Exhibit 10.104(b)
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EXECUTION COPY
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FIRST INVESTORS FINANCIAL SERVICES, INC.,
as Seller,
FIRST INVESTORS SERVICING CORPORATION,
as Servicer,
FIRST INVESTORS AUTO FUNDING CORPORATION
as Depositor,
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Indenture Trustee
and
FIRST INVESTORS AUTO OWNER TRUST 2002-A
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SALE AND ALLOCATION AGREEMENT
Dated as of January 1, 2002
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TABLE OF CONTENTS
PAGE
Article I Definitions...............................................................................3
SECTION 1.1 DEFINITIONS......................................................................3
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS...................................................17
Article II Trust Property..........................................................................17
SECTION 2.1 CONVEYANCE OF TRUST PROPERTY....................................................17
SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE CONTRACTS................20
SECTION 2.3 REPURCHASE BY SELLER UPON BREACH................................................24
Article III Distributions; Reserve Account;........................................................24
Statements to Noteholders and Certificateholders...................................................24
SECTION 3.1 ACCOUNTS........................................................................24
SECTION 3.2 COLLECTIONS.....................................................................26
SECTION 3.3 APPLICATION OF COLLECTIONS......................................................27
SECTION 3.4 APPLICATION OF DEPOSITS.........................................................27
SECTION 3.5 DETERMINATION DATE CALCULATIONS.................................................27
SECTION 3.6 RESERVE ACCOUNT.................................................................31
SECTION 3.7 STATEMENTS TO NOTEHOLDERS.......................................................33
SECTION 3.8 CONTROL OF SECURITIES ACCOUNTS..................................................34
SECTION 3.9 POLICY MATTERS..................................................................34
Article IV the Seller..............................................................................35
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER....................................35
SECTION 4.2 LIABILITY OF SELLER; INDEMNITIES................................................36
SECTION 4.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, SELLER.........37
SECTION 4.4 LIMITATION ON LIABILITY OF SELLER AND OTHERS....................................38
SECTION 4.5 SELLER MAY OWN NOTES............................................................38
Article V Miscellaneous............................................................................39
SECTION 5.1 AMENDMENT.......................................................................39
SECTION 5.2 PROTECTION OF TITLE OF TRUST....................................................40
SECTION 5.3 GOVERNING LAW...................................................................42
SECTION 5.4 NOTICES.........................................................................42
SECTION 5.5 SEVERABILITY OF PROVISIONS......................................................42
SECTION 5.6 ASSIGNMENT......................................................................42
SECTION 5.7 FURTHER ASSURANCES..............................................................42
SECTION 5.8 NO WAIVER; CUMULATIVE REMEDIES..................................................43
SECTION 5.9 THIRD-PARTY BENEFICIARIES.......................................................43
SECTION 5.10 ACTIONS BY NOTEHOLDERS.........................................................43
SECTION 5.11 COUNTERPARTS....................................................................43
SECTION 5.12 AGENT FOR SERVICE...............................................................43
SECTION 5.13 NO BANKRUPTCY...................................................................43
SECTION 5.14 LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE..................44
SECTION 5.15 CERTAIN RIGHTS OF THE INSURER...................................................44
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Exhibits
Exhibit A Form of Monthly Servicer Report
Exhibit B [Reserved]
Exhibit C Credit and Collection Policy
Exhibit D Offering Memorandum
Exhibit E Form of Originator Agreement
Exhibit F Form of Additional Contract Assignment
SCHEDULES
Schedule 1 Schedule of Initial Contracts
Schedule 2 Location of Contract Files
ii
SALE AND ALLOCATION AGREEMENT, dated as of January 1, 2002 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"AGREEMENT"), by and among FIRST INVESTORS AUTO OWNER TRUST 2002-A, a Delaware
business trust (the "TRUST"), FIRST INVESTORS FINANCIAL SERVICES, INC., a Texas
corporation, as seller (the "SELLER"), FIRST INVESTORS AUTO FUNDING CORPORATION,
as depositor (the "DEPOSITOR"), ▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee, and FIRST INVESTORS SERVICING CORPORATION
("FISC"), a Georgia corporation, as Servicer (together with its successors and
assigns in such capacity, the "SERVICER").
WHEREAS, the Trust desires to purchase the Contracts purchased by the
Seller in the ordinary course of business;
WHEREAS, the Seller is willing to sell the Contracts to the Trust as of the
date hereof; and
WHEREAS, FISC is willing to service such Contracts on behalf of the Trust;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, whenever capitalized shall have the following
meanings:
ACCEPTABLE EXTENDED CONTRACT RATE: 3% calculated as of the three month average
Extended Contract Rate for the current Collection Period and the prior two
Collection Periods.
ADDITIONAL CONTRACT: Any Contract purchased by the Trust from the Seller during
the Prefunding Period from proceeds available in the Prefunding Account.
ADDITIONAL CONTRACT CUTOFF DATE: With respect to any Additional Contract, the
date that is two Business Days prior to the related Additional Contract Purchase
Date.
ADDITIONAL CONTRACT PURCHASE DATE: Any Business Day during the Prefunding Period
that is designated by the Seller in writing to the Indenture Trustee and the
Insurer as the date on which Additional Contracts will be purchased by the Trust
from the Seller.
ADDITIONAL CONVEYED PROPERTY: With respect to any Additional Contracts, the
proceeds, rights and other items described in SECTION 2.1(a)(ii) through (ix).
ADDITIONAL NOTE INTEREST: For any Payment Date, with respect to the Class A
Notes, the sum of (i) all accrued but unpaid Monthly Note Interest for previous
Payment Dates plus (ii) to the
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extent permitted by law, interest on such accrued but unpaid Monthly Note
Interest at the Note Rate.
ADDITIONAL PURCHASE PRICE: With respect to any Additional Contract and the
related Additional Conveyed Property, 100% of the outstanding balance of such
Additional Contract as of the related Additional Cutoff Date.
ADDITIONAL RESERVE ACCOUNT DEPOSIT: As defined in SECTION 2.1(f)(iii).
AFFILIATE: With respect to any Person, any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such
Person. For purposes of this definition, "control" when used with respect to any
Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
AMOUNT FINANCED: With respect to any Contract, the aggregate amount advanced to
the related Obligor under such Contract toward the purchase price of the
Financed Vehicle and any related costs.
APPLICABLE TAX STATE: As of any date of determination, (i) any state in which
the Owner Trustee maintains the Corporate Trust Office, (ii) any state in which
the Owner Trustee maintains its principal executive offices and (iii) any state
in which the Servicer regularly conducts servicing and collection activities
(other than purely ministerial activities) with respect to a material portion of
the Contracts.
APR: With respect to any Contract, the annual percentage rate of interest stated
in such Contract.
AVAILABLE FUNDS: For any Payment Date, (i) all Obligor payments received with
respect to the Contracts during the preceding Collection Period, (ii) all
Liquidation Proceeds and insurance proceeds received with respect to the
Contracts during the preceding Collection Period, (iii) all interest earned on
funds on deposit in the Collection Account, the Reserve Account and the
Prefunding Account during the preceding Collection Period, (iv) the Purchase
Amount for all Contracts that became Purchased Contracts during the preceding
Collection Period and (v) all prepayments received with respect to the Contracts
during the preceding 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, credit life and credit disability insurance
policies); PROVIDED, HOWEVER, that Available Funds for any Payment Date shall
not include any payments or other amounts (including Liquidation Proceeds and
insurance proceeds) received with respect to any Purchased Contract the Purchase
Amount for which was included in Available Funds for a previous Payment Date.
BACK-UP SERVICER: ▇▇▇▇▇ Fargo Bank Minnesota, National Association, a national
banking association, in its capacity as back-up servicer, and its successors and
assigns in such capacity.
BUSINESS DAY: 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;
Houston, Texas; Minneapolis, Minnesota or Atlanta, Georgia are authorized or
obligated by law, executive order or governmental decree to remain closed.
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CAPITALIZED INTEREST AMOUNT: For the period from and including the Closing Date
to but excluding the first Payment Date, $228,291.25; for the period from and
including the first Payment Date to but excluding the second Payment Date,
$158,400.00; for the period from and including the second Payment Date to but
excluding the Prefunding Account Payout Date, $105,600.00; for the period from
and including the third Payment Date to but excluding the fourth Payment Date,
$52,800.00; provided, however, on any day on which the amount on deposit in the
Prefunding Account is zero, the Capitalized Interest Amount shall be zero.
CLASS A MONTHLY NOTE PRINCIPAL: For any Payment Date, the lesser of (i) the
Class A Note Balance as of the day preceding such Payment Date and (ii) the
amount necessary to reduce the Class A Note Balance as of the day preceding such
Payment Date to the sum of (A) 97% of the Pool Balance as of the last day of the
related Collection Period and (B) 99% of the Prefunding Account Balance as of
the last day of the related Collection Period; PROVIDED, HOWEVER, that the Class
A Monthly Note Principal for the Final Note Payment Date for the Class A Notes
shall equal the amount necessary to reduce the Class A Note Balance to zero;
provided, further, that for the purposes of determining Class A Monthly Note
Principal, the unpaid balance of any Defaulted Contract or a Purchased Contract
will be deemed zero on and after the last day of the Collection Period during
which such Contract became a Defaulted Contract or a Purchased Contract.
CLASS B MONTHLY NOTE PRINCIPAL: For any Payment Date, the lesser of (i) the
Class B Note Balance as of the day preceding such Payment Date and (ii) the
greater of (A) 0 and (B) the amount necessary to reduce the Class B Note Balance
as of the day preceding such Payment Date to the sum of (1) 3% of the Pool
Balance as of the last day of the related Collection Period and (2) 1% of the
Prefunding Account Balance as of the last day of the related Collection Period;
PROVIDED, HOWEVER, that the Class B Monthly Note Principal for the Final Note
Payment Date for the Class B Notes shall equal the amount necessary to reduce
the Class B Note Balance to zero; provided, further, that for the purposes of
determining Class B Monthly Note Principal, the unpaid balance of any Defaulted
Contract or a Purchased Contract will be deemed zero on and after the last day
of the Collection Period during which such Contract became a Defaulted Contract
or a Purchased Contract.
CLASS A NOTE BALANCE: At any time, as the context may require, (i) with respect
to all of the Class A Notes, an amount equal to, initially, the Initial Class A
Note Balance and, thereafter, an amount equal to the Initial Class A Note
Balance as reduced from time to time by all amounts allocable to principal
previously distributed to the Class A Noteholders or (ii) with respect to any
Class A Note, an amount equal to, initially, the initial denomination of such
Class A Note and, thereafter, an amount equal to such initial denomination as
reduced from time to time by all amounts allocable to principal previously
distributed in respect of such Class A Note; PROVIDED, HOWEVER, that in
determining whether the Holders of Class A Notes evidencing the requisite
percentage of the Class A Note Balance have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any other
Transaction Document, Class A Notes owned by the Trust, any other obligor upon
the Class A Notes, the Seller, the Servicer or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed to be excluded from the Class
A Note Balance (unless such Persons own 100% of the Class A Note Balance),
except that, in determining whether the Indenture Trustee or the Owner Trustee
shall be protected in relying on any such request, demand, authorization,
direction, notice, consent or waiver, only Class A Notes that a Responsible
Officer of the Indenture Trustee or the Owner Trustee, as applicable, actually
knows to be so owned shall be so disregarded; and, PROVIDED
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FURTHER, that Class A Notes that, to the actual knowledge of a Responsible
Officer of the Indenture Trustee or the Owner Trustee, as applicable, have been
pledged in good faith may be regarded as included in the Class A Note Balance if
the pledgee establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee, as applicable, the pledgee's right so to act with respect to such
Class A Notes and that the pledgee is not the Trust, any other obligor upon the
Class A Notes, the Seller, the Servicer or any Affiliate of any of the foregoing
Persons.
CLASS B NOTE BALANCE: At any time, as the context may require, (i) with respect
to all of the Class B Notes, an amount equal to, initially, the Initial Class B
Note Balance and, thereafter, an amount equal to the Initial Class B Note
Balance as reduced from time to time by all amounts allocable to principal
previously distributed to the Class B Noteholders or (ii) with respect to any
Class B Note, an amount equal to, initially, the initial denomination of such
Class B Note and, thereafter, an amount equal to such initial denomination as
reduced from time to time by all amounts allocable to principal previously
distributed in respect of such Class B Note.
CLASS A NOTE PAYMENT ACCOUNT: The account established and maintained as such
pursuant to SECTION 3.1(b)(i).
CLASS B NOTE PAYMENT ACCOUNT: The account established and maintained as such
pursuant to SECTION 3.1(b)(ii).
CLOSING DATE: January 29, 2002.
COLLECTION ACCOUNT: The account established and maintained as such pursuant to
SECTION 3.1(a).
COLLECTION PERIOD: Each calendar month during the term of this Agreement or, in
the case of the initial Collection Period, the period from but excluding the
Cutoff Date to and including February 28, 2002.
CONTRACT: A retail installment sale contract or promissory note and security
agreement identified on the Contract Schedule (as such contract may be amended,
supplemented or otherwise modified and in effect from time to time).
CONTRACT FILE: With respect to any Contract:
(i) the original, executed copy of such Contract; and
(ii) the original certificate of title for the related Financed
Vehicle, a copy of the lien record or such other documents that the
Servicer or the Seller shall keep on file, in accordance with its customary
practices and procedures, and in accordance with applicable state title
registration agency procedures evidencing the security interest of the
Seller in such Financed Vehicle.
