit of the Issuer. The entire equitable
interest in such Receivable and the related Receivable File shall at all times
be vested in the Issuer.
Section 2.07. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer of the
Indenture Trustee. A certified copy of excerpts of authorizing resolutions of
the board of directors of the Indenture Trustee shall constitute conclusive
evidence of the authority of any such Responsible Officer to act and shall be
considered in full force and effect until receipt by the Servicer of written
notice to the contrary given by the Indenture Trustee.
Section 2.08. Indemnification by Custodian. The Servicer, in its
capacity as custodian of the Receivable Files, shall indemnify and hold harmless
the Issuer, the Trustees and each of their respective officers, directors,
employees and agents from and against any and all liabilities, obligations,
losses, compensatory damages, payments, costs or expenses (including reasonable
legal fees, if any) of any kind whatsoever that may be imposed on, incurred or
asserted against the Issuer, the Trustees and each of their respective officers,
directors, employees and agents as the result of any improper act or omission in
any way relating to the maintenance and custody of the Receivable Files by the
Servicer, as custodian; provided, however, that the Servicer shall not be liable
for any portion of any such liabilities, obligations, losses, compensatory
damages, payments, costs or expenses resulting from the willful misfeasance, bad
faith or negligence of either Trustee.
Section 2.09. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
the Servicer shall resign as Servicer under Section 6.05, or if all of the
rights and obligations of the Servicer shall have been terminated under Section
7.01, the appointment of the Servicer as custodian hereunder may be terminated
by (i) the Issuer, with the consent of the Indenture Trustee, (ii) Holders of
Notes evidencing not less than 25% of the Note Balance of the Controlling Class
or, if the Notes have been paid in full, by Certificateholders evidencing not
less than 25% of the aggregate Certificate Percentage Interest or (iii) the
Owner Trustee, with the consent of Holders of Notes evidencing not less than 25%
of the Note Balance of the Controlling Class, in each case by notice then given
in writing to the Depositor and the Servicer (with a copy to the Trustees if
given by the Noteholders or the Certificateholders). As soon as practicable
after any termination of such appointment, the Servicer shall deliver, or cause
to be delivered, the Receivable Files and the related accounts and records
maintained by the Servicer to the Indenture Trustee, the Indenture Trustee's
agent or the
20
Indenture Trustee's designee, as the case may be, at such place as the Indenture
Trustee may reasonably designate or, if the Notes have been paid in full, at
such place as the Owner Trustee may reasonably designate.
21
ARTICLE THREE
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.01. Duties of Servicer. The Servicer, acting alone or through
one or more subservicers to the extent permitted hereunder, for the benefit of
the Issuer, shall manage, service, administer and make collections on the
Receivables with reasonable care but in no event less than the care that the
Servicer exercises with respect to all comparable motor vehicle receivables that
it services for itself or others. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors or by federal,
State or local government authorities with respect to the Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting tax
information to Obligors in accordance with its customary practices, policing the
collateral, accounting for collections and furnishing monthly and annual
statements to the Trustees with respect to distributions, providing collection
and repossession services in the event of Obligor default, generating federal
income tax information and performing the other duties specified herein. The
Servicer shall have full power and authority to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable, it being understood, however, that the Servicer
shall at all times remain responsible to the Issuer, the Paying Agent and the
Indenture Trustee for the performance of its duties and obligations hereunder.
Subject to the foregoing and to Section 3.02, the Servicer shall follow its
customary standards, policies, practices and procedures in performing its duties
hereunder as Servicer. Without limiting the generality of the foregoing, the
Servicer shall be authorized and empowered to execute and deliver, on behalf of
itself, the Depositor, the Issuer, the Trustees, the Securityholders or any of
them, any and all instruments of satisfaction or cancellation, or of partial or
full release or discharge and all other comparable instruments, with respect to
the Receivables and the Financed Vehicles.
The Servicer is hereby authorized to commence, in its own name or in
the name of the Issuer, a legal proceeding to enforce a Receivable pursuant to
Section 3.04 or to commence or participate in a legal proceeding (including a
bankruptcy proceeding) relating to or involving a Receivable, including a
Defaulted Receivable. If the Servicer commences or participates in such a legal
proceeding in its own name, the Issuer shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection on behalf of the
party retaining an interest in such Receivable, such Receivable and the other
property conveyed to the Issuer pursuant to Section 2.01 with respect to such
Receivable to the Servicer for purposes of commencing or participating in any
such proceeding as a party or claimant, and the Servicer is authorized and
empowered by the Issuer to execute and deliver in the Servicer's name any
notices, demands, claims, complaints, responses, affidavits or other documents
or instruments in connection with any such proceeding. If in any enforcement
suit or legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the grounds that it shall not be a real party in interest or a
holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Servicer's expense and written direction, take steps to enforce such Receivable,
including bringing suit in the Servicer's or the Issuer's name or the name of
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders or any of them.
The Owner Trustee, on behalf of the Issuer, shall furnish the Servicer
with any powers of attorney and other documents and take any other steps which
the Servicer may deem necessary
22
or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. The Servicer, at its expense, shall obtain on
behalf of the Issuer or the Owner Trustee all licenses, if any, required by the
laws of any jurisdiction to be held by the Issuer or the Owner Trustee in
connection with ownership of the Receivables and shall make all filings and pay
all fees as may be required in connection therewith during the term of this
Agreement. The Servicer shall, or cause the Administrator to, prepare, execute
and deliver all certificates or other documents required to be delivered by the
Issuer pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 or the rules and regulations
promulgated thereunder.
Section 3.02. Subservicers. The Servicer may enter into subservicing
agreements with one or more subservicers approved by the Indenture Trustee for
the servicing and administration of certain of the Receivables (including
holding the related Receivable Files as custodian). The Servicer shall notify
each Rating Agency promptly if a subservicer is hired. References herein to
actions taken or to be taken by the Servicer in servicing the Receivables
include actions taken or to be taken by a subservicer on behalf of the Servicer.
Each subservicing agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and as the Servicer and the subservicer have
agreed. With the approval of the Servicer, a subservicer may delegate its
servicing obligations to third-party servicers, but such subservicer will remain
obligated under the related subservicing agreement. The Servicer and a
subservicer may enter into amendments thereto or different forms of subservicing
agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement or
materially adversely affect the rights of the Securityholders hereunder.
The Servicer shall be entitled to terminate any subservicing agreement
that may exist in accordance with the terms and conditions of such subservicing
agreement and without any limitation by virtue of this Agreement; provided,
however, that in the event of termination of any subservicing agreement by the
Servicer or the related subservicer, the Servicer shall either act directly as
servicer of the related Receivable or enter into a subservicing agreement with a
successor subservicer approved by the Indenture Trustee which will be bound by
the terms of the related subservicing agreement.
Notwithstanding any subservicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer or a
subservicer or reference to actions taken through such Persons or otherwise, the
Servicer shall remain obligated and liable to the Indenture Trustee, the Owner
Trustee, the Issuer and the Securityholders for the servicing and administering
of the Receivables in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from a subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Receivables. The Servicer
shall be entitled to enter into an agreement with a subservicer for
indemnification of the Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Receivables involving a
subservicer or an Affiliate of the Servicer in its capacity as such, and not as
an originator of Receivables, shall be deemed to be between the subservicer or
such Affiliate, as the case may be, and the Servicer alone, and none of the
23
Indenture Trustee, the Owner Trustee, the Issuer, the Noteholders nor the
Certificateholders shall be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the subservicer
except as set forth in the immediately succeeding paragraph.
In the event the Servicer shall for any reason no longer be acting as
servicer under this Agreement (including by reason of termination of the
Servicer following the occurrence of a Servicer Termination Event), the
Indenture Trustee or its designee may, at the sole discretion of the Indenture
Trustee, thereupon assume all of the rights and obligations of such Servicer
under each subservicing agreement selected by the Indenture Trustee in its sole
discretion. In such event, the Indenture Trustee, its designee or such other
Successor Servicer that is appointed pursuant to Section 7.02 and assumes the
obligations and duties of the Servicer under this Agreement shall be deemed to
have assumed all of the Servicer's interest therein and to have replaced the
Servicer as a party to each such subservicing agreement to the same extent as if
such subservicing agreement had been assigned to the assuming party except that
the Servicer shall not thereby be relieved of any liability or obligations under
the subservicing agreement. The Servicer shall, upon request of the Indenture
Trustee but at the expense of the Servicer, deliver to the assuming party all
documents and records relating to each such subservicing agreement and the
Receivables then being serviced and an accounting of amounts collected and held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
The Servicer, each subservicer and any Successor Servicer shall at all
times comply with all applicable federal, State and local laws, rules,
regulations and ordinances governing or relating to the privacy rights of the
Obligors in connection with its performance of its duties under this Agreement,
including the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. The Servicer, each subservicer and any
Successor Servicer shall implement such physical and other security measures as
shall be necessary to (i) ensure the security and confidentiality of the
"nonpublic personal information" of each Obligor, (ii) protect against any
threats or hazards to the security and integrity of such nonpublic personal
information and (iii) protect against any unauthorized access to or use of such
nonpublic personal information.
In those cases where a subservicer is servicing a Receivable pursuant
to a subservicing agreement, the Servicer shall cause the subservicer to remit
to the Servicer for deposit in the Collection Account, on a daily basis, within
two Business Days after receipt by the subservicer, all proceeds of the
Receivables and all Available Collections received by the subservicer.
Section 3.03. Collection of Receivable Payments; Modification of
Receivables. The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and otherwise act with respect to the Receivables and the
other Trust Property in such manner as will, in the reasonable judgment of the
Servicer, maximize the amount to be received by the Issuer with respect thereto
and in accordance with the standard of care required by Section 3.01. The
Servicer shall allocate collections on or in respect of the Receivables between
principal and interest in accordance with the Simple Interest Method and the
customary servicing practices and procedures it follows with respect to all
comparable motor vehicle retail installment sale contracts that it services for
itself or others. The Servicer shall not increase or decrease the number or
amount of any Monthly Payment, the Amount Financed under any Receivable or the
Contract Rate of any Receivable, or
24
extend, rewrite or otherwise modify the payment terms of any Receivable;
provided, however, that the Servicer may extend the due date for one or more
payments due on any Receivable for credit-related reasons that would be
acceptable to the Servicer with respect to comparable motor vehicle retail
installment sale contracts that it services for itself or others and in
accordance with its customary standards, policies, practices and procedures if
the cumulative extensions with respect to any Receivable shall not cause the
term of such Receivable to extend beyond the last day of the Collection Period
relating to the Class C Final Scheduled Distribution Date. If the Servicer fails
to comply with the provisions of the preceding sentence, the Servicer shall be
required to purchase each Receivable affected thereby for the related Purchase
Amount, in the manner specified in Section 3.08, as of the close of business on
the last day of the Collection Period which includes the 30th day after the
Servicer becomes aware of such failure. The Servicer may, in its discretion (but
only in accordance with its customary standards, policies, practices and
procedures), waive any late payment charge or any other fee that may be
collected in the ordinary course of servicing a Receivable. In addition, in the
event that any such extension of a Receivable modifies the terms of such
Receivable in such a manner as to constitute a cancellation of such Receivable
and the creation of a new motor vehicle receivable that results in a deemed
exchange thereof within the meaning of Section 1001 of the Code, the Servicer
shall purchase such Receivable pursuant to Section 3.08, and the Receivable
created shall not be included in the Trust Property.
Section 3.04. Realization Upon Receivables.
(a) The Servicer shall use commercially reasonable efforts on behalf of
the Issuer, in accordance with the standard of care required under Section 3.01,
to repossess or otherwise convert the ownership of each Financed Vehicle
securing a Defaulted Receivable. In taking such action, the Servicer shall
follow such customary and usual practices and procedures as it shall deem
necessary or advisable in its servicing of comparable motor vehicle installment
sale contracts, and as are otherwise consistent with the standard of care
required under Section 3.01. The Servicer shall be entitled to recover all
reasonable expenses incurred by it with respect to realizing on a Defaulted
Receivable, including such expenses incurred in the course of repossessing and
liquidating a Financed Vehicle into cash proceeds, but only out of the cash
proceeds of such Financed Vehicle and any deficiency amount obtained from the
Obligor. The foregoing is subject to the proviso that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with any repair or towards the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair or
repossession shall increase the Liquidation Proceeds or Recoveries of the
related Receivable.
(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement, the act of commencement shall be deemed to be an automatic
assignment from the Issuer to the Servicer of the rights of recourse under such
Dealer Agreement. If, however, in any enforcement suit or legal proceeding, it
is held that the Servicer may not enforce a Dealer Agreement on the grounds that
it is not a real party in interest or a Person entitled to enforce the Dealer
Agreement, the Owner Trustee, at the Servicer's expense and direction, shall
take such steps as the Servicer deems necessary to enforce the Dealer Agreement,
including bringing suit in its name or the names of the Indenture Trustee, the
Securityholders or any of them.
25
Section 3.05. Maintenance of Physical Damage Insurance Policies. The
Servicer shall follow its customary practices and procedures to determine
whether or not each Obligor shall have maintained physical damage insurance
covering the related Financed Vehicle. In the event that the Servicer has
determined that an Obligor fails to maintain the required insurance, the
Servicer shall treat the Obligor as being in default under the related
Receivable.
