EXHIBIT 10.2
----------------------------------------
UNITED FIDELITY AUTO RECEIVABLES TRUST [____-_]
$[ _________ ] [ __ ]% CLASS [A-1] ASSET BACKED NOTES
$[ _________ ] [ __ ]% CLASS [A-2] ASSET BACKED NOTES
$[ _________ ] [ __ ]% CLASS [A-3] ASSET BACKED NOTES
$[ _________ ] [ __ ]% CLASS [B] ASSET BACKED NOTES
ASSET BACKED CERTIFICATE
----------------------------------------
SALE AND SERVICING AGREEMENT
among
UNITED FIDELITY AUTO RECEIVABLES TRUST [____-_],
as Issuer
UNITED FIDELITY BANK, FSB,
as Originator and Subservicer
UNITED FIDELITY FINANCE, LLC,
as Transferor
______________________________,
as Trust Collateral Agent and Back-up Servicer
and
______________________________,
as Master Servicer
-----------------
Dated as of ________, ____
-----------------
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................2
SECTION 1.01 Definitions............................................................................2
SECTION 1.02 Other Definitional Provisions.........................................................26
SECTION 1.03 Closing Date and Record Date..........................................................27
SECTION 1.04 Section References....................................................................27
SECTION 1.05 Compliance Certificates...............................................................27
SECTION 1.06 Directions............................................................................27
SECTION 1.07 Calculations..........................................................................28
SECTION 1.08 Action by or Consent of Noteholders...................................................28
SECTION 1.09 Material Adverse Effect...............................................................28
ARTICLE II CONVEYANCE OF TRUST PROPERTY; FURTHER ENCUMBRANCE THEREOF.............................................28
SECTION 2.01 Conveyance of Initial Receivables.....................................................28
SECTION 2.02 Conveyance of Subsequent Receivables..................................................29
SECTION 2.03 Further Encumbrance of Trust Property.................................................35
SECTION 2.04 Assignment by Transferor..............................................................36
ARTICLE III THE CONTRACTS........................................................................................36
SECTION 3.01 Representations and Warranties........................................................36
SECTION 3.02 Repurchase Upon Breach................................................................45
SECTION 3.03 Custody of Receivable Files...........................................................46
SECTION 3.04 Acceptance of Receivable Files By Trust Collateral Agent..............................46
SECTION 3.05 Covenants of the Trust Collateral Agent...............................................47
SECTION 3.06 Representations, Warranties and Covenants of the Originator...........................48
ARTICLE IV ADMINISTRATION AND SERVICING OF CONTRACTS.............................................................48
SECTION 4.01 Duties of Servicer....................................................................48
SECTION 4.02 The Master Servicer...................................................................49
SECTION 4.03 The Back-up Servicer..................................................................50
SECTION 4.04 Retention and Termination of Subservicer..............................................51
SECTION 4.05 Collection and Application of Receivable Payments.....................................51
SECTION 4.06 Realization Upon Receivables..........................................................52
SECTION 4.07 Insurance.............................................................................53
SECTION 4.08 Maintenance of Security Interests in Financed Vehicles................................53
SECTION 4.09 Covenants of Servicer.................................................................54
SECTION 4.10 Purchase of Receivables Upon Breach...................................................55
SECTION 4.11 Servicer Fee..........................................................................55
SECTION 4.12 Servicer's Certificate................................................................56
SECTION 4.13 Annual Statement as to Compliance; Notice of Default..................................56
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SECTION 4.14 Annual Independent Certified Public Accountant's Report...............................57
SECTION 4.15 Access to Certain Documentation and Information Regarding Receivables.................58
SECTION 4.16 Servicer Expenses.....................................................................58
SECTION 4.17 Fidelity Bond.........................................................................58
SECTION 4.18 Delegation of Duties..................................................................58
ARTICLE V TRUST ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS........................59
SECTION 5.01 Lock-Box Account......................................................................59
SECTION 5.02 Establishment of Trust Accounts.......................................................60
SECTION 5.03 Collections...........................................................................63
SECTION 5.04 Certain Reimbursements to the Servicer................................................64
SECTION 5.05 Additional Deposits...................................................................64
SECTION 5.06 Spread Account........................................................................65
SECTION 5.07 Pre-Funding Account...................................................................65
SECTION 5.08 Capitalized Interest Account..........................................................66
SECTION 5.09 Claims under the Note Policy..........................................................67
SECTION 5.10 Preference Claims; Direction of Proceedings...........................................68
SECTION 5.11 Surrender of the Note Policy..........................................................69
SECTION 5.12 Transfers and Distributions...........................................................69
SECTION 5.13 Distributions from the Note Distribution Account......................................71
SECTION 5.14 Certificate Distribution Account......................................................73
SECTION 5.15 Statements to Certificateholders and Noteholders; Tax Returns.........................75
SECTION 5.16 Payments upon an Indenture Event of Default and Acceleration of the Notes.............77
SECTION 5.17 Optional Deposits by the Note Insurer.................................................77
SECTION 5.18 Securities Accounts...................................................................77
ARTICLE VI THE TRANSFEROR........................................................................................78
SECTION 6.01 Representations of Transferor.........................................................78
SECTION 6.02 Liability of Transferor; Indemnities..................................................80
SECTION 6.03 Merger or Consolidation of, or Assumption of the Obligations of, Transferor...........81
SECTION 6.04 Limitation on Liability of Originator, Transferor and Others..........................82
SECTION 6.05 Originator and Transferor May Own Securities..........................................82
SECTION 6.06 Additional Covenants of the Transferor................................................82
ARTICLE VII THE MASTER SERVICER; SUBSERVICER; AND BACK-UP SERVICER...............................................83
SECTION 7.01 Representations and Warranties........................................................83
SECTION 7.02 Master Servicer, Subservicer and Back-up Servicer Not to Resign.......................87
SECTION 7.03 Indemnities of the Servicer, Master Servicer and the Originator.......................88
SECTION 7.04 Merger or Consolidation of, or Assumption of the Obligations of, the
Subservicer, Master Servicer and Back-up Servicer.....................................90
SECTION 7.05 Limitation on Liability of Servicer and Others........................................92
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SECTION 7.06 Delegation of Duties..................................................................92
SECTION 7.07 Verification of Servicer's Certificate................................................93
ARTICLE VIII SERVICER AND MASTER SERVICER DEFAULTS...............................................................94
SECTION 8.01 Servicer Default......................................................................94
SECTION 8.02 Master Servicer Default...............................................................98
SECTION 8.03 Appointment of Successors............................................................100
SECTION 8.04 Notification to Noteholders and Certificateholders...................................103
SECTION 8.05 Waiver of Past Defaults..............................................................103
ARTICLE IX THE TRUST COLLATERAL AGENT...........................................................................104
SECTION 9.01 Duties of the Trust Collateral Agent.................................................104
SECTION 9.02 Rights of the Trust Collateral Agent.................................................106
SECTION 9.03 Individual Rights of Trust Collateral Agent..........................................107
SECTION 9.04 Reports by Trust Collateral Agent to Holders.........................................107
SECTION 9.05 Compensation.........................................................................107
SECTION 9.06 Eligibility..........................................................................108
SECTION 9.07 Trust Collateral Agent's Disclaimer..................................................108
SECTION 9.08 Limitation on Liability..............................................................108
SECTION 9.09 Reliance Upon Documents..............................................................109
SECTION 9.10 Successor Trust Collateral Agent.....................................................109
SECTION 9.11 Representations and Warranties of the Trust Collateral Agent.........................110
SECTION 9.12 Waiver of Setoffs....................................................................111
SECTION 9.13 Trust Collateral Agent to Act for the Noteholders and Note Insurer...................111
SECTION 9.14 Rights of Note Insurer to Direct Trust Collateral Agent..............................111
ARTICLE X TERMINATION...........................................................................................112
SECTION 10.01 Clean-up Call........................................................................112
ARTICLE XI ADMINISTRATION OF TRUST..............................................................................112
SECTION 11.01 Administrative Trust Duties..........................................................112
ARTICLE XII MISCELLANEOUS PROVISIONS............................................................................114
SECTION 12.01 Amendment............................................................................114
SECTION 12.02 Protection of Title to Trust.........................................................115
SECTION 12.03 Limitation on Rights of Noteholders and Certificateholders...........................117
SECTION 12.04 Governing Law........................................................................118
SECTION 12.05 Notices..............................................................................119
SECTION 12.06 Severability of Provisions...........................................................120
SECTION 12.07 Assignment...........................................................................120
SECTION 12.08 Further Assurances...................................................................120
SECTION 12.09 No Waiver; Cumulative Remedies.......................................................120
SECTION 12.10 Third-Party Beneficiaries............................................................120
SECTION 12.11 Actions by Noteholders or Certificateholders.........................................121
SECTION 12.12 Corporate Obligation.................................................................121
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SECTION 12.13 Covenant Not to File a Bankruptcy Petition...........................................121
SECTION 12.14 Independence of the Subservicer, Master Servicer and Back-up Servicer................122
SECTION 12.15 No Joint Venture.....................................................................122
SECTION 12.16 Consent to Jurisdiction..............................................................122
SECTION 12.17 Headings.............................................................................123
SECTION 12.18 Trial by Jury Waived.................................................................123
SECTION 12.19 Entire Agreement.....................................................................124
SECTION 12.20 Limitation of Liability of Owner Trustee.............................................124
SECTION 12.21 Effect of Policy Expiration Date.....................................................124
SECTION 12.22 Counterparts.........................................................................124
EXHIBITS
Exhibit A - Form of Trust Collateral Agent's Certificate pursuant to Section 3.01, 3.02, 4.10 or 10.01
Exhibit B - Form of Servicer's Certificate
Exhibit C - Summary of __________'s Services
Exhibit D - Charge-Off Policy
Exhibit E - Form of Dealer Agreement
Exhibit F - Trust Collateral Agent Fee Letter
Exhibit G - Form of Transfer Agreement
Exhibit H - Delinquency Methodology
Exhibit I - Form of Investor Certification
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Delivery Requirement
Schedule C - Schedule of Master Servicer Fees and Successor Servicer Fees
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This Sale and Servicing Agreement, dated as of ________, ____, among UNITED
FIDELITY BANK, FSB, a federally-chartered savings association, as Originator
(the "Originator") and as subservicer (the "Subservicer"), UNITED FIDELITY AUTO
RECEIVABLES TRUST [____-_], a Delaware business trust (the "Issuer" or the
"Trust"), UNITED FIDELITY FINANCE, LLC, a Delaware limited liability company, as
transferor (the "Transferor"), ______________________________, a national
association, as the trust collateral agent and back-up servicer (the "Trust
Collateral Agent" and the "Back-up Servicer") and
______________________________, a ___________ corporation, in its capacity as
master servicer (the "Master Servicer").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
"Accrual Period" means, with respect to each Distribution Date, the
immediately preceding calendar month. Interest shall be computed on the basis of
a 360-day year of twelve 30-day months for purposes of this definition.
"Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Trust pursuant to Section 2.02 of this Agreement, notice of
the Transferor's election to transfer Subsequent Receivables to the Trust, such
notice to designate the related Subsequent Cut-off Date, Subsequent Transfer
Date and the Principal Balance of Subsequent Receivables expected to be
transferred on such Subsequent Transfer Date.
"Additional Funds Available" means, with respect to any Distribution Date,
the sum of (i) the Deficiency Claim Amount, if any, received by the Trust
Collateral Agent with respect to that Distribution Date plus (ii) the Insurer
Optional Deposit, if any, received by the Trust Collateral Agent with respect to
that Distribution Date.
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly controls, or is under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Sale and Servicing Agreement, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
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"Amount Available" means with respect to any Distribution Date, the sum of
(x) Available Funds for such Distribution Date and (y) Additional Funds
Available, if any, for such Distribution Date.
"Amount Financed" with respect to a Receivable means the aggregate amount
originally advanced under the Receivable toward the purchase price of the
Financed Vehicle and any related costs, including the cost of any insurance and
warranties.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
finance charges stated in the Receivable. If after the Closing Date, in the case
of an Initial Receivable, or the related Subsequent Transfer Date, in the case
of a Subsequent Receivable, the annual rate with respect to such Receivable as
of the Closing Date or related Subsequent Transfer Date, as applicable, is
reduced as a result of (i) an insolvency proceeding involving the related
Obligor or (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, the Annual Percentage Rate or APR shall refer to such reduced rate.
"Assignments" means each of the Initial Assignment and each Subsequent
Assignment.
"Authorized Officer" has the meaning assigned to such term in the
Indenture.
"Available Funds" means with respect to any Distribution Date, each of the
following then on deposit in any Trust Accounts with respect to the related
Collection Period, (i) Scheduled Receivable Payments (including Modified
Scheduled Receivable Payments) received by the Servicer, (ii) partial and full
prepayments received by the Servicer, (iii) Liquidation Proceeds, (iv)
Recoveries, (v) interest earned on funds held in the Collection Account and the
Pre-Funding Account, (vi) Purchase Amounts and/or any indemnity payments made in
lieu of or otherwise relating to such Purchase Amounts in accordance with the
terms of this Agreement and the Purchase Agreement, (vii) proceeds from any
insurance policies related to the Receivables or Financed Vehicles, (viii) the
Redemption Amount and (ix) funds transferred from the Pre-Funding Account and/or
the Capitalized Interest Account to the Collection Account in accordance with
Sections 5.07(b) and 5.08(b) hereof, respectively.
"Back-up Servicer" means ______________________________, in its capacity as
Back-up Servicer or such Person as shall have been appointed Back-up Servicer
pursuant to Section 8.03 hereof.