CONTRACT SCHEDULE: The list identifying the Contracts attached as SCHEDULE 1 to
this Agreement (which list may be in the form of microfiche or compact disk), as
such schedule may be amended from time to time.
CORPORATE TRUST OFFICE: As applicable, (i) the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at Sixth Street and Marquette Avenue, MAC
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N9311-161, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services
Asset-Backed Trust Administration, or at such other address as the Indenture
Trustee may designate from time to time by notice to the Noteholders, the Owner
Trustee and the Seller, or the principal corporate trust office of any successor
Indenture Trustee at the address designated by such successor Indenture Trustee
by notice to the Noteholders, the Owner Trustee and the Seller or (ii) the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of the
execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Trust or at such other address as the
Owner Trustee may designate from time to time by notice to the Indenture Trustee
and the Seller, or the principal corporate trust office of any successor Owner
Trustee at the address designated by such successor Owner Trustee by notice to
the Indenture Trustee and the Seller.
CREDIT AND COLLECTION POLICY: The credit and collection policy of the Seller
substantially in the form attached hereto as EXHIBIT C as amended and restated
from time to time with the consent of the Insurer and in accordance with the
Transaction Documents.
CUMULATIVE NET LOSS RATE: The ratio of (i) cumulative Net Losses for the related
Collection Period and all preceding Collection Periods to (ii) the sum of (a)
the aggregate Principal Balances of all the Contracts as of the Initial Cutoff
Date and (b) the sum, for each Additional Contract Cutoff Date, of the aggregate
Principal Balances of all Contracts that became Additional Contracts on such
Additional Contract Cutoff Date.
CUSTODIAN: ▇▇▇▇▇ Fargo Bank Minnesota, National Association, in its capacity as
custodian pursuant to the Indenture.
CUTOFF DATE: (i) With respect to the Initial Contracts, the Initial Cutoff Date
and (ii) with respect to any Additional Contract, the Additional Contract Cutoff
Date for such Contract.
DEFAULT: As defined in the Indenture.
DEFAULTED CONTRACT: Any Contract as to which the first of any of the following
has occurred (i) a scheduled payment, or any portion thereof in excess of
$10.00, is more than 120 days delinquent (or if the related obligor is insolvent
or has sought protection under the United States Bankruptcy Code and such
Contract is more than 180 days delinquent), (ii) 90 days have elapsed since the
Servicer repossessed the Financed Vehicle, (iii) the related Financed Vehicle
has been repossessed and sold, or (iv) consistent with the Servicer's Credit and
Collection Policy, has been or should be written off as uncollectible.
DELINQUENT CONTRACT: The entire principal balance of any Contract (other than a
Defaulted Contract) as to which more than $10.00 of any scheduled payment
remains unpaid for more than 31 days from the date at which it is contractually
due and payable, plus the entire principal balance of any Contract granted an
extension during the Collection Period in excess of the Acceptable Extended
Contract Rate.
DELINQUENCY RATIO: With respect to any date of determination, the ratio
(expressed as a percentage) of (i) the Principal Balance of Contracts that were
Delinquent Contracts at the end of the preceding Collection Period to (ii) the
Principal Balance of all Contracts at the end of such preceding Collection
Period.
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DEPOSITOR: As defined in the Trust Agreement.
DEPOSITOR ACCOUNT: The account established and maintained as such pursuant to
SECTION 3.1(c).
DETERMINATION DATE: The third Business Day preceding each Payment Date
commencing on March 12, 2002.
ELIGIBLE INVESTMENTS: On any date of determination, book entry securities,
negotiable instruments or securities represented by instruments in bearer or
registered form with maturities not exceeding the next Payment Date which
evidence:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America;
(ii) demand deposits, time deposits, bankers' acceptances or
certificates of deposit of any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof (or any domestic branch of a foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities, including the Indenture Trustee or the Owner
Trustee, acting in their respective commercial capacities; PROVIDED,
HOWEVER, that, at the time of the investment or contractual commitment to
invest therein, such depository institution or trust company shall be rated
Prime-1 by Moody's and A-1+ by S&P or any other deposit which is fully
insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with a depository institution or trust company
(acting as principal) 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 of America or any state thereof; the short term unsecured
obligations of which are rated Prime-1 by Moody's and A-1 by S&P at the
time of the investment;
(v) commercial paper, at the time of the investment or contractual
commitment to invest therein, rated Prime-1 by Moody's and A-1+ by S&P at
the time of the investment;
(vi) guaranteed investment contracts issued by an insurance company
or other corporation acceptable to the Rating Agencies and the Insurer
(provided that no Insurer Default shall have occurred and be continuing);
(vii) investments in money market funds having a rating of Aaa by
Moody's and AAA by S&P, and
(viii) any other investment approved in writing by the Insurer in
advance with notice to the Rating Agencies.
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Each of the Eligible Investments may be purchased by or through the
Indenture Trustee or an Affiliate thereof.
ELIGIBLE INSTITUTION: The corporate trust department of the Indenture Trustee or
the corporate trust department of any other depository institution organized
under the laws of the United States of America or any state thereof or the
District of Columbia or any domestic branch of a foreign bank which at all times
has either a long term unsecured debt rating of at least Baa3 from Moody's and a
long term unsecured debt rating, a short term unsecured debt rating or a
certificate of deposit rating acceptable to the Rating Agencies and the Insurer
(provided that no Insurer Default shall have occurred and be continuing) and
whose deposits are insured by the Federal Deposit Insurance Corporation.
ELIGIBLE SERVICER: First Investors Servicing Corporation, as initial Servicer,
and any other Person which, at the time of its appointment as Servicer, (i) is
approved in writing by the Insurer, (provided that no Insurer Default shall have
occurred and be continuing) (ii) has a net worth of not less than $50,000,000,
(iii) is servicing a portfolio of motor vehicle retail installment sale
contracts and/or motor vehicle loans, (iv) is legally qualified, and has the
capacity, to service the Contracts, (v) has demonstrated the ability to service
a portfolio of motor vehicle retail installment sale contracts and/or motor
vehicle loans similar to the Contracts professionally and competently in
accordance with standards of skill and care that are consistent with prudent
industry standards and (vi) 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.
EVENT OF DEFAULT: As defined in the Indenture.
EVENT OF SERVICING TERMINATION: As defined in Section 5.1 of the Servicing
Agreement.
EXCESS PREFUNDING AMOUNT: As defined in the Indenture.
EXTENDED CONTRACT RATE: A fraction (expressed as a percentage) calculated as of
the last day of the related Collection Period, the numerator of which is the
number of Contracts extended during the related Collection Period and the
denominator of which is the number of all Contracts.
FINAL ORDER: A final, non-appealable order of a court exercising jurisdiction in
a proceeding relating to an Insolvency Event with respect to the Seller, the
Servicer or the Depositor to the effect that all or any portion of any payment
made to the Class A Noteholders must be returned prior to the end of the Term of
the Insurance Agreement (as defined in the Insurance Agreement) as a voidable
preference under the United States Bankruptcy Code (11 U.S.C.), as amended from
time to time.
FINAL NOTE PAYMENT DATE: December 15, 2008.
FINANCED VEHICLE: A new or used automobile or light-duty truck, together with
all accessions thereto, securing an Obligor's indebtedness under a Contract.
FISC: First Investors Servicing Corporation.
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FISCAL AGENT: As defined in the Policy.
HOLDER: A Noteholder.
INDENTURE: The Indenture, dated as of January 1, 2002, between the Trust, the
Indenture Trustee, and the Seller as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
INDENTURE TRUSTEE: ▇▇▇▇▇ Fargo Bank Minnesota, National Association, not in its
individual capacity but solely as Indenture Trustee under the Indenture, its
successors in interest and any successor trustee under the Indenture.
INITIAL CLASS A NOTE BALANCE: As the context may require, (i) with respect to
all of the Notes, $159,036,000, or (ii) with respect to any Class A Note, an
amount equal to the initial denomination of such Class A Note.
INITIAL CLASS B NOTE BALANCE: As the context may require, (i) with respect to
all of the Notes, $4,819,000, or (ii) with respect to any Class B Note, an
amount equal to the initial denomination of such Class B Note.
INITIAL CONTRACTS: As defined in the Indenture.
INITIAL CONTRACT PRICE: $135,643,108.96.
INITIAL CONVEYED PROPERTY: With respect to the Initial Contracts, the proceeds,
rights and other items described in SECTION 2.1(a)(ii) through (ix).
INITIAL CUTOFF DATE: December 31, 2001.
INITIAL PREFUNDING ACCOUNT AMOUNT: $25,000,000.
INITIAL RESERVE ACCOUNT DEPOSIT: An amount equal to the sum of (i) 2% of the
Principal Balance of the Initial Contracts as of the Initial Cutoff Date and
(ii) the Capitalized Interest Amount.
INSOLVENCY EVENT: With respect to any Person, (i) the making by such Person of a
general assignment for the benefit of creditors, (ii) the filing by such Person
of a voluntary petition in bankruptcy, (iii) such Person being adjudged bankrupt
or insolvent, or having had entered against such Person an order for relief in
any bankruptcy or insolvency proceeding, (iv) the filing by such Person of a
petition or answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, (v) the filing by such Person of an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against such Person in any proceeding specified in CLAUSE (vii) below, (vi)
seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator of such Person or of all or any substantial part of the assets of
such Person or (vii) the failure to obtain dismissal within 60 days of the
commencement of any proceeding against such Person seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, or the entry of any order
appointing a trustee, liquidator or receiver of such Person of all or any
substantial portion of the assets of such Person.
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INSURANCE AGREEMENT: The Insurance Agreement, dated as of January 1, 2002 by and
among the Seller, the Servicer, the Administrator, the Depositor, the Issuer,
the Backup Servicer, the Owner Trustee, the Insurer and the Indenture Trustee as
the same may be amended, supplemented or otherwise modified and in effect from
time to time.
INSURANCE PAYMENT AMOUNT: For any Payment Date, the premium payable under the
Insurance Agreement for that Payment Date plus any overdue premiums payable
under the Insurance Agreement for previous Payment Dates.
INSURANCE PREMIUM: As defined in the Indenture.
INSURER: MBIA Insurance Corporation, a stock insurance corporation incorporated
under the laws of the State of
New York.
INSURER DEFAULT: The failure of the Insurer to make any required payment under
the Policy or an Insolvency Event with respect to the Insurer.
LIEN: A security interest, lien, 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: All amounts received by the Servicer with respect to any
Defaulted Contract, net of the sum of (i) any reasonable expenses incurred by
the Servicer in connection with collection of such Contract and the disposition
of the related Financed Vehicle (to the extent determinable by the Servicer and
not previously reimbursed) PLUS (ii) any amounts required by law to be remitted
to the related Obligor.
MONTHLY NOTE INTEREST: With respect to the Class A Notes, an amount equal to (i)
for the initial Payment Date, $703,115.83 and (ii) for each Payment Date
thereafter, one-twelfth of the product of (A) the Note Rate and (B) the
outstanding principal balance of the Class A Notes as of the close of business
on the immediately preceding Payment Date (after giving effect to all payments
of principal made to the Holders of the Class A Notes on or before such Payment
Date).
MONTHLY SERVICER REPORT: As defined in the Servicing Agreement.
MONTHLY SERVICING FEE: For any Collection Period, the fee payable to the
Servicer for services rendered during such Collection Period as determined
pursuant to Section 2.8 of the Servicing Agreement.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
NET LOSSES: With respect to any Collection Period, the excess, if any, of (i)
the aggregate Principal Balance of all Contracts that became Defaulted Contracts
during such Collection Period over (ii) the aggregate Liquidation Proceeds
received by the Servicer during such Collection Period.
NOTE PAYMENT ACCOUNTS: Collectively, the Class A Note Payment Account and the
Class B Note Payment Account.
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NOTE POOL FACTOR: With respect to the Class A Notes, (i) as of the Closing Date,
1.0000000 and (ii) as of the close of business on the last day of any Collection
Period ending after the Closing Date, a seven digit decimal figure equal to the
Class A Note Balance as of such last day (after giving effect to any reductions
of the Class A Note Balance to be made on the following Payment Date) divided by
the Initial Class A Note Balance.
NOTEHOLDER: As defined in the Indenture.
NOTE RATE: With respect to the Class A Notes, 3.46% per annum.
NOTES: As defined in the Indenture.
OBLIGOR: The purchaser or co-purchasers of a new or used automobile or
light-duty truck purchased in whole or in part by the execution and delivery of
a Contract or any other Person who owes or may be liable for payments under a
Contract.
OFFERING MEMORANDUM: That certain Offering Memorandum dated as of January 17,
2002, attached hereto as EXHIBIT D.
OFFICER'S CERTIFICATE: A certificate signed by the chairman, the president, any
executive vice president, senior vice president, vice president or the treasurer
of the Seller or the Servicer, as the case may be, and delivered to the Owner
Trustee and the Indenture Trustee.
OPINION OF COUNSEL: One or more written opinions of counsel who may, except as
otherwise expressly provided in this Agreement, be outside counsel to, the
Seller or the Servicer and who shall be acceptable to the Indenture Trustee, the
Insurer the Owner Trustee or the Rating Agencies, as applicable.
ORIGINATOR: Each Person from whom the Seller has acquired a Contract.