Section 3.06. Maintenance of Security Interests in Financed Vehicles.
The Servicer shall take such steps, in accordance with the standard of care
required under Section 3.01, as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Issuer hereby authorizes the Servicer, and the Servicer hereby agrees, 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 the Servicer receives
notice of, or otherwise has actual knowledge of, the fact that such security
interest is not perfected as a result of the relocation of a Financed Vehicle or
for any other reason. 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, to grant to the Issuer a first priority perfected security
interest in the related Financed Vehicle, the Servicer hereby agrees to serve as
the agent of the Issuer for the purpose of perfecting the security interest of
the Issuer in such Financed Vehicle and agrees that the Servicer's listing as
the secured party on the certificate of title is solely in its capacity as agent
of the Issuer. The Servicer shall not release, in whole or in part, any security
interest in a Financed Vehicle created by the related Receivable except as
permitted herein or in accordance with its customary standards, policies,
practices and procedures.
Section 3.07. Covenants of Servicer. The Servicer makes the following
covenants:
(a) Liens in Force. Except upon the payment in full of a
Receivable or as otherwise contemplated by this Agreement or applicable
law, the Servicer shall not release in whole or in part any Financed
Vehicle from the security interest securing the related Receivable.
(b) No Impairment. The Servicer shall not impair in any
material respect the rights of the Depositor, the Issuer, the Trustees
or the Securityholders in the Receivables or, except as permitted under
Section 3.03, otherwise amend or alter the terms of the Receivables and
as a result of such amendment or modification or alteration, the
interests of the Depositor, the Issuer, the Trustees or the
Securityholder would be materially adversely affected.
Section 3.08. Purchase of Receivables Upon Breach. The Depositor, the
Seller, the Servicer or the Owner Trustee, as the case may be, shall inform the
other parties to this Agreement and the Indenture Trustee promptly, in writing,
upon the discovery of any breach of Section 3.03, 3.06 or 3.07. If such breach
shall not have been cured by the close of business on the last day of the
Collection Period which includes the 30th day after the date on which the
Servicer becomes aware of, or receives written notice from the Depositor, the
Seller, or the Owner Trustee of, such breach, and such breach materially and
adversely affects the interest of the Issuer in a Receivable, the Servicer shall
purchase such Receivable from the Issuer on the related Deposit Date; provided,
however, that, with respect to a breach of Section 3.03, the Servicer shall
purchase the affected Receivable from the Issuer at the end of the Collection
26
Period in which such breach occurs. In consideration of the purchase of a
Receivable hereunder, the Servicer shall remit the related Purchase Amount of
such Receivable to the Collection Account in the manner specified in Section
4.05. The sole remedy of the Issuer, the Owner Trustee, the Indenture Trustee,
the Noteholders and the Certificateholders with respect to a breach of Section
3.03, 3.06 or 3.07 shall be to require the Servicer to purchase Receivables
pursuant to this Section. Neither the Owner Trustee nor the Indenture Trustee
shall have any duty to conduct an affirmative investigation as to the occurrence
of any condition requiring the purchase of any Receivable pursuant to this
Section.
Section 3.09. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall receive the Monthly Servicing Fee for servicing the
Receivables. The Monthly Servicing Fee for any Collection Period shall equal the
product of one-twelfth of the Servicing Rate and the Pool Balance as of the
first day of such Collection Period (or, in the case of the initial Collection
Period, as of the Cutoff Date). As additional servicing compensation, the
Servicer shall be entitled to receive or retain the Supplemental Servicing Fee.
The Servicer shall pay all expenses incurred by it in connection with the
activities under this Agreement (including fees and expenses of the Trustees and
the Paying Agent, the independent accountants and any subservicer, taxes imposed
on the Servicer, expenses incurred in connection with distributions and reports
to Securityholders and all other fees and expenses not expressly stated under
this Agreement to be for the account of the Securityholders), except expenses
incurred in realizing upon Receivables under Section 3.04.
Section 3.10. Servicer's Certificate. On or before each Determination
Date, the Servicer shall deliver to the Depositor, the Seller, the Trustees,
each Paying Agent and each Rating Agency a Servicer's Certificate containing all
information necessary to make the transfers and distributions required by
Sections 4.05, 4.06, 4.07 and 4.08 in respect of the related Collection Period
on the related Distribution Date and all information necessary for the Trustees
to send statements to Securityholders pursuant to Section 4.09 and pursuant to
Section 6.06 of the Indenture. The Servicer shall also specify to the Trustees,
no later than the Determination Date following the last day of a Collection
Period as of which the Seller shall separately identify (by account number) in a
written notice to the Depositor and the Trustees, the Receivables to be
repurchased by the Seller or purchased by the Servicer, as the case may be, on
the related Deposit Date and, upon request of one of the foregoing parties, each
Receivable that became a Defaulted Receivable during the related Collection
Period. The Servicer shall deliver to the Rating Agencies any information, to
the extent that it is available to the Servicer, that the Rating Agencies
reasonably request in order to monitor the Issuer.
Section 3.11. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Depositor, the Trustees and each
Rating Agency, within 90 days after each year end, beginning with the first year
end that is at least four months after the Closing Date, an Officer's
Certificate of the Servicer, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period ended December 31 (or, if
applicable, such shorter period in the case of the first such Officer's
Certificate) and of its performance under this Agreement has been made under
such officer's supervision and (ii) to such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such period, or, if there has been a default in the fulfillment of
27
any such obligation, specifying each such default known to such officer and the
nature and status thereof. Notwithstanding the foregoing, to the extent that the
Commission adopts a rule requiring the delivery by the Servicer of an annual
report on an assessment of servicing compliance on the basis of detailed
servicing criteria or other report, the delivery of a copy of such report to the
Depositor, the Trustees and each Rating Agency shall be deemed to satisfy the
provisions of this subsection.
(b) The Servicer shall deliver to the Depositor, the Trustees and each
Rating Agency, promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, an Officer's Certificate specifying
any event which constitutes or, with the giving of notice or lapse of time, or
both, would become, a Servicer Termination Event.
Section 3.12. Annual Accountants' Report. The Servicer shall cause a
firm of independent certified public accountants (who may also render other
services to the Servicer or to the Depositor or their respective Affiliates) to
deliver to the Depositor and the Trustees within 90 days after each year end,
beginning with the first year end that is at least four months after the Closing
Date, a report with respect to the preceding 12-month period ended December 31
(or, if applicable, such shorter period in the case of the first such report) or
other report to the effect that such accountants have examined, on a test basis,
evidence of the Servicer's compliance with the covenants and conditions set
forth in this Agreement. The report will express an opinion on the Servicer's
assertion that the Servicer complied in all material respects with the
aforementioned covenants and conditions is fairly stated, in all material
respects or the reason why such an opinion cannot be expressed. Such report
shall also indicate that the firm is independent with respect to the Depositor
and the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants. Notwithstanding the
foregoing, to the extent the Commission adopts a rule requiring the delivery of
an annual attestation of a firm of independent public accountants with respect
to the assessment of servicing compliance with specified servicing criteria by
the Servicer stating, among other things, that the Servicer's assertion of
compliance with the specified servicing criteria is fairly stated in all
material respects, or the reason why such an opinion cannot be expressed, the
delivery of a copy of such attestation to the Depositor and the Trustees shall
be deemed to satisfy the provisions of this Section.
Section 3.13. Access to Certain Documentation and Information Regarding
Receivables. Subject to Section 2.06(b), the Servicer shall provide the
Depositor, the Trustees and the Securityholders with access to the Receivables
Files in the cases where the related Trustee or such Securityholder is required
by applicable statutes or regulations to have access to such documentation. Such
access shall be afforded without charge but only upon reasonable request and
during normal business hours which does not unreasonably interfere with the
normal operations or customer or employee relations of the Servicer, at the
offices of the Servicer. Nothing in this Section shall affect the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section. Each Securityholder, by its acceptance of the related Security or a
beneficial interest therein, shall be deemed to have agreed to keep any
information obtained by it pursuant to this Section confidential, except as may
be required by applicable law.
28
Section 3.14. Reports to the Commission. The Servicer shall, on behalf
of the Issuer, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder. The Depositor shall, at its expense,
cooperate in any reasonable request made by the Servicer in connection with such
filings.
Section 3.15. Reports to Rating Agencies. The Servicer shall deliver to
each Rating Agency, at such address as such Rating Agency may request, a copy of
all reports or notices furnished or delivered pursuant to this Article and a
copy of any amendments, supplements or modifications to this Agreement and any
other information reasonably requested by such Rating Agency to monitor this
transaction.
29
ARTICLE FOUR
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO SECURITYHOLDERS
Section 4.01. Establishment of Accounts.
(a) The Servicer shall establish, on or before the Closing Date, and
maintain an Eligible Account with, and in the name of the Indenture Trustee, at
an Eligible Institution (which shall initially be Wachovia Bank) a segregated
trust account for the benefit of (i) the Securityholders, the Servicer, the
Trustees and the Paying Agent, designated as the "Wachovia Auto Owner Trust
2004-B Collection Account" (the "Collection Account") and (ii) the Noteholders,
the Servicer, the Trustees and the Paying Agent, designated as the "Wachovia
Auto Owner Trust 2004-B Note Payment Account" (the "Note Payment Account"), in
each case bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the related Persons. The Collection
Account and the Note Payment Account shall be under the sole dominion and
control of the Indenture Trustee; provided, however, that the Servicer may
direct the Paying Agent or the Indenture Trustee in writing to make deposits to
and withdrawals from the Collection Account and the Note Payment Account in
accordance with this Agreement and the other Basic Documents. All monies
deposited from time to time in the Collection Account and the Note Payment
Account shall be held by the Indenture Trustee or the Paying Agent as part of
the Trust Property, and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
(b) If the Servicer is required to remit collections on a daily basis
pursuant to the first sentence of Section 4.02, all (i) amounts held in the
Accounts shall, to the extent permitted by applicable law, rules and
regulations, be either invested by the Indenture Trustee or the Paying Agent in
Permitted Investments selected in writing by the Servicer or maintained in cash
and (ii) interest and other income (net of losses and investment expenses) on
funds on deposit in the Accounts shall be retained on deposit in the related
Account. In the event that the Servicer is permitted to remit collections on a
monthly basis pursuant to Section 4.02, all interest and other income (net of
losses and investment expenses) on funds on deposit in (A) the Collection
Account shall be payable to the Servicer as part of the Supplemental Servicing
Fee and (B) the Note Payment Account shall be retained on deposit therein.
(c) The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Owner Trustee at an Eligible Institution (which
shall initially be Wachovia Bank) a segregated trust account designated as the
"Wachovia Auto Owner Trust 2004-B Certificate Payment Account" (the "Certificate
Payment Account"). The Certificate Payment Account shall be held in trust for
the benefit of the Certificateholders. The Certificate Payment Account shall be
under the sole dominion and control of the Owner Trustee; provided, however,
that the Servicer may direct the Indenture Trustee or the Paying Agent in
writing to make deposits to and withdrawals from the Certificate Payment Account
in accordance with this Agreement and the other Basic Documents. All monies
deposited from time to time in the Certificate Payment Account shall be held by
the Owner Trustee as part of the Trust Property and shall be applied as provided
in the Basic Documents. The amounts on deposit in the Certificate Payment
Account shall not be invested.
30
(d) In the event that the Paying Agent is no longer an Eligible
Institution, the Servicer shall, with the Paying Agent's assistance as
necessary, promptly (and in any case within ten days) cause the Collection
Account, the Note Payment Account and the Certificate Payment Account to be
moved to an Eligible Institution. The Servicer shall promptly notify the Rating
Agencies and the Trustees in writing of any change in the account number or
location of the Collection Account, the Note Payment Account and the Certificate
Payment Account.
Section 4.02. Collections. The Servicer shall remit to the Collection
Account all amounts received by the Servicer on or in respect of the Receivables
(including Liquidation Proceeds and all amounts received by the Servicer in
connection with the repossession and sale of a Financed Vehicle (whether or not
the related Receivable has been classified as a Defaulted Receivable) but
excluding payments with respect to Purchased Receivables) as soon as practicable
and in no event after the close of business on the second Business Day after
such receipt; provided, however, that for so long as the Monthly Remittance
Condition shall be satisfied, the Servicer may remit all such amounts received
on or in respect of the Receivables during any Collection Period to the
Collection Account in immediately available funds on the related Deposit Date.