"Back-up Servicer Fee" means, for any Collection Period, the fee payable to
the Back-up Servicer for services rendered during such Collection Period, which
shall be equal to the greater of (A) the product of (i) the Back-up Servicer Fee
Rate and (ii) the aggregate Principal Balance of the Receivables as of the first
day of such Collection Period and (B) $[____]. If the Back-up Servicer shall
have taken on the role as Servicer hereunder, its compensation shall be equal to
the Successor Servicer Fee, and it shall not be entitled to a Back-up Servicer
Fee.
"Back-up Servicer Fee Rate" shall be 1/12th of [___]% payable monthly.
3
"Bank" means United Fidelity Bank, FSB, a federally-chartered savings
association, and its successors and assigns.
"__________" means ______________________________, and its successors and
assigns.
"Basic Documents" means this Agreement, each Transfer Agreement, the Trust
Agreement, the Indenture, the Purchase Agreement, each Assignment, the Insurance
Agreement, the Indemnification Agreement, the Spread Account Agreement, the
Premium Letter, the Certificate Pledge Agreement, the Pledge Agreement, the
Underwriting Agreement, the Lock-Box Agreement, the organizational documents of
the Transferor (including the Operating Agreement) and other documents and
certificates delivered in connection therewith.
"Business Day" means any day other than Saturday, Sunday, or legal holiday
or other day on which commercial banking institutions in Wilmington, Delaware,
New York, New York, Indianapolis, Indiana or any other location of any successor
servicer, successor owner trustee, successor collateral agent, or successor
trust collateral agent are authorized or obligated by law, executive order or
governmental decree to be closed.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.08 hereof.
"Capitalized Interest Account Deposit" has the meaning assigned to such
term in Section 5.08(a) hereof.
"Casualty" means, with respect to any Financed Vehicle, the total loss or
destruction of such Financed Vehicle.
"Certificate" means the Trust Certificate (as defined in the Trust
Agreement).
"Certificate Distribution Account" has the meaning assigned to such term in
Section 5.02(c) hereof.
"Certificate Pledge Agreement" means the Certificate Pledge and Collateral
Agency Agreement, dated as of ________, ____, among the Transferor, the Issuer,
the Note Insurer, and ______________________________, as collateral agent, as
the same may be amended, supplemented, or otherwise modified from time to time
in accordance with the terms thereof.
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Issuer
Trust Agreement.
"Certificateholder" means the person in whose name the Certificate shall be
registered in the Certificate Register.
"Charge-Off Policy" means the Charge-Off Policy as set forth in Exhibit D
hereto, as such policy may be amended, supplemented or otherwise modified with
the prior written consent of the Note Insurer.
4
"Charged-Off Receivable" means a Receivable which has been charged off by
the Servicer in accordance with the Charge-Off Policy.
"Class A Note Balance" equals, initially, $[ _________ ] and thereafter
equals the initial Class [A-1] Note Balance, Class [A-2] Note Balance and Class
[A-3] Note Balance reduced by all amounts previously distributed to Class A-1,
A-2 and A-3 Noteholders.
"Class A Notes" means a Class [A-1] Note, a Class [A-2] Note or a Class
[A-3] Note of the Issuer.
"Class A Note Distribution Account" means the Class A Note Distribution
Account established and maintained pursuant to Section 5.02(b) hereof.
"Class A Pool Factor", as of the close of business on a Distribution Date,
means a seven-digit decimal figure equal to the Class A Note Balance divided by
the initial Class A Note Balance.
"Class A-1 Interest Carryover Shortfall" means, as of the close of business
on any Distribution Date, the excess of the Class A-1 Interest Distributable
Amount for such Distribution Date plus any outstanding Class A-1 Interest
Carryover Shortfall from the preceding Distribution Date plus interest on such
outstanding Class A-1 Interest Carryover Shortfall at the Class A-1 Note Rate
for the related Accrual Period, to the extent permitted by law, over the amount
in respect of interest on the Class A-1 Notes that was actually deposited in the
Class A Note Distribution Account on such current Distribution Date. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months for
purposes of this definition.
"Class A-1 Interest Distributable Amount" means, with respect to any
Distribution Date, interest accrued for the related Accrual Period, at the Class
A-1 Note Rate on the Class A-1 Note Balance as of the last day of the
immediately preceding Collection Period. Interest shall be computed on the basis
of a 360-day year of twelve 30-day months for purposes of this definition.
"Class A-1 Note" means a promissory note executed on behalf of the Issuer
and authenticated by the Indenture Trustee, substantially in the form of Exhibit
A-1 to the Indenture.
"Class A-1 Note Balance" equals, initially $[________] and thereafter
equals the initial Class A-1 Note Balance reduced by all amounts previously
distributed to the Class A-1 Noteholders.
"Class A-1 Note Rate" means, with respect to the Class A-1 Notes, [ __ ]%
per annum.
"Class A-1 Percentage" The Class A-1 Percentage for any Distribution Date
is (i) __% prior to the payment in full of the Class A Notes and (ii) 0% after
the payment in full of the Class A Notes.
"Class A-1 Principal Carryover Shortfall" means, as of the close of
business on any Distribution Date, the excess of the Class A-1 Principal
Distributable Amount plus any
5
outstanding Class A-1 Principal ▇▇▇▇▇▇▇▇▇ Shortfall from the preceding
Distribution Date over the amount in respect of principal on the Class A-1 Notes
that was actually deposited in the Class A Note Distribution Account on such
current Distribution Date.
"Class A-1 Principal Distributable Amount" means, with respect to any
Distribution Date other than the Stated Final Maturity Date, the Class A-1
Percentage of the Total Principal Distributable Amount with respect to such
Distribution Date. The Class A-1 Principal Distributable Amount on the Class A-1
Stated Final Maturity Date will equal the then outstanding Class A-1 Note
Balance.
"Class A-1 Stated Final Maturity Date" means [____________].
"Class A-2 Interest Carryover Shortfall" means, as of the close of business
on any Distribution Date, the excess of the Class A-2 Interest Distributable
Amount for such Distribution Date plus any outstanding Class A-2 Interest
Carryover Shortfall from the preceding Distribution Date plus interest on such
outstanding Class A-2 Interest Carryover Shortfall at the Class A-2 Note Rate
for the related Accrual Period, to the extent permitted by law, over the amount
in respect of interest on the Class A-2 Notes that was actually deposited in the
Class A Note Distribution Account on such current Distribution Date. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months for
purposes of this definition.
"Class A-2 Interest Distributable Amount" means, with respect to any
Distribution Date, interest accrued for the related Accrual Period, at the Class
A-2 Note Rate on the Class A-2 Note Balance as of the last day of the
immediately preceding Collection Period. Interest shall be computed on the basis
of a 360-day year of twelve 30-day months for purposes of this definition.
"Class A-2 Note" means a promissory note executed on behalf of the Issuer
and authenticated by the Indenture Trustee, substantially in the form of Exhibit
A-2 to the Indenture.
"Class A-2 Note Balance" equals, initially $[________] and thereafter
equals the initial Class A-2 Note Balance reduced by all amounts previously
distributed to the Class A-2 Noteholders.
"Class A-2 Note Rate" means, with respect to the Class A-2 Notes, [ __ ]%
per annum.
"Class A-2 Percentage" The Class A-2 Percentage for any Distribution Date
is (i) 48% prior to the payment in full of the Class A Notes and (ii) 0% after
the payment in full of the Class A Notes.
"Class A-2 Principal Carryover Shortfall" means, as of the close of
business on any Distribution Date, the excess of the Class A-2 Principal
Distributable Amount plus any outstanding Class A-2 Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal on the Class A-2 Notes that was actually deposited in the Class A Note
Distribution Account on such current Distribution Date.
6
"Class A-2 Principal Distributable Amount" means, with respect to any
Distribution Date other than the Stated Final Maturity Date, the Class A-2
Percentage of the Total Principal Distributable Amount with respect to such
Distribution Date. The Class A-2 Principal Distributable Amount on the Class A-2
Stated Final Maturity Date will equal the then outstanding Class A-2 Note
Balance.
"Class A-2 Stated Final Maturity Date" means [____________].
"Class A-3 Interest Carryover Shortfall" means, as of the close of business
on any Distribution Date, the excess of the Class A-3 Interest Distributable
Amount for such Distribution Date plus any outstanding Class A-3 Interest
Carryover Shortfall from the preceding Distribution Date plus interest on such
outstanding Class A-3 Interest Carryover Shortfall at the Class A-3 Note Rate
for the related Accrual Period, to the extent permitted by law, over the amount
in respect of interest on the Class A-3 Notes that was actually deposited in the
Class A Note Distribution Account on such current Distribution Date. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months for
purposes of this definition.
"Class A-3 Interest Distributable Amount" means, with respect to any
Distribution Date, interest accrued for the related Accrual Period, at the Class
A-3 Note Rate on the Class A-3 Note Balance as of the last day of the
immediately preceding Collection Period. Interest shall be computed on the basis
of a 360-day year of twelve 30-day months for purposes of this definition.
"Class A-3 Note" means a promissory note executed on behalf of the Issuer
and authenticated by the Indenture Trustee, substantially in the form of Exhibit
A-3 to the Indenture.
"Class A-3 Note Balance" equals, initially $[________] and thereafter
equals the initial Class A-3 Note Balance reduced by all amounts previously
distributed to the Class A-3 Noteholders.
"Class A-3 Note Rate" means, with respect to the Class A-3 Notes, [ __ ]%
per annum.
"Class A-3 Percentage" The Class A-3 Percentage for any Distribution Date
is (i) 48% prior to the payment in full of the Class A Notes and (ii) 0% after
the payment in full of the Class A Notes.
"Class A-3 Principal Carryover Shortfall" means, as of the close of
business on any Distribution Date, the excess of the Class A-3 Principal
Distributable Amount plus any outstanding Class A-3 Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal on the Class A-3 Notes that was actually deposited in the Class A Note
Distribution Account on such current Distribution Date.
"Class A-3 Principal Distributable Amount" means, with respect to any
Distribution Date other than the Stated Final Maturity Date, the Class A-3
Percentage of the Total Principal Distributable Amount with respect to such
Distribution Date. The Class A-3 Principal Distributable Amount on the Class A-3
Stated Final Maturity Date will equal the then outstanding Class A-3 Note
Balance.
7
"Class A-3 Stated Final Maturity Date" means [____________].
"Class B Accelerated Principal Payment Amount" means, (a) with respect to
any Distribution Date on or prior to [_______________, _____], zero, and (b)
with respect to any Distribution Date after [_______________, _____], an amount
equal to the Available Funds and any Spread Account Release Amount remaining
after distributions required to be made pursuant to clauses (i) through (x) of
Section 5.12(a) on such Distribution Date.
"Class B Interest Carryover Shortfall" means, as of the close of business
on any Distribution Date, the excess of the Class B Interest Distributable
Amount for such Distribution Date plus any outstanding Class B Interest
Carryover Shortfall from the preceding Distribution Date plus interest on such
outstanding Class B Interest Carryover Shortfall at the Class B Note Rate for
the related Accrual Period, to the extent permitted by law, over the amount in
respect of interest on the Class B Notes that was actually deposited in the
Class B Note Distribution Account on such current Distribution Date. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months for
purposes of this definition.
"Class B Interest Distributable Amount" means, with respect to any
Distribution Date, interest accrued for the related Accrual Period, at the Class
B Note Rate on the Class B Note Balance as of the last day of the immediately
preceding Collection Period. Interest shall be computed on the basis of a
360-day year of twelve 30-day months for purposes of this definition.
"Class B Note" means a promissory note executed on behalf of the Issuer and
authenticated by the Indenture Trustee, substantially in the form of Exhibit B-1
to the Indenture.
"Class B Note Balance" equals, initially, $[__________] and thereafter
equals the initial Class B Note Balance reduced by all amounts allocable to
principal and previously distributed to Class B Noteholders.
"Class B Note Distribution Account" means the Class B Note Distribution
Account established and maintained pursuant to Section 5.02(b) hereof.
"Class B Note Rate" means, with respect to the Notes, [ __ ]% per annum.
"Class B Percentage" The Class B Percentage for any Distribution Date is
(i) __% prior to the payment in full of the Class A Notes, (ii) 100% after
payment in full of the Class A Notes and all amounts due and owing to the Note
Insurer and (iii) 0% after the payment in full of the Class B Notes.
"Class B Pool Factor", as of the close of business on a Distribution Date,
means a seven-digit decimal figure equal to the Class B Note Balance divided by
the initial Class B Note Balance.
"Class B Principal ▇▇▇▇▇▇▇▇▇ Shortfall" means, as of the close of business
on any Distribution Date, the excess of the Class B Principal Distributable
Amount plus any outstanding Class B Principal Carryover Shortfall from the
preceding Distribution Date over the amount in respect of principal on the Class
B Notes that was actually deposited in the Class B Note Distribution Account on
such current Distribution Date.
8
"Class B Principal Distributable Amount" means, with respect to any
Distribution Date other than the Class B Stated Final Maturity Date, the Class B
Percentage of the Total Principal Distributable Amount with respect to such
Distribution Date. The Class B Principal Distributable Amount on the Class B
Stated Final Maturity Date will equal the then outstanding Class B Note Balance.
"Class B Stated Final Maturity Date" means [____________].
"Closing Date" shall be _______________, _____. ------------
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" shall have the meaning set forth in the "Granting Clause" of
the Indenture.
"Collateral Agent" means ______________________________, in its capacity as
Collateral Agent pursuant to the Spread Account Agreement, and any successor
thereto pursuant to the terms of the Spread Account Agreement.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.02(a).
"Collection Period" means, with respect to each Distribution Date, the
preceding calendar month. Any amount stated "as of the close of business on the
last day of a Collection Period" shall give effect to all collections,
charge-offs and other account activity during such Collection Period.