ORIGINATOR AGREEMENT: An agreement substantially in the form of EXHIBIT E
hereto.
OUTSTANDING: As defined in the Indenture.
OWNER TRUST ESTATE: As defined in the Trust Agreement.
OWNER TRUSTEE: Bankers Trust (Delaware), not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, its successors in interest
and any successor trustee under the Trust Agreement.
PAYMENT DATE: The 15th day of each month or, if such 15th day is not a Business
Day, the following Business Day, commencing on March 15, 2002.
PERSON: A legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, limited liability partnership, trust, unincorporated organization, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
POLICY: That certain insurance policy, dated as of January 29, 2002, issued by
MBIA Insurance Corporation in favor of the Indenture Trustee for the benefit of
the Class A Noteholders.
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POLICY CLAIM AMOUNT: As defined in SECTION 3.5(c).
POOL BALANCE: On any day, the aggregate Principal Balance of the Contracts
calculated as of the last day of the most recently ended Collection Period.
PREFUNDING ACCOUNT: The account established and maintained as such pursuant to
SECTION 3.7.
PREFUNDING ACCOUNT BALANCE: On any date of determination, the amount on deposit
in the Prefunding Account (including the proceeds of any Eligible Investments
therein).
PREFUNDING ACCOUNT ENDING DATE: As defined in the Indenture.
PREFUNDING PERIOD: The period beginning on the Closing Date and ending on the
Prefunding Account Ending Date.
PRINCIPAL BALANCE: With respect to any Contract as of any date, the Amount
Financed under such Contract minus the sum of (i) that portion of all Scheduled
Payments actually received on or prior to such date allocable to principal (to
the extent collected) PLUS (ii) any rebates of extended warranty contract costs
or physical damage, credit life or credit disability insurance premiums included
in the Amount Financed PLUS (iii) any full or partial prepayment applied to
reduce the unpaid principal balance of such Contract; PROVIDED, HOWEVER, that
(A) the Principal Balance of a Defaulted Contract shall be zero as of the last
day of the Collection Period during which it became a Defaulted Contract, (B)
the Principal Balance of a Purchased Contract shall be zero as of the date on
which the related Purchase Amount is remitted by the Seller or the Servicer, and
(C) the Principal Balance of a Contract that has been foreclosed upon by the
Indenture Trustee at the direction of the Insurer pursuant to Section 5.4(a) of
the Indenture shall be zero as of the date of such foreclosure.
PRINCIPAL DEFICIT: As of any Payment Date, the excess, if any, of (i) the Class
A Note Balance as of such Payment Date (after giving effect to all distributions
of principal in reduction of the Class A Note Balance) over (ii) the sum of (a)
the Pool Balance as of the last day of the related Collection Period and (b) 99%
of the amounts on deposit in the Prefunding Account.
PURCHASE AMOUNT: With respect to any Payment Date and any Contract to be
repurchased by the Seller or purchased by the Servicer on such Payment Date, an
amount equal to the sum of (i) the Principal Balance of such Contract PLUS (ii)
the amount of accrued but unpaid interest on such Principal Balance at the
related APR to but excluding such Payment Date.
PURCHASE PRICE: (i) With respect to the Initial Contracts and the related
Initial Conveyed Property, the Initial Contract Price and (ii) with respect to
any Additional Contract and the related Additional Conveyed Property, the
Additional Purchase Price.
PURCHASED CONTRACT: A Contract as to which payment of the Purchase Amount has
been made by the Seller pursuant to SECTION 2.3 hereof or by the Servicer
pursuant to Section 2.28 of the Servicing Agreement.
PURCHASE DATE: With respect to the Initial Contracts, the Closing Date and with
respect to any Additional Contract, the applicable Additional Contract Purchase
Date.
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RATING AGENCIES: Moody's and S&P and their respective successors; PROVIDED,
HOWEVER, that if no such organization or successor is any longer in existence,
Rating Agency shall mean a nationally recognized statistical rating organization
or other comparable Person designated by the Trust and acceptable to the Insurer
(provided that no Insurer Default shall have occurred and is continuing), notice
of which designation shall have been given to the Indenture Trustee, the Owner
Trustee and the Servicer.
RATING AGENCY CONDITION: With respect to any action, that each Rating Agency
shall have been given prior notice thereof and shall have notified the Seller,
the Insurer, the Servicer, the Owner Trustee and the Indenture Trustee that such
action will not result in a reduction or withdrawal of the then current rating
of the Notes, without regard to the Policy.
RECORD DATE: With respect to any Payment Date, the close of business on the
Business Day preceding such Payment Date; PROVIDED, HOWEVER, that if Definitive
Notes have been issued, Record Date shall mean, with respect to any Payment
Date, the last day of the calendar month preceding such Payment Date.
RELEVANT UCC: The Uniform Commercial Code as in effect from time to time in any
relevant jurisdiction.
REQUIRED PAYMENT AMOUNT: For any Payment Date, the meaning specified for such
Payment Date in SECTION 3.5(a).
REQUIRED RATING: A short term unsecured debt rating of Prime-1 by Moody's and
A-1+ by S&P.
REQUIRED RESERVE ACCOUNT AMOUNT: For the Closing Date, the Initial Reserve
Account Deposit and, thereafter, for any Payment Date, (i) if a Reserve Account
Increase Event has not occurred or is not continuing, an amount equal to the sum
of (A) 2% of the aggregate initial Principal Balance of the Contracts as of the
applicable Cutoff Date for each such Contract and (B) the applicable Capitalized
Interest Amount, or (ii) if a Reserve Account Increase Event has occurred and is
continuing, the sum of (A) the greater of (x) 2% of the aggregate initial
Principal Balance of the Contracts as of the applicable Cutoff Date for each
such Contract, and (y) 6.00% of the Pool Balance as of the last day of the
related Collection Period and (B) the applicable Capitalized Interest Amount.
RESERVE ACCOUNT: The account established and maintained as such pursuant to
SECTION 3.6(a).
RESERVE ACCOUNT AMOUNT: For any Payment Date, the amount on deposit in and
available for withdrawal from the Reserve Account on such Payment Date (after
giving effect to all deposits to and withdrawals from the Reserve Account on the
preceding Payment Date, or, in the case of the first Payment Date, the Closing
Date), including, without limitation, all interest and other income (net of
losses and investment expenses) earned on such amount during the preceding
Collection Period.
RESERVE ACCOUNT DEFICIENCY: For any Payment Date, the meaning specified for such
Payment Date in SECTION 3.5(b).
RESERVE ACCOUNT DRAW AMOUNT: As defined in SECTION 3.5(b).
RESERVE ACCOUNT INCREASE EVENT: The occurrence of either of the following:
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(i) the average Delinquency Ratio for any three Collection Periods exceeds
6% during months one through twelve after the Closing Date and the Delinquency
Ratio exceeds 7.5% thereafter; or
(ii) the Cumulative Net Loss Rate at any month indicated in the following
table (measured as from the Closing Date), exceeds the percentage corresponding
thereto:
Months
0-3 0.20%
4-6 1.50%
7-9 2.50%
10-12 3.60%
13-15 4.60%
16-18 5.50%
19-21 6.10%
22-24 6.70%
25-27 7.30%
28-30 7.80%
31-33 8.20%
34-36 8.50%
37-39 8.80%
40-42 9.00%
43 and thereafter 9.10%
RESERVE ACCOUNT PROPERTY: All amounts, securities, investments, financial assets
and other property deposited in or credited to the Reserve Account from time to
time.
RESPONSIBLE OFFICER: (i) in the case of the Indenture Trustee, any officer
within the Corporate Trust Department of the Indenture Trustee with direct
responsibility for the administration of the Indenture and also, with respect to
a particular matter, any other officer of the Indenture Trustee to whom such
matter is referred because of such officer's knowledge of and familiarity with
such matter or other similar matters and (ii) in the case of the Owner Trustee,
any officer within the Corporate Trust Office of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement or this Agreement
and also, with respect to a particular matter, any other officer of the Owner
Trustee to whom such matter is referred because of such officer's knowledge of
and familiarity with such matter or other similar matters.
SCHEDULED PAYMENT: For any Contract, each payment required to be made by the
related Obligor in accordance with the terms of such Contract (after giving
effect to any deferral of payments pursuant to the Servicing Agreement or any
rescheduling of payments as a result of any Insolvency Event with respect to
such Obligor).
SELLER: First Investors Financial Services, Inc., a Texas corporation, in its
capacity as seller of the Contracts under this Agreement, and its successors and
assigns in such capacity.
SERVICER: FISC, in its capacity as servicer of the Contracts under this
Agreement, and its successors and assigns (including, if applicable, the Back-Up
Servicer) in such capacity.
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SERVICING AGREEMENT: That certain Servicing Agreement, dated as of January 1,
2002, between FISC, the Back-Up Servicer, the Indenture Trustee, the Servicer
and the Trust.
SERVICING FEE: The amount paid to the Servicer on each Payment Date for the
preceding Collection Period equal to the product of one-twelfth (or in the case
of the initial Collection Period, one-sixth) of the Servicing Rate multiplied by
the Pool Balance as of the close of business on the first day of the related
Collection Period.
SERVICING OFFICER: Any officer of the Servicer involved in, or responsible for,
the administration and servicing of the Contracts whose name appears on a list
of servicing officers attached to an Officer's Certificate furnished on the
Closing Date to the Owner Trustee and the Indenture Trustee by the Servicer, as
such list may be amended from time to time by the Servicer in writing.
SERVICING RATE: 2.5% per annum or such other rate as determined in the Servicing
Agreement; PROVIDED, HOWEVER, that if the Back-Up Servicer becomes the Successor
Servicer, the Servicing Rate shall be equal to the greater of (i) 2.5% per annum
and (ii) the lowest of three bids obtained by the Back-Up Servicer from
third-party servicers, who are qualified to act as servicers, selected by the
Back-Up Servicer and approved by the Insurer.
S & P: Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., and its successors.
TOTAL AVAILABLE FUNDS: For any Payment Date, the sum of (i) the Available Funds
for such Payment Date PLUS (ii) the Reserve Account Draw Amount, if any, for
such Payment Date.
TOTAL NOTE INTEREST: For any Payment Date with respect to the Class A Notes, the
sum of (i) the Monthly Note Interest for such Payment Date PLUS (ii) the
Additional Note Interest for such Payment Date.
TOTAL SERVICING FEE: For any Collection Period, the sum of (i) the Monthly
Servicing Fee for such Collection Period PLUS (ii) all accrued but unpaid
Monthly Servicing Fees for previous Collection Periods.
TRANSACTION DOCUMENTS: As defined in the Indenture.
TRUST: The First Investors Auto Owner Trust 2002-A, a Delaware business trust.
TRUST AGREEMENT: The Amended and Restated Trust Agreement, dated as of January
29, 2002, between the Depositor and the Owner Trustee, as the same may be
further amended, supplemented or otherwise modified and in effect from time to
time.
TRUST OFFICER: (i) in the case of the Indenture Trustee, any officer within the
Corporate Trust Department of the Indenture Trustee with direct responsibility
for the administration of the Indenture and also, with respect to a particular
matter, any other officer of the Indenture Trustee to whom such matter is
referred because of such officer's knowledge of and familiarity with such matter
or other similar matters and (ii) in the case of the Owner Trustee, any officer
within the Corporate Trust Office of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and this Agreement
and also, with respect to a particular matter, any other
16
officer of the Owner Trustee to whom such matter is referred because of such
officer's knowledge of and familiarity with such matter or other similar
matters.
TRUST PROPERTY: As of any date of determination, (i) the Contracts and other
related property sold, transferred, assigned and otherwise conveyed by the
Seller to the Trust pursuant to SECTION 2.1(b), and (ii) all monies deposited
from time to time in the Collection Account, the Prefunding Account, the Class A
Note Payment Amount, the Class B Note Payment Account, the Depositor Account and
the Reserve Account.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used herein and not otherwise defined herein have the
meanings assigned to them in the Indenture or the Servicing Agreement.
(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.
(c) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings assigned to them
under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) 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. Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified. The term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
ARTICLE II
TRUST PROPERTY
SECTION 2.1 CONVEYANCE OF TRUST PROPERTY.
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(a) Subject to SECTION 2.1(B), in consideration of the Trust's delivery to
the Seller of the Purchase Price, the Seller hereby agrees to sell, transfer,
assign and otherwise convey to the Trust, without recourse (subject to the
obligations herein), all right, title and interest of the Seller, whether now
owned or hereafter acquired, in, to and under the following:
(i) the Contracts;
(ii) all amounts received on or in respect of the Contracts after
the applicable Cutoff Date (except that interest accrued on the Contracts
prior to the applicable Cutoff Date and received after such Cutoff Date
will be remitted by the Trust to the Seller);
(iii) the Collection Account, the Reserve Account, the Prefunding
Account, the Class A Note Payment Account and the Class B Note Payment
Account and all amounts, securities, financial assets, investments and
other property deposited in or credited to any of the foregoing and all
proceeds thereof;
(iv) the security interests in the Financed Vehicles;
(v) any proceeds from claims on or refunds of premiums with respect
to extended warranties or physical damage, theft, credit life and credit
disability insurance policies relating to the Financed Vehicles or the
related Obligors;
(vi) any Liquidation Proceeds;
(vii) the Contract Files;
(viii) rights under the Servicing Agreement to cause the Servicer to
purchase Contracts affected materially and adversely by breaches of the
representations and warranties of the Servicer made in the Servicing
Agreement; and
(ix) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever in respect
of any or all of the foregoing, including all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all
cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing.