As of the Closing Date, the Servicer shall make remittances to the Collection
Account on a monthly basis. Neither Trustee shall be deemed to have knowledge of
any event or circumstance under clause (i) or (ii) of the definition of the term
"Monthly Remittance Condition" that would require daily remittances by the
Servicer to the Collection Account unless such Trustee has received notice of
such event or circumstance from the Depositor or the Servicer in an Officer's
Certificate or from the Holders of Notes evidencing not less than 25% of the
Note Balance of the Controlling Class or a Responsible Officer of such Trustee
has actual knowledge of such event or circumstance. If the Servicer shall fail
to satisfy the Monthly Remittance Condition, the Servicer shall remit to the
Collection Account on the Closing Date all amounts received by the Servicer on
or in respect of the Receivables (including Liquidation Proceeds and all amounts
received by the Servicer in connection with the repossession and sale of a
Financed Vehicle (whether or not the related Receivable has been classified as a
Defaulted Receivable)) during the period from but excluding the Cutoff Date to
and including the second Business Day preceding the Closing Date. If the
Servicer shall satisfy the Monthly Remittance Condition, the Servicer shall
remit to the Collection Account on the related Deposit Date for the initial
Collection Period, all amounts received by the Servicer on or in respect of the
Receivables (including Liquidation Proceeds and all amounts received by the
Servicer in connection with the repossession and sale of a Financed Vehicle
(whether or not the related Receivable has been classified as a Defaulted
Receivable)) during the period from but excluding the Cutoff Date to and
including the last day of the initial Collection Period.
Section 4.03. Application of Collections. For purposes of this
Agreement, all amounts received on or in respect of a Receivable during any
Collection Period (including Liquidation Proceeds and all amounts received by
the Servicer in connection with the repossession and sale of a Financed Vehicle
(whether or not the related Receivable has been classified as a Defaulted
Receivable) but excluding payments with respect to Purchased Receivables) shall
be applied by the Servicer, as of the last day of such Collection Period, to
interest and principal on such Receivable in accordance with the Simple Interest
Method.
31
Section 4.04. Advances.
(a) If, as of the end of any Collection Period, the payments received
during such Collection Period by or on behalf of an Obligor in respect of a
Receivable (other than a Purchased Receivable) shall be less than the related
Monthly Payment, whether as a result of any extension granted to the Obligor or
otherwise, then an amount equal to the product of the Principal Balance of such
Receivable as of the first day of the related Collection Period and one-twelfth
of its Contract Rate minus the amount of interest actually received on such
Receivable during such Collection Period (each, an "Advance") may be deposited
by the Servicer, at its option, into the Collection Account on the related
Deposit Date. If such a calculation in respect of a Receivable results in a
negative number, an amount equal to such negative amount shall be paid to the
Servicer in reimbursement of any outstanding Advances. In addition, in the event
that a Receivable becomes a Defaulted Receivable, the amount of accrued and
unpaid interest thereon (but not including interest for the current Collection
Period) shall, up to the amount of outstanding Advances, be withdrawn from the
Collection Account and paid to the Servicer in reimbursement of such outstanding
Advances. No Advances will be made with respect to the Principal Balance of
Receivables. The Servicer shall not be required to make an Advance to the extent
that the Servicer, in its sole discretion, shall determine that such Advance is
likely to become a Nonrecoverable Advance.
(b) Notwithstanding the provisions of Section 4.02, the Servicer shall
be entitled to reimbursement for an outstanding Advance made in respect of a
Receivable, without interest, from the following sources with respect to such
Receivable: (i) subsequent payments made by or on behalf of the related Obligor,
(ii) Liquidation Proceeds and Recoveries and (iii) the Purchase Amount. If the
Servicer determines that it has made a Nonrecoverable Advance, the Servicer
shall reimburse itself, without interest, from unrelated amounts received by the
Servicer on or in respect of the Receivables (including Liquidation Proceeds and
all amounts received by the Servicer in connection with the repossession and
sale of a Financed Vehicle (whether or not the related Receivable has been
classified as a Defaulted Receivable)) to the extent it shall, concurrently with
the withholding of any such amounts from deposit in or credit to the Collection
Account, furnish to the Trustees a certificate of a Servicing Officer setting
forth the basis for the Servicer's determination, the amount of, and Receivable
with respect to which, such Nonrecoverable Advance was made and the installment
or installments or other proceeds respecting which such reimbursement has been
taken.
Section 4.05. Additional Deposits.
(a) The following additional deposits shall be made to the Collection
Account: (i) the Seller shall remit the aggregate Purchase Amount with respect
to Purchased Receivables pursuant to Section 2.04, (ii) Servicer shall remit (A)
the aggregate Purchase Amount with respect to Purchased Receivables pursuant to
Section 3.08 and (B) the amount required upon the optional purchase of all
Receivables by the Servicer pursuant to Section 8.01 and (iii) the Indenture
Trustee, directly or through the Paying Agent, shall remit the Reserve Fund Draw
Amount pursuant to Sections 4.06 and 4.07.
(b) All deposits required to be made in respect of a Collection Period
pursuant to this Section by the Servicer may be made
32
in the form of a single deposit and shall be made in immediately available
funds, no later than 5:00 p.m., New York City time, on the related Deposit Date.
Section 4.06. Determination Date Calculations; Application of Available
Funds.
(a) On each Determination Date, the Servicer shall calculate the
following amounts with respect to the related Distribution Date and Collection
Period
(i) the Available Collections;
(ii) the Total Servicing Fee;
(iii) the Total Trustee Fees;
(iv) the Interest Distributable Amount for each Class of Class
A Notes;
(v) the Priority Principal Distributable Amount;
(vi) the Interest Distributable Amount for the Class B Notes;
(vii) the Secondary Principal Distributable Amount;
(viii) the Interest Distributable Amount for the Class C
Notes;
(ix) the Tertiary Principal Distributable Amount;
(x) the sum of the amounts described in clauses (ii) through
(ix) above (the "Required Payment Amount"); and
(xi) the Regular Principal Distributable Amount.
(b) On each Determination Date, the Servicer shall calculate the
following amounts with respect to the related Distribution Date and Collection
Period:
(i) the lesser of (A) the amount, if any, by which the
Required Payment Amount exceeds Available Collections and (B) the
Reserve Fund Amount (before giving effect to any deposits to or
withdrawals from the Reserve Fund on such Distribution Date) (such
lesser amount, the "Reserve Fund Draw Amount"); provided, however, that
the Reserve Fund Draw Amount will equal the Reserve Fund Amount if (1)
Available Collections and the amount on deposit in the Reserve Fund
Amount equals or exceeds the Note Balance, accrued and unpaid interest
therein and all amounts on the related Distribution Date required to be
paid to the Servicer, the Trustees and the Paying Agent or (2) on the
last day of the related Collection Period the Pool Balance is zero;
(ii) the Required Reserve Fund Amount (after giving effect to
the withdrawal of the Reserve Fund Draw Amount for such Distribution
Date); and
33
(iii) the amount, if any, by which the Required Reserve Fund
Amount exceeds the Reserve Fund Amount (after giving effect to the
withdrawal of the Reserve Fund Draw Amount for such Distribution Date)
(such excess, the "Reserve Fund Deficiency").
On each Distribution Date, the Servicer shall instruct the Indenture
Trustee or the Paying Agent to transfer and deposit into the Collection Account,
the Reserve Fund Draw Amount, if any, from the Reserve Fund.
(c) On each Distribution Date, the Servicer shall instruct the
Indenture Trustee and the Paying Agent in writing to apply the Available Funds
for such Distribution Date to make the related payments and deposits set forth
in Section 2.08 of the Indenture. Any distributions to be made by the Indenture
Trustee under the Basic Documents may be made by the Paying Agent.
Section 4.07. Reserve Fund.
(a) The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Indenture Trustee, at an Eligible Institution (which
shall initially be Wachovia Bank) a segregated trust account designated as the
"Wachovia Auto Owner Trust 2004-B Reserve Fund" (the "Reserve Fund"). The
Reserve Fund shall be held in trust for the benefit of the Securityholders. The
Reserve Fund shall be under the sole dominion and control of the Indenture
Trustee; provided, however, that the Servicer may direct the Indenture Trustee
or the Paying Agent in writing to make deposits to and withdrawals from the
Reserve Fund in accordance with this Agreement and the other Basic Documents. On
the Closing Date, the Seller shall deposit the Reserve Fund Initial Deposit into
the Reserve Fund from the net proceeds of the sale of the Receivables. The
Reserve Fund and all amounts, securities, investments, Financial Assets and
other property deposited in or credited to the Reserve Fund (the "Reserve Fund
Property") has been conveyed by the Depositor to the Issuer pursuant to Section
2.01(a). Pursuant to the Indenture, the Issuer will pledge all of its right,
title and interest in, to and under the Reserve Fund and the Reserve Fund
Property to the Indenture Trustee on behalf of the Securityholders to secure its
obligations under the Notes and the Indenture.
(b) The Reserve Fund Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing by
the Servicer, by the bank or trust company then maintaining the Reserve Fund in
Permitted Investments that mature not later than the Deposit Date following the
date of investment. All such Permitted Investments shall be held to maturity.
All interest and other income (net of losses and investment expenses) on funds
on deposit in the Reserve Fund shall be retained on deposit therein. If the
Reserve Fund is no longer to be maintained at the Paying Agent, the Servicer
shall, with the Paying Agent's assistance as necessary, promptly (and in any
case within ten calendar days) cause the Reserve Fund to be moved to an Eligible
Institution. The Servicer shall promptly notify the Rating Agencies and the
Trustees in writing of any change in the account number or location of the
Reserve Fund.
(c) With respect to any Reserve Fund Property:
(i) any Reserve Fund Property that is a Financial Asset shall
be physically delivered to, or credited to an account in the name of,
the Eligible Institution maintaining
34
the Reserve Fund, in accordance with such institution's customary
procedures such that such institution establishes a Security
Entitlement in favor of the Indenture Trustee with respect thereto;
(ii) any Reserve Fund Property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee at
one or more depository institutions having the Required Rating and each
such deposit account shall be subject to the exclusive custody and
control of the Indenture Trustee and the Indenture Trustee either
directly or through the Paying Agent shall have sole signature
authority with respect thereto; and
(iii) except for any deposit accounts specified in clause (ii)
above, the Reserve Fund shall only be invested in securities or in
other assets which the Eligible Institution maintaining the Reserve
Fund agrees to treat as Financial Assets.
(d) If any Class of Notes has not been paid in full on any Distribution
Date on and after its Final Scheduled Distribution Date (after giving effect to
the distribution of Available Funds on such Distribution Date), the Servicer
shall instruct the Indenture Trustee and the Paying Agent to distribute from
amounts on deposit in the Reserve Fund to the Noteholders of that Class of
Notes, an amount equal to the lesser of (i) the amount on deposit in the Reserve
Fund and (ii) the outstanding principal amount of that Class of Notes. If the
Reserve Fund Amount for any Distribution Date (after giving effect to the
withdrawal of the Reserve Fund Draw Amount for such Distribution Date and the
distribution described in the preceding sentence) exceeds the Required Reserve
Fund Amount for such Distribution Date, the Servicer shall instruct the
Indenture Trustee and the Paying Agent in writing to distribute the amount of
such excess to the Certificate Payment Account for payment to the
Certificateholders. The Trustees hereby release, on each Distribution Date,
their security interest in, to and under Reserve Fund Property distributed to
the Certificateholders.
(e) If the Note Balance and all other amounts owing or to be
distributed hereunder or under the Indenture or the Trust Agreement to the
Noteholders or the Certificateholders have been paid in full and the Issuer has
been terminated, any remaining Reserve Fund Property shall be distributed to the
Certificateholders.
Section 4.08. Net Deposits. For so long as the Monthly Remittance
Condition is met, unless the Servicer is required to remit collections on a
daily basis pursuant to the first sentence of Section 4.02, the Depositor and
the Servicer may make any remittances pursuant to this Article with respect to a
Collection Period net of distributions or reimbursements to be made to the
Depositor or the Servicer with respect to such Collection Period; provided,
however, that such obligations shall remain separate obligations, no party shall
have a right of offset, and each such party shall account for all of the above
described remittances and distributions as if the amounts were deposited or
transferred separately.
Section 4.09. Statements to Securityholders.
(a) On each Distribution Date, the Servicer shall provide to the Owner
Trustee (with copies to the Depositor, the Rating Agencies and each Paying
Agent) to forward to each Certificateholder of record, and to the Indenture
Trustee, either directly or through a Paying
35
Agent, to forward to each Noteholder of record a statement, based on the related
Servicer's Certificate setting forth at least the following information as to
the Securities with respect to the related Distribution Date and Collection
Period, in substantially the form of Exhibit B, to the extent applicable:
(i) the amount of such distribution allocable to principal for
each Class of Notes;
(ii) the Priority Principal Distributable Amount;
(iii) the Secondary Principal Distributable Amount;
(iv) the Tertiary Principal Distributable Amount;
(v) the Regular Principal Distributable Amount;
(vi) the amount of such distribution allocable to current and
overdue interest (including any interest on overdue interest) for each
Class of Notes;
(vii) the Total Servicing Fee;
(viii) the Total Trustee Fees;
(ix) the aggregate outstanding principal amount of each Class
of Notes and the Note Pool Factor with respect to each Class of Notes
(in each case after giving effect to payments allocated to principal
reported under clause (i) above);
(x) the Pool Balance as of the close of business on the last
day of the related Collection Period;
(xi) the Reserve Fund Amount on such Distribution Date (after
giving effect to all deposits to or withdrawals from the Reserve Fund
on such Distribution Date) and the Reserve Fund Draw Amount;
(xii) the aggregate Purchase Amount of Receivables repurchased
by the Seller or purchased by the Servicer, if any, with respect to the
related Collection Period;
(xiii) the number and aggregate Principal Balance of
Receivables that were 30-59 days, 60-89 days or 90 days or more
delinquent as of the last day of the related Collection Period;
(xiv) the Net Losses with respect to the related Collection
Period;
(xv) the Overcollateralization Target Amount and the amount by
which the Pool Balance exceeds the Note Balance (after giving effect to
any payments made to the Noteholders on such Distribution Date);
(xvi) the amount of Available Collections;
36
(xvii) the Cumulative Net Loss Percentage and the Sequential
Payment Trigger; and
(xviii) the amount of Excess Collections.