"Computer Tape" means computer tape or diskette (or other means of
electronic transmission acceptable to the Back-up Servicer, the Master Servicer
and the Note Insurer) in a format acceptable to the Back-up Servicer, the Master
Servicer and the Note Insurer.
"Controlling Party" means (a) the Note Insurer, so long as (i) no Insurer
Default shall have occurred and be continuing or (ii) Class A Notes remain
Outstanding and any amounts remain due and unpaid to the Note Insurer under the
Basic Documents, or (b) the Indenture, at the direction of the Majority
Noteholders, for so long as (i) an Insurer Default shall have occurred and be
continuing or (ii) Class A Notes are no longer Outstanding and no amounts remain
due and unpaid to the Note Insurer under the Basic Documents.
"Corporate Trust Office" means (i) with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee, which at the time of
execution of this Agreement is ______________________________, [Address],
__________, __________ (ii) with respect to the Trust Collateral Agent and the
Collateral Agent, the principal corporate trust office of the Trust Collateral
Agent, which at the time of execution of this Agreement is
______________________________, [Address], Attention: __________.
"Cram Down Loss" means, with respect to a Receivable (other than a
Charged-Off Receivable), if a court of appropriate jurisdiction in an insolvency
proceeding issues a ruling
9
that reduces the amount owed on a Receivable or otherwise modifies or
restructures the Scheduled Receivable Payments to be made thereon, an amount
equal to (a) the Principal Balance of the Receivable immediately prior to such
order minus the Principal Balance of such Receivable as so reduced, modified or
restructured plus (b) if such court shall have issued an order reducing the
effective rate of interest on such Receivable, the excess of (i) the net present
value (using a discount rate equal to the adjusted APR on such Receivable) of
the Scheduled Receivable Payments as so modified or restructured over (ii) the
net present value (using a discount rate equal to the original APR on such
Receivable) of the Scheduled Receivable Payments as so modified or restructured.
A Cram Down Loss will be deemed to have occurred on the date of issuance of such
order.
"Cut-off Date" means the Initial Cut-off Date or the applicable Subsequent
Cut-off Date, as the context may require.
"Dealer" means the seller of the related Financed Vehicle who originated
and assigned the related Receivable to the Originator.
"Dealer Agreement" means each Dealer Agreement between the Originator and
the related Dealer substantially in the form of Exhibit E attached hereto.
"Dealer Recourse" means, with respect to a Receivable, all monies received
in respect of recourse rights against the Dealer which originated the Receivable
under the related Dealer Agreement and any successor to such Dealer.
"Defaulted Receivable" means with respect to any Distribution Date, a
Receivable with respect to which the earliest of the following has occurred: (a)
the related Obligor is contractually delinquent on a Scheduled Receivable
Payment, or Modified Scheduled Receivable Payment, as applicable, for greater
than 90 days, (b) the mandatory redemption period, if any, has expired for a
Receivable with respect to which the related Financed Vehicle has been
repossessed, or (c) such Receivable is in default and the Servicer has
determined in good faith that payments thereunder are not likely to be resumed.
"Deficiency Claim Amount" means, for any Distribution Date, the amount,
after taking into account the application on such Distribution Date of the
Available Funds on such Distribution Date, equal to any shortfall in the full
payment of amounts described in clauses (i) through [(v)] of Section 5.12(a), to
the extent that such amount is available for the particular purpose on such
Distribution Date in accordance with the provisions of the Spread Account
Agreement.
"Deficiency Claim Date" means, with respect to any Distribution Date, the
fourth Business Day immediately preceding such Distribution Date.
"Deficiency Notice" has the meaning ascribed thereto in Section 5.06.
"Delinquent Receivable" means, a Receivable with respect to which any
Scheduled Receivable Payment, or Modified Scheduled Receivable Payment, as
applicable, is between 31 and 90 days delinquent as of the last day of the
Collection Period preceding the
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related Distribution Date, as determined in accordance with the methodology in
Exhibit H hereto.
"Delivery" means with respect to assets held in the Trust Accounts:
(1)(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC, transfer thereof:
(i) by physical delivery to the Trust Collateral Agent, indorsed to,
or registered in the name of, the Trust Collateral Agent or its nominee or
indorsed in blank;
(ii) by the Trust Collateral Agent continuously maintaining possession
of such instrument; and
(iii) by the Trust Collateral Agent continuously indicating by
book-entry that such instrument is credited to the related Trust Account;
(b) with respect to a "certificated security" (as defined in Section
8-102(a)(4) of the UCC), transfer thereof:
(i) by physical delivery of such certificated security to the Trust
Collateral Agent, provided that if the certificated security is in
registered form, it shall be indorsed to, or registered in the name of, the
Trust Collateral Agent or indorsed in blank;
(ii) by the Trust Collateral Agent continuously maintaining possession
of such certificated security; and
(iii) by the Trust Collateral Agent continuously indicating by
book-entry that such certificated security is credited to the related Trust
Account;
(c) with respect to any security issued by the U.S. Treasury, the Federal
Home Loan Mortgage Corporation or the Federal National Mortgage Association that
is a book-entry security held through the Federal Reserve System pursuant to
Federal book entry regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles 8 and 9 of
the UCC, transfer thereof:
(i) by (x) book-entry registration of such property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a securities
intermediary which is also a "depositary" pursuant to applicable federal
regulations and issuance by such securities intermediary of a deposit
advice or other written confirmation of such book-entry registration to the
Trust Collateral Agent of the purchase by the securities intermediary on
behalf of the Trust Collateral Agent of such book-entry security; the
making by such securities intermediary of entries in its books and records
identifying such book-entry security held through the Federal Reserve
System pursuant to Federal book-entry
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regulations as belonging to the Trust Collateral Agent and continuously
indicating that such securities intermediary holds such book-entry security
solely as agent for the Trust Collateral Agent or (y) continuous book-entry
registration of such property to a book-entry account maintained by the
Trust Collateral Agent with a Federal Reserve Bank; and
(ii) by the Trust Collateral Agent continuously indicating by
book-entry that property is credited to the related Trust Account;
(d) with respect to any asset in the Trust Accounts that is an
"uncertificated security" (as defined in Section 8-102(a)(18) of the UCC) and
that is not governed by clause (c) above or clause (e) below:
(i) transfer thereof:
(A) by registration to the Trust Collateral Agent as the
registered owner thereof, on the books and records of the issuer
thereof; or
(B) by another Person (not a securities intermediary) who either
becomes the registered owner of the uncertificated security on behalf
of the Trust Collateral Agent, or having become the registered owner,
acknowledges that it holds for the Trust Collateral Agent; or
(ii) the issuer thereof has agreed that it will comply with
instructions originated by the Trust Collateral Agent with respect to such
uncertificated security without further consent of the registered owner
thereof; or
(e) in the case of each security in the custody of or maintained on the
books of a clearing corporation (as defined in Section 8-102(a)(5)) or its
nominee, by causing:
(i) the relevant clearing corporation to credit such security to a
securities account of the Trust Collateral Agent at such clearing
corporation; and
(ii) the Trust Collateral Agent to continuously indicate by book-entry
that such security is credited to the related Trust Account;
(f) with respect to a "security entitlement" (as defined in Section
8-102(a)(17) of the UCC) to be transferred to or for the benefit of the
Collateral Agent and not governed by clauses (c) or (e) above: if a securities
intermediary (A) indicates by book entry that the underlying "financial asset"
(as defined in Section 8-102(a)(9) of the UCC) has been credited to be the Trust
Collateral Agent's "securities account" (as defined in Section 8-501(a) of the
UCC), (B) receives a financial asset from the Trust Collateral Agent or acquires
the underlying financial asset for the Trust Collateral Agent, and in either
case, accepts it for credit to the Trust Collateral Agent's securities account
or (C) becomes obligated under other law, regulation or rule to credit the
underlying financial asset to the Trust Collateral Agent's securities account,
the making by the securities intermediary of entries on its books and records
continuously identifying such security entitlement as belonging to the Trust
Collateral Agent; and continuously indicating by
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book-entry that such securities entitlement is credited to the Trust Collateral
Agent's securities account; and by the Trust Collateral Agent continuously
indicating by book-entry that such security entitlement (or all rights and
property of the Trust Collateral Agent representing such securities entitlement)
is credited to the related Trust Account; and/or
(2) In the case of any such asset, such additional or alternative
procedures as are now or may hereafter become appropriate to effect the complete
transfer of ownership of, or control over, any such assets in the Trust Accounts
to the Trust Collateral Agent free and clear of any adverse claims, consistent
with changes in applicable law or regulations or the interpretation thereof.
In each case of delivery contemplated herein, the Trust Collateral Agent
shall make appropriate notations on its records, and shall cause the same to be
made on the records of its nominees, indicating that securities are held in
trust pursuant to and as provided in this Agreement.
"Determination Date" means the fifth Business Day prior to the related
Distribution Date.
"Distribution Date" means, for each Collection Period, the [15th] day of
the following month, or if the [15th] day is not a Business Day, the next
following Business Day, commencing on [_______________, _____].
"Draw Date" means the third Business Day (as defined in the Note Policy)
prior to each Distribution Date.
"Eligible Account" shall mean a segregated trust account or accounts
maintained with (A) an institution whose deposits are insured by the FDIC, the
unsecured and uncollateralized long term debt obligations of which institution
shall be rated AA- or higher by S&P and Aa2 or higher by Moody's and in the
highest short term rating category by each of the Rating Agencies, and which is
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved by the Note Insurer and
each of the Rating Agencies by written notice to the Trust Collateral Agent and
the Collateral Agent or (B) a chartered depository institution acceptable to
each Rating Agency and the Note Insurer, having capital and surplus of not less
than $100,000,000, acting in its fiduciary capacity.
"Eligible Investments" mean any one or more of the following types of
investments:
(a) (i) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality of the United States the
obligations of which are backed by the full faith and credit of the United
States and (ii) direct
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interest-bearing obligations of, and interest-bearing obligations
guaranteed as to timely payment of principal and interest by, the Federal
National Mortgage Association or the Federal Home Loan Mortgage
Corporation, but only if, at the time of investment, such obligations are
rated AAA by S&P and Aaa by Moody's;
(b) demand or time deposits in, certificates of deposit of, or
bankers' acceptances issued by any depository institution or trust company
organized under the laws of the United States or any State and subject to
supervision and examination by federal and/or State banking authorities
(including, if applicable, the Indenture Trustee or any agent of the
Indenture Trustee acting in their respective commercial capacities);
provided that the commercial paper or other short-term unsecured debt
obligations of such depository institution or trust company at the time of
such investment, or contractual commitment providing for such investment,
are rated A-1+ by S&P and P-1 by Moody's;
(c) repurchase obligations pursuant to a written agreement (1) with
respect to any obligation described in clause (i) above, where the Trust
Collateral Agent has taken actual or constructive delivery of such
obligation, and (2) entered into with a depository institution or trust
company organized under the laws of the United States or any State thereof,
the deposits of which are insured by the Federal Deposit Insurance
Corporation and the short-term unsecured debt obligations of which are
rated A-1+ by S&P and P-1 by Moody's (including, if applicable, the
Indenture Trustee or the Trust Collateral Agent, as the case may be or any
agent of the Indenture Trustee acting in their respective commercial
capacities);
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State
whose long-term unsecured debt obligations are rated AAA by S&P and Aaa by
Moody's at the time of such investment or contractual commitment providing
for such investment; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent that
an investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the related Trust
Account to exceed 10% of the Eligible Investments held in the related Trust
Account (with Eligible Investments held in the related Trust Account valued
at par);
(e) commercial paper that (1) is payable in United States dollars and
(2) is rated at least A-1+ by S&P and P-1 by ▇▇▇▇▇'▇;
(f) any money market fund that has been rated Aaa by ▇▇▇▇▇'▇ and AAAm
or AAAm-G (without an "r" script) by S&P and numerical gradations within
such rating category (or the equivalent long-term rating of such Rating
Agency) for such money market funds; and
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(g) any other demand or time deposit, obligation, security or
investment as may be acceptable to the Rating Agencies and the Note Insurer
(so long as the Note Insurer is the Controlling Party).
Any of the foregoing Eligible Investments may be purchased from, by or
through the Owner Trustee, the Indenture Trustee, or the Trust Collateral Agent
or any of their respective Affiliates.
"Eligible Servicer" means __________, as Master Servicer, __________, as
Back-up Servicer, United Fidelity, as Subservicer, or another Person which at
the time of its appointment as Servicer or Subservicer, (i) is servicing a
portfolio of motor vehicle retail installment sale contracts and/or motor
vehicle installment loans, (ii) is legally qualified and has the capacity to
service the Receivables, (iii) has demonstrated the ability professionally and
competently to service a portfolio of motor vehicle retail installment sale
contracts and/or motor vehicle installment loans similar to the Receivables with
reasonable skill and care, and (iv) 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 the this Agreement or otherwise
has available software which is adequate to perform its duties and
responsibilities under this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financed Vehicle" means a [new or used automobile, sport utility vehicle,
light duty truck, van or mini-van], together with all accessions thereto, that
is security for an Obligor's indebtedness under the related Receivable.
"Funding Period" means the period from the Closing Date until the earlier
to occur of (i) the date on which the Pre-Funding Balance is less than $100,000
or (ii) the close of business on [the date which is 90 days following the
Closing Date].
"Funding Termination Date" means the date on which the Funding Period ends.
"Indenture" means the Indenture, dated as of ________, ____, between the
Issuer and the Indenture Trustee, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Indenture Trustee" means ______________________________, in its capacity
as trustee under the Indenture.