(b) On the Closing Date, subject to the terms and conditions of this
Agreement, in consideration of the Trust's delivery of the Initial Contract
Price, the Seller hereby irrevocably sells, transfers, assigns and otherwise
conveys to the Trust and the Trust hereby purchases from the Seller the Initial
Contracts and the Initial Conveyed Property. On each Additional Contract
Purchase Date subject to the terms and conditions of this Agreement, in
consideration of the Trust's delivery of the Additional Purchase Price, the
Seller will transfer, assign and otherwise convey and the Trust will purchase
from the Seller such Additional Contracts and Additional Conveyed Property as
the Seller may specify by written notice to the Indenture Trustee, the Owner
Trustee and the Trust.
18
(c) The Seller and the Trust intend that each transfer of Trust Property
contemplated by SECTION 2.1(b) constitutes a sale of the Trust Property,
conveying good title to the related Trust Property, from the Seller to the
Trust. In addition, without prejudicing the parties' intent that each transfer
of the Trust Property constitutes a sale, in case that any or all of such
transfers is deemed by a court of competent jurisdiction to be a pledge to
secure the payment of the Notes, or for any other reason the Trust is not the
owner thereof the Seller hereby grants to the Trust a "security interest" in all
of the Seller's right, title and interest in, to and under the Trust Property,
and all proceeds thereof, to secure the payment of the Notes. In either event,
it is understood by the parties hereto that each transfer of the Trust Property
shall constitute the grant of a "security interest" in favor of the Trust under
the Relevant UCC, it being understood that "security interest" under the
Relevant UCC includes any interest of a buyer of "accounts" or "chattel paper".
(d) The sale, transfer, assignment and conveyance of the Trust Property
made under SECTION 2.1(b) shall not constitute and is not intended to result in
an assumption by the Trust of any obligation of the Seller to the Obligors or
any other Person in connection with the Contracts and the other Trust Property
or any agreement, document or instrument related thereto.
(e) Upon each of the transfers of the Trust Property pursuant to CLAUSE (b)
of this SECTION 2.1, the Seller shall clearly ▇▇▇▇ its files, documents, books
and any other records (including computer records) in the Seller's control
pertaining to the Trust Property, in order to indicate that the Trust Property
has been transferred to the Trust.
(f) The Trust's obligation to purchase Additional Contracts and Additional
Conveyed Property pursuant to CLAUSE (b) of this SECTION 2.1 is subject to
satisfaction on or before the related Additional Contract Purchase Date of the
following conditions precedent:
(i) each of the representations and warranties of the Seller made
pursuant to SECTION 2.2 with respect to the Additional Contracts shall be
true and correct as of the Additional Contract Purchase Date;
(ii) the Seller shall have executed and delivered to the Trust and
the Trust shall have executed and delivered to the Indenture Trustee,
written assignments in the form of EXHIBIT F hereto conveying such
Additional Contracts and Additional Conveyed Property to the Trust and the
Indenture Trustee, respectively;
(iii) the Issuer shall have deposited, or cause to be deposited, in
the Reserve Account, an amount equal to 2% of the aggregate outstanding
principal balance of Additional Contracts to be conveyed on such Additional
Contract Purchase Date (the "ADDITIONAL RESERVE ACCOUNT DEPOSIT");
(iv) the Seller shall have delivered file-stamped copies (or other
evidence of filing) of UCC-1 financing statements for each jurisdiction in
which required by applicable law, executed by the Seller, as seller or
debtor, and naming the Trust, as purchaser or secured party and describing
as collateral the Additional Conveyed Property then being transferred,
which financing statements meet the requirements of the laws of each such
jurisdiction and in such manner as is necessary to perfect the sale,
transfer, assignment and conveyance of such Conveyed Property to the Trust;
19
(v) estoppel and release letters and related UCC-3 termination
statements and/or amendment statements (for each appropriate jurisdiction),
to release all security interests or similar rights of any Person in the
Additional Conveyed Property, including the security interests in the
Financed Vehicles securing the Contracts and any proceeds of the foregoing;
(vi) evidence that all filings (including all UCC filings) required
to be made by any Person and actions required to be taken or performed by
any Person in any jurisdiction to give the Trust a first priority Lien on,
or ownership interest in, the Additional Conveyed Property to be conveyed
on such date have been made, taken and performed;
(vii) the Trust shall have received the prior written consent of the
Insurer; and
(viii) such other documents as the Trust or the Insurer may reasonably
request.
(g) It is explicitly agreed by the Seller, the Depositor and the Trust that
the Purchase Price delivered to the Seller by the Trust pursuant to CLAUSE (b)
of this SECTION 2.1 shall consist of the net proceeds from the sale of the Notes
(minus the sum of the Initial Reserve Account Deposit and the Additional Reserve
Account Deposits) and that the remaining portion of the Purchase Price shall be
deemed to constitute a capital contribution by the Seller to the Depositor (it
being understood that the Seller has a 100% ownership interest in the Depositor
and that the Depositor has a 100% ownership interest in the Trust).
SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE
CONTRACTS.
The Seller makes the following representations and warranties as to the
Contracts on which the Trust shall be deemed to have relied in accepting the
Contracts. The representations and warranties speak as of the execution and
delivery of this Agreement and, with respect to any Additional Contracts, as of
the related Additional Contract Purchase Date, except to the extent otherwise
provided, but shall survive the sale, transfer, assignment and conveyance of the
Contracts to the Trust pursuant to this Agreement and the pledge of the
Contracts to the Indenture Trustee pursuant to the Indenture.
(a) CHARACTERISTICS OF CONTRACTS. Each Contract (i) has been purchased in a
bona fide sale by the Seller from a dealer, bank, finance company or similar
entity in the ordinary course of the Seller's business and was originated by
such Person in connection with an advance made for the sale or re-financing of a
new or used automobile or light-duty truck and has been fully and properly
executed by the parties thereto, (ii) has created a valid, binding and
enforceable security interest in favor of the Seller in the related Financed
Vehicle, which security interest has been validly assigned by the Seller to the
Trust, and by the Trust to the Indenture Trustee, (iii) 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, (iv) provides for level monthly payments that fully amortize the
Amount Financed by maturity (except that the period between the date of such
Contract and the date of the first Scheduled Payment may be less than or greater
than one month and the amount of the first and last Scheduled Payments may be
less than or greater than the level payments) and yield interest at the related
APR, (v) provides for, in the event that such Contract is prepaid, a prepayment
that fully pays the Principal Balance of such Contract with interest at the
related APR through the date of
20
payment, (vi) is secured by a new or used automobile or light-duty truck, (vii)
relates to an Obligor who has made a down payment under such Contract as of the
applicable Cutoff Date, (viii) satisfies in all material respects the
requirements under the Credit and Collection Policy, and (ix) requires the
Obligor thereunder to obtain and maintain physical damage insurance covering the
related Financed Vehicle in accordance with the Seller's normal requirements.
(b) CONTRACT SCHEDULE. The information set forth in the Contract Schedule
was true and correct in all material respects as of the opening of business on
the applicable Cutoff Date, and no selection procedures believed to be adverse
to the Trust or the Noteholders were utilized in selecting the Contracts from
those retail installment sale contracts or security agreements and promissory
notes which met the criteria contained herein. The information set forth in the
compact disk or other listing regarding the Contracts made available to the
Trust and its assigns (which compact disk or other listing is required to be
delivered as specified herein) is true and correct in all material respects.
(c) COMPLIANCE WITH LAW. Each Contract and the sale of the related Financed
Vehicle complied, at the time such Contract was originated and complies, as of
the related Purchase Date, in all material respects with all requirements of
applicable federal, state and local laws, and regulations thereunder, including,
without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Credit Billing
Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act,
the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's Regulations B, M and
Z, the Soldiers' and Sailors' Civil Relief Act of 1940 and state adaptations of
the Uniform Consumer Credit Code.
(d) BINDING OBLIGATION. Each Contract 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 enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
(e) NO GOVERNMENT OR INCORPORATED OBLIGOR. No Contract is due from the
United States of America or any state thereof or from any agency, department or
instrumentality of the United States of America or any state thereof or from any
incorporated entity.
(f) SECURITY INTEREST IN FINANCED VEHICLES. Immediately prior to the
transfer of the Contracts by the Seller to the Trust, each Contract was secured
by a valid, binding and enforceable first priority perfected security interest
in favor of the Seller in the related Financed Vehicle and, at such time as
enforcement of such security interest is sought, there shall exist a valid,
binding and enforceable first priority perfected security interest in such
Financed Vehicle for the benefit of the Seller and the Trust, respectively,
which is subject to regulatory registration with a clear legal right of
repossession in favor of the Seller and the Trust.
(g) CONTRACTS IN FORCE. No Contract has been satisfied, subordinated or
rescinded, nor has any Financed Vehicle been released in whole or in part from
the Lien granted by the related Contract.
(h) NO WAIVER. No provision of a Contract has been waived in such a manner
that such Contract fails to meet all of the representations and warranties made
by the Seller in this
21
SECTION 2.2 with respect thereto and no provision of any Contract has been
waived except as noted in the Contract Files.
(i) NO DEFENSES. No Contract 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 Contract, or the exercise of any right thereunder, will
not render such Contract 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 of any
such right of rescission, setoff, counterclaim or defense asserted with respect
thereto.
(j) NO LIENS. No liens or claims exist or have been filed for work, labor
or materials or unpaid state or federal taxes relating to any Financed Vehicle
that are prior to, or equal or coordinate with, the security interest in such
Financed Vehicle created by the related Contract.
(k) NO DEFAULT; REPOSSESSION. No default, breach, violation or event
permitting acceleration under the terms of any Contract has occurred (other than
payments that are not more than 30 days past due), no continuing condition that
with notice or the lapse of time or both would constitute a default, breach,
violation or event permitting acceleration under the terms of any Contract has
arisen and no Financed Vehicle has been repossessed as of the applicable Cutoff
Date.
(l) TITLE. The Seller intends that the transfer of the Contracts
contemplated by SECTION 2.1(b) constitute a sale of the Contracts from the
Seller to the Trust and that the beneficial interest in, and title to, the
Contracts not be part of the Seller's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. The
Seller has not sold, transferred, assigned or pledged any Contract to any Person
other than the Trust and such Contract has not been released. Immediately prior
to the transfer of the Contracts contemplated by SECTION 2.1(b), the Seller had
good and marketable title to the Contracts free and clear of all Liens,
encumbrances, security interests and rights of others and, immediately upon such
transfer, the Trust shall have good and marketable title to the Contracts, free
and clear of all Liens, encumbrances, security interests and rights of others.
The transfer of the Contracts contemplated by SECTION 2.1(b) has been perfected
by all necessary action under the Relevant UCC.
(m) VALID ASSIGNMENT. No Contract has been originated in, or is subject to
the laws of, any jurisdiction under which the sale, transfer, assignment and
conveyance of such Contract under this Agreement or the pledge of such Contract
under the Indenture is unlawful, void or voidable. No Contract is subject to any
agreement with any account debtor that prohibits, restricts or conditions the
assignment of the Contracts.
(n) ALL FILINGS MADE. All filings (including, without limitation, filings
under the Relevant UCC) necessary in any jurisdiction to give the Trust a first
priority perfected security interest in the Contracts and to give the Indenture
Trustee a first priority perfected security interest in the Contracts have been
made or will be made on or prior to the related Purchase Date.
(o) CHATTEL PAPER. Each Contract constitutes "chattel paper" as defined in
the Relevant UCC.
(p) ONE ORIGINAL. There is only one original executed copy of each
Contract.
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(q) PRINCIPAL BALANCE. Each Contract had a Principal Balance as of the
Cutoff Date of not more than $40,000.
(r) NO BANKRUPT OBLIGORS. As of the applicable Cutoff Date, no Contract was
due from an Obligor that was the subject of a proceeding under the Bankruptcy
Code of the United States or was bankrupt.
(s) TERM TO MATURITY. Each Contract had an original term to maturity of not
more than 66 months; provided, however that as of the Prefunding Account Ending
Date, no more than 19% of the Pool Balance shall represent Contracts with an
original term to maturity greater than 60 months and less than or equal to 66
months.
(t) ANNUAL PERCENTAGE RATE. Each Contract has an APR of at least 4.00%;
provided, however that as of the Prefunding Account Ending Date, the weighted
average APR of all Contracts shall not be less than 17.74%.
(u) LOCATION OF CONTRACT FILES. The Contract Files have been delivered to
the Custodian prior to the applicable Purchase Date and are maintained at the
location listed in SCHEDULE 2 to this Agreement.
(v) NO DELINQUENT CONTRACTS. As of the applicable Cutoff Date, no Contract
was a Delinquent Contract or a Defaulted Contract.
(w) OFFERING MEMORANDUM DATA. The tabular and numerical data contained in
the Offering Memorandum relating to the characteristics of the Contracts is true
and correct in all material respects.
(x) NO DEFAULTS. No Contract is due from an Obligor that has previously
defaulted on a retail installment sales contract or promissory note and security
agreement purchased by the Seller.
(y) FINAL SCHEDULED PAYMENT DATE. The original final scheduled payment date
for each Contract is on or before November 30, 2007.