(b) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of the Issuer, but not later
than the latest date permitted by law, the related Trustee, upon receipt
thereof, shall mail to each Person who at any time during such calendar year
shall have been a Securityholder, a statement, prepared by the Servicer,
containing certain information for such calendar year or, in the event such
Person shall have been a Securityholder during a portion of such calendar year,
for the applicable portion of such year, for the purposes of such
Securityholder's preparation of federal income tax returns. In addition, the
Servicer shall furnish to the Trustees for distribution to such Person at such
time any other information necessary under applicable law for the preparation of
such income tax returns.
Section 4.10. Control of Accounts. Notwithstanding anything to the
contrary contained herein, the Issuer agrees that each Account will be
established only with an Eligible Institution which agrees substantially as
follows: (i) it will comply with Entitlement Orders related to such account
issued by the Indenture Trustee, and as provided for in, and consistent with,
Section 5 of the Control Agreement, the Paying Agent, without further consent by
the Servicer, (ii) until termination of this Agreement, it will not enter into
any other agreement related to such account pursuant to which it agrees to
comply with Entitlement Orders of any Person other than the Indenture Trustee
(or the Paying Agent as provided for in clause (i) above), (iii) all Account
Collateral delivered or credited to it in connection with such account and all
proceeds thereof will be promptly credited to such account, (iv) it will treat
all Account Collateral as Financial Assets and (v) all Account Collateral will
be physically delivered (accompanied by any required endorsements) to, or
credited to an account in the name of, the Eligible Institution maintaining the
related Account in accordance with such Eligible Institution's customary
procedures such that such Eligible Institution establishes a Security
Entitlement in favor of the Indenture Trustee with respect thereto over which
the Indenture Trustee (or such other Eligible Institution) has Control.
37
ARTICLE FIVE
THE DEPOSITOR
Section 5.01. Representations and Warranties 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 as
of the Closing Date, and shall survive the sale, transfer, assignment and
conveyance of the Trust Property to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor has been
duly organized and is validly existing as a limited liability company
in good standing under the laws of the State of Delaware, with 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 and sell the Receivables.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing and
has obtained all necessary licenses and approvals in each jurisdiction
in which the failure to so qualify or to obtain such licenses and
approvals would, in the reasonable judgment of the Depositor,
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this
Agreement, each other Basic Document to which the Depositor is a party,
the Receivables, the Notes or the Certificates.
(c) Power and Authority. The Depositor has the power and
authority to execute, deliver and perform its obligations under this
Agreement and each other Basic Document to which it is a party. The
Depositor has the power and authority to sell, assign, transfer and
convey the property to be transferred to and deposited with the Issuer
and has duly authorized such sale, assignment, transfer and conveyance
by all necessary limited liability company action; and the execution,
delivery and performance of this Agreement and each other Basic
Document to which the Depositor is a party has been duly authorized by
the Depositor by all necessary limited liability company action.
(d) Valid Sale; Binding Obligation. This Agreement effects a
valid sale, transfer, assignment and conveyance to the Issuer of the
Receivables and the other Trust Property, enforceable against all
creditors of and purchasers from the Depositor. Each of this Agreement
and each other Basic Document to which the Depositor is a party
constitutes a legal, valid and binding obligation of the Depositor
enforceable against the Depositor in accordance with its terms, except
as enforceability may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability shall
be considered in a proceeding in equity or at law.
38
(e) No Violation. The execution, delivery and performance by
the Depositor of this Agreement and the other Basic Documents to which
the Depositor is a party and the consummation of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof
and thereof does not conflict with, result in any breach of any of the
terms and provisions of, nor constitute (with or without notice or
lapse of time, or both) a default under, the certificate of formation
or limited liability company agreement of the Depositor, or conflict
with or violate any of the material terms or provisions of, or
constitute (with or without notice or lapse of time, or both) a default
under, any indenture, agreement or other instrument to which the
Depositor is a party or by which it shall be bound or to which any of
its properties is subject; nor 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 (other than this Agreement);
nor violate any law or, to the Depositor's knowledge, any order, rule
or regulation applicable to the Depositor or of any federal or State
regulatory body, court, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties, which breach, default, conflict, Lien or violation would
have a material adverse effect on the earnings, business affairs or
business prospects of the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Depositor's knowledge, threatened against the
Depositor, 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 other Basic Document or the Securities, (ii) seeking to
prevent the issuance of the Securities or the consummation of any of
the transactions contemplated by the Basic Documents, (iii) seeking any
determination or ruling that, in the reasonable judgment of the
Depositor, would materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability
of, the Basic Documents, the Receivables or the Securities or (iv)
relating to the Depositor and which might adversely affect the federal
income tax attributes of the Issuer or the Securities.
Section 5.02. Liability of Depositor; Indemnities.
(a) The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Depositor under this
Agreement.
(b) The Depositor shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to the transactions
contemplated by the Basic Documents, including any sales, gross receipts,
general corporation, tangible personal property, privilege or license taxes (but
not including any taxes asserted with respect to, and as of the date of the sale
of the Receivables to the Issuer or the issuance and original sale of the
Securities, or asserted with respect to ownership of the Receivables or federal
or State income taxes arising out of distributions on the Securities), and all
costs and expenses in defending against such taxes.
(c) The Depositor shall indemnify, defend and hold harmless the Issuer,
the Trustees and the Securityholders from and against any loss, liability,
claim, damage or expense incurred by reason of the Depositor's willful
misfeasance, bad faith or negligence (other than errors in
39
judgment) 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.
(d) The Depositor shall indemnify, defend and hold harmless the
Trustees from and against all losses, liabilities, claims, damages or expenses
arising out of or incurred in connection with the acceptance or performance of
the trusts and duties contained herein, in the Trust Agreement (in the case of
the Owner Trustee) and in the Indenture (in the case of the Indenture Trustee),
except to the extent that such loss, liability, claim, damage or expense (i)
shall be due to the willful misfeasance, bad faith or negligence of the Owner
Trustee or the Indenture Trustee, as applicable, (ii) in the case of the Owner
Trustee, shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in the Trust Agreement, (iii) in the
case of the Indenture Trustee, shall arise from the breach by the Indenture
Trustee of any of its representations and warranties set forth in the Indenture
or shall arise out of or be incurred in connection with the performance by the
Indenture Trustee of duties of a Successor Servicer hereunder, (iv) shall be one
as to which the Servicer is required to indemnify the Owner Trustee or the
Indenture Trustee, as the case may be, or (v) relates to any tax other than the
taxes with respect to which the Servicer shall be required to indemnify the
Owner Trustee or the Indenture Trustee, as the case may be.
(e) The Depositor shall pay any and all taxes levied or assessed upon
all or any part of the Trust Property.
(f) Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee, as the case may be, and
the termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Depositor shall have made any
indemnity payments pursuant to this Section 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. Notwithstanding anything to the contrary contained herein, the
Depositor shall only be required to pay (i) any fees, expenses, indemnities or
other liabilities that it may incur under the Basic Documents from funds
available pursuant to, and in accordance with, the payment priorities set forth
in this Agreement and the other Basic Documents and (ii) to the extent the
Depositor has additional funds available (other than funds described in clause
(i)) that would be in excess of amounts that would be necessary to pay the debt
and other obligations of the Depositor in accordance with the Depositor's
certificate of formation, operating agreement and all financing documents to
which the Depositor is a party. The agreement set forth in the preceding
sentence shall constitute a subordination agreement for purposes of Section
510(a) of the Bankruptcy Code. In addition, no amount owing by the Depositor
hereunder in excess of liabilities that it is required to pay in accordance with
the preceding sentence shall constitute a "claim" (as defined in Section 101(5)
of the Bankruptcy Code) against it.
ISection 5.03. Merger, Consolidation or Assumption of the Obligations of
Depositor; Certain Limitations.
(a) Any Person (i) into which the Depositor shall be merged or
consolidated, (ii) resulting from any merger, conversion or consolidation to
which the Depositor shall be a
40
party or (iii) that shall succeed by purchase and assumption to all or
substantially all of 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, shall be the successor to the Depositor
under this Agreement without the execution or filing of any other document or
any further act on the part of any of the parties to this Agreement; provided,
however, that (A) the Depositor shall have delivered to the Trustees an
Officer's Certificate and an Opinion of Counsel each stating that such merger,
conversion, consolidation or succession and such agreement of assumption comply
with this Section, (B) the Depositor shall have delivered to the Trustees an
Opinion of Counsel stating that, in the opinion of such counsel, either (1) all
financing statements and continuation statements and amendments thereto have
been authorized and filed that are necessary to fully preserve and protect the
interest of the Issuer and the Indenture Trustee, respectively, in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (2) no such action shall
be necessary to fully preserve and protect such interest and (C) the Rating
Agency Condition shall have been satisfied. Notwithstanding anything to the
contrary contained herein, the execution of the foregoing agreement of
assumption and compliance with clauses (A), (B) and (C) above shall be
conditions to the consummation of the transactions referred to in clauses (i),
(ii) and (iii) above.
(b) (i) Subject to paragraph (ii) below, the purpose of the Depositor
shall be to engage in any lawful activity for which a limited liability company
may be organized under the general limited liability company law of Delaware
other than the banking business, the trust company business or the practice of a
profession permitted to be incorporated by the Delaware Limited Liability
Company Act.
(ii) Notwithstanding paragraph (b)(i) above, the purpose of
the Depositor shall be limited to the conduct or promotion of the
following activities: (A) to acquire retail installment sales
contracts, purchase money notes or other notes between motor vehicle
dealers or lenders and purchasers of new and used automobiles,
minivans, sport utility vehicles, light-duty trucks, motorcycles or
commercial vehicles (the "Motor Vehicle Receivables"); (B) to act as
settlor or grantor of one or more trusts or special purpose entities
(each, a "Securitization Trust") formed pursuant to a trust agreement
or other agreement for the purpose of issuing one or more series or
classes of certificates, bonds, notes or other evidences of interest or
indebtedness (collectively, the "Motor Vehicle Securities") secured by
or representing beneficial interests in the Motor Vehicle Receivables;
(C) to acquire, lease, own, hold, sell, transfer, convey, dispose of,
pledge, assign, borrow money against, finance, refinance or otherwise
deal with, publicly or privately and whether with unrelated third
parties or with affiliated entities, retail installment sales
contracts, purchase money notes or other notes between motor vehicle
dealers or lenders and purchasers of Motor Vehicle Receivables; (D) to
acquire Motor Vehicle Securities or other property of a Securitization
Trust (including remainder interests in collateral or reserve accounts)
or any interest in any of the foregoing; (E) to issue, authorize, sell
and deliver Motor Vehicle Securities or other instruments secured or
collateralized by the Motor Vehicle Securities; (F) to own equity
interests in other limited liability companies or partnerships whose
purposes are substantially restricted to those described in clauses (A)
through (E) above; (G) to borrow money other than pursuant to clause
(C) above, but only to the extent that such borrowing is permitted by
the terms of
41
the transactions contemplated by clauses (A) through (F) above; and (H)
to (1) negotiate, authorize, execute, deliver or assume or perform the
obligations under any agreement, instrument or document relating to the
activities set forth in clauses (A) through (G) above, including the
Basic Documents and (2) engage in any lawful act or activity and to
exercise any powers permitted to limited liability companies organized
under the laws of the State of Delaware that are incidental to and
necessary, convenient or advisable for the accomplishment of the
above-mentioned purposes, including the entering into of interest rate
or basis swap, cap, floor or collar agreements, currency exchange
agreements or similar hedging transactions and referral, management,
servicing and administration agreements. So long as any outstanding
debt of the Depositor or securities are rated by any nationally
recognized statistical rating organization, the Depositor shall not
issue notes or otherwise borrow money unless (A) the Depositor has made
a written request to the related nationally recognized statistical
rating organization to issue notes or incur borrowings, which notes or
borrowings are rated by the related nationally recognized statistical
rating organization the same as or higher than the rating afforded any
outstanding rated debt or securities, or (B) such notes or borrowings
(1) are fully subordinated (and which shall provide for payment only
after payment in respect of all outstanding rated debt or securities)
or are nonrecourse against any assets of the Depositor other than the
assets pledged to secure such notes or borrowings, (2) do not
constitute a claim against the Depositor in the event such assets are
insufficient to pay such notes or borrowings and (3) where such notes
or borrowings are secured by the rated debt or securities, are fully
subordinated (and which shall provide for payment only after payment in
respect of all outstanding rated debt or securities) to such rated debt
or securities.