"Independent" means, when used with respect to any specified Person, who
(1) is in fact independent of the Issuer, any obligor upon the Notes, the
Transferor and any of their respective Affiliates, (2) does not have any direct
financial interest or any material indirect financial interest in the Issuer,
any such other obligor, the Transferor or in any Affiliate of any of the
foregoing Persons, and (3) is not connected with the Issuer, any such other
obligor, the Transferor or Affiliate as an officer, employee, promoter,
underwriter, trustee, partner, director, or Person performing similar functions.
15
"Independent Accountants" means a firm of certified public accountants that
is Independent and is acceptable to the Note Insurer.
"Initial Assignments" means the assignment dated as of ________, ____ by
the Originator to the Transferor substantially in the form of Exhibit A to the
Purchase Agreement, pursuant to which the Initial Receivables are conveyed to
the Transferor.
"Initial Cut-off Date" means, with respect to each Initial Receivable, the
opening of business on ________, ____.
"Initial Class A Note Balance" means the Initial Class A-1 Note Balance,
the Initial Class A-2 Note Balance and the Initial Class A-3 Note Balance as of
the Closing Date, which balance shall be $[ _________ ].
"Initial Class A-1 Note Balance" means the Initial Class A-1 Note Balance
as of the Closing Date, which balance shall be $[ _________ ].
"Initial Class A-2 Note Balance" means the Initial Class A-2 Note Balance
as of the Closing Date, which balance shall be $[ _________ ].
"Initial Class A-3 Note Balance" means the Initial Class A-3 Note Balance
as of the Closing Date, which balance shall be $[ _________ ].
"Initial Class B Note Balance" means the Initial Class B Note Balance as of
the Closing Date, which balance shall be $1,000,000.
"Initial Pool Balance" means $[_______________ ].
"Initial Receivables" means the Receivables set forth on Schedule A hereto
to be delivered on the Closing Date.
"Insolvency Proceeds" means the proceeds, after all payments and reserves
from the sale of the assets of the Trust upon the dissolution of the Trust
because of an insolvency of the Transferor.
"Insurance Agreement" means the Insurance and Indemnity Agreement, dated as
of ________, ____, among the Note Insurer, the Transferor, the Issuer and the
Originator.
"Insurance Agreement Event of Default" means an Event of Default (as such
term is defined in the Insurance Agreement).
"Insurance Agreement Indenture Cross Defaults" shall have the meaning
assigned to such term in the Insurance Agreement.
"Insurer Default" means the existence and continuance of any of the
following:
(a) the Note Insurer shall have failed to make a payment required under the
Note Policy when due in accordance with its terms; or
16
(b) the Note Insurer shall have (i) filed a petition or commenced any case
or proceeding under any provision or chapter of the United States Bankruptcy
Code or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation or reorganization, (ii) made a general
assignment for the benefit of its creditors, or (iii) had an order for relief
entered against it under the United States Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization; or
(c) a court of competent jurisdiction, the New York Department of Insurance
or other competent regulatory authority shall have entered an order, judgment or
decree (i) appointing a custodian, trustee, agent or receiver for the Note
Insurer or for all or any material portion of its property or (ii) authorizing
the taking of possession by a custodian, trustee, agent or receiver of the Note
Insurer (or the taking of possession of all or any material portion of the
property of the Note Insurer).
"Insurer Optional Deposit" has the meaning ascribed thereto in Section 5.17
hereof.
"Issuer" means United Fidelity Auto Receivables Trust [____-_].
"Lien" means any security interest, lien, charge, pledge, equity, or
encumbrance of any kind (other than tax liens, mechanics' liens, and any liens
which may attach to a Financed Vehicle by operation of law as a result of any
act or omission by the related Obligor).
"Liquidation Proceeds" means the monies collected from whatever source
during a Collection Period on a Defaulted Receivable, net of the sum of (i) any
out-of-pocket expenses reasonably incurred by the Servicer in enforcing such
Defaulted Receivable plus (ii) any amounts required by law to be remitted to the
related Obligor.
"Lock-Box" means the post-office box or boxes, to be established by the
Subservicer and maintained pursuant to this Agreement and the Lock-Box
Agreement, into which the Subservicer shall direct each Obligor under each
Receivable to forward all payments in respect of such Receivable.
"Lock-Box Account" means the segregated account or accounts designated as
such, established and maintained by the Subservicer in accordance with this
Agreement and the Lock-Box Agreement.
"Lock-Box Agreement" means the [Four Party Agreement Relating to Lockbox
Services], dated as of ________, ____, among the Originator, the Trust, the
Lock-Box Processor and the Trust Collateral Agent, as amended, modified or
supplemented from time to time in accordance with the terms thereof, unless such
Agreement shall be terminated in accordance with its terms or the terms hereof
or unless a replacement Lock-Box Agreement has been entered into in accordance
with the terms hereof, in which event "Lock-Box Agreement" shall mean such other
agreement, in form and substance acceptable to the Note Insurer, in its sole and
absolute discretion, among the Originator, the Trust, the Lock-Box Processor and
the Trust Collateral Agent.
17
"Lock-Box Bank" means, initially, ______________________________, or any
replacement or additional depository institution named by the Servicer and
acceptable to the Note Insurer, in its sole discretion, at which a Lock-Box
Account is established and maintained in accordance with the terms of this
Agreement and the Lock-Box Agreement.
"Lock-Box Collection Percentage" has the meaning ascribed thereto in the
Insurance Agreement.
"Lock-Box Processor" means, initially, the Lock-Box Bank, or any
replacement or subcontracted Lock-Box Processor named by the Servicer and
acceptable to the Note Insurer (unless an Insurer Default has occurred and is
continuing), in its sole discretion, who acts as the processor of the payments
received in respect of the Receivables in the Lock-Box in accordance with the
Lock-Box Agreement.
"Majority Noteholders" means, as of any date of determination, (i) so long
as the Class A Notes remain Outstanding, the Holders holding in the aggregate
51% or more of the outstanding Class A Note Balance as of such date or (ii) if
the Class A Notes are no longer Outstanding, the Holders holding in the
aggregate 51% or more of the outstanding Class B Note Balance as of such date.
"Master Servicer" means __________, as the master servicer of the
Receivables, and each successor to __________ (in the same capacity) appointed
pursuant to Section 8.03(d) hereof.
"Master Servicer Default" has the meaning ascribed thereto in Section 8.02
hereof.
"Master Servicer Fee" means, for any Collection Period, the fee payable to
the Master Servicer as set forth in Schedule C attached hereto.
"Modified Scheduled Receivable Payment" means, with respect to any
Receivable which is not a Charged-Off Receivable and as to which the related
Obligor shall have been declared bankrupt with the result that such Obligor's
periodic Scheduled Receivable Payment amount has been reduced pursuant to an
order of bankruptcy court, the amount of such reduced periodic Scheduled
Receivable Payment.
"Monthly Capitalized Interest Amount" means in the case of the
_______________ Distribution Dates, an amount equal to the difference between
(i) one month's interest on the Subsequent Balance as of the last day of the
immediately preceding Collection Period, or with respect to the initial
Distribution Date, as of the Closing Date, at a rate equal to the sum of the
Weighted Average Note Rate and the rate at which the Premium is calculated and
(ii) interest earned on amounts on deposit in the Pre-Funding Account for the
related Collateral Period which rate shall be an assumed rate of [1.25]% per
annum.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successor and
assigns.
"Note Balance" means the Class A Note Balance and the Class B Note Balance.
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"Note Insurer" means ______________________________.
"Note Policy" means the financial guaranty insurance policy
No.[____________] issued by the Note Insurer to the Indenture Trustee for the
benefit of the Class A Noteholders pursuant to the Insurance Agreement,
including any endorsements thereto.
"Note Register" and "Note Registrar" shall have the meanings set forth in
the Indenture.
"Noteholder" or "Holder" means the Person in whose name a Note shall be
registered in the Note Register, except that, solely for the purposes of giving
any consent, waiver, request, or demand pursuant to this Agreement, the interest
evidenced by any Note registered in the name of the Originator, the Transferor,
the Servicer, or any person controlling, controlled by, or under common control
with the Originator, the Transferor or the Servicer, shall not be taken into
account in determining whether the requisite percentage necessary to effect any
such consent, waiver, request, or demand shall have been obtained.
"Notes" means the Class A Notes and the Class B Notes.
"Obligor" means any Person who owes payments or may be liable for payments
under a Receivable (not including any Dealer in respect of Dealer Recourse).
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an Authorized Officer thereof.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Agreement or as otherwise
required by the Trust Collateral Agent or the Note Insurer, be employees of or
counsel to the Issuer and who shall be reasonably satisfactory to the Trust
Collateral Agent and the Note Insurer, and which shall comply with any
applicable requirements of Section 11.1 of the Indenture, and shall be in form
and substance satisfactory to the Trust Collateral Agent, the Collateral Agent
and the Note Insurer.
"Optional Purchase" means an optional purchase of the Trust Property as set
forth in Section 10.01 hereof.
"Original Pre-Funding Balance" means $[_______________ ].
"Origination Date" means, with respect to any Receivable, the date
specified in such Receivable as the date of execution thereof.
"Originator" means United Fidelity Bank, FSB, a federally-chartered savings
association, and its successors.
"Overfunded Capitalized Interest Amount" means:
With respect to the date of the initial Distribution Date, the excess of
(a) the amount on deposit in the Capitalized Interest Account on such
Distribution Date (after giving
19
effect to the transfer of the Monthly Capitalized Interest Amount to the
Collection Account on such date) over (b) the product of (i) 1/360, (ii) 1.25%,
(iii) 60 and (iv) the Pre-Funding Balance (excluding investment earnings) at the
close of business on [_____ __, ____].
With respect to the date of the second Distribution Date, the excess of (a)
the amount on deposit in the Capitalized Interest Account on such Distribution
Date (after giving effect to the transfer of the Monthly Capitalized Interest
Amount to the Collection Account on such date) over (b) the product of (i)
1/360, (ii) 1.25%, (iii) 30 and (iv) the Pre-Funding Balance (excluding
investment earnings) at the close of business on [----------].
With respect to the third Distribution Date, the amount on deposit in the
Capitalized Interest Account on such Distribution Date (after giving effect to
the transfer of the Monthly Capitalized Interest Amount to the Collection
Account on such date).
"Owner Trustee" means ______________________________, a __________ banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Issuer Trust Agreement, its successors in interest or any successor Owner
Trustee under the Issuer Trust Agreement.
"Owner Trustee's Fees" means, with respect to any Distribution Date, 1/12th
of $[____].
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
limited liability company, limited liability partnership or government or any
agency or political subdivision thereof.
"Pledge Agreement" means the Pledge and Collateral Agency Agreement, dated
as of _______________, _____, among the Originator, the Note Insurer and
______________________________, as collateral agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Policy Claim Amount" shall have the meaning set forth in Section 5.09.
"Policy Expiration Date" means the date on which the Class A Notes have
been paid in full and all outstanding Reimbursement Obligations and other
amounts due to the Note Insurer have been paid in full and the Term Of This
Policy (as defined in the Note Policy) has expired.
"Policy Payments Account" means the Policy Payments Account established and
maintained pursuant to 5.02(f) hereof.
"Pool Balance" means the aggregate Principal Balance of the Receivables
(excluding Purchased Receivables and Charged-Off Receivables) as determined as
of the close of business of the last day of the related Collection Period.
"Preference Claim" has the meaning assigned thereto in Section 5.10(b).
20
"Pre-Funding Account" means the account designated as such, established and
maintained pursuant to Section 5.07 hereof.
"Pre-Funding Balance" means the Original Pre-Funding Balance as reduced
from time to time upon payment for Subsequent Receivables.
"Premium" has the meaning ascribed thereto in the Premium Letter.
"Premium Letter" means the premium letter, dated _______________, _____
among the Note Insurer, the Originator, the Transferor, the Trust and the Trust
Collateral Agent.
"Principal Balance" of a Receivable, as of any date, means the Amount
Financed minus the sum of (a) that portion of all Scheduled Receivable Payments
received on or prior to such day allocable to principal, (b) any refunded
portion of extended warranty protection plan costs, or of physical damage,
credit life, or disability insurance premiums included in the Amount Financed,
(c) any payment of the Purchase Amount with respect to the Receivable allocable
to principal, (d) the principal portion of any Modified Scheduled Receivable
Payments received on or prior to such day (e) any prepayment in full or any
partial prepayments applied to reduce the principal balance of the Receivable
and (f) the amount of any Cram Down Loss; provided, however, that any
Charged-Off Receivable or Purchased Receivable shall have a Principal Balance of
zero.
"Private Placement Memorandum" means the Private Placement Memorandum dated
_______________, _____, relating to the private issuance of the Class B Notes.
"Prospectus" means the Prospectus dated _______________, _____, as
supplemented, relating to the issuance of the Class A Notes by the Prospectus
Supplement dated _______________, _____.
"Purchase Agreement" means the Purchase Agreement, dated as of ________,
____, between the Transferor and the Originator relating to the purchase of the
Receivables by the Transferor from the Originator, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Purchase Amount" means, with respect to a Receivable, the amount equal to
the amount that would be required to be paid by an Obligor to prepay in full
such Receivable under the terms thereof (including one month's interest thereon
at the related APR) which the Transferor, the Servicer or the Originator, as
applicable, will be obligated hereunder to pay to repurchase such Receivable.
"Purchased Receivable" means a Receivable purchased by the Transferor, the
Originator or the Servicer in accordance with Section 3.02 or Section 4.10
hereof, as applicable.
"Rating Agencies" means, collectively, ▇▇▇▇▇'▇, S&P and any successors
thereof. If such organization or successor is no longer in existence, "Rating
Agency" shall be such nationally recognized statistical rating organization or
other comparable Person designated by the Note Insurer, notice of which shall be
given to the Trust Collateral Agent, the Indenture Trustee and the Servicer.