(z) ORIGINATOR AGREEMENT. Each Contract is subject to an Originator
Agreement with the Seller and which if acquired by the Seller pursuant to a
"bulk purchase" from another Originator has been approved by the Insurer.
(aa) LOCKBOX. The Obligor with respect to each contract has been instructed
to make payments under the Contract to a Lockbox which is under the control of
the Servicer.
(bb) UNITED STATES OBLIGOR. Each Contract is due from an Obligor which has
provided as its most recent billing address an address located in the United
States of America.
(cc) U.S. DOLLARS. Each Contract is payable in the lawful money of the
United States of America.
(dd) NO WAIVER OR MODIFICATION. No Contract has been waived or modified as
of the applicable Cutoff Date except as permitted by the Servicing Agreement.
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(ee) SCHEDULED PAYMENTS. Each Initial Contract relates to an Obligor who
has made at least one Scheduled Payment; PROVIDED, that the Additional Contracts
and $5,000,000 of the initial aggregate Principal Balance of the Initial
Contracts are exempt from this requirement.
SECTION 2.3 REPURCHASE BY SELLER UPON BREACH.
The Seller, the Insurer, the Depositor, the Servicer or the Trust, 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 made by the Seller pursuant to
SECTION 2.2. 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 thirtieth
(30th) day after the date on which the Seller becomes aware of, or receives
written notice from the Servicer, the Depositor, the Insurer or the Trust of,
such breach or failure, and such breach or failure materially and adversely
affects the interest of the Trust in a Contract, the Seller shall repurchase
such Contract from the Trust on the Business Day next preceding the Payment Date
immediately following such Collection Period. In consideration of the repurchase
of a Contract hereunder, the Seller shall remit the Purchase Amount of such
Contract in the manner specified in SECTION 3.4. The sole remedy of the Trust,
the Owner Trustee, the Indenture Trustee and the Noteholders with respect to a
breach or failure to be true of the representations and warranties made by the
Seller pursuant to SECTION 2.2 shall be to require the Seller to repurchase
Contracts pursuant to this SECTION 2.3. 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 Contract
pursuant to this SECTION 2.3 or the eligibility of any Contract for purposes of
this Agreement.
ARTICLE III
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 3.1 ACCOUNTS.
(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 the Indenture Trustee) a segregated trust account designated
as the Collection Account (the "COLLECTION ACCOUNT"). The Collection Account
shall be held in trust for the benefit of the Insurer and the Noteholders. The
Collection Account shall be under the sole dominion and control of the Indenture
Trustee; PROVIDED, HOWEVER, that the Servicer may make deposits to and direct
the Indenture Trustee in writing to make withdrawals from the Collection Account
in accordance with this Agreement and the Indenture. All monies deposited from
time to time in the Collection Account pursuant to this Agreement shall be held
by the Indenture Trustee as part of the Trust Property and shall be applied as
provided in this Agreement. All deposits to and withdrawals from the Collection
Account shall be made only upon the terms and conditions of the Transaction
Documents.
If the Servicer is required to remit collections within two Business Days
pursuant to the first sentence of SECTION 3.2, all amounts held in the
Collection Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the bank or
trust company then maintaining the Collection Account in Eligible
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Investments that mature not later than the Business Day preceding the Payment
Date following the Collection Period to which such amounts relate. All such
Eligible Investments shall be held to maturity. If the Collection Account is no
longer to be maintained at the Indenture Trustee, the Servicer shall, with the
Indenture Trustee's assistance as necessary, cause the Collection Account to be
moved to an Eligible Institution within ten (10) Business Days (or such longer
period not to exceed thirty (30) calendar days as to which each Rating Agency
and the Insurer (provided that no Insurer Default shall have occurred and is
continuing) may consent). The Servicer shall promptly notify the Indenture
Trustee, the Insurer (provided that no Insurer Default shall have occurred and
is continuing) and the Owner Trustee of any change in the account number or
location of the Collection Account.
(b) 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 the Indenture Trustee) the following note payment accounts:
(i) a segregated trust account designated as the Class A Note Payment
Account (the "CLASS A NOTE PAYMENT ACCOUNT"). The Class A Note Payment
Account shall be held in trust for the benefit of the Class A Noteholders
and the Insurer. The Class A Note Payment Account shall be under the sole
dominion and control of the Indenture Trustee; PROVIDED, HOWEVER, that the
Servicer may make deposits to and direct the Indenture Trustee in writing
to make withdrawals from the Class A Note Payment Account in accordance
with this Agreement and the Indenture. All monies deposited from time to
time in the Class A Note Payment Account pursuant to this Agreement and the
Indenture shall be held by the Indenture Trustee as part of the Trust
Property and shall be applied as provided in this Agreement and the
Indenture. The amounts on deposit in the Class A Note Payment Account shall
not be invested. If the Class A Note Payment Account is no longer to be
maintained at the Indenture Trustee, the Servicer shall, with the Indenture
Trustee's assistance as necessary, cause the Class A Note Payment Account
to be moved to an Eligible Institution within ten (10) Business Days (or
such longer period not to exceed thirty (30) calendar days as to which each
Rating Agency and the Insurer (provided that no Insurer Default shall have
occurred and is continuing) may consent). The Servicer shall promptly
notify the Indenture Trustee, the Insurer and the Owner Trustee of any
change in the account number or location of the Class A Note Payment
Account; and
(ii) a segregated trust account designated as the Class B Note Payment
Account (the "CLASS B NOTE PAYMENT ACCOUNT"). The Class B Note Payment
Account shall be held in trust for the benefit of the Class B Noteholders.
The Class B Note Payment Account shall be under the sole dominion and
control of the Indenture Trustee; PROVIDED, HOWEVER, that the Servicer may
make deposits to and direct the Indenture Trustee in writing to make
withdrawals from the Class B Note Payment Account in accordance with this
Agreement and the Indenture. All monies deposited from time to time in the
Class B Note Payment Account pursuant to this Agreement and the Indenture
shall be held by the Indenture Trustee as part of the Trust Property and
shall be applied as provided in this Agreement and the Indenture. The
amounts on deposit in the Class B Note Payment Account shall not be
invested. If the Class B Note Payment Account is no longer to be maintained
at the Indenture Trustee, the Servicer shall, with the Indenture Trustee's
assistance as necessary, cause the Class B Note Payment Account to be moved
to an Eligible Institution within ten (10) Business Days (or such longer
period not to
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exceed thirty (30) calendar days as to which each Rating Agency and the
Insurer (provided that no Insurer Default shall have occurred and is
continuing) may consent). The Servicer shall promptly notify the Indenture
Trustee, the Insurer and the Owner Trustee of any change in the account
number or location of the Class B Note Payment Account.
(c) The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Trust at an Eligible Institution (which shall
initially be the Owner Trustee) a segregated trust account designated as the
Depositor Account (the "DEPOSITOR ACCOUNT"). The Depositor Account shall be held
in trust for the benefit of the Depositor. The Depositor Account shall be under
the sole dominion and control of the Trust; PROVIDED, HOWEVER, that the Servicer
may direct the Indenture Trustee in writing to make deposits to the Depositor
Account in accordance with this Agreement and the Indenture and may direct the
Owner Trustee in writing to make withdrawals from the Depositor Account in
accordance with this Agreement and the Trust Agreement. All monies deposited
from time to time in the Depositor Account pursuant to this Agreement and the
Indenture shall be held by the Trust as part of the Trust Property and shall be
applied as provided in this Agreement and the Trust Agreement. The amounts on
deposit in the Depositor Account shall not be invested. If the Depositor Account
is no longer to be maintained at the Owner Trustee, the Servicer shall, with the
Owner Trustee's assistance as necessary, cause the Depositor Account to be moved
to an Eligible Institution within ten (10) Business Days (or such longer period
not to exceed thirty (30) calendar days as to which each Rating Agency and the
Insurer (provided that no Insurer Default shall have occurred and is continuing)
may consent). The Servicer shall promptly notify the Indenture Trustee, the
Insurer (provided that no Insurer Default shall have occurred and is continuing)
and the Owner Trustee of any change in the account number or location of the
Depositor Account.
SECTION 3.2 COLLECTIONS.
The Servicer shall remit to the Collection Account all amounts received by
the Servicer on or in respect of the Contracts (excluding payments with respect
to Purchased Contracts) 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 (a) FISC is the Servicer, (b) no Event of Servicing
Termination shall have occurred and be continuing and (c) (i) the short term
unsecured debt of FISC (for so long as it is Servicer) shall be rated at least
Prime-1 by Moody's and at least A-1 by S&P or (ii) the Rating Agency Condition
shall have been satisfied and the written consent of the Insurer shall have been
obtained (each, a "MONTHLY REMITTANCE CONDITION"), the Servicer may remit any
such amounts received during any Collection Period to the Collection Account in
immediately available funds on the Business Day preceding the Payment Date
following such Collection Period. The Owner Trustee and the Indenture Trustee
shall not be deemed to have knowledge of any event or circumstance under CLAUSE
(ii) or (iii) of the definition of Monthly Remittance Condition that would
require daily remittance by the Servicer to the Collection Account (and shall be
entitled to presume and be fully protected in presuming that no such event or
circumstance has occurred or exists) unless the Owner Trustee or the Indenture
Trustee, as applicable, has received written notice of such event or
circumstance from the Seller or the Servicer in an Officer's Certificate or
written notice from the Insurer (if no Insurer Default shall have occurred and
be continuing), the Holders of Notes evidencing not less than 25% of the Class A
Note Balance or a Responsible Officer of the Owner Trustee or the Indenture
Trustee, as applicable, has actual knowledge of such event or circumstance.
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SECTION 3.3 APPLICATION OF COLLECTIONS.
For purposes of this Agreement, all amounts received on or in respect of a
Contract during any Collection Period (excluding payments with respect to
Purchased Contracts) shall be applied by the Servicer, on the date received, to
interest and principal on such Contract in accordance with the terms of such
Contract.
SECTION 3.4 APPLICATION OF DEPOSITS.
The Seller and the Servicer shall deposit or cause to be deposited in the
Collection Account the aggregate Purchase Amount with respect to Purchased
Contracts pursuant to SECTION 2.3 hereof. All such deposits with respect to a
Collection Period shall be made in immediately available funds no later than
5:00 p.m.,
New York City time, on the Business Day preceding the Payment Date
following such Collection Period.
SECTION 3.5 DETERMINATION DATE CALCULATIONS.
(a) On each Determination Date, the Servicer shall calculate the following
amounts:
(i) the Available Funds for the following Payment Date;
(ii) the Total Servicing Fee for the preceding Collection Period;
(iii) the Total Note Interest for the following Payment Date;
(iv) the Class A Monthly Note Principal for the following Payment
Date;
(v) the Insurance Premium for the following Payment Date plus any
overdue Insurance Premiums for previous Payment Dates;
(vi) the aggregate amount of any unreimbursed payments under the
Policy to the extent payable to the Insurer under the Insurance Agreement
PLUS accrued interest on any unreimbursed payments under the Policy at the
rate provided in the Insurance Agreement PLUS any other amounts due the
Insurer under the Insurance Agreement and the Policy;
(vii) the sum of the amounts described in CLAUSES (ii), (iii) and (iv)
above (the "REQUIRED PAYMENT AMOUNT");
(viii) the sum of the amounts described in CLAUSES (v) and (vi) above
(the "INSURANCE PAYMENT AMOUNT");
(ix) the Class B Monthly Note Principal for the following Payment
Date; and
(x) any unpaid or unreimbursed fees and expenses (including but not
limited to, attorneys' fees and transition expenses) due to the Back-Up
Servicer, the Indenture Trustee and the Owner Trustee.
(b) On each Determination Date, the Servicer shall calculate the following
amounts:
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(i) the lesser of (A) the amount, if any, by which the sum of the
Required Payment Amount (for purposes of this subsection (b)(i)(A), the
Required Payment Amount shall be calculated assuming that the Class A
Monthly Note Principal is equal to the amount by which the Class A Note
Balance as of the related Determination Date exceeds the sum of the Pool
Balance for such Determination Date and 99% of the amount on deposit in the
Prefunding Account on the last day of the related Collection Period) PLUS
the Insurance Payment Amount for the following Payment Date exceeds
the Available Funds for such Payment Date and (B) the Reserve Account
Amount for such Payment Date (before giving effect to any deposits to or
withdrawals from the Reserve Account on such Payment Date) (such lesser
amount, the "RESERVE ACCOUNT DRAW AMOUNT");
(ii) the Policy Claim Amount;
(iii) the Reserve Account Amount for the following Payment Date (after
giving effect to the withdrawal of the Reserve Account Draw Amount for such
Payment Date); and
(iv) the amount, if any, by which the Required Reserve Account Amount
for the following Payment Date exceeds the Reserve Account Amount for such
Payment Date (after giving effect to the withdrawal of the Reserve Account
Draw Amount for such Payment Date) (such excess, the "RESERVE ACCOUNT
DEFICIENCY").
On each Payment Date, the Servicer shall instruct the Indenture Trustee to
withdraw, and the Indenture Trustee upon receipt of such instructions shall
withdraw, the Reserve Account Draw Amount, if any, for such Payment Date from
the Reserve Account and apply such amount in accordance with PARAGRAPH (e) of
this SECTION 3.5.