(c) Notwithstanding any other provision of this Section and any
provision of law, the Depositor shall not do any of the following:
(i) engage in any business or activity other than as set forth
in Section 5.03(b);
(ii) without the unanimous written consent of the members of
the Depositor and the members of the Board of Directors of the
Depositor (including all independent directors of the Depositor), (A)
consolidate or merge the Depositor with or into any Person or sell all
or substantially all of the assets of the Depositor, (B) institute
proceedings to have the Depositor be adjudicated bankrupt or insolvent,
or consent to the institution of bankruptcy or insolvency proceedings
against Depositor, (C) file a petition seeking, or consent to,
reorganization or relief with respect to the Depositor under any
applicable federal or state law relating to bankruptcy, (D) consent to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Depositor or a
substantial part of its property, (E) make any assignment for the
benefit of creditors of the Depositor, (F) admit in writing the
Depositor's inability to pay its debts generally as they become due,
(G) take any action in furtherance of any action set forth in clauses
(A) through (F) above or (H) to the fullest extent permitted by law,
dissolve or liquidate the Depositor; or
42
(iii) change the current number of independent special members
under the limited liability company agreement of the Depositor.
(d) The Depositor shall not amend its organizational documents except
in accordance with the provisions thereof.
Section 5.04. Limitation on Liability of Depositor and Others. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on any document of any kind, prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor and any director or officer or employee or agent of the Depositor
shall be reimbursed by the Owner Trustee or the Indenture Trustee, as the case
may be, for any contractual damages, liability or expense incurred by reason of
the Owner Trustee's or the Indenture Trustee's willful misfeasance, bad faith or
negligence (except for errors in judgment) in the performance of their
respective duties hereunder, or by reason of reckless disregard of their
respective obligations and duties hereunder. The Depositor shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability. The indemnities contained in this
Section shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement.
Section 5.05. Depositor Not to Resign. Subject to the provisions of
Section 5.03, the Depositor shall not resign from the obligations and duties
hereby imposed on it as Depositor hereunder.
Section 5.06. Depositor May Own Securities. The Depositor and any of
its Affiliates may, in its individual or any other capacity, become the owner or
pledgee of Securities with the same rights as it would have if it were not the
Depositor or an Affiliate of the Depositor, except as otherwise expressly
provided herein or in any other Basic Document (including in the definition of
the term "Note Balance"). Except as otherwise expressly provided herein or in
the other Basic Documents (including in the definition of the term "Note
Balance"), Securities so owned by or pledged to the Depositor or 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 the Notes and the Certificates as the case may be.
43
ARTICLE SIX
THE SERVICER
Section 6.01. Representations and Warranties of Servicer. The Servicer
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 as of
the Closing Date, and shall survive the sale, transfer, assignment and
conveyance of the Trust Property to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture:
(a) Organization and Good Standing. The Servicer is a national
banking association duly organized and validly existing as a banking
institution under the laws of the United States and continues to hold a
valid certificate to do business as such. It is duly authorized to own
its properties and transact its business and is in good standing in
each jurisdiction in which the character of the business transacted by
it or any properties owned or leased by it requires such authorization
and in which the failure to be so authorized would have a material
adverse effect on its business, properties, assets, or condition
(financial or other) and those of its subsidiaries, considered as one
enterprise. The Servicer has, and at all relevant times had, the power,
authority and legal right to service the Receivables and to hold the
Receivable Files as custodian on behalf of the Issuer.
(b) Due Qualification. The Servicer is duly qualified to do
business in good standing and has obtained all necessary licenses and
approvals in each jurisdiction in which the failure to so qualify or to
obtain such licenses and approvals would, in the reasonable judgment of
the Servicer, materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability
of, this Agreement, each other Basic Document to which the Servicer is
a party, the Receivables, the Notes or the Certificates.
(c) Power and Authority. The Servicer has the power and
authority to execute, deliver and perform its obligations under this
Agreement and each other Basic Document to which it is a party; and the
execution, delivery and performance of this Agreement and each other
Basic Document to which it is a party have been duly authorized by the
Servicer by all necessary action.
(d) Binding Obligation. This Agreement and each other Basic
Document to which the Servicer is a party constitute legal, valid and
binding obligations of the Servicer, enforceable against the Servicer
in accordance with their respective terms, except that such
enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer
and other similar laws relating to or affecting creditors' rights
generally, and creditors of national banking associations and financial
institutions the accounts of which are insured by the Federal Deposit
Insurance Corporation in particular, and to general equitable
principles (regardless of whether considered in a proceeding in equity
or at law), including concepts of commercial
44
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief.
(e) No Violation. The execution, delivery and performance by
the Servicer of this Agreement and each other Basic Document to which
the Servicer is a party, the consummation of the transactions
contemplated hereby and thereby and the fulfillment of their respective
terms shall not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, the articles of association or bylaws of
the Servicer, or any material indenture, agreement, mortgage, deed of
trust or other instrument to which the Servicer is a party, by which
the Servicer is bound or to which any of its properties are subject; or
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement
and the other Basic Documents, or violate any law, order, rule or
regulation applicable to the Servicer or its properties of any federal
or State regulatory body, court, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or
any of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the knowledge of the Servicer, threatened, against the
Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having jurisdiction over
the Servicer or its properties: (i) asserting the invalidity of this
Agreement or any of the other Basic Documents, (ii) seeking to prevent
the issuance of the Securities or the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic
Documents, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Servicer, would materially and adversely
affect the performance by it of its obligations under, or the validity
or enforceability of, this Agreement or the Receivables or (iv) seeking
to adversely affect the federal income tax or other federal, State or
local tax attributes of the Securities.
Section 6.02. Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement. Such obligations shall include
the following:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Trustees, the Securityholders and the Depositor from and
against all losses, liabilities, claims, damages and expenses arising
out of or incurred in connection with the use, ownership or operation
by the Servicer or any Affiliate of the Servicer of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Depositor and the Trustees from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents,
including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but not including any
taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of the
Securities, or asserted with respect to ownership of the
45
Receivables, or federal or State income taxes arising out of
distributions on the Securities) and costs and expenses in defending
against such taxes.
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Trustees, the Securityholders and the Depositor from and
against any loss, liability, claim, damage or expense incurred by
reason of the Servicer's willful misfeasance, bad faith or negligence
in the performance of its duties under this Agreement or any other
Basic Document to which it is a party or by reason of a reckless
disregard of its obligations and duties under this Agreement or any
other Basic Document to which it is a party.
(d) The Servicer shall indemnify, defend and hold harmless the
Trustees and their respective officers, directors, employees and agents
from and against all losses, liabilities, claims, damages and expenses
arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein and contained in the Trust
Agreement (in the case of the Owner Trustee) and contained in the
Indenture (in the case of the Indenture Trustee), except to the extent
that such loss, liability, claim, damage or expense: (i) shall be due
to the willful misfeasance, bad faith or negligence (except for errors
in judgment) of the Owner Trustee or the Indenture Trustee, as
applicable, (ii) in the case of the Owner Trustee, shall arise from the
breach by the Owner Trustee of any of its representations or warranties
set forth in Section 7.03 of the Trust Agreement, (iii) in the case of
the Indenture Trustee, shall arise from the breach by the Indenture
Trustee of any of its representations and warranties set forth in the
Indenture or shall arise out of or be incurred in connection with the
performance by the Indenture Trustee of the duties of a Successor
Servicer hereunder or (iv) relates to any tax other than to the taxes
with respect to which either the Depositor or the Servicer shall be
required to indemnify the Owner Trustee or the Indenture Trustee, as
applicable.
(e) The Servicer shall pay the Owner Trustee compensation,
reimbursement or other payments owed to it pursuant to Sections 8.01
and 8.02 of the Trust Agreement.
In addition to the foregoing indemnities, if the Owner Trustee or the
Indenture Trustee is entitled to indemnification by the Depositor pursuant to
Section 5.02 and the Depositor is unable for any reason to provide such
indemnification to the Owner Trustee or the Indenture Trustee, then the Servicer
shall be liable for any indemnification that the Owner Trustee or the Indenture
Trustee is entitled to under Section 5.02. For purposes of this Section, in the
event of a termination of the rights and obligations of the Servicer (or any
Successor Servicer) pursuant to Section 7.01 or a resignation by such Servicer
pursuant to Section 6.05, such Servicer shall be deemed to be the Servicer
pending appointment of a Successor Servicer (other than the Indenture Trustee)
pursuant to Section 7.02. Indemnification under this Section by the Servicer (or
any Successor Servicer), with respect to the period such Person was (or was
deemed to be) the Servicer, shall survive the termination of each Person as
Servicer or a resignation by such Person as Servicer, as well as the resignation
or removal of the Owner Trustee or the Indenture Trustee, as the case may be, or
the termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Servicer shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are
46
made thereafter collects any of such amounts from others, such Person shall
promptly repay such amounts to the Servicer, as the case may be, without
interest.
Section 6.03. Merger, Consolidation or Assumption of the Obligations of
Servicer. Any Person (i) into which the Servicer shall be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Servicer shall be a party or (iii) which may succeed to all or
substantially all of the business of the Servicer, which Person in any of the
foregoing cases is an Eligible Servicer and executes an agreement of assumption
to perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer under this Agreement without the execution or filing
of any other document or any further act on the part of any of the parties
hereto; provided, however, (a) the Servicer shall have delivered to the
Depositor and the Trustees an Officer's Certificate and an Opinion of Counsel
each stating that such merger, conversion or consolidation and such agreement of
assumption comply with this Section and (b) the Servicer shall have delivered to
the Depositor and the Trustees an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been authorized and filed that are
necessary to preserve and protect the interest of the Issuer and the Indenture
Trustee, respectively, in the assets of the Issuer and reciting the details of
such filings or referring to prior Opinions of Counsel in which such details are
given or (B) no such action shall be necessary to preserve and protect such
interest. Notwithstanding anything to the contrary contained herein, the
execution of the foregoing agreement of assumption and compliance with clauses
(a) and (b) above shall be conditions to the consummation of the transactions
referred to in clauses (i), (ii) and (iii) above. The Servicer shall provide
prior written notice of any merger, conversion, consolidation or succession
pursuant to this Section to the Trustees and the Rating Agencies.
Section 6.04. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of its directors, officers, employees
or agents shall be under any liability to the Issuer or any Securityholders for
any action taken or for refraining from the taking of any action pursuant
hereto, or for errors in judgment; provided, however, that this provision shall
not protect the Servicer or any such Person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Servicer and any of its respective directors,
officers, employees or agents may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person in respect of any
matters arising under this Agreement.
(b) Except as provided herein, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to administer and service the Receivables in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties to this Agreement and the interests of the
Noteholders and the 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 Servicer.
47
Section 6.05. Wachovia Bank Not to Resign as Servicer. Subject to the
provisions of Section 6.03, Wachovia Bank shall not resign from the obligations
and duties imposed on it pursuant hereto as Servicer under this Agreement except
upon determination that the performance of its duties hereunder is no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Depositor and the Trustees. No such resignation shall
become effective until the Indenture Trustee or a Successor Servicer shall have
(i) assumed the obligations and duties of the Servicer in accordance with
Section 7.02 and (ii) become the Administrator under the Administration
Agreement pursuant to Section 1.20 thereof.
Section 6.06. Servicer May Own Securities. The Servicer and any of its
Affiliates may, in its individual or other capacity, become the owner or pledgee
of Securities with the same rights as it would have if it were not the Servicer
or an Affiliate of the Servicer, except as otherwise expressly provided herein
or in any other Basic Document (including in the definition of the term "Note
Balance"). Except as otherwise expressly provided herein or in the other Basic
Documents (including in the definition of the term "Note Balance"), Securities
so owned by or pledged to the Servicer or 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 the Notes and
the Certificates, as the case may be.
48
ARTICLE SEVEN
SERVICER TERMINATION EVENTS
Section 7.01. Servicer Termination Events. The occurrence of any one of
the following events shall constitute an event of servicing termination
hereunder (each, a "Servicer Termination Event"):
(a) any failure by the Servicer to deliver to the Owner
Trustee or the Indenture Trustee the Servicer's Certificate for any
Collection Period, which failure shall continue unremedied beyond the
earlier of three Business Days following the date such Servicer's
Certificate was required to be delivered and the related Deposit Date,
or any failure by the Servicer to make any required payment or deposit
under this Agreement, which failure shall continue unremedied beyond
the earlier of five Business Days following the date such payment or
deposit was due and, in the case of a payment or deposit to be made no
later than a Distribution Date or the related Deposit Date, such
Distribution Date or Deposit Date, as applicable;
(b) any failure by the Servicer to duly observe or to perform
in any material respect any other covenant or agreement of the Servicer
set forth in this Agreement, which failure shall materially and
adversely affect the rights of the Depositor or the Noteholders and
shall continue unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given (i) to the Servicer by the Depositor,
the Owner Trustee or the Indenture Trustee or (ii) to the Depositor,
the Servicer and the Trustees by the Holders of Notes evidencing not
less than 25% of the Note Balance of the Controlling Class;
(c) any representation or warranty of the Servicer made in
this Agreement, or in any certificate delivered pursuant hereto or in
connection herewith, other than any representation or warranty relating
to a Receivable that has been purchased by the Servicer, proving to
have been incorrect in any material respect as of the time when the
same shall have been made, and the circumstance or condition in respect
of which such representation or warranty was incorrect shall not have
been eliminated or otherwise cured for a period of 30 days after the
date on which written notice of such circumstance or condition,
requiring the same to be eliminated or cured, shall have been given (i)
to the Servicer by the Depositor, the Owner Trustee or the Indenture
Trustee or (ii) to the Depositor, the Servicer and the Trustees by the
Holders of Notes evidencing not less than 25% of the Note Balance of
the Controlling Class;
(d) the entry of a decree or order by a court or agency or
supervisory authority of competent jurisdiction for the appointment of
a conservator, receiver, liquidator or trustee for the Servicer in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceeding, or for the winding up or liquidation of its
affairs, which decree or order continues unstayed and in effect for a
period of 60 consecutive days; or
(e) the consent by the Servicer to the appointment of a
conservator, receiver, liquidator or trustee in any insolvency,
readjustment of debt, marshalling of assets and
49
liabilities or similar proceeding of or relating to the Servicer or
relating to substantially all of its property, the admission in writing
by the Servicer of its inability to pay its debts generally as they
become due, the filing by the Servicer of a petition to take advantage
of any applicable insolvency or reorganization statute, the making by
the Servicer of an assignment for the benefit of its creditors or the
voluntary suspension by the Servicer of payment of its obligations.