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"Receivable" means each motor vehicle retail installment sale contract
sold, transferred, assigned, set-over and otherwise conveyed to the Trust
pursuant to the terms of this Agreement and, in the case of Subsequent
Receivables, the related Transfer Agreement, as set forth on Schedule A hereto,
as the same may be supplemented from time to time in accordance with Section
2.02(b)(ii), which has not been released by the Trust Collateral Agent from the
Trust pursuant to this Agreement, and all replacements and substitutions thereto
and all rights thereunder.
"Receivable File" means, with respect to each Receivable, the following
documents: (i) the original certificate of title (or the application for such)
for each Financed Vehicle evidencing the security interest of the Originator in
the Financed Vehicle, (ii) the fully executed original of such Receivable with
fully executed assignment from the related Dealer to the Originator (together
with any agreements modifying the Receivable, including, without limitation, any
extension agreements) and (iii) the fully executed original of any form legally
required to be executed by a co-▇▇▇▇▇▇, each of which are to be held by the
Trust Collateral Agent pursuant to Section 3.03.
"Record Date" means, with respect to a Distribution Date, the last Business
Day of the preceding Collection Period.
"Recoveries" means, with respect to a Charged-Off Receivable and for any
Collection Period occurring after the date on which such Receivable becomes a
Charged-Off Receivable, all payments, including insurance proceeds, that the
Servicer received from or on behalf of an Obligor regarding such Charged-Off
Receivable, or from liquidation of the related Financed Vehicle, net of any
reasonably incurred out-of-pocket expenses incurred by the Servicer in enforcing
such Charged-Off Receivable.
"Redemption Amount" has the meaning ascribed thereto in the Indenture.
"Redemption Date" has the meaning ascribed thereto in the Indenture.
"Reimbursement Obligations" means, with respect to each Distribution Date,
any amounts due to the Note Insurer under the terms of the Sale and Servicing
Agreement, the Indenture, the Insurance Agreement or the Premium Letter and with
respect to which the Note Insurer has not been previously paid whether or not
the Originator is obligated to pay such amounts.
"Reliening Expenses" has the meaning ascribed thereto in Section 4.08(b).
"Requisite Amount" has the meaning ascribed thereto in the Spread Account
Agreement.
"Responsible Officer" means, with respect to the Indenture Trustee, the
Trust Collateral Agent, the Collateral Agent or the Owner Trustee, any officer
within their respective Corporate Trust Office including any Vice President,
Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other
officer of the Indenture Trustee, the Trust Collateral Agent or the Owner
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter, any
other officer to
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whom such matter is referred because of such officer's knowledge of any
familiarity with the particular subject.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Scheduled Receivable Payment" means, with respect to a Receivable, that
portion of the payment required to be made by the Obligor during the respective
Collection Period sufficient to amortize the Principal Balance under the simple
interest method over the term of the Receivable and to provide interest at the
APR.
"Secured Parties" means the Note Insurer and the Indenture Trustee.
"Securities" means the Notes and the Certificate.
"Securities Act" means the Securities Act of 1933, as amended.
"Servicer" means the Subservicer; provided that if the Subservicer has been
removed pursuant to Section 4.04 or 8.01 hereof, "Servicer" shall mean the
Master Servicer or such other Person appointed as the successor Servicer
pursuant to Section 8.03 hereof. If the Master Servicer has been removed
pursuant to Section 8.02 hereof, "Servicer" shall mean the Back-up Servicer or
such other Person appointed as the successor Servicer pursuant to Section 8.03
hereof.
"Servicer Default" has the meaning ascribed thereto in Section 8.01 hereof.
"Servicer Extension Notice" means the notice delivered pursuant to Section
4.04 hereof.
"Servicer Fee" means the sum of the Servicing Fee and the Supplemental
Servicing Fee and all reasonable out-of-pocket expenses of the Servicer (which
expenses shall not exceed the sum of $[___________]in the aggregate over the
term of the Notes).
"Servicer Fee Rate" shall be 1/12th of 1.00% payable monthly.
"Servicer's Certificate" means a certificate completed and executed by the
Servicer by the chairman of the board, the vice chairman, the president, any
vice president, the treasurer, any assistant treasurer, the chief financial
officer, the secretary, any assistant secretary, the controller, or any
assistant controller of the Servicer pursuant to Section 4.12 hereof.
"Servicing Fee" means, for any Collection Period, a fee payable to the
Servicer for services rendered during such Collection Period, which shall be the
product of (i) the Servicer Fee Rate and (ii) the aggregate Principal Balance of
the Receivables as of the first day of such Collection Period.
"Simple Interest Method" means the method of allocating a fixed level
payment on an obligation between principal and interest, pursuant to which the
portion of such payment that is allocated to interest is equal to the product of
the fixed rate of interest on such obligation
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multiplied by the unpaid Principal Balance multiplied by the period of time
(expressed as a fraction of a year, based on the actual number of days in the
calendar month and 365 days in the calendar year) elapsed since the preceding
payment under which the obligation was made and the remainder of such payment is
allocable to principal.
"Simple Interest Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
"Spread Account" means the account designated as such, established and
maintained pursuant to Section 3.01 of the Spread Account Agreement.
"Spread Account Additional Deposit" means, as of any Subsequent Transfer
Date, an amount equal to [______]% of the Principal Balance of the Subsequent
Receivables as of the related Subsequent Cut-off Date to be transferred to the
Trust on such Subsequent Transfer Date.
"Spread Account Agreement" means the Master Spread Account Agreement dated
as of ________, ____ among the Note Insurer, the Transferor and the Collateral
Agent, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof.
"Spread Account Initial Deposit" means an amount equal to .25% of the
Initial Pool Balance (which is equal to $[_______________ ]).
"Spread Account Release Amount" means, with respect to any Distribution
Date, the excess of amounts on deposit in the Spread Account (after giving
effect to the withdrawal of any Deficiency Claim Amounts on such Distribution
Date) over the Requisite Amount with respect to such Distribution Date.
"__________" means ______________________________, a ____________
corporation.
"State" means any state or commonwealth of the United States of America, or
the District of Columbia.
"Subsequent Assignment" means each assignment dated as of the related
Subsequent Cut-off Date by the Originator to the Transferor substantially in the
form of Exhibit B to the Purchase Agreement, pursuant to which Subsequent
Receivables are conveyed to the Transferor.
"Subsequent Cut-off Date" means, with respect to each Subsequent
Receivable, the close of business on the last day of the calendar month
immediately preceding the related Subsequent Transfer Date, or such other date
as may be specified in the related Transfer Agreement.
"Subsequent Receivables" means the Receivables transferred by the
Originator to the Transferor pursuant to a Subsequent Assignment and by the
Transferor to the Trust pursuant to a Transfer Agreement, in each case on the
related Subsequent Transfer Date, which
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Receivables will be listed on Schedule A to the related Subsequent Assignment
and Transfer Agreement.
"Subsequent Transfer Date" means the date or dates during the Funding
Period on which the Subsequent Receivables are acquired from the Transferor.
"Subservicer" means United Fidelity Bank, FSB, and its successors.
"Successor Servicer Fee" means, for any Collection Period, the fee payable
to the Successor Servicer as set forth in Schedule C attached hereto, or, if
such successor Servicer is not __________, such other fee schedule approved by
the Note Insurer in its sole and absolute discretion.
"Supplemental Servicing Fee" has the meaning set forth in Section 4.11(b)
hereof.
"Total Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of (i) the portion of Available Funds relating to
principal for the Collection Period immediately preceding such Distribution
Date, (ii) the Principal Balance of any Charged-Off Receivable that first became
a Charged-Off Receivable during the Collection Period immediately preceding such
Distribution Date and (iii) the aggregate amount of Cram Down Losses with
respect to the Receivables incurred during the Collection Period immediately
preceding such Distribution Date.
"Transfer Agreement" means the Transfer Agreement in the form of Exhibit G
hereto.
"Transferor" means United Fidelity Finance, LLC, a Delaware limited
liability company, and its successors.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trigger Event" has the meaning set forth in the Insurance Agreement.
"Trust" means the Issuer.
"Trust Agreement" means the trust agreement dated as of ________, ____,
between the Transferor and the Owner Trustee, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Trust Accounts" means the Collection Account, the Class A Note
Distribution Account, the Class B Note Distribution Account, the Certificate
Distribution Account, the Policy Payments Account, the Pre-Funding Account and
the Capitalized Interest Account.
"Trust Collateral Agent" means the Person acting as Trust Collateral Agent
hereunder, its successors in interest and any successor Trust Collateral Agent
hereunder.
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"Trust Collateral Agent Fee" means the fees and reasonable expenses payable
on each Distribution Date to the Trust Collateral Agent in consideration for the
performance of its duties as Trust Collateral Agent, Indenture Trustee and
Collateral Agent as set forth in the fee letter agreement dated ________, ____,
attached hereto as Exhibit F.
"Trust Property" has the meaning set forth in Section 2.02(c) hereof.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the relevant jurisdiction.
"Underwriting Agreement" means the Underwriting Agreement relating to the
Notes, dated _______________, _____, among the Originator, the Transferor, the
Trust and City Securities, Inc., as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"United Fidelity" means United Fidelity Finance, LLC, a Delaware limited
liability company.
"United Fidelity Auto Receivables Trust [____-_]" means United Fidelity
Auto Receivables Trust [____-_], a Delaware business trust.
"Weighted Average Note Rate" means, as of any Determination Date, the
weighted average of the Class A-1 Note Rate, the Class A-2 Note Rate, the Class
A-3 Note Rate and the Class B Note Rate (weighted based on the outstanding Class
A-1 Note Balance, the outstanding Class A-2 Note Balance, the outstanding Class
A-3 Note Balance and the outstanding Class B Note Balance as of such
Determination Date).
SECTION 1.02 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such instrument,
certificate or other document, and accounting terms partly defined in this
Agreement or in any such instrument, certificate or other document to the extent
not defined, shall have the respective meanings given to them under generally
accepted accounting principles as in effect from time to time or any such
instrument, certificate or other document, as applicable. To the extent that the
definitions of accounting terms in this Agreement or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such instrument, certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this
26
Agreement are references to Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(d) With respect to all terms in this Agreement, the singular includes the
plural and the plural the singular; words importing any gender include the other
gender; references to "writing" include printing, typing, lithography, and other
means of reproducing words in a visible form; references to agreements and other
contractual instruments include all subsequent amendments thereto or changes
therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the term "including" means "including without
limitation."
(e) 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.
SECTION 1.03 Closing Date and Record Date.
All references to the Record Date prior to the first Distribution Date in
the life of the Trust shall be to the Closing Date.
SECTION 1.04 Section References.
All section references shall be to Sections in this Agreement (unless
otherwise provided).
SECTION 1.05 Compliance Certificates.
Upon any application or request by the Originator, the Transferor, the
Master Servicer, the Subservicer or the Back-up Servicer to the Trust Collateral
Agent to take any action under any provision herein, such requesting party shall
furnish to the Trust Collateral Agent and the Note Insurer, an Officer's
Certificate stating that all conditions precedent, if any, provided for herein
relating to the proposed action have been complied with, except that in the case
of any other such application or request as to which the furnishing of such
documents is specifically required by any provision of this Agreement relating
to such particular application or request, no additional certificate need be
furnished.
Every certificate with respect to compliance with a condition or covenant
provided herein shall include a statement that each individual signing such
certificate has read such covenant or condition and the definitions and other
provisions herein relating thereto.
SECTION 1.06 Directions.
Any direction required to be given by the Noteholders shall be given
hereunder by the Note Insurer, unless an Insurer Default shall have occurred and
be continuing, in which case the Majority Noteholders shall be entitled to give
such direction.
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SECTION 1.07 Calculations.
All calculations of the amount of the Servicing Fee, the Back-up Servicer
Fee, Successor Servicer Fee, the Trust Collateral Agent Fee and the Master
Servicer Fee shall be made on the basis of a 360-day year consisting of twelve
30-day months. All references to the Principal Balance of a Receivable as of the
last day of a Collection Period shall refer to the close of business on such
day.
SECTION 1.08 Action by or Consent of Noteholders.
Whenever any provision of this Agreement refers to action to be taken, or
consented to, by Noteholders, such provision shall be deemed to refer to
Noteholders of record as of the Record Date immediately preceding the date on
which such action is to be taken, or consent given, by Noteholders. Solely for
the purposes of any action to be taken or consented to by Noteholders, any Note
registered in the name of the Transferor, __________, the Servicer or any
Affiliate thereof shall be deemed not to be outstanding and shall not be taken
into account in determining whether the requisite interest necessary to effect
any such action or consent has been obtained; provided, however, that, solely
for the purpose of determining whether the Indenture Trustee or the Trust
Collateral Agent is entitled to rely upon any such action or consent, only Notes
which the Indenture Trustee or the Trust Collateral Agent actually knows to be
so owned shall be so disregarded.
SECTION 1.09 Material Adverse Effect.
Whenever a determination is to be made under this Agreement as to whether a
given event, action, course of conduct or set of facts or circumstances could or
would have a material adverse effect on the Issuer or Noteholders (or any
similar or analogous determination), such determination shall be made without
taking into account the insurance provided by the Note Policy. Whenever a
determination is to be made under this Agreement whether a breach of a
representation, warranty or covenant has or could have a material adverse effect
on a Receivable or the interest therein of the Issuer, the Noteholders or the
Note Insurer (or any similar or analogous determination), such determination
shall be made by the Controlling Party in its sole discretion.
ARTICLE II
CONVEYANCE OF TRUST PROPERTY; FURTHER ENCUMBRANCE THEREOF
SECTION 2.01 Conveyance of Initial Receivables.