(c) If the Servicer determines on any Determination Date that the Available
Funds for the following Payment Date PLUS the Reserve Account Draw Amount
(excluding that portion attributable to CLAUSE (ii) of SECTION 3.5(a)) for such
Payment Date will be insufficient to pay in full the Required Payment Amount
(excluding that portion attributable to CLAUSE (ii) of SECTION 3.5(a)) for such
Payment Date, the Servicer shall deliver to the Indenture Trustee, with a copy
to the Insurer, the Owner Trustee and the Fiscal Agent, no later than 2:00 p.m.,
New York City time, on such Determination Date, a written notice specifying the
Policy Claim Amount for such Payment Date. The Indenture Trustee shall, no later
than 12:00 p.m.,
New York City time, on the second Business Day prior to such
Payment Date, make a claim under the Policy for such Policy Claim Amount by
delivering to the Insurer and the Fiscal Agent, with a copy to the Servicer, a
Notice (as defined in the Policy) for such Policy Claim Amount. In making any
such claim, the Indenture Trustee shall comply with all the terms and conditions
of the Policy. The "POLICY CLAIM AMOUNT" with respect to a Payment Date shall
equal the sum of the following amounts:
(i) the excess, if any, of (A) the Total Note Interest for such
Payment Date over (B) the portion of Total Available Funds for such Payment
Date applied to the payment thereof pursuant to SECTIONS 3.5(d) and (e);
and
(ii) the Principal Deficit; and
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(iii) the Class A Note Balance outstanding on the Final Note Payment
Date, after giving effect to all other distributions to the Class A
Noteholders to be made on such Final Note Payment Date.
The Servicer shall instruct the Indenture Trustee to deposit, and the
Indenture Trustee upon receipt of such instructions shall deposit, the proceeds
of any drawing under the Policy in respect of CLAUSES (i), (ii) and (iii) above
to the Class A Note Payment Account.
It is understood that this SECTION 3.5(c) shall have no effect upon the
Insurer's obligations under the Policy, which are governed solely by the Policy.
(d) On each Payment Date, the Servicer shall instruct the Indenture Trustee
to apply the Available Funds for such Payment Date to make the following
payments and deposits in the following order of priority:
(i) to the Back-Up Servicer, Indenture Trustee, Custodian and Owner
Trustee in its individual capacity, respectively, any unpaid or
unreimbursed fees and expenses (including, but not limited to, attorneys'
fees and transition expenses); PROVIDED that any such expenses shall not
exceed $50,000 in the aggregate per year and (A) prior to an Event of
Servicing Termination, $100,000 in the total aggregate or (B) after an
Event of Servicing Termination, $200,000 in the total aggregate so long as
the Notes shall remain outstanding and the Policy has not been cancelled;
(ii) to the Servicer, the Total Servicing Fee for the preceding
Collection Period;
(iii) to the Class A Note Payment Account, the Total Note Interest for
such Payment Date;
(iv) unless an Insurer Default has occurred and is continuing, to the
Insurer, the Insurance Premium for such Payment Date plus any overdue
Insurance Premiums for previous Payment Dates;
(v) to the Class A Note Payment Account, the Class A Monthly Note
Principal for such Payment Date;
(vi) to the Insurer, the aggregate amount of any unreimbursed
payments under the Policy to the extent payable to the Insurer under the
Insurance Agreement PLUS accrued interest on any unreimbursed payments
under the Policy at the rate provided in the Insurance Agreement PLUS any
other amounts due the Insurer under the Insurance Agreement and the Policy;
(vii) if the Notes have been declared immediately due and payable
following the occurrence of an Event of Default, to the Class A Note
Payment Account, the lesser of (a) the amount of Available Funds available
after payment of items (i) through (vi) above and (b) the Class A Note
Balance;
(viii) to the Reserve Account, the Reserve Account Deficiency, if any,
for such Payment Date;
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(ix) after the occurrence of a Re-▇▇▇▇▇▇▇ Trigger, to the Servicer (if
not First Investors Servicing Corporation), any and all expenses incurred
in connection with re-titling the Financed Vehicles, to the extent not
previously paid;
(x) to the Class B Note Payment Account, the Class B Monthly Note
Principal for such Payment Date;
(xi) other amounts, if any, due the Owner Trustee in its individual
capacity, the Indenture Trustee, the Custodian, the Back-Up Servicer, the
Servicer and the Insurer, respectively, pursuant to the Transaction
Documents; and
(xii) to the Depositor Account, any remaining amount of Available
Funds.
On each Payment Date, the Servicer shall instruct the Indenture Trustee to
make the payments described in Section 2.8 of the Indenture, as applicable, from
the Note Payment Accounts.
(e) On each Payment Date, the Servicer shall instruct the Indenture Trustee
to apply, and the Indenture Trustee shall apply, the amount withdrawn from the
Reserve Account in respect of the Reserve Account Draw Amount in accordance with
PARAGRAPH (B) of this SECTION 3.5 to make the following payments in the
following order of priority:
(i) to the Servicer, the Total Servicing Fee for the preceding
Collection Period;
(ii) to the Class A Note Payment Account, the Total Note Interest for
such Payment Date;
(iii) to the Class A Note Payment Account, the Class A Monthly Note
Principal for such Payment Date (only if, and to the extent that, at such
time the Class A Balance exceeds the sum of the Pool Balance and 99% of the
amount on deposit in the Prefunding Account as of the last day of the
related Collection Period);
(iv) unless an Insurer Default has occurred and is continuing, to the
Insurer, the Insurance Premium for such Payment Date plus any overdue
Insurance Premiums for previous Payment Dates; and
(v) to the Insurer, the aggregate amount of any unreimbursed
payments under the Policy to the extent payable to the Insurer under the
Insurance Agreement PLUS accrued interest on any unreimbursed payments
under the Policy at the rate provided in the Insurance Agreement PLUS any
other amounts due the Insurer under the Insurance Agreement and the Policy.
(f) On any Payment Date on or after which the Class A Notes have become due
and payable, the Servicer may, with the prior written consent (a copy of which
written consent shall be forwarded by the Servicer to the Indenture Trustee) of
the Insurer, and shall, at the written direction (a copy of which written
direction shall be forwarded by the Servicer to the Indenture Trustee) of the
Insurer (provided that no Insurer Default shall have occurred and be
continuing), instruct the Indenture Trustee to withdraw from the Reserve
Account, and the Indenture Trustee upon receipt of such instructions shall
withdraw from the Reserve Account, an amount equal to
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the remainder of the Class A Note Balance after the application of all other
amounts distributable to the Class A Noteholders on such Payment Date pursuant
to the Transaction Documents. The Servicer may, with the prior written consent
(a copy of which written consent shall be forwarded by the Servicer to the
Indenture Trustee) of the Insurer (provided that no Insurer Default shall have
occurred and be continuing), and shall, at the written direction (a copy of
which written direction shall be forwarded by the Servicer to the Indenture
Trustee) of the Insurer, instruct the Indenture Trustee to apply, and the
Indenture Trustee shall apply, such amount to the payment of the Class A Note
Balance until the Class A Note Balance has been reduced zero.
SECTION 3.6 RESERVE ACCOUNT.
(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 the Indenture Trustee) a segregated trust account designated
as the Reserve Account (the "RESERVE ACCOUNT"). The Reserve Account shall be
held in trust for the benefit of the Class A Noteholders, the Servicer and the
Insurer. The Reserve Account shall be under the sole dominion and control of the
Indenture Trustee; PROVIDED, HOWEVER, that the Servicer may make deposits to and
direct the Indenture Trustee in writing to make withdrawals from the Reserve
Account in accordance with this Agreement and the Indenture. On the Closing
Date, the Trust shall deposit the Initial Reserve Account Deposit into the
Reserve Account from the net proceeds of the sale of the Notes. Pursuant to the
Indenture, the Trust will pledge all of its right, title and interest in, to and
under the Reserve Account and the Reserve Account Property and to the Indenture
Trustee on behalf of the Class A Noteholders and the Insurer to secure its
obligations under the Class A Notes and the Indenture.
(b) The Reserve Account 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 Account
in Eligible Investments that mature not later than the Business Day preceding
the next Payment Date. All such Eligible Investments shall be held to maturity.
All interest and other income (net of losses and investment expenses) on funds
on deposit in the Reserve Account shall, at the written direction of the
Servicer, be paid to the Trust on any Payment Date to the extent that funds on
deposit therein, as certified by the Servicer, exceed the Required Reserve
Account Amount. If the Reserve Account is no longer to be maintained at the
Indenture Trustee, the Servicer shall, with the Indenture Trustee's assistance
as necessary, cause the Reserve Account to be moved to an Eligible Institution
within ten (10) Business Days (or such longer period not to exceed thirty (30)
calendar days as to which each Rating Agency and the Insurer (provided that no
Insurer Default shall have occurred and is continuing) may consent). The
Servicer shall promptly notify the Insurer (provided that no Insurer Default
shall have occurred and is continuing) and the Indenture Trustee of any change
in the account number or location of the Reserve Account.
(c) With respect to any Reserve Account Property:
(i) any Reserve Account Property that is a "financial asset" as
defined in Section 8-102(a)(9) of the UCC shall be physically delivered to,
or credited to an account in the name of, the Eligible Institution
maintaining the Reserve Account, in accordance with such institution's
customary procedures such that such institution establishes a "securities
entitlement" in favor of the Indenture Trustee with respect thereto;
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(ii) any Reserve Account 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 shall have sole signature
authority with respect thereto; and
(iii) except for any deposit accounts specified in CLAUSE (II) above,
the Reserve Account shall only be invested in securities or in other assets
which the Eligible Institution maintaining the Reserve Account agrees to
treat as "financial assets" as defined in Section 8-102(a)(9) of the UCC.
(d) If the Reserve Account Amount for any Payment Date (after giving effect
to the withdrawal of the Reserve Account Draw Amount for such Payment Date)
exceeds the Required Reserve Account Amount for such Payment Date, the Servicer
shall, unless an Event of Default has occurred and is continuing, instruct the
Indenture Trustee in writing to distribute, and the Indenture Trustee upon
receipt of such instructions shall distribute, the amount of such excess to the
Paying Agent for distribution in accordance with Section 5.2 of the Trust
Agreement. The Indenture Trustee hereby releases, on each Payment Date, its
security interest in, to and under Reserve Account Property distributed to the
Depositor pursuant to this SECTION 3.6. If an Event of Default has occurred and
is continuing, the Servicer shall instruct the Indenture Trustee to apply, and
the Indenture Trustee upon receipt of such instructions shall apply, the amount
of such excess to the Collection Account for application to the Available Funds
pursuant to SECTION 3.5(d).
(e) If the Class A Note Balance and all other amounts owing or to be
distributed hereunder or under the Indenture to the Class A Noteholders and the
Insurer have been paid in full and the Trust has been terminated, any remaining
Reserve Account Property shall be distributed in accordance with Section 5.2 of
the Trust Agreement.
SECTION 3.7 PREFUNDING ACCOUNT.
(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 the Indenture Trustee) a segregated trust account designated
as the Prefunding Account (the "PREFUNDING ACCOUNT"). The Prefunding Account
shall be held in trust for the benefit of the Insurer and the Noteholders. The
Prefunding Account shall be under the sole dominion and control of the Indenture
Trustee; PROVIDED, HOWEVER, that the Servicer may make deposits to and direct
the Indenture Trustee in writing to make withdrawals from the Prefunding Account
in accordance with this Agreement and the Indenture. All monies deposited from
time to time in the Prefunding Account pursuant to this Agreement shall be held
by the Indenture Trustee as part of the Trust Property and shall be applied as
provided in this Agreement. All deposits to and withdrawals from the Prefunding
Account shall be made only upon the terms and conditions of the Transaction
Documents.
(b) All amounts held in the Prefunding Account 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
Prefunding Account in Eligible Investments that mature not later than the
Business Day preceding the Payment Date following the Collection Period to which
such amounts relate. All such Eligible Investments shall be held to maturity. If
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the Prefunding Account is no longer to be maintained at the Indenture Trustee,
the Servicer shall, with the Indenture Trustee's assistance as necessary, cause
the Prefunding Account to be moved to an Eligible Institution within ten (10)
Business Days (or such longer period not to exceed thirty (30) calendar days as
to which each Rating Agency and the Insurer (provided that no Insurer Default
shall have occurred and is continuing) may consent). The Servicer shall promptly
notify the Indenture Trustee, the Insurer (provided that no Insurer Default
shall have occurred and is continuing) and the Owner Trustee of any change in
the account number or location of the Prefunding Account.
(c) On the Closing Date, the Trust will deposit an amount equal to the
Initial Prefunding Account Deposit from the aggregate proceeds of the sale of
the Notes into the Prefunding Account. The Issuer shall cause the Servicer to
notify the Indenture Trustee five Business Days prior to any proposed purchase
of Additional Contracts, such notice to contain (i) a Contract Schedule listing
the relevant information for such Additional Contracts, (ii) the Additional
Purchase Price and (iii) the proposed Additional Contract Purchase Date. During
the Prefunding Period, unless the Indenture Trustee, on such proposed Additional
Contract Purchase Date, has actual knowledge of the occurrence of a Default or
Event of Default, the Indenture Trustee shall transfer the Additional Purchase
Price for such Additional Contracts from the Prefunding Account to such account
as the Trust, through the Servicer, may specify.
(d) On the Prefunding Account Ending Date, upon direction from the
Servicer, the Indenture Trustee shall transfer 99% of the Excess Prefunding
Amount to the Class A Note Payment Account and the remaining 1% of the Excess
Prefunding Amount to the Class B Note Payment Account.