If a Servicer Termination Event shall have occurred and not have been
remedied, either the Indenture Trustee or the Holders of Notes evidencing not
less than 51% of the Note Balance of the Controlling Class, in each case by
notice then given in writing to the Depositor, the Owner Trustee and the
Servicer (and to the Trustees if given by the Noteholders) (each, a "Servicer
Termination Notice") may terminate all the rights and obligations of the
Servicer under this Agreement; provided, however, that the indemnification
obligations of the Servicer under Section 6.02 shall survive such termination.
On or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Notes, the Certificates, the Trust Property or otherwise, shall, without further
action, pass to and be vested in the Indenture Trustee or such Successor
Servicer as may be appointed under Section 7.02; and, without limitation, the
Trustees are hereby authorized and empowered to execute and deliver, on behalf
of the outgoing 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 Receivable
Files or the certificates of title to the Financed Vehicles, or otherwise. The
outgoing Servicer shall cooperate with the Indenture Trustee, the Owner Trustee
and such Successor Servicer in effecting the termination of the responsibilities
and rights of the outgoing Servicer under this Agreement, including the transfer
to the Indenture Trustee or such Successor Servicer for administration by it of
all cash amounts that shall at the time be held by the outgoing Servicer for
deposit, or have been deposited by the outgoing Servicer, in the Accounts or
thereafter received with respect to the Receivables, all Receivable Files and
all information or documents that the Indenture Trustee or such Successor
Servicer may require. In addition, the Servicer shall transfer its electronic
records relating to the Receivables to the Successor Servicer in such electronic
form as the Successor Servicer may reasonably request. All Transition Costs
shall be paid by the outgoing Servicer (or by the initial Servicer if the
outgoing Servicer is the Indenture Trustee acting on an interim basis) upon
presentation of reasonable documentation of such costs and expenses.
The Trustees shall have no obligation to notify the Noteholders, the
Certificateholders or any other Person of the occurrence of any event specified
in this Section prior to the continuance of such event through the end of any
cure period specified in this Section.
Section 7.02. Appointment of Successor Servicer. Upon the resignation
of the Servicer pursuant to Section 6.05 or the termination of the Servicer
pursuant to Section 7.01, the Indenture Trustee shall be the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement and
shall be subject to all the obligations and duties placed on the Servicer by the
terms and provisions of this Agreement; provided, however, that the Indenture
Trustee, as Successor Servicer, shall not, in any event, be required to make any
Advances pursuant to Section 4.04 and shall have no obligations pursuant to
Section 3.09 with respect to the fees and expenses of the Owner Trustee or the
Indenture Trustee, the fees and expenses of the Owner
50
Trustee's attorneys or the Indenture Trustee's attorneys, the fees and expenses
of any custodian appointed by the Trustees, the fees and expenses of independent
accountants or expenses incurred in connection with distributions and reports to
the Certificateholders and the Noteholders. As compensation therefor, the
Indenture Trustee shall be entitled to such compensation (whether payable out of
the Collection Account or otherwise) as the Servicer would have been entitled to
under this Agreement if no such resignation or termination had occurred, except
that all collections on or in respect of the Receivables shall be deposited in
the Collection Account within two Business Days of receipt and shall not be
retained by the Servicer. Notwithstanding the foregoing, the Indenture Trustee
may, if it shall be unwilling so to act, or shall, if it is legally unable so to
act, appoint, or petition a court of competent jurisdiction to appoint, an
Eligible Servicer as the successor to the terminated Servicer under this
Agreement. In connection with such appointment, the Indenture Trustee may make
such arrangements for the compensation of such Successor Servicer out of
collections on or in respect of the Receivables as it and such successor shall
agree; provided, however, that such compensation shall not be greater than that
payable to Wachovia Bank as initial Servicer hereunder without the prior consent
of the Holders of Notes evidencing not less than 51% of the Note Balance of the
Controlling Class. The Indenture Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. The Indenture Trustee shall not be relieved of its duties as
Successor Servicer under this Section until a newly appointed Servicer shall
have assumed the obligations and duties of the terminated Servicer under this
Agreement. Notwithstanding anything to the contrary contained herein, in no
event shall the Indenture Trustee be liable for any servicing fee or for any
differential in the amount of the servicing fee paid hereunder and the amount
necessary to induce any Successor Servicer to act as Successor Servicer
hereunder.
Section 7.03. Effect of Servicing Transfer.
(a) After a transfer of servicing hereunder, the Indenture Trustee or
Successor Servicer shall notify the Obligors to make directly to the Successor
Servicer payments that are due under the Receivables after the effective date of
such transfer.
(b) Except as provided in Section 7.02, after a transfer of servicing
hereunder, the outgoing Servicer shall have no further obligations with respect
to the administration, servicing, custody or collection of the Receivables and
the Successor Servicer shall have all of such obligations, except that the
outgoing Servicer will transmit or cause to be transmitted directly to the
Successor Servicer for its own account, promptly on receipt and in the same form
in which received, any amounts or items held by the outgoing Servicer (properly
endorsed where required for the Successor Servicer to collect any such items)
received as payments upon or otherwise in connection with the Receivables.
(c) Any Successor Servicer shall provide the Depositor with access to
the Receivable Files and to the Successor Servicer's records (whether written or
automated) with respect to the Receivable Files. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Successor Servicer. Nothing in this Section shall
affect the obligation of a Successor Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors, and the failure of
the Servicer to
51
provide access to information as a result of such obligation shall not
constitute a breach of this Section.
(d) Any transfer of servicing hereunder shall not constitute an
assumption by the related Successor Servicer of any liability of the related
outgoing Servicer arising out of any breach by such outgoing Servicer of such
outgoing Servicer's duties hereunder prior to such transfer of servicing.
Section 7.04. Notification to Noteholders, Certificateholders and
Rating Agencies. Upon any notice of a Servicer Termination Event or upon any
termination of, or any appointment of a successor to, the Servicer pursuant to
this Article, the Indenture Trustee shall give prompt written notice thereof to
the Noteholders and the Owner Trustee shall give prompt written notice thereof
to the Certificateholders and to the Rating Agencies.
Section 7.05. Waiver of Past Servicer Termination Events. The
Noteholders evidencing not less than 51% of the Note Balance of the Controlling
Class may, on behalf of all Noteholders, waive any Servicer Termination Event
and its consequences, except an event resulting from the failure to make any
required deposits to or payments from the Collection Account, the Note Payment
Account, the Certificate Payment Account or the Reserve Fund in accordance with
this Agreement. Upon any such waiver of a Servicer Termination Event, such event
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 or impair any right arising therefrom, except to the extent
expressly so waived.
Section 7.06. Repayment of Advances. If the identity of the Servicer
shall change, the outgoing Servicer shall be entitled to receive reimbursement
for outstanding and unreimbursed Advances made pursuant to Section 4.04 by the
outgoing Servicer.
52
ARTICLE EIGHT
TERMINATION
Section 8.01. Optional Purchase of All Receivables.
(a) If, as of the last day of any Collection Period, the Pool Balance
shall be less than or equal to 10% of the initial Pool Balance, the Servicer
shall have the option to purchase on the following Distribution Date the Owner
Trust Estate, other than the Collection Account, the Note Payment Account, the
Certificate Payment Account and the Reserve Fund. To exercise such option, the
Servicer shall notify the Depositor, the Seller, the Owner Trustee, the
Indenture Trustee and the Rating Agencies no later than 30 days prior to the
Distribution Date on which such repurchase is to be effected and shall deposit
into the Collection Account on the related Deposit Date an amount equal to the
lesser of the (i) fair market value of the Receivables and (ii) aggregate
Purchase Amount for the Receivables (including Receivables that became Defaulted
Receivables during the related Collection Period); provided, however, that the
Servicer shall not be permitted to exercise such option unless the amount to be
deposited in the Collection Account (together with amounts on deposit in the
Reserve Fund and the Collection Account) pursuant to this Section is at least
equal to the sum of all amounts due to the Servicer under this Agreement plus
the Note Balance plus all accrued but unpaid interest (including any overdue
interest) on the Notes plus all amounts due to the Servicer for any outstanding
and unreimbursed Advances and Nonrecoverable Advances plus all accrued but
unpaid Total Trustee Fees. Upon such payment, the Servicer shall succeed to and
own all interests in and to the Issuer. The aggregate amount so deposited in
respect of such Distribution Date, plus, to the extent necessary, all amounts in
the Reserve Fund, shall be used to make payments in full to the Noteholders in
the manner set forth in Article Four.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders shall succeed to the rights of the Noteholders hereunder and
the Indenture Trustee shall continue to carry out its obligations hereunder with
respect to the Certificateholders, including making distributions from the
Collection Account in accordance with Section 4.06(c) and making withdrawals
from the Reserve Fund in accordance with Sections 4.06(b) and 4.07.
53
ARTICLE NINE
MISCELLANEOUS
Section 9.01. Amendment.
(a) This Agreement may be amended from time to time by the Depositor,
the Seller, the Servicer and the Owner Trustee, on behalf of the Issuer, with
the consent of the Indenture Trustee, but without the consent of any of the
Noteholders, to cure any ambiguity, to correct or supplement any provision in
this Agreement that may be inconsistent with any other provisions in this
Agreement or any offering document used in connection with the initial offer and
sale of the Notes, to add, change or eliminate any other provisions with respect
to matters or questions arising under this Agreement that are not inconsistent
with the provisions of this Agreement; provided, however, that no such amendment
(i) may materially adversely affect the interests of any Noteholder and (ii)
will be permitted unless an Opinion of Counsel is delivered to the Depositor,
the Owner Trustee and the Indenture Trustee to the effect that such amendment
will not cause the Issuer to be characterized for federal income tax purposes as
an association taxable as a corporation or otherwise have any material adverse
impact on the federal income taxation of any Notes Outstanding or any
Noteholder.
(b) This Agreement may also be amended from time to time by the
Depositor, the Seller, the Servicer and the Owner Trustee, on behalf of the
Issuer, with the consent of the Indenture Trustee and the consent of the Holders
of Notes evidencing at least 66 2/3% of the Note Balance of the Controlling
Class, 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; provided, however, that no such amendment
(1) will be permitted unless an Opinion of Counsel is delivered to the Depositor
and the Trustees to the effect that such amendment will not cause the Issuer to
be characterized for federal income tax purposes as an association taxable as a
corporation or otherwise have any material adverse impact on the federal income
taxation of any Notes Outstanding or any Noteholder and (2) may:
(i) 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 or in respect of the Receivables or
distributions that are required to be made for the benefit of the
Noteholders or change any Interest Rate or the Required Reserve Fund
Amount, without the consent of 100% of the Noteholders of Notes then
Outstanding; or
(ii) reduce the percentage of the Note Balance of the
Controlling Class, the consent of the Noteholders of which is required
for any amendment to this Agreement without the consent of 100% of the
Noteholders of Notes then Outstanding.
(c) An amendment to this Agreement shall be deemed not to materially
adversely affect the interests of any Noteholder if (i) the Person requesting
such amendment obtains and delivers to the Trustees an Opinion of Counsel to
that effect or (ii) the Rating Agency Condition is satisfied.
54
(d) Prior to the execution of any amendment or consent pursuant to this
Section, the Servicer shall provide written notification of the substance of
such amendment or consent to each Rating Agency.
(e) Promptly after the execution of any amendment or consent pursuant
to Section 9.01(b), the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder. It shall not
be necessary for the consent of the Noteholders pursuant to Section 9.01(b) 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 the Noteholders provided for
in this Agreement) and of evidencing the authorization of the execution thereof
by the Noteholders shall be subject to such reasonable requirements as the
Trustees may prescribe.