In consideration of the Trust's delivery to or upon the order of the
Transferor on the Closing Date of the Certificate and the net proceeds from the
sale of the Notes and the other amounts to be distributed from time to time to
or upon the order of the Transferor in accordance with the terms of this
Agreement and the Spread Account Agreement, the Transferor does hereby sell,
transfer, assign, set over and otherwise convey to the Trust, without recourse
(subject to the obligations set forth herein), all right, title and interest of
the Transferor in and to:
28
(i) the Initial Receivables and all amounts due thereunder on or after
the Initial Cut-off Date but received after the Cut-off Date;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Receivables and any accessions thereto,
and any other interest of the Transferor in such Financed Vehicles and
accessions, including, without limitation, the certificates of title and
other evidences of ownership with respect to such Financed Vehicles;
(iii) any proceeds from claims on any physical damage, credit life or
disability, GAP or other insurance policies thereon covering the Financed
Vehicles or the Obligors relating to the Initial Receivables and any
proceeds from the liquidation of Initial Receivables or Financed Vehicles;
(iv) all property (including the right to receive future Liquidation
Proceeds) that secures an Initial Receivable and that has been acquired by
or on behalf of the Issuer pursuant to the liquidation of such Initial
Receivable;
(v) the Purchase Agreement and this Agreement, insofar as such right,
title and interest relates to the Initial Receivables, or the Receivable
Files or Financed Vehicles relating thereto, including the right of the
Transferor to cause the Originator to repurchase the Initial Receivables
from the Issuer or the Transferor or to make indemnity payments in respect
thereof under the circumstances set forth in the Purchase Agreement;
(vi) the Dealer Recourse relating to the Initial Receivables;
(vii) rebates or refunds of premiums and other amounts relating to
insurance policies and other items financed under the Initial Receivables
or otherwise covering an Obligor or a Financed Vehicle;
(viii) all amounts and property from time to time held in or credited
to any of the Trust Accounts and the Lock-Box Account (to the extent such
amounts and property in the Lock-Box Account relate to the Initial
Receivables);
(ix) the Receivable Files and all other documents that the Originator
keeps on file in accordance with its customary procedures relating to the
Initial Receivables, or the Obligors or Financed Vehicles relating thereto;
and
(x) the proceeds of any and all of the foregoing.
Such sale shall be effective as of the Initial Cut-off Date with respect to
all Trust Property and other property and rights appurtenant thereto.
SECTION 2.02 Conveyance of Subsequent Receivables.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Issuer's delivery on each Subsequent Transfer Date to or
upon the order of the Transferor of the amount described in Section 5.07(a) to
be delivered to or upon the order of the Transferor
29
on such date, the Transferor does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer without recourse (subject to the obligations set
forth herein), all right, title and interest of the Transferor in and to:
(i) the Subsequent Receivables listed on Schedule A to the related
Transfer Agreement and all amounts due thereunder on or after the
applicable Subsequent Cut-off Date but received after such Subsequent
Cut-off Date;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Subsequent Receivables and any accessions thereto,
and any other interest of the Transferor in such Financed Vehicles and
accessions, including, without limitation, the certificates of title and
other evidence of ownership with respect to such Financed Vehicles;
(iii) any proceeds from claims on any physical damage, credit life or
disability, GAP or other insurance policies thereon covering the Financed
Vehicles or the Obligors relating to the Subsequent Receivables and any
proceeds from the liquidation of the Subsequent Receivables or Financed
Vehicles;
(iv) all property (including the right to receive future Liquidation
Proceeds) that secures a Subsequent Receivable and that has been acquired
by or on behalf of the Issuer pursuant to the liquidation of such
Subsequent Receivable;
(v) the Purchase Agreement, the related Transfer Agreement and this
Agreement, insofar as such right, title and interest relates to the
Subsequent Receivables or the Receivable Files or Financed Vehicles
relating thereto, including the right of the Transferor to cause the
Originator to repurchase the Subsequent Receivables from the Transferor or
the Issuer or to make indemnity payments in respect thereof under the
circumstances set forth in the Purchase Agreement;
(vi) the Dealer Recourse relating to the Subsequent Receivables;
(vii) rebates or refunds of premiums and other amounts relating to
insurance policies and other items financed under the Subsequent
Receivables or otherwise covering an Obligor or a Financed Vehicle;
(viii) all amounts and property from time to time held in or credited
to any of the Trust Accounts and the Lock-Box Account (to the extent such
amounts and property in the Lock-Box Account relate to the Subsequent
Receivables);
(ix) the Receivable Files and all other documents that the Originator
keeps on file in accordance with its customary procedures relating to the
Subsequent Receivables, or the Obligors or Financed Vehicles relating
thereto; and
(x) the proceeds of any and all of the foregoing.
30
Such sale shall be effective with respect to the applicable Subsequent
Receivables as of the related Subsequent Cut-off Date with respect to all Trust
Property and other property and rights appurtenant thereto.
(b) The Transferor shall transfer to the Trust the Subsequent Receivables
and the other property and rights related thereto described in paragraph (a)
above only upon the satisfaction of each of the following conditions on or prior
to the related Subsequent Transfer Date:
(i) the Transferor (1) shall have provided the Trust Collateral Agent,
the Owner Trustee, the Note Insurer and the Rating Agencies with an
Addition Notice not later than five Business Days prior to such Subsequent
Transfer Date, (2) shall have provided the Trust Collateral Agent and the
Note Insurer with an electronic transmission of the information on the
related Subsequent Receivables set forth in such Addition Notice in a
format acceptable to each of the Trust Collateral Agent and the Note
Insurer no later than such fifth Business Day prior to the related
Subsequent Transfer Date and (3) shall have provided any other information
reasonably requested by any of the foregoing with respect to the Subsequent
Receivables;
(ii) the Originator shall have delivered to the Transferor, a written
Subsequent Assignment, which shall include a list of the Subsequent
Receivables so transferred attached thereto as Schedule A;
(iii) the Transferor shall have delivered to the Owner Trustee and the
Trust Collateral Agent a duly executed Transfer Agreement which shall
include supplements to Schedule A, listing the Subsequent Receivables to be
transferred on such Subsequent Transfer Date;
(iv) the Servicer shall have deposited in the Collection Account all
collections received by the Servicer in respect of the Subsequent
Receivables which were received by the Servicer as of the related
Subsequent Transfer Date;
(v) as of each Subsequent Transfer Date, (A) neither the Transferor
nor the Originator shall be insolvent or become insolvent as a result of
the transfer of Subsequent Receivables on such Subsequent Transfer Date,
(B) neither the Transferor, nor the Originator shall intend to incur or
believe that it shall incur debts that would be beyond its ability to pay
as such debts mature, (C) such transfer shall not have been made with
actual intent to hinder, delay or defraud any Person and (D) the assets of
each of the Transferor and the Originator shall not constitute unreasonably
small capital to carry out its respective business as conducted;
(vi) the Funding Period shall not have terminated;
(vii) after giving effect to any transfer of Subsequent Receivables on
a Subsequent Transfer Date, the Subsequent Receivables transferred to the
Trust pursuant hereto shall meet the following criteria (based on the
characteristics of the Initial Receivables on the Initial Cut-off Date and
the Subsequent Receivables on the related Subsequent Cut-off Date) as such
information is provided to the Trust Collateral Agent
31
by the Servicer: (i) the weighted average APR of the Receivables
transferred to the Trust shall not be less than _____%, unless, with the
prior consent of the Rating Agencies and the Note Insurer, the Transferor
increases the Spread Account Additional Deposit with respect to such
Subsequent Receivables by the amount required by the Note Insurer; (ii) the
remaining term to scheduled maturity of the Receivables transferred to the
Trust shall not be greater than [__] months nor less than [__] months;
(viii) each of the representations and warranties made by the
Transferor pursuant to Section 3.01 with respect to the Subsequent
Receivables to be transferred on such Subsequent Transfer Date shall be
true and correct as of the related Subsequent Transfer Date and the
representations and warranties made by the Originator with respect to each
such Subsequent Receivable being transferred to the Trust on such
Subsequent Transfer Date in Section 3.2(b) of the Purchase Agreement shall
be true and correct as of such Subsequent Transfer Date, and the Transferor
shall have performed all obligations to be performed by it hereunder on or
prior to such Subsequent Transfer Date;
(ix) each of the Originator and the Transferor shall, at its own
expense, on or prior to the Subsequent Transfer Date indicate in its
computer files that the Subsequent Receivables identified in the related
Transfer Agreement have been sold to the Trust pursuant to this Agreement
and the related Transfer Agreement;
(x) each of the Originator and the Transferor shall have taken any
action required to maintain the first priority perfected ownership interest
of the Trust in the Trust Property and the first perfected security
interest of the Trust Collateral Agent in the Collateral;
(xi) no selection procedures adverse to the interests of the
Noteholders or the Note Insurer shall have been utilized in selecting the
Subsequent Receivables;
(xii) the addition of any such Subsequent Receivables shall not result
in a material adverse tax consequence to the Trust or the Noteholders;
(xiii) the Transferor shall have delivered (A) to the Rating Agencies
and the Note Insurer Opinions of Counsel with respect to the transfer of
such Subsequent Receivables substantially in the form of the Opinions of
Counsel delivered to the Rating Agencies and the Note Insurer on the
Closing Date relating to true sale, perfection, nonconsolidation and such
other matters satisfactory in form and substance to the Rating Agencies,
the Note Insurer and the Trust Collateral Agent and (B) to the Trust
Collateral Agent the Opinion of Counsel required by Section 12.02(h)(1);
(xiv) the conveyance of the Subsequent Receivables shall not result in
a qualification, modification or withdrawal of the then-current ratings of
the Notes; provided that written confirmation of such ratings shall not be
required from the Rating Agencies;
(xv) the Note Insurer (so long as no Insurer Default shall have
occurred and be continuing), in its absolute and sole discretion, shall
have approved the transfer of such Subsequent Receivables to the Trust and
the Note Insurer shall have been reimbursed for
32
any fees and expenses incurred by the Note Insurer in connection with the
granting of such approval;
(xvi) the Transferor shall have transferred the related Spread Account
Additional Deposit to the Collateral Agent with respect to the Subsequent
Receivables transferred on such Subsequent Transfer Date;
(xvii) the Transferor shall have delivered to the Note Insurer and the
Trust Collateral Agent an Officers' Certificate confirming the satisfaction
of each condition precedent specified in Section 5 of the Transfer
Agreement and this paragraph (b) and certifying that:
(A) such conveyance of Subsequent Receivables by the Transferor
to the Trust on the related Subsequent Transfer Date was made in good
faith for legitimate business purposes and was not made with intent to
hinder, delay or defraud any Person to which the Transferor has been,
is or will become, on or after the related Subsequent Transfer Date,
indebted;
(B) the Transferor did not receive less than a reasonably
equivalent value in exchange for the conveyance of the Subsequent
Receivables by the Transferor to the Issuer on the related Subsequent
Transfer Date pursuant to the related Transfer Agreement;
(C) the Transferor is not insolvent on the related Subsequent
Transfer Date and will not become insolvent as a result of the
conveyance of the Subsequent Receivables by the Transferor to the
Issuer on the related Subsequent Transfer Date pursuant to the related
Transfer Agreement;
(D) the Transferor is not engaged in a business or transaction,
and is not about to engage in a business or transaction, for which any
property remaining with the Transferor after such business or
transaction would be an unreasonably small amount of capital; and
(E) the Transferor has not incurred, and does not believe that it
will incur, debts that would be beyond the Transferor's ability to pay
as such debts mature;
(xviii) the Originator shall have delivered to the Note Insurer and
the Trust Collateral Agent an Officer's Certificate confirming the
satisfaction of each condition precedent specified in Section 5 of the
related Transfer Agreement and this paragraph (b) and certifying that:
(A) such sale of Subsequent Receivables by the Originator to the
Transferor on the related Subsequent Transfer Date was made in good
faith for legitimate business purposes and was not made with intent to
hinder, delay or defraud any Person to which the Originator has been,
is or will become, on or after the related Subsequent Transfer Date,
indebted;
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(B) the Originator has not received less than a reasonably
equivalent value in exchange for the sale of the Subsequent
Receivables by the Originator to the Transferor on the related
Subsequent Transfer Date pursuant to the Purchase Agreement and the
related Subsequent Assignment;
(C) the Originator is not insolvent on the related Subsequent
Transfer Date and will not become insolvent as a result of the sale of
the Subsequent Receivables by the Originator to the Transferor on the
related Subsequent Transfer Date pursuant to the Purchase Agreement
and the related Subsequent Assignment;
(D) the Originator is not engaged in a business or transaction,
and is not about to engage in a business or transaction, for which any
property remaining with the Originator after such business or
transaction would be an unreasonably small amount of capital; and
(E) the Originator has not incurred, and does not believe that it
will incur, debts that would be beyond the Originator's ability to pay
as such debts mature;
(xix) the Transferor shall have caused a firm of independent
accountants to deliver to the Trust Collateral Agent and the Note Insurer
written confirmation that the Receivables, including the related Subsequent
Receivables, meet the following criteria:
(1) the weighted average remaining term of the Receivables will
be no more than [__] months and the weighted average original term for
the Receivables will be no more than [__] months;
(2) each Receivable will have a minimum APR of [__]%;
(3) each Receivable will have an original term of no more than
[__] months; and
(4) the weighted average APR for the Receivables will be greater
than or equal to [__]%.