SECTION 3.8 STATEMENTS TO NOTEHOLDERS.
On or prior to each Determination Date, the Servicer shall provide to the
Indenture Trustee (with copies to the Rating Agencies and each Paying Agent) for
the Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date upon a written request from any such Noteholder, a statement
which shall set forth at least the following information as to the Notes (to the
extent applicable) with respect to the distribution to be made on such Payment
Date:
(a) the amount of such distribution allocable to Total Note Interest;
(b) the amount of such distribution allocable to interest, overdue interest
and interest on overdue interest for the Class A Notes;
(c) the amount of such distribution allocable to principal on the Class A
Notes and the Class B Notes;
(d) the Total Servicing Fee for the preceding Collection Period;
(e) the Class A Note Balance and the Note Pool Factor, in each case as of
the close of business on the last day of the preceding Collection Period (after
giving effect to payments allocated to principal reported under CLAUSE (c)
above);
(f) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
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(g) the Reserve Account Amount on such Payment Date (after giving effect to
all deposits to or withdrawals from the Reserve Account on such Payment Date);
(h) the aggregate Purchase Amount of Purchased Contracts, if any, with
respect to the preceding Collection Period;
(i) the number and aggregate Principal Balance of Contracts that were 31-59
days, 60-89 days or 90 days or more delinquent as of the last day of the
preceding Collection Period;
(j) Cumulative Net Loss Rate information with respect to the preceding
Collection Periods; and
(k) prior to the Prefunding Account Ending Date, the Prefunding Account
Balance and the Capitalized Interest Amount.
SECTION 3.9 CONTROL OF SECURITIES ACCOUNTS.
(a) Notwithstanding anything else contained herein, the Servicer, the
Depositor and the Trust agrees that each of the Collection Account, the
Prefunding Account, the Class A Note Payment Account, the Class B Note Payment
Account and the Reserve Account will only be established at an Eligible
Institution that agrees substantially as follows: (i) it will comply with
"entitlement orders" (as defined in Section 8-102(a)(8) of the UCC) relating to
such accounts issued by the Indenture Trustee without further consent by the
Trust, the Servicer or the Depositor; (ii) until the termination of the
Indenture, it will not enter into any other agreement relating to any such
account pursuant to which it agrees to comply with entitlement orders of any
Person other than the Indenture Trustee; (iii) all assets delivered or credited
to it in connection with such accounts and all investments thereof will be
promptly credited to such accounts; and (iv) that all property credited to such
accounts are "financial assets" as defined in Section 8-102(9) of the Relevant
UCC.
(b) Notwithstanding anything else contained herein, the Servicer, the
Depositor and the Trust agree that the Depositor Account will only be
established at an Eligible Institution that agrees substantially as follows: (i)
it will comply with "entitlement orders" (as defined in Section 8-102(a)(8) of
the UCC) relating to such accounts issued by the Trust without further consent
by the Depositor or the Servicer; (ii) until the termination of the Trust
Agreement, it will not enter into any other agreement relating to any such
account pursuant to which it agrees to comply with entitlement orders of any
Person other than the Trust; (iii) all assets delivered or credited to it in
connection with such accounts and all investments thereof will be promptly
credited to such account; and (iv) that all property credited to such account
are "financial assets" as defined in Section 8-102(9) of the Relevant UCC.
SECTION 3.10 POLICY MATTERS.
(a) The Indenture Trustee hereby agrees on behalf of the Class A
Noteholders (and each Class A Noteholder, by its acceptance of its Class A
Notes, hereby agrees) for the benefit of the Insurer that the Indenture Trustee
shall recognize that to the extent the Insurer makes a payment under the Policy,
either directly or indirectly (as by paying through the Indenture Trustee), to
the Class A Noteholders, the Insurer will be entitled to be subrogated to the
rights of the Class A Noteholders to the extent of such payment made under the
Policy. Any rights of subrogation acquired by the Insurer as a result of any
payment made under the Policy shall, in all
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respects, be subordinate and junior in right of payment to the prior
indefeasible payment in full of all amounts due under the Class A Notes.
(b) The Indenture Trustee, for itself and on behalf of the Noteholders,
hereby agrees that the Insurer may at any time during the continuation of any
proceeding relating to a Final Order, provided that no Insurer Default shall
have occurred and be continuing, direct all matters relating to such Final
Order, including, without limitation, the direction of any appeal of any order
relating to such Final Order and the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition and without limitation of
the foregoing, the Insurer shall be subrogated, to the extent of any payments
made under the Policy relating to a Final Order, to the rights of the Depositor,
the Servicer, the Seller, the Trust, the Indenture Trustee and the Class A
Noteholders in the conduct of any preference claim relating to a Final Order,
including, without limitation, all rights of any party to any adversarial
proceeding or action with respect to any court order issued in connection with
any such preference claim; PROVIDED, that such subrogation rights shall remain
subject to the last sentence of PARAGRAPH (a) of this SECTION 3.10.
ARTICLE IV
THE SELLER
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller makes the following representations and warranties on which the
Trust shall be deemed to have relied in accepting the Trust Property. The
representations and warranties speak as of the execution and delivery of this
Agreement and shall survive the sale, transfer, assignment and conveyance of the
Trust Property to the Trust pursuant to this Agreement and the pledge of the
Trust Property to the Indenture Trustee pursuant to the Indenture:
(a) ORGANIZATION AND GOOD STANDING. The Seller has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Texas, has the power, authority and legal right to own its properties
and to conduct its business as such properties are currently owned and such
business is currently conducted, and has the power, authority and legal right to
acquire, own and sell the Contracts.
(b) DUE QUALIFICATION. The Seller is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary licenses and
approvals in each jurisdiction in which the failure to so qualify or to obtain
such licenses and approvals would, in the reasonable judgment of the Seller,
materially and adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement, the Indenture, the
Trust Agreement, any of the other Transaction Documents, the Contracts or the
Notes.
(c) POWER AND AUTHORITY. The Seller has the power and authority to execute,
deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party. The Seller has the power and
authority to sell, assign, transfer and convey the property to be transferred to
and deposited with the Trust and has duly authorized such transfer and deposit
by all necessary corporate action, and the execution, delivery and performance
of this Agreement and the other Transaction Documents to which the Seller is a
party have been duly authorized by the Seller by all necessary corporate action.
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(d) VALID TRANSFER; BINDING OBLIGATION. This Agreement effects a valid
sale, transfer, assignment and conveyance to the Trust of the Contracts and the
other Trust Property enforceable against creditors of and purchasers from the
Seller. This Agreement and the other Transaction Documents to which the Seller
is a party constitute legal, valid and binding obligations of the Seller,
enforceable against the Seller in accordance with their terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and to general
equitable principles.
(e) NO VIOLATION. The execution, delivery and performance by the Seller of
this Agreement and the other Transaction Documents to which the Seller is a
party, the consummation of the transactions contemplated hereby and thereby and
the fulfillment of the terms hereof and thereof will not conflict with, result
in a 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 organization or
by-laws of the Seller or any material indenture, agreement, mortgage, deed of
trust or other instrument to which the Seller is a party or by which the Seller
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 pursuant to this Agreement), or violate any law, order,
rule or regulation applicable to the Seller or its properties of any federal or
state regulatory body, court, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending, or,
to the knowledge of the Seller, threatened, against the Seller before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (i)
asserting the invalidity of this Agreement, the Indenture, the Trust Agreement,
any of the other Transaction Documents or the Notes, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement, the Indenture, the Trust Agreement or any of the
other Transaction Documents, (iii) seeking any determination or ruling that, in
the reasonable judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, the Trust Agreement, any of
the other Transaction Documents, the Contracts or the Notes, or (iv) that, in
the reasonable judgment of the Seller, would adversely affect the federal or
Applicable Tax State income, excise, franchise or similar tax attributes of the
Notes or the Trust.
SECTION 4.2 LIABILITY OF SELLER; INDEMNITIES.
(a) The Seller shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Seller under this Agreement.
(b) Notwithstanding any other provision in any Transaction Document, the
Seller shall indemnify, defend and hold harmless the Trust, the Owner Trustee in
its individual capacity, Bankers Trust Company, and the Indenture Trustee from
and against any taxes that may at any time be asserted against any such Person
with respect to, and as of the date of, the transfer of the Contracts to the
Trust or the issuance and original sale of the Notes, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Trust, not including any taxes asserted with
respect to ownership of the Contracts or federal or other Applicable Tax State
income taxes arising out of the transactions
36
contemplated by this Agreement and the other Transaction Documents), and all
costs and expenses in defending against such taxes.
(c) Notwithstanding any other provision in any Transaction Document, the
Seller shall indemnify, defend and hold harmless the Trust, the Owner Trustee in
its individual capacity, Bankers Trust Company, the Indenture Trustee and the
Noteholders from and against any loss, liability or expense incurred by reason
of (i) the Seller's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement or any other Transaction 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 Transaction Document to which it is
a party and (ii) the Seller's violation of federal or state securities laws in
connection with the registration or the sale of the Notes and (iii) any action
taken, or failed to be taken, by the Seller in respect of any portion of the
Trust Property.
(d) Notwithstanding any other provision in any Transaction Document, the
Seller shall indemnify, defend and hold harmless the Owner Trustee in its
individual capacity, Bankers Trust Company, and the Indenture Trustee and their
respective officers, directors, employees and agents from and against all costs,
expenses, unpaid fees, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties contained herein and 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 cost, expense, loss, claim, damage or liability (i) shall
be due to the willful misfeasance, bad faith or gross 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 in its
individual capacity 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 (iv) relates
to any tax other than the taxes with respect to which either the Seller or the
Servicer shall be required to indemnify the Owner Trustee or the Indenture
Trustee, as applicable.
(e) The Seller shall pay any and all taxes levied or assessed upon all or
any part of the Owner Trust Estate.
Indemnification under this SECTION 4.2 shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this SECTION 4.2 and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others, such
Person shall promptly repay such amounts to the Seller, without interest.
SECTION 4.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SELLER.
Any Person (a) into which the Seller shall be merged or consolidated, (b)
resulting from any merger, conversion or consolidation to which the Seller shall
be a party or (c) that shall succeed by purchase and assumption to all or
substantially all of the business of the Seller, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Seller under this Agreement, shall be the successor to the Seller under
this Agreement without the execution or filing of any other document or any
further act on the part of
37
any of the parties to this Agreement; PROVIDED, HOWEVER, that (i) the Seller
shall have delivered to the Owner Trustee and the Indenture Trustee 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 4.3 and (ii) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been authorized and filed that are necessary to
fully preserve and protect the interest of the Trust and the Indenture Trustee,
respectively, in the Contracts and the other Trust Property, and reciting the
details of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to fully preserve and protect such interest. The
Seller shall provide notice of any merger, conversion, consolidation or
succession pursuant to this SECTION 4.3 to the Rating Agencies. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with CLAUSES (i) and (ii) above shall be conditions to
the consummation of the transactions referred to in CLAUSES (a), (b) and (c)
above.
SECTION 4.4 LIMITATION ON LIABILITY OF SELLER AND OTHERS.
(a) Neither the Seller nor any of the directors, officers, employees or
agents of the Seller shall be under any liability to the Trust or the
Noteholders for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Seller or any such Person against any
liability that would otherwise be imposed by reason of willful misfeasance or
bad faith in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement, or by reason of negligence in the
performance of duties under this Agreement (except for errors in judgment). The
Seller, and its directors, officers, employees and agents, may rely in good
faith on the advice of counsel or on any document of any kind PRIMA FACIE
properly executed and submitted by any Person in respect of any matters arising
under this Agreement.
(b) The Seller shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its obligations under
this Agreement and that in its opinion may involve it in any expense or
liability.
SECTION 4.5 SELLER MAY OWN CLASS A NOTES.
The Seller, and any Affiliate of the Seller, may, in its individual or any
other capacity, become the owner or pledgee of Class A Notes with the same
rights as it would have if it were not the Seller or an Affiliate of the Seller,
except as otherwise expressly provided herein (including in the definition of
"CLASS A NOTE BALANCE") or in the other Transaction Documents. Except as
otherwise expressly provided herein (including the definition of "CLASS A NOTE
BALANCE") or in the other Transaction Documents, Class A Notes so owned by or
pledged to the Seller or such Affiliate shall have an equal and proportionate
benefit under the provisions of this Agreement and the other Transaction
Documents, without preference, priority or distinction as among the Class A
Notes.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1 AMENDMENT.
(a) This Agreement may be amended from time to time by the Seller, the
Servicer, the Depositor and the Trust, with the consent of the Indenture Trustee
and the Insurer (provided that no Insurer Default shall have occurred and be
continuing), 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 or 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 such amendment shall not,
as evidenced by an Opinion of Counsel delivered to the Owner Trustee, the
Indenture Trustee and the Insurer, materially and adversely affect the interests
of any Noteholder. Any such amendment shall be deemed not to materially and
adversely affect the interests of any Noteholder if the Rating Agency Condition
is satisfied or the Person requesting the amendment obtains an Opinion of
Counsel satisfactory to the Indenture Trustee and the Owner Trustee to that
effect.