(f) Prior to the execution of any amendment pursuant to this Section,
the Depositor and the Trustees shall be entitled to receive and rely upon (i) an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and (ii) an Officer's Certificate of the Servicer
that all conditions precedent provided for in this Agreement to the execution of
such amendment have been complied with. The Owner Trustee or the Indenture
Trustee may, but shall not be obligated to, enter into any such amendment which
affects such Owner Trustee's or Indenture Trustee's own rights, duties or
immunities under this Agreement or otherwise.
Section 9.02. Protection of Title to Issuer.
(a) The Depositor or the Servicer, or both, shall authorize and file
such financing statements and cause to be authorized and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Issuer and of the
Indenture Trustee for the benefit of the Noteholders in the Receivables and in
the proceeds thereof. The Depositor or the Servicer, or both, shall deliver (or
cause to be delivered) to the Trustees file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or organizational structure in any manner that would make any financing
statement or continuation statement filed in accordance with Section 9.02(a)
seriously misleading within the meaning of Section 9-506 of the UCC, unless it
shall have given the Trustees at least 60 days' prior written notice thereof and
shall have promptly filed such amendments to previously filed financing
statements or continuation statements or such new financing statements as may be
necessary to continue the perfection of the interest of the Issuer and the
Indenture Trustee for the benefit of the Noteholders in the Receivables and the
proceeds thereof.
(c) Each of the Seller, the Depositor and the Servicer shall give the
Trustees at least 60 days' prior written notice of any change in its name,
identity, organizational structure or jurisdiction of organization or any
relocation of its principal place of business or chief executive office if, as a
result of such change or relocation, the applicable provisions of the UCC would
require the filing of any amendment to any previously filed financing statement
or continuation statement or of any new financing statement and shall promptly
file any such amendment,
55
continuation statement or new financing statement. The Depositor shall at all
times maintain its jurisdiction of organization, its principal place of business
and its chief executive office within the United States. The Servicer shall at
all times maintain each office from which it shall service Receivables, and each
office at which the Receivable Files are located, within the United States.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
and held by the Reserve Fund in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of transfer of the Receivables to the Issuer pursuant to this
Agreement, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly and unambiguously
the interest of the Issuer and the Indenture Trustee in such Receivable and 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 be deleted from or modified on the
Servicer's computer systems when, and only when, such Receivable shall have been
paid in full or repurchased by the Seller or purchased by the Servicer.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in any motor
vehicle retail installment sale contract to any prospective purchaser, lender or
other transferee, the Servicer shall give to such prospective purchaser, lender
or other transferee computer tapes, CDs, records or printouts (including any
restored from back-up archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly and unambiguously that such
Receivable has been sold and is owned by the Issuer and has been pledged to the
Indenture Trustee (unless such Receivable has been paid in full or repurchased
by the Seller or purchased by the Servicer).
(g) The Servicer shall permit the Trustees and their respective agents
at any time during normal business hours to inspect, audit and make copies of
and abstracts from the Servicer's records regarding any Receivable.
(h) If the Seller has repurchased one or more Receivables from the
Issuer pursuant to Section 2.04 or the Servicer has purchased one or more
Receivables from the Issuer pursuant to Section 3.08, the Servicer shall, upon
request, furnish to the Owner Trustee or to the Indenture Trustee, within ten
Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Issuer, together with a reconciliation of such
list to the Receivables Schedule and to each of the Servicer's Certificates
furnished before such request indicating removal of Receivables from the Issuer.
(i) The Servicer shall deliver to the Depositor and the Trustees:
(i) promptly after the authorization and delivery of each
amendment to any financing statement delivered pursuant to this
Agreement, an Opinion of Counsel stating
56
that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been authorized and filed
that are necessary fully to preserve and protect the interest of the
Depositor (in the case of an opinion delivered by the Servicer) or the
Issuer and the Indenture Trustee (in the case of an opinion delivered
by the Depositor) in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to preserve and
protect such interest; and
(ii) within 90 days after the beginning of each calendar year
(beginning with the first year beginning more than three months after
the Cutoff Date) an Opinion of Counsel, dated as of a date during such
90-day period, stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements have been
authorized and filed that are necessary fully to preserve and protect
the interest of the Depositor (in the case of an opinion delivered by
the Servicer) or the Issuer and the Indenture Trustee (in the case of
an opinion delivered by the Depositor) in the Receivables, and reciting
the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i) or (ii) above shall
specify any action necessary (as of the date of such opinion) to be taken on or
before March 31 of the following year to preserve and protect such interest.
(j) The Depositor shall, to the extent required by applicable law,
cause the Notes to be registered with the Commission pursuant to Section 12(b)
or Section 12(g) of the Exchange Act within the time periods specified in such
sections.
Section 9.03. Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered, sent by telecopier,
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt in the case of (i) the
Depositor, at One Wachovia Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel, (ii) the Seller or the
Servicer, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Treasury Department, (iii) the Issuer or the Owner
Trustee, at the Corporate Trust Office (as such term is defined in the Trust
Agreement), (iv) the Indenture Trustee, at the Corporate Trust Office, (v)
Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ABS Monitoring Department, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (vi) Standard & Poor's, to Standard &
Poor's Ratings Services, a Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance
Department or (vii) as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties.
Section 9.04. Assignment.
(a) Notwithstanding anything to the contrary contained herein, except
as provided in the remainder of this Section or as provided in Sections 6.03 and
7.02, this Agreement may not
57
be assigned by the Depositor or the Servicer without the prior written consent
of the Trustees and the Holders of Notes evidencing at least 66 2/3% of the Note
Balance of the Controlling Class.
(b) The Depositor hereby acknowledges and consents to the mortgage,
pledge, assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders
of all right, title and interest of the Issuer in, to and under the Trust
Property and the assignment of any or all of the Issuer's rights and obligations
hereunder to the Indenture Trustee.
Section 9.05. Severability. 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
and terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions and terms of this
Agreement.
Section 9.06. Further Assurances. The Depositor, the Seller, the
Servicer and the Issuer agree to do and perform, from time to time, any and all
acts and to authorize or execute any and all further instruments required or
reasonably requested by the Owner Trustee or the Indenture Trustee more fully to
effect the purposes of this Agreement, including the authorization and execution
of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 9.07. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Depositor, the Owner Trustee, the
Indenture Trustee, 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
provided in this Agreement are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 9.08. Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Owner Trustee, the
Noteholders, the Certificateholders and their respective successors and
permitted assigns. Except as otherwise provided in this Article, no other Person
shall 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 pursuant to the Indenture.
Section 9.09. Actions by Noteholder 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 the Noteholders or the
Certificateholders, such action, notice or instruction may be taken or given by
any Noteholder or any Certificateholder, as applicable, unless such provision
requires a specific percentage of the Noteholders or the Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Noteholder or a Certificateholder shall bind such
Noteholder or Certificateholder and every
58
subsequent Holder of the related 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 or the Servicer in reliance thereon, whether or not notation
of such action is made upon such Note or Certificate.
Section 9.10. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 9.11. Headings. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect the
meaning or interpretation of the terms or provisions hereof.
Section 9.12. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of NEW YORK, without reference to its
conflict of law provisions (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 9.13. Nonpetition Covenants. The Owner Trustee, the Indenture
Trustee and the Servicer each covenants and agrees that it will not at any time
institute against, or join any other Person in instituting against, the
Depositor or the Issuer any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings or other proceedings under any federal or State
bankruptcy or similar law. This Section shall survive the resignation or removal
of the Owner Trustee under the Trust Agreement and the Indenture Trustee under
the Indenture and shall survive the termination of the Trust Agreement and the
Indenture.
Section 9.14. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything to the contrary contained herein, this
Agreement has been executed by the Owner Trustee not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event shall
the Owner Trustee in its individual capacity 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 Six, Seven and
Eight of the Trust Agreement.
(b) Notwithstanding anything to the contrary contained herein, this
Agreement has been accepted by the Indenture Trustee, not in its individual
capacity but solely as Indenture Trustee and in no event shall the Indenture
Trustee in its individual capacity 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.
59
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers, thereunto duly authorized, as of the
day and year first above written.
WACHOVIA AUTO OWNER TRUST 2004-B
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee on behalf of the
Issuer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
POOLED AUTO SECURITIES SHELF LLC,
as Depositor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Seller and Servicer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Acknowledged and accepted as
of the day and year first
above written:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Sale and Servicing Agreement
SCHEDULE A
LOCATION OF RECEIVABLE FILES
Wachovia Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Columbia, South Carolina 29226-0002
Wachovia Bank, National Association
Dealer Service Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SA-1
EXHIBIT A
REPRESENTATIONS AND WARRANTIES AS TO THE RECEIVABLES
(i) Characteristics of Receivables. Each Receivable (A) was originated
in the United States by a Dealer located in the United States for the retail
sale of a Financed Vehicle in the ordinary course of the applicable Dealer's
business in accordance with the Seller's credit policies as of the date of
origination or acquisition of the related Receivable, is payable in United
States dollars, has been fully and properly executed by the parties thereto, has
been purchased by the Seller from such Dealer under an existing Dealer Agreement
(or approved form of assignment) and has been validly assigned by such Dealer to
the Seller, (B) has created a valid, subsisting and enforceable first priority
security interest in favor of the Seller in the Financed Vehicle, which security
interest shall be perfected and prior to any other interest in such Financed
Vehicle, and which security interest is assignable by the Seller and
reassignable by the assignee, (C) contains customary and enforceable provisions
such that the rights and remedies of the holder thereof are adequate for
realization against the collateral of the benefits of the security, (D) shall,
except as otherwise provided in the Sale and Servicing Agreement, provide for
level Monthly Payments (provided that the payment in the first or last month in
the life of the Receivable may be minimally different from the level payment)
that fully amortize the Amount Financed over its original term and shall provide
for a finance charge or shall yield interest at its Contract Rate, (E) is a
Simple Interest Receivable, (F) is due from an Obligor with a mailing address
within the United States or its territories, (G) to the best of the Seller's
knowledge, is due from an Obligor who is a natural person and (H) to the best of
the Seller's knowledge, is not assumable by another person in a manner which
would release the Obligor thereof from such Obligor's obligations to the Seller
with respect to such Receivable.
(ii) Receivables Schedule. The information set forth in the Receivables
Schedule shall be true and correct in all material respects as of the close of
business on the Cutoff Date, and the Receivables were selected (a) from those
motor vehicle receivables of the Seller which met the selection criteria set
forth in this Agreement and (b) using selection procedures, believed by the
Seller, not to be adverse to the Noteholders.
(iii) Compliance with Law. Each Receivable complied at the time it was
originated or made, and at the Closing Date complies, in all material respects
with all requirements of applicable federal, State and, to the best knowledge of
the Seller, local laws, rulings and regulations thereunder (including usury
laws).
(iv) Binding Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation in writing of the related Obligor,
enforceable by the holder thereof in accordance with its terms, except as (A)
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law
and (B) such Receivable may be modified by the application after the Cutoff Date
of the Servicemembers Civil Relief Act or by any similar applicable State law.
A-1
(v) No Government Obligor. No Receivable is due from the United States
or any State or any agency, department, subdivision or instrumentality thereof.
(vi) Obligor Bankruptcy. To the best of the Seller's knowledge, at the
Cutoff Date, no Obligor is the subject of a bankruptcy proceeding.
(vii) Security Interest in Financed Vehicles. Immediately prior to the
transfer of the Receivables by the Seller to the Depositor, each Receivable was
secured by a valid, binding and enforceable first priority perfected security
interest in favor of the Seller in the related Financed Vehicle, which security
interest has been validly assigned by the Seller to the Depositor. The Servicer
has received, or will receive within 180 days after the Closing Date, the
original certificate of title for each Financed Vehicle (other than any Financed
Vehicle that is subject to a certificate of title statute or motor vehicle
registration law that does not require that the original certificate of title
for such Financed Vehicle be delivered to the Seller).
(viii) Receivables in Force. No Receivable shall have been satisfied,
subordinated or rescinded, nor shall any Financed Vehicle have been released in
whole or in part from the Lien granted by the related Receivable.
(ix) No Waivers. No provision of a Receivable shall have been waived in
such a manner that such Receivable fails to meet all of the other
representations and warranties made by the Seller herein with respect thereto.
(x) No Amendments. No Receivable shall have been amended or modified in
such a manner that the total number of Monthly Payments has been increased or
decreased or that the related Amount Financed has been increased or decreased or
that such Receivable fails to meet all of the other representations and
warranties made by the Seller herein with respect thereto.
(xi) No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of any Receivable, or the exercise of any right
thereunder, will not render such Receivable unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and the Seller has not received written notice of the
assertion with respect to any Receivable of any such right of rescission,
setoff, counterclaim or defense.
(xii) No Liens. No Liens or claims shall have been filed, including
Liens for work, labor or materials or for unpaid local, State or federal taxes
relating to any Financed Vehicle that shall be prior to, or equal or coordinate
with, the security interest in such Financed Vehicle granted by the related
Receivable.
(xiii) No Defaults; Repossessions. Except for payment defaults that, as
of the Cutoff Date, have been continuing for a period of not more than 30 days,
no default, breach or violation under the terms of any Receivable, permitting
acceleration, shall have occurred as of the Cutoff Date and no continuing
condition that with notice or the lapse of time or both would constitute a
default, breach or violation under the terms of any Receivable, permitting
acceleration, shall have arisen; and the Seller shall not have waived any of the
foregoing except as otherwise permitted hereunder. On or prior to the Cutoff
Date, no Financed Vehicle has been repossessed.