(xx) the Transferor shall satisfy the document delivery requirements
for such Subsequent Receivables as specified in Section 3.03;
(xxi) on or before such Subsequent Transfer Date, the Transferor shall
have provided any information reasonably requested by the Rating Agencies,
the Note Insurer or the Trust Collateral Agent with respect to any
Subsequent Receivables; and
(xxii) the Trust Collateral Agent shall acknowledge receipt of files
which the Transferor shall represent are the Receivable Files relating to
the Subsequent Receivables and the Trust Collateral Agent shall have
reviewed the Receivable Files relating to the Subsequent Receivables and
shall have determined that it has received a Receivable File
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for each Subsequent Receivables identified in the supplement to the
Schedule of Receivables attached as Schedule A to the related Transfer
Agreement.
The Transferor covenants that in the event any of the foregoing conditions
precedent are not satisfied with respect to any Subsequent Receivables on the
date required as specified above, the Transferor will immediately repurchase
such Subsequent Receivable from the Trust, at a price equal to the Purchase
Amount thereof, in the manner specified in Section 4.10.
(c) The items described in clauses (i)-(x) of Section 2.01 and clauses
(i)-(x) of Section 2.02(a), together, shall constitute the Trust Property (the
"Trust Property") conveyed by the Transferor. It is the intention of the
Transferor that each transfer and assignment contemplated by Sections 2.01 and
2.02(a) hereof with respect to the Initial Receivables and the Subsequent
Receivables, respectively, shall constitute a sale of the Initial Receivables,
the Subsequent Receivables and other Trust Property from the Transferor to the
Issuer and the beneficial interest in and title to the Initial Receivables, the
Subsequent Receivables and the other Trust Property shall not be part of the
Transferor's estate in the event of the filing of a bankruptcy petition by or
against the Transferor under any bankruptcy law. In the event that,
notwithstanding the intent of the Transferor, the transfer and assignment
contemplated hereby is held by a court of competent jurisdiction not to be a
sale, this Agreement shall constitute a grant of a first priority security
interest in the property referred to in Sections 2.01 and 2.02(a) for the
benefit of the Noteholders and the Note Insurer.
(d) In consideration of the sale of the Initial Receivables, the Trust
shall (i) pay to the Transferor on the Closing Date a cash purchase price equal
to the aggregate Principal Balances of the Receivables as of the Initial Cut-off
Date and (ii) deliver to the Transferor, the Certificates. With respect to the
cash portion of the purchase price, the Transferor directs (i) as described in
Section 5.06(a), that the Spread Account Initial Deposit be deposited in the
Spread Account, (ii) as described in Section 5.07(a), that the Original
Pre-Funding Balance be deposited in the Pre-Funding Account and (iii) as
described in Section 5.08(a), that the Capitalized Interest Account Deposit be
deposited in the Capitalized Interest Account. In consideration of the sale of
any Subsequent Receivables, the Trust shall pay to or upon the order of the
Transferor on the relevant Subsequent Transfer Date the amount provided in
Section 5.07(a), and with respect thereto, the Transferor hereby directs that
the related Spread Account Additional Deposit be deducted from such amount and
deposited in the Spread Account as described in Section 5.06(a).
SECTION 2.03 Further Encumbrance of Trust Property.
(a) Immediately upon the conveyance to the Trust by the Transferor of any
item of the Trust Property pursuant to Section 2.01 and 2.02, all right, title
and interest of the Transferor in and to such item of Trust Property shall
terminate, and all such right, title and interest shall vest in the Trust, in
accordance with the Issuer Trust Agreement and Sections 3802 and 3805 of the
Business Trust Statute (as defined in the Issuer Trust Agreement).
(b) Immediately upon the vesting of the Trust Property in the Trust, the
Trust shall have the sole right to pledge or otherwise encumber such Trust
Property but only in accordance with the terms of the Basic Documents. Pursuant
to the Indenture, the Trust shall
35
▇▇▇▇▇ a security interest in the Trust Property to secure the repayment of the
Notes. The Certificate shall represent the beneficial ownership interest in the
Trust Property, and the Certificateholder and the Noteholders shall be entitled
to receive distributions with respect thereto as set forth herein and pursuant
to the Issuer Trust Agreement and the Indenture, respectively.
(c) The Trust Collateral Agent shall, at such time as there are no Notes
outstanding, the Note Policy has expired in accordance with its terms and all
sums due to (i) the Indenture Trustee pursuant to Section 6.7 of the Indenture,
(ii) the Trust Collateral Agent pursuant to Section 9.05 hereof, and (iii) the
Note Insurer pursuant to this Agreement and the Insurance Agreement have been
paid, upon instructions from the Indenture Trustee pursuant to Section 8.2 of
the Indenture, release any remaining portion of the Trust Property to the
Certificateholder.
(d) Following the payment in full of the Notes and the release and
discharge of the Indenture, all covenants of the Issuer under Article III of the
Indenture shall, until payment in full of the Certificate, remain as covenants
of the Issuer for the benefit of the Certificateholder, enforceable by the
Certificateholder to the same extent as such covenants were enforceable by the
Noteholders prior to the discharge of the Indenture. Any rights of the Indenture
Trustee under Article III of the Indenture, following the discharge of the
Indenture, shall vest in the Certificateholder.
SECTION 2.04 Assignment by Transferor.
The Transferor does hereby transfer, assign and otherwise convey unto the
Issuer, for the benefit of the Noteholders and the Note Insurer, its right to
any recourse to the Originator resulting from the occurrence of a breach of any
of the Originator's representations and warranties contained in Section 3.2(b)
of the Purchase Agreement and Section 4 of each Transfer Agreement or from the
failure of the Originator to comply with its obligations pursuant to Section 5.5
or Section 6.2 of the Purchase Agreement. The provisions of this Section 2.04
are intended to grant the Issuer a direct right against the Originator to demand
performance under the terms of the Purchase Agreement and each Transfer
Agreement.
ARTICLE III
THE CONTRACTS
SECTION 3.01 Representations and Warranties.
The Transferor hereby makes each of the following representations and
warranties with respect to the Receivables for the benefit of the Issuer, the
Indenture Trustee, the Trust Collateral Agent and the Note Insurer on which the
Issuer relies in acquiring the Receivables, the Indenture Trustee relies in
performing its obligations under the Indenture, the Trust Collateral Agent
relies in connection with performance of its obligations under the Basic
Documents and the Note Insurer relies in issuing the Note Policy. Such
representations and warranties speak (unless otherwise specified) as of the
execution and delivery of this Agreement on the Closing Date (as to Receivables
transferred to the Trust on the Closing Date) and each Subsequent
36
Transfer Date (as to Receivables transferred to the Trust on such Subsequent
Transfer Date), but shall in each case survive the sale, transfer, and
assignment of the Receivables to the Trust and the pledge thereof to the
Indenture Trustee pursuant to the Indenture. With respect to each Receivable,
the Origination Date of such Receivable is, or will be, as applicable, on or
after [______________].
(i) Each Receivable (a) has been originated in the United States of
America by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business, such Dealer had all necessary
licenses and permits to originate such Receivable in the State where such
Dealer was located, has been fully and properly executed by the parties
thereto, has been purchased by the Transferor either (i) directly from the
Originator or (ii) from the Originator, which purchased such Receivables
from such Dealer, under an existing Dealer Agreement with the Originator,
in connection with the sale of Financed Vehicles by the Dealer, and has
been validly assigned by such Dealer to the Originator, and in turn has
been validly assigned by the Originator to the Transferor pursuant to the
Purchase Agreement and, with respect to the Initial Receivables, the
Initial Assignment, or with respect to the Subsequent Receivables, the
related Subsequent Assignment and validly assigned to the Trust by the
Transferor pursuant to this Agreement and, with respect to the Subsequent
Receivables, the related Transfer Agreement, (b) creates a valid,
subsisting, and enforceable first priority security interest for the
benefit of the Originator in the Financed Vehicle, which security interest
has been, in turn, validly assigned by the Originator directly to the
Transferor (c) contains customary and enforceable provisions such that the
rights and remedies of the holder thereof shall be adequate for realization
against the collateral of the benefits of the security, (d) provides for
level monthly payments (provided that the payment in the first or last
month in the life of the Receivable may be minimally different from the
level payment) that fully amortize the Amount Financed by maturity and
yield interest at the Annual Percentage Rate over an original term of no
less than [__] months and no greater than [__] months; provided, however,
that Receivables may have an original term up to __ months only with the
Note Insurer's prior consent, (e) provides for, in the event that such
Receivable is prepaid in full, a prepayment that fully pays the Principal
Balance, (f) is a Simple Interest Receivable and (g) was originated by a
Dealer to an Obligor and was originated and sold by the Dealer to the
Originator, without any fraud or misrepresentation on the part of such
Dealer or on the part of the Obligor.
(ii) The information set forth in Schedule A to this Agreement, as the
same may be supplemented from time to time in accordance with the terms
hereof, is true and correct in all material respects as of the close of
business on each Cut-off Date, and no selection procedures adverse to the
Noteholders or the Note Insurer have been or will be utilized in selecting
the Receivables.
(iii) Each Receivable and the sale of the related Financed Vehicle and
the sale of any extended warranty protection plan costs, or of physical
damage, credit life or disability insurance included in the Amount Financed
related thereto complied at the time it was originated or made and complies
at the execution of this Agreement with respect to an Initial Receivable,
or at the execution of the related Transfer Agreement in the case of a
Subsequent Receivable, in all material respects with all requirements of
applicable
37
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 Debt
Collection Practices Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's Regulations B and Z
(including amendments to the Federal Reserve's Official Staff Commentary to
Regulation Z effective October 1, 1998 concerning negative equity loans),
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended, and State
adaptations of the National Consumer Act and of the Uniform Consumer Credit
Code, and other consumer credit laws and equal credit opportunity and
disclosure laws.
(iv) Each Receivable represents the genuine, legal, valid, and binding
payment obligation in writing of the Obligor, enforceable by the holder
thereof in accordance with its terms subject to the effect of bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement
of creditors' rights generally and to general principles of equity, no
Obligor has any right of action against the Transferor, the Subservicer,
the Master Servicer or the Trust or any right to any offset, counterclaim
or rescission, no such right has been asserted or threatened with respect
to any Receivable, and all parties to each Receivable had full legal
capacity to execute and deliver such Receivable and all other documents
related thereto and to grant the security interest purported to be granted
thereby.
(v) None of the Receivables is due from the United States of America
or any State or from any agency, department, or instrumentality of the
United States of America or any State.
(vi) To the knowledge of the Transferor, no Obligor was the subject of
a bankruptcy proceeding at the time of origination of the related
Receivable.
(vii) Immediately prior to the sale, assignment, and transfer thereof
pursuant to the Purchase Agreement and, with respect to the Initial
Receivables, the Initial Assignment, or with respect to the Subsequent
Receivables, the related Subsequent Assignment, and immediately prior to
the sale, assignment, and transfer thereof pursuant to Section 2.01 or
Section 2.02(a) hereof, as applicable, and, with respect to a Subsequent
Receivable, pursuant to the related Transfer Agreement, each Receivable was
secured by a validly perfected first priority security interest in the
Financed Vehicle for the benefit of the Originator as secured party and
such security interest is prior to all other liens upon and security
interests in such Financed Vehicle which now exist or may hereafter arise
or be created (except, as to priority, for any lien for taxes, labor or
materials or any other non-consensual lien affecting a Financed Vehicle
arising subsequent to the Closing Date or the related Subsequent Transfer
Date, as applicable), or all necessary and appropriate actions had been
commenced (including the filing of the related applications for
certificates of title with the related department of motor vehicles) that
would result in the valid perfection of a first priority security interest
in the Financed Vehicle in favor of the Trust Collateral Agent for the
benefit of the Originator as secured party. Immediately after the sale,
assignment and transfer thereof to the Trust, although the related
certificates of title will not indicate the Trust or Owner Trustee as
secured party, each Receivable will be secured by an enforceable and
perfected first priority security interest
38
in the Financed Vehicle in favor of the Indenture Trustee as secured party
for the benefit of the Noteholders and the Note Insurer, which security
interest is prior to all other Liens in such Financed Vehicle.
(viii) Based on the location of the Dealers and the Principal Balances
of the Initial Receivables as of the Initial Cut-off Date, approximately
[__]%, [__]% and [__]% of the Initial Receivables were originated in
Indiana, Kentucky and Illinois, and no more than [__]% of the Initial
Receivables were originated in any other single state. As of each
Subsequent Transfer Date, no more than [__]% of the Receivables (based on
the Principal Balances of the Receivables as of the applicable Cut-off
Date) will have been originated in any single state other than Indiana,
Kentucky and Illinois.
(ix) No later than 30 days after the Closing Date or the applicable
Subsequent Transfer Date, each Obligor will have been notified by the
Originator to make payments with respect to its respective Receivable
directly to the Lock-Box, and will provide each Obligor with a new coupon
book in order to enable such Obligor to make payments directly to the
Lock-Box.
(x) No Receivable has been satisfied, subordinated, or rescinded, nor
has any Financed Vehicle been released from the Lien granted by the related
Receivable in whole or in part.
(xi) No provision of a Receivable has been waived, altered, amended or
modified in any respect since its origination, except by instruments or
documents contained in the related Receivable File on the Closing Date or
the related Subsequent Transfer Date, as applicable. No Receivable has been
modified as a result of application of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended.
(xii) To the best of the Transferor's knowledge, no liens or claims
have been filed for work, labor, storage or materials relating to a
Financed Vehicle that are prior to, or equal or coordinate with, the
security interest in the Financed Vehicle granted by the Receivable.
(xiii) Except for contractual delinquencies continuing for a period of
not more than 30 days as of the Cut-off Date, no default, breach,
violation, or event permitting acceleration under the terms of any
Receivable has occurred and there was no material misrepresentation by any
Obligor on such Obligor's credit application; and no continuing condition
that with notice or the lapse of time would constitute a default, breach,
violation, or event permitting acceleration under the terms of any
Receivable has arisen and the Originator shall not waive and has not waived
any of the foregoing.
(xiv) At the time of origination of a Receivable, the Originator, in
accordance with its customary procedures, has determined that the Obligor
has obtained physical damage insurance covering the Financed Vehicle or has
applied for such insurance (i) in an amount at least equal to the lesser of
(a) the actual cash value of the related Financed Vehicle or (b) the unpaid
Principal Balance of such Receivable, (ii) naming the Originator as loss
payee and (iii) insuring against loss and damage due to fire, theft,
39
transportation, collision and other risks generally covered by
comprehensive and collision damage and each Receivable requires the Obligor
to obtain and maintain such insurance naming the Originator and its
successors and assigns as an additional insured or loss payee, (B) each
Receivable that finances the cost of premiums for physical damage, credit
life or disability insurance is covered by an insurance policy and
certificate of insurance naming the Originator as policyholder (creditor)
or loss payee under each such insurance policy and certificate of insurance
and (C) as to each Receivable that finances the cost of an extended
warranty protection plan, the respective Financed Vehicle which secures the
Receivable is covered by such extended warranty protection plan. The
Originator has not force-placed insurance on such Finance Vehicle at any
time.
(xv) It is the intention of the Transferor that each transfer and
assignment herein contemplated pursuant to Section 2.01 or Section 2.02(a),
as applicable, will constitute on the Closing Date or the Subsequent
Transfer Date, as applicable, a sale of the Receivables from the Transferor
to the Trust and that the beneficial interest in and title to the
Receivables not be part of the Transferor's estate in the event of the
filing of a bankruptcy petition by or against the Transferor under any
bankruptcy law. No Receivable has been sold, transferred, assigned, or
pledged by the Transferor to any Person other than the Trust. Immediately
prior to each transfer and assignment of each Receivable herein
contemplated pursuant to Section 2.01 or Section 2.02(a), as applicable,
the Transferor will have good and marketable title to such Receivable free
and clear of all Liens and rights of others and, immediately upon the
transfer thereof, the Trust shall have good and marketable title to such
Receivable, free and clear of all Liens and rights of others; and each such
transfer has been perfected under the UCC. Without limiting the generality
of the foregoing, no Dealer has any right, title or interest in respect of
any Receivable. Neither the Transferor nor the Originator has taken any
action to convey any right to any Person that would result in such Person
having a right to payments received under any insurance policies related to
the Receivables or the Financed Vehicles or the related Dealer Agreements
or to payments due under such Receivables, other than granting certain
Liens which will be released on or prior to the Closing Date or the related
Subsequent Transfer Date.
(xvi) No Receivable has been originated in, or is subject to the laws
of, any jurisdiction under which the sale, transfer, and assignment of such
Receivable under this Agreement shall be unlawful, void, or voidable. The
Originator has not entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of any portion of the
Receivables. (xvii) All filings (including, without limitation, UCC
filings) necessary in any jurisdiction to give the Trust a first priority
perfected ownership interest in the Receivables and the proceeds thereof
and the other Trust Property (other than the Financed Vehicles) will be
made on or prior to the Closing Date or the related Subsequent Transfer
Date, as applicable.
(xviii) Each Receivable constitutes "chattel paper" as defined in the
UCC.
40
(xix) Each Receivable transferred to the Trust had an original term to
maturity of no less than [__] months and no greater than [__] months and a
remaining term to maturity of at least one month but not greater than [__]
months as of the applicable Cut-off Date; provided that Receivables may
have an original and/or remaining term to maturity up to [__] months only
with the prior consent of the Note Insurer. Each Receivable was originated
on or before the applicable Cut-off Date.
(xx) The weighted average original term to maturity of the Initial
Receivables is [__] months as of the Initial Cut-off Date and the weighted
average remaining term to maturity of the Initial Receivables was [__]
months as of the Initial Cut-off Date. No greater than [__]% by aggregate
Principal Balance of the Initial Receivables as of the Initial Cut-off Date
have an APR of less than [____]% and the weighted average APR of the
Initial Receivables as of the Initial Cut-off Date is [__]%.
(xxi) There is only one original executed copy of each Receivable, and
such original and a complete Receivable File with respect to each
Receivable has been delivered to the Trust Collateral Agent on or prior to
the Closing Date with respect to an Initial Receivable or, with respect to
a Subsequent Receivable, will be delivered to the Trust Collateral Agent on
or prior to the related Subsequent Transfer Date.
(xxii) As of the applicable Cut-off Date, no Financed Vehicle related
to a Receivable has suffered a Casualty.
(xxiii) The Transferor and its assignees has not assumed any
obligation to Dealers or other originators or holders of the Receivables
(including, but not limited to under dealer reserves) as a result of its
purchase of the Receivables.
(xxiv) No Receivable is assumable by another Person in a manner which
would release the Obligor thereof from such Obligor's obligations to the
Transferor or the Originator with respect to such Receivable.
(xxv) Each Receivable is payable in U.S. dollars, and, to the best of
the Transferor's knowledge, the Obligor thereon is an individual who is a
U.S. resident.
(xxvi) Each Receivable has a final Scheduled Receivable Payment at
least six months prior to the Stated Final Maturity Date.
(xxvii) The weighted average of the number of Scheduled Receivable
Payments that have been due under the Receivables since origination is at
least one.
(xxviii) Each Receivable has a Principal Balance of at least $[______]
and not greater than $[_______]as of the Cut-off Date, provided, however,
that Receivables may have a Principal Balance greater than $[_______]only
with the consent of the Note Insurer.
(xxix) No advances were made on behalf of the Obligor to satisfy any
of the representations and warranties set forth herein with respect to the
related Receivable.
41
(xxx) No Financed Vehicle was repossessed on or prior to the
applicable Cut-off Date, except for Financed Vehicles subject to
Receivables on which the Obligor has paid, on or prior to the due date
therefore, the [four] Scheduled Receivable Payments due immediately prior
to the applicable Cut-off Date.
(xxxi) Each Receivable satisfies in all material respects the
requirements under the Originator's underwriting guidelines that were in
effect as of the date the Receivable was purchased. Each Receivable
originated by a Dealer was underwritten by the Originator pursuant to and
in accordance with agreed upon and well articulated underwriting and
documentation standards. The collection practices used with respect to each
Receivable have been in all respects legal, proper, prudent and customary
in the motor vehicle financing and servicing business.
(xxxii) The servicing of each Receivable and the collection practices
relating thereto have been lawful and in accordance with the standards set
forth in this Agreement; other than the Subservicer, the Master Servicer
and the Back-up Servicer, no other person has the right to service any
Receivable.
(xxxiii) There are no proceedings pending, or to the best of the
Transferor's knowledge, threatened, wherein the Obligor or any governmental
agency has alleged that any Receivable is illegal or unenforceable.
(xxxiv) As of the Closing Date or the related Subsequent Transfer
Date, as applicable, the Transferor will have duly fulfilled all
obligations to be fulfilled on the lender's part under or in connection
with the origination, acquisition and assignment of the Receivables and the
related Trust Property, including, without limitation, giving any notices
or consents necessary to effect the acquisition of the Receivables and the
related Trust Property by the Trust, and the pledge thereof to the
Indenture Trustee pursuant to the Indenture. Neither the Originator nor the
Transferor has done anything to convey any right to any Person that would
result in such Person having a right to payments due under any Receivables
(other than granting Liens thereon that will be released on or prior to the
Closing Date or the related Subsequent Transfer Date, as applicable) or
otherwise done anything to impair the rights of the Trust, the Noteholders
or the Note Insurer in payments with respect thereto.
(xxxv) Each sale, transfer, assignment and conveyance of the
Receivables and the related Trust Property by the Transferor hereunder
pursuant to Section 2.01 or Section 2.02(a) or the pledge by the Issuer to
the Indenture Trustee pursuant to the Indenture is not subject to and will
not result in any tax, fee or governmental charge payable by the
Transferor, the Issuer or the Trust Collateral Agent to any federal, state
or local government ("Transfer Taxes") other than Transfer Taxes which have
or will be paid by the Transferor as due. In the event that the Issuer, the
Indenture Trustee or the Trust Collateral Agent receives actual notice of
any Transfer Taxes arising out of the transfer, assignment and conveyance
of the Receivables and the related Trust Property pursuant to Section 2.01
or Section 2.02(a) or the pledge by the Issuer to the Indenture Trustee
pursuant to the Indenture, on written demand by the Issuer, the Indenture
Trustee or the Trust Collateral Agent, or upon the Transferor's otherwise
being given notice
42
thereof by the Issuer, the Indenture Trustee or the Trust Collateral Agent,
the Transferor shall pay, and otherwise indemnify and hold the Issuer, the
Indenture Trustee, the Trust Collateral Agent and the Note Insurer
harmless, on an after-tax basis, from and against any and all such Transfer
Taxes (it being understood that the Noteholders, the Indenture Trustee, the
Trust Collateral Agent, the Issuer and the Note Insurer shall have no
obligation to pay such Transfer Taxes).
(xxxvi) Each Dealer that originated a Receivable for sale to the
Originator has been selected by the Originator based on the Originator's
underwriting criteria, its financial and operating history and record of
compliance with requirements of applicable Federal and state law. Each
Dealer from whom the Originator purchases Receivables directly has entered
into an agreement with the Originator providing for the sale of motor
vehicle loans from time to time by such Dealer to the Originator and is
authorized to originate Receivables for sale to the Originator under the
Originator's underwriting guidelines.
(xxxvii) The Transferor used no selection procedures that identified
the Receivables as being less desirable or valuable than other comparable
motor vehicle loans originated or acquired by the Transferor.
(xxxviii) The Computer Tape from which the selection of the Initial
Receivables being acquired on the Closing Date was made available to the
accountants that are providing a comfort letter to the Underwriters and the
Note Insurer in connection with any information contained in the Prospectus
and the Private Placement Memorandum, and such information is complete and
accurate as of the Initial Cut-off Date and the Closing Date in all
material respects and includes a description of the same Receivables that
are described in the Prospectus and the Private Placement Memorandum and on
Schedule A hereto and the payments due hereunder as of the Closing Date.
(xxxix) By the Closing Date or the related Subsequent Transfer Date,
as applicable, the Originator will have caused the portions of the
Subservicer's servicing records relating to the Receivables to be clearly
and unambiguously marked to show that the Receivables constitute part of
the Trust Property and are owned by the Issuer in accordance with the terms
of this Agreement.
(xl) As of the Closing Date, or the related Subsequent Transfer Date,
there is no lien against any Financed Vehicle for delinquent taxes.
(xli) At the time of origination of each Receivable, the proceeds of
such Receivable were fully disbursed. There is no requirement for future
advances thereunder, and all fees and expenses in connection with the
origination of such Receivable have been paid.
(xlii) No Receivable is due from an Obligor who has defaulted under a
previous contract with the Transferor or the Originator.
(xliii) The Dealer that sold each Receivable to the Originator has
entered into a Dealer Agreement and such Dealer Agreement (along with any
addenda thereto) constitutes the entire agreement between such Originator
and the related Dealer with
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respect to the sale of such Receivable to the Originator. Each such Dealer
Agreement is in full force and effect and is the legal, valid and binding
obligation of such Dealer, there have been no material defaults by such
Dealer or by the Originator under such Dealer Agreement; the Originator has
fully performed all of its obligations under such Dealer Agreement; the
Originator has not made any statements or representations to such Dealer
(whether written or oral) inconsistent with any term of such Dealer
Agreement; the purchase price (as specified in the applicable Dealer
Agreement, if any) for such Receivable has been paid in full by the
Originator; there is no other payment due to such Dealer from the
Originator for the purchase of such Receivable; such Dealer has no right,
title or interest in or to any Receivable; there is no prior course of
dealing between such Dealer and the Originator which will affect the terms
of such Dealer Agreement; any payment owed to such Dealer by the Originator
is a corporate obligation of the Originator in the nature of a bonus for
amounts collected by the Originator in excess of the purchase price for a
Receivable.
(xliv) Each Receivable contains provisions requiring the Obligor to
assume all risk of loss or malfunction of the related Financed Vehicle and
to maintain liability insurance with respect thereto, requiring the Obligor
to pay all sales, use, property, excise and other similar taxes imposed on
or with respect to the related Financed Vehicle and making the Obligor
liable for all payments required to be made thereunder, without any setoff,
counterclaim or defense for any reason whatsoever, subject only to the
Obligor's right of quiet enjoyment.
(xlv) No Receivable provides for the substitution, exchange or
addition of any Financed Vehicle subject to such Receivable.
(xlvi) The rights with respect to each Receivable are assignable by
the Transferor without the consent of any Person other than consents which
will have been obtained on or before the Closing Date or the related
Subsequent Transfer Date, as applicable.
(xlvii) To the best of the Transferor's knowledge, no Obligor is a
Person involved in re-leasing or re-selling the Financed Vehicles.
(xlviii) [The Trust Collateral Agent holds the certificate of title or
the application for a certificate of title for each of the Financed
Vehicles as of the Closing Date, or with respect to a Subsequent
Receivable, will hold the certificate of title or the application for a
certificate of title for each of the related Financed Vehicles as of the
related Subsequent Transfer Date, and the Subservicer will obtain within
180 days of the Closing Date or the related Subsequent Transfer Date, as
applicable, and deliver to the Trust Collateral Agent certificates of title
with respect to each Financed Vehicle as to which the Trust Collateral
Agent holds only such application.]
(xlix) No Receivable has been extended, rewritten or is subject to any
forbearance, or any other such modified payment plan other than in
accordance with the Originator's collection policies and procedures (of
which the Trust Collateral Agent retains a copy and which is available from
the Trust Collateral Agent upon request) as in effect on the Closing Date
or the related Subsequent Transfer Date, as applicable.
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(l) The Purchase Agreement has been duly authorized