(b) This Agreement may also be amended from time to time by the Seller, the
Servicer, the Depositor, the Trust and the Insurer (provided that no Insurer
Default shall have occurred and be continuing and if so, provided further that
such amendment shall not have a material adverse effect on the Insurer), with
the consent of the Indenture Trustee and the Holders of Notes evidencing not
less than 51% of the Class A Note Balance, 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 shall (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 on or in respect of the Contracts or
distributions that are required to be made for the benefit of the Noteholders or
change the Note Rate, or the Required Reserve Account Amount, without the
consent of all adversely affected Noteholders (ii) reduce the percentage
required to consent to any such amendment, without the consent of all adversely
affected Noteholders or (iii) adversely affect the rating of the Notes by the
Rating Agencies without the consent of the Holders of Notes evidencing not less
than 66-2/3% of the Class A Note Balance.
(c) Prior to the execution of any amendment or consent pursuant to SECTION
5.1(B), the Servicer shall provide written notification of the substance of such
amendment or consent to each Rating Agency and the Insurer.
(d) Promptly after the execution of any amendment or consent pursuant to
SECTION 5.1(b), the Trust shall furnish written notification of the substance of
such amendment or consent to the Indenture Trustee and each of the Rating
Agencies. It shall not be necessary for the consent of the Noteholders pursuant
to SECTION 5.1(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
39
thereof by the Noteholders shall be subject to such reasonable requirements as
the Owner Trustee and the Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment pursuant to this SECTION 5.1,
the Owner Trustee and the Indenture Trustee shall be entitled to receive and
rely upon (i) an Opinion of Counsel stating that the execution of such amendment
(A) is authorized or permitted by this Agreement, (B) will not materially
adversely affect the federal or any Applicable Tax State income or franchise
taxation of any Outstanding Note or any Holder thereof and (C) will not cause
the Trust to be taxable as a corporation for federal or any Applicable Tax State
income or franchise tax purposes 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 5.2 PROTECTION OF TITLE OF TRUST.
(a) The Seller 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 Trust and the
Indenture Trustee for the benefit of the Noteholders and the Insurer in the
Contracts and the proceeds thereof. The Seller or the Servicer, or both, shall
deliver (or cause to be delivered) to the Owner Trustee and the Indenture
Trustee file-stamped copies of, or filing receipts for, any document filed as
provided above as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity or
corporate structure in any manner that would make any financing statement or
continuation statement filed by the Seller or the Servicer in accordance with
SECTION 5.2(a) seriously misleading within the meaning of Section 9-507 of the
Relevant UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least sixty (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 Trust and the Indenture Trustee
for the benefit of the Noteholders and the Insurer in the Contracts and the
proceeds thereof.
(c) The Seller and the Servicer shall give the Owner Trustee and the
Indenture Trustee at least sixty (60) days' prior written notice of any
relocation of its principal executive office or change of its jurisdiction of
formation and shall promptly file any such amendment, continuation statement or
any new financing statement. The Servicer shall at all times maintain each
office from which it shall service Contracts, and its principal executive
office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each Contract
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Contract, 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 Contract and the amounts from time to
time deposited in the Collection Account and the Reserve Account in respect of
such Contract.
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(e) The Servicer shall maintain its computer systems so that, from and
after the time of the transfer of the Contracts to the Trust pursuant to this
Agreement, the Servicer's master computer records (including any back-up
archives) that refer to a Contract shall indicate clearly the interest of the
Trust and the Indenture Trustee in such Contract and that such Contract is owned
by the Trust and has been pledged to the Indenture Trustee pursuant to the
Indenture. Indication of the Trust's and the Indenture Trustee's interest in a
Contract shall be deleted from or modified on the Servicer's computer systems
when, and only when, such Contract shall have been paid in full or repurchased
by the Seller or purchased by the Servicer.
(f) If at any time the Seller or the Servicer shall propose to sell, grant
a security interest in or otherwise transfer any interest in any motor vehicle
retail installment sale contract or security interest and promissory note to any
prospective purchaser, lender or other transferee, the Servicer shall give to
such prospective purchaser, lender or other transferee computer tapes, compact
disks, records or print-outs (including any restored from back-up archives)
that, if they shall refer in any manner whatsoever to any Contract, shall
indicate clearly that such Contract has been sold and is owned by the Trust and
has been pledged to the Indenture Trustee (unless such Contract has been paid in
full or repurchased by the Seller or purchased by the Servicer).
(g) The Servicer shall permit the Owner Trustee, the Indenture Trustee 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
Contract.
(h) Upon request, the Servicer shall furnish to the Owner Trustee and the
Indenture Trustee, within ten (10) Business Days, a list of all Contracts (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Contract Schedule and to each of the
Monthly Servicer Reports furnished before such request indicating removal of
Contracts from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(i) promptly after the execution and delivery of each amendment to
any financing statement, an Opinion of Counsel either (A) stating that, in
the opinion of such Counsel, all financing statements and continuation
statements have been authorized and filed that are necessary fully to
preserve and protect the interest of the Trust and the Indenture Trustee in
the Contracts, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) stating
that, in the opinion of such Counsel, no such action shall be necessary to
preserve and protect such interest; and
(ii) within ninety (90) days after the beginning of each calendar
year (beginning with the year 2003), an Opinion of Counsel, dated as of a
date during such 90-day period, either (A) stating that, in the opinion of
such Counsel, all financing statements and continuation statements have
been authorized and filed that are necessary fully to preserve and protect
the interest of the Trust and the Indenture Trustee in the Contracts, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that, in the
opinion of such Counsel, no such action shall be necessary to preserve and
protect such interest.
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Each Opinion of Counsel referred to in CLAUSE (i)(A) or (i)(B) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
SECTION 5.3 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of
New York and the obligations, rights and remedies of the parties under this
Agreement shall be determined in accordance with such laws.
SECTION 5.4 NOTICES.
All demands, notices and other 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 (a) in the case of the Seller, at the following
address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇
Duck, (b) in the case of the Servicer, at the following address: ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ Duck, (c) in the case
of the Owner Trustee, at the related Corporate Trust Office, with a copy to
Bankers Trust Company, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Structured Finance Group, (d) in the case of the Indenture Trustee,
at the related Corporate Trust Office, (e) in the case of Moody's, at the
following address: ▇▇▇▇▇'▇ Investors Service, Inc., ABS Monitoring Department,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (f) in the case of S&P, at the
following address: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Asset Backed Surveillance Department, and (g) in the case of the
Insurer, at the following address: MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Insured Portfolio Management, Structured
Finance.
SECTION 5.5 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement, or of the Notes, or the rights of the Holders thereof.
SECTION 5.6 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein this Agreement
may not be assigned by the Seller or the Servicer without the prior written
consent of the Trust, the Indenture Trustee, the Holders of Notes evidencing not
less than 66-2/3% of the Class A Note Balance.
SECTION 5.7 FURTHER ASSURANCES.
The Seller and the Servicer agree to do and perform, from time to time, any
and all acts and to execute any and all further instruments required or
reasonably requested by the Owner Trustee or the Indenture Trustee more fully to
effect the purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements relating
42
to the Contracts for filing under the provisions of the Relevant UCC of any
applicable jurisdiction.
SECTION 5.8 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the Owner
Trustee, the Indenture Trustee, the Insurer, the Noteholders, 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 5.9 THIRD-PARTY BENEFICIARIES.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto, the Noteholders, the Insurer and their respective successors and
permitted assigns. Except as otherwise provided in SECTION 4.2 and this
ARTICLE V, 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 Trust to the Indenture Trustee for the benefit of the Noteholders and the
Insurer pursuant to the Indenture.
SECTION 5.10 ACTIONS BY NOTEHOLDERS.
(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, such action,
notice or instruction may be taken or given by any Noteholder, as applicable,
unless such provision requires a specific percentage of the Noteholders.
(b) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Noteholder shall bind such Noteholder and every subsequent
Holder of such Note 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.
SECTION 5.11 COUNTERPARTS.
For the purpose of facilitating the execution of this Agreement and for
other purposes, this Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
SECTION 5.12 AGENT FOR SERVICE.
The agent for service of the Seller and the Servicer in respect of this
Agreement shall be ▇▇▇▇▇▇ Duck, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
SECTION 5.13 NO BANKRUPTCY.
43
The Owner Trustee, the Indenture Trustee, the Trust, the Depositor and the
Servicer each covenants and agrees that, prior to the date which is one year and
one day after the payment in full of all securities issued by the Trust, which
securities were rated by any nationally recognized statistical rating
organization, it will not institute against, or join any other Person in
instituting against, or knowingly or intentionally cooperate or encourage any
other Person in instituting against, the Depositor or the Trust any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law. This SECTION
5.13 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 5.14 LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE
TRUSTEE.
(a) Notwithstanding anything contained herein or contemplated hereby to the
contrary, this Agreement has been signed by the Owner Trustee not in its
individual capacity but solely in its capacity as Owner Trustee of the Trust,
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 Trust hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto or contemplated hereby, as to all of which
recourse shall be had solely to the assets of the Trust. For all purposes of
this Agreement, the Owner Trustee (as such and in its individual capacity) shall
be subject to, and entitled to the benefits of, the terms and provisions of the
Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, 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 Trust hereunder or
in any of the certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the Trust.
SECTION 5.15 CERTAIN RIGHTS OF THE INSURER.
So long as no Insurer Default shall have occurred and be continuing, the
Insurer shall have the right to exercise all rights, including voting rights,
which the Class A Noteholders are entitled to exercise pursuant to this
Sale and
Allocation Agreement, without any consent of such Class A Noteholders; PROVIDED,
HOWEVER, that the foregoing shall not apply to the rights of the Class A
Noteholders set forth in the proviso to PARAGRAPH (B) of SECTION 5.1 of this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
44
IN WITNESS WHEREOF, parties hereto have caused this
Sale and Allocation
Agreement to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
FIRST INVESTORS FINANCIAL SERVICES, INC.,
as Seller
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST INVESTORS SERVICING CORPORATION,
as Servicer
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST INVESTORS
AUTO OWNER TRUST 2002-A
By: BANKERS TRUST (DELAWARE), not in
its individual capacity but solely
as Owner Trustee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST INVESTORS AUTO FUNDING CORPORATION,
as Depositor
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Accepted and agreed:
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Indenture Trustee
By:
---------------------------------------------------------
Name:
-------------------------------------------------------
Title:
------------------------------------------------------
Schedule 1
Contract Schedule
Schedule 2
Location of Contract Files
Sixth Street and Marquette Avenue
MAC N9328-011
Suite ABS
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Services - Asset Backed Securities Vault
Exhibit A
Form of Monthly Servicer Report
Exhibit B
[Reserved]
Exhibit C
Credit and Collection Policy
Exhibit D
Offering Memorandum
Exhibit E
Form of Originator Agreement
Exhibit F
Form Of Additional Contract Assignment
For value received, in accordance with the
Sale and Allocation Agreement
(the "
SALE AND ALLOCATION AGREEMENT"), dated as of January 1, 2002, by and among
the First Investors Financial Services, Inc., First Investors Servicing
Corporation, First Investors Auto Funding Corporation, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association and First Investors Auto Owner Trust 2002-A (the
"PURCHASER") the undersigned does hereby sell, transfer, assign and otherwise
convey unto the Purchaser, without recourse (subject to the obligations in the
Sale and Allocation Agreement) all right, title and interest of the Seller in
and to (i) the Additional Contracts listed on Schedule 1 hereto, (ii) all
amounts received on or in respect of such Additional Contracts after the
Additional Cutoff Date related thereto; (iii) the security interests in the
Financed Vehicles related thereto; (iv) as each relates to the Additional
Contracts, the Collection Account, the Reserve Account, the Prefunding Account,
the Class A Note Payment Account and the Class B Note Payment Account and all
amounts, securities, financial assets, investments and other property in or
credited to any of the foregoing and all proceeds thereof; (v) any proceeds from
claims on or refunds of premiums with respect to extended warranties or physical
damage, theft, credit life and credit disability insurance policies relating to
the Financed Vehicles or the related Obligors with respect to such Additional
Contracts; (vi) any Liquidation Proceeds with respect to such Additional
Contracts; (vii) the Contract Files with respect to such Additional Contracts;
(viii) rights under the Servicing Agreement to cause the Servicer to purchase
such Additional Contracts affected materially and adversely by breaches of the
representations and warranties of the Servicer made in the Servicing Agreement;
(ix) and all present and future claims, demands, causes of action and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
All provisions of the
Sale and Allocation Agreement are incorporated herein
by reference. All capitalized terms not defined herein shall have the meanings
set forth in the
Sale and Allocation Agreement.
In consideration for the conveyance of the Additional Contracts to the
Purchaser, Purchaser shall pay to the Seller, contemporaneously with the
execution of this Additional Contract Assignment, cash in the amount of
$_________
The Seller does hereby make each of the representations and warranties
referred to in Section 2.2 of the
Sale and Allocation Agreement with respect to
this Agreement with full force and effect as if fully set forth herein. The
Seller does hereby certify that each of the conditions precedent set forth in
Section 2.1(f) of the Sale and Allocation Agreement has been satisfied.
This Additional Contract Assignment shall be governed by, and construed in
accordance with, the laws of the State of
New York, without giving effect to the
conflicts of laws principles thereof.
IN WITNESS WHEREOF, the undersigned has caused this Additional Contract
Assignment to be executed by its officer thereunto duly authorized, as of
________________, 200[_].
FIRST INVESTORS FINANCIAL SERVICES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Schedule 1
to
Additional Contract Assignment
Dated
__________, 2002
List of Additional Contracts