A-2
(xiv) Insurance. Each Receivable requires the related Obligor to obtain
physical damage insurance covering the related Financed Vehicle and to maintain
such insurance.
(xv) Title. It is the intention of the Seller that the transfers and
assignments herein contemplated constitute a sale of the Receivables from the
Seller to the Purchaser and that the beneficial interest in and title to the
Receivables not be part of the debtor's estate in the event of the appointment
of a receiver or conservator for the Seller under any receivership, bankruptcy
law, insolvency or banking law; no Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than the Purchaser, and no
provision of a Receivable shall have been waived, except as provided in clause
(ix) above; immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Receivable free
and clear of all Liens and rights of others, except for Liens that shall be
released on or before the Closing Date; immediately upon the transfer and
assignment thereof, the Purchaser shall have good and marketable title to each
Receivable, free and clear of all Liens and rights of others; and the transfer
and assignment herein contemplated has been perfected under the UCC.
(xvi) Security Interest Matters. This Agreement creates a valid and
continuing "security interest" (as defined in the UCC) in the Receivables in
favor of the Depositor, which security interest is prior to all other Liens and
is enforceable as such as against creditors of and purchasers from the Seller.
With respect to each Receivable, the Seller has taken all steps necessary to
perfect its security interest against the related Obligor in the related
Financed Vehicle. The Receivables constitute "tangible chattel paper" (as
defined in the UCC). The Seller has caused or will cause prior to the Closing
Date the filing of all appropriate financing statements in the proper filing
offices in the appropriate jurisdictions under applicable law necessary to
perfect the security interest in the Receivables granted to the Depositor under
the Receivables Purchase Agreement. Other than the security interest granted to
the Depositor under the Receivables Purchase Agreement, the Seller has not
pledged, assigned, sold, granted a security interest in or otherwise conveyed
any of the Receivables. The Seller has not authorized the filing of and is not
aware of any financing statements against the Seller that include a description
of collateral covering the Receivables other than any financing statement
relating to the security interest granted to the Depositor under the Sale and
Servicing Agreement or that has been terminated. The motor vehicle retail
installment sale 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 Depositor, the Issuer or the
Indenture Trustee. The Seller is not aware of any judgment or tax lien filings
against the Seller.
(xvii) Financing Statements. All financing statements filed or to be
filed against the Seller in favor of the Issuer (as assignee of the Depositor)
contain a statement substantially 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". All financing statements filed or to be filed
against the Seller in favor of the Indenture Trustee (as assignee of the Issuer)
contain a statement substantially to the following effect: "A purchase of or
security interest in any collateral described in this financing statement will
violate the rights of the Indenture Trustee".
(xviii) Lawful Assignment. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer,
assignment and conveyance of such Receivable under this Agreement or the Sale
and Servicing Agreement or the pledge of such
A-3
Receivables hereunder or under the Indenture is unlawful, void or voidable or
under which such Receivable would be rendered void or voidable as a result of
any such sale, transfer, assignment, conveyance or pledge. The Seller has not
entered into any agreement with any account debtor that prohibits, restricts or
conditions the assignment of the Receivables.
(xix) All Filings Made. All filings (including UCC filings) necessary
in any jurisdiction to give the Purchaser, the Issuer and the Indenture Trustee
a first priority security interest in the Receivables shall have been made or
will be made on the Closing Date.
(xx) One Original. There shall be only one original executed copy of
each Receivable.
(xxi) Location of Receivable Files. Each Receivable File shall be kept
at one of the locations listed in Schedule A.
(xxii) Custodial Agreements. Immediately prior to the transfer of the
Receivables by the Seller to the Purchaser, the Seller, an Affiliate of the
Seller or an agent on behalf of the Seller had possession of the Receivable
Files and there were no, and there will not be, any custodial agreements in
effect affecting the right or ability of the Seller to make, or cause to be
made, any delivery required under this Agreement.
(xxiii) Bulk Transfer Laws. The transfer of the Receivables and the
Receivable Files by the Seller to the Purchaser pursuant to this Agreement is
not subject to the bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.
(xxiv) Principal Balance. Each Receivable had an original Principal
Balance of not more than $100,000.00 and a remaining Principal Balance, as of
the Cutoff Date, of not less than $500.00.
(xxv) New and Used Vehicles. As of the Cutoff Date, approximately
67.41% of the Pool Balance was secured by new Financed Vehicles and
approximately 32.59% of the Pool Balance was secured by used Financed Vehicles.
(xxvi) Origination. Each Receivable was originated after December 27,
1998.
(xxvii) Original Term to Maturity. Each Receivable had an original term
to maturity of not more than 72 months and not less than 12 months and a
remaining term to maturity as of the Cutoff Date, of not more than 72 months and
not less than three months.
(xxviii) Weighted Average Remaining Term to Maturity. As of the Cutoff
Date, the weighted average remaining term to maturity of the Receivables was
approximately 50.71 months.
(xxix) Annual Percentage Rate. Each Receivable has an Contract Rate of
at least 2.39% and not more than 9.494%.
(xxx) Simple Interest Method. All payments with respect to the
Receivables have been allocated consistently in accordance with the Simple
Interest Method.
A-4
(xxxi) Marking Records. As of the Closing Date, the Seller will have
caused its computer and accounting records relating to each Receivable to be
marked to show that the Receivables have been sold to the Purchaser by the
Seller and transferred and assigned by the Purchaser to the Issuer in accordance
with the terms of the Sale and Servicing Agreement and pledged by the Issuer to
the Indenture Trustee in accordance with the terms of the Indenture.
(xxxii) Chattel Paper. Each Receivable constitutes "tangible chattel
paper" within the meaning of the UCC as in effect in the State of origination;
provided, however, that upon satisfaction of the Rating Agency Condition, a
Receivable may constitute "electronic chattel paper" within the meaning of the
UCC as in effect in the State of origination.
(xxxiii) Final Scheduled Distribution Date. No Receivable has a final
scheduled payment date later than six months prior to the Class C Final
Scheduled Distribution Date.
(xxxiv) No Fleet Sales. None of the Receivables have been included in a
"fleet" sale (i.e., a sale to any single Obligor of more than eight Financed
Vehicles).
(xxxv) No Fraud or Misrepresentation. Each Receivable that was
originated by a Dealer and was sold by the Dealer to the Seller, to the best of
the Seller's knowledge, was so originated and sold without fraud or
misrepresentation on the part of such Dealer in either case.
(xxxvi) No Impairment. The Seller has not done anything to convey any
right to any Person that would result in such Person having a right to payments
due under a Receivable or otherwise to impair the rights of the Depositor in any
Receivable or the proceeds thereof.
(xxxvii) Servicing. Each Receivable has been serviced in conformity
with all applicable laws, rules and regulation and in conformity with the
Seller's policies and procedures which are consistent with customary, prudent
industry standards.
(xxxviii) No Consent. To the best of the Seller's knowledge, no notice
to or consent from any Obligor is necessary to effect the acquisition of the
Receivables by the Purchaser or the Issuer or the pledge of the Receivables by
the Issuer to the Indenture Trustee.
(xxxix) Other Receivables. To the best of the Seller's knowledge,
neither the Obligor on any Receivable nor any of its Affiliates is the obligor
on Receivables with an aggregate principal amount representing more than 0.10%
of the aggregate Principal Balance of the Receivables as of the Cutoff Date.
A-5
EXHIBIT B
FORM OF DISTRIBUTION STATEMENT
Wachovia Auto Owner Trust 2004-B
Priority Principal Distributable Amount $__________
Secondary Principal Distributable Amount $__________
Tertiary Principal Distributable Amount $__________
Regular Principal Distributable Amount $__________
Interest Distributable Amount $__________
Class A-1 Notes: $ per $1,000 original principal amount
Class A-2 Notes: $ per $1,000 original principal amount
Class A-3 Notes: $ per $1,000 original principal amount
Class A-4 Notes: $ per $1,000 original principal amount
Class B Notes: $ per $1,000 original principal amount
Class C Notes: $ per $1,000 original principal amount
Available Collections $__________
Available Funds $__________
Pool Balance as of the close of business on the last day of the Collection Period $__________
(per $1,000 original principal amount)
Note Pool Factor $__________
Class A-1 Notes: $__________
Class A-2 Notes: $__________
Class A-3 Notes: $__________
Class A-4 Notes: $__________
Class B Notes: $__________
Class C Notes: $__________
Note Balance $__________
Class A-1 Notes: $__________
Class A-2 Notes: $__________
Class A-3 Notes: $__________
Class A-4 Notes: $__________
Class B Notes: $__________
Class C Notes: $__________
Class D Notes: $__________
Reserve Fund Amount $__________
change from immediately preceding Distribution Date $__________
Reserve Fund Draw Amount $__________
Total Servicing Fee $__________
Total Trustee Fees $__________
Required Payment Amount $__________
B-1
Aggregate Amount of Defaulted Receivables $__________
Aggregate Purchase Amount of Purchased Receivables $__________
Purchase Amount $__________
Net Losses on the Receivables $__________
Aggregate Principal Balance of Receivables $__________
30 to 59 days past due (No. of Receivables ____) $__________
60 to 89 days past due (No. of Receivables ____) $__________
90 or more days past due (No. of Receivables ____) $__________
B-2
EXHIBIT C
FORM OF SERVICER'S CERTIFICATE
Wachovia Auto Owner Trust 2004-B
Collection Period ____________________
Determination Date ____________________
Distribution Date ____________________
1. Pool Balance as of the close of business on the last day of the $__________
Collection Period (per $1,000 original principal amount)
2. Note Balance
a. Class A-1 Notes $
b. Class A-2 Notes $
c. Class A-3 Notes $
d. Class A-4 Notes $
e. Class B Notes $
f. Class C Notes $
3. Pool Factors
a. Class A-1 Notes
b. Class A-2 Notes
c. Class A-3 Notes
d. Class A-4 Notes
e. Class B Notes f. Class C Notes
4. Available Funds $__________
5. Available Collections $__________
6. Total Servicing Fee $__________
a. Monthly Servicing Fee $__________
b. Amount Unpaid from prior months $__________
7. Total Trustee Fees $__________
a. Monthly Trustee Fees $__________
b. Amount Unpaid from prior months $__________
8. Priority Principal Distributable Amount $__________
9. Secondary Principal Distributable Amount $__________
10. Tertiary Principal Distributable Amount $__________
11. Regular Principal Distributable Amount $__________
12. Interest Distributable Amount (per $1,000 original principal amount) $__________
a. Class A-1 Notes (per $1,000 original principal amount) $__________
b. Class A-2 Notes (per $1,000 original principal amount) $__________
c. Class A-3 Notes (per $1,000 original principal amount) $__________
d. Class A-4 Notes (per $1,000 original principal amount) $__________
e. Class B Notes (per $1,000 original principal amount) $__________
f. Class C Notes (per $1,000 original principal amount) $__________
C-1
13. Required Payment Amount $__________
14. Reserve Fund Amount $__________
Change from immediately preceding Distribution Date $__________
15. Reserve Fund Draw Amount $__________
16. The lesser of: (a or b)
a. The amount, if any, by which the Required Payment Amount
for the Distribution Date exceeds Available Collections
for such Distribution Date $__________
b. The Reserve Fund Amount for such Distribution Date (before
giving effect to any deposits to or withdrawals from the Reserve
Fun on the related Distribution Date) $__________
17. The amount by which the Required Payment Amount exceeds the sum of
Available Collections plus the Reserve Fund Draw Amount: $__________
18. Reserve Fund Amount $__________
19. The amount by which the Required Reserve Fund Amount exceeds the
Reserve Fund Amount $__________
20. Aggregate Amount of Defaulted Receivables $__________
Account No. ___ $__________
21. Aggregate Purchase Amount of Purchased Receivables $__________
Account No. ___ $__________
22. Trustee Fees and Expenses $__________
23. Purchase Amount $__________
24. Net Losses on the Receivables $__________
25. Aggregate Principal Balance of Receivables $__________
a. 30 to 59 days past due (No. of Receivables ____) $__________
b. 60 to 89 days past due (No. of Receivables ____) $__________
c. 90 or more days past due (No. of Receivables ____) $__________
26. Cumulative Losses and the Sequential Payment Trigger $__________
Instructions to the Indenture Trustee or Paying Agent
From the Collection Account:
1. To the Servicer $__________
2. To the Trustees $__________
3. To the Note Payment Account $__________
4. To the Reserve Fund $__________
5. To the Certificate Payment Account $__________
From the Note Payment Account:
1. To the Class A-1 Noteholders $__________
C-2
2. To the Class A-2 Noteholders $__________
3. To the Class A-3 Noteholders $__________
4. To the Class A-4 Noteholders $__________
5. To the Class B Noteholders $__________
6. To the Class C Noteholders $__________
From the Certificate Payment Account:
1. To the Certificateholders $__________
From the Reserve Fund:
1. To the Collection Account $__________
2. To the Certificateholders $__________
C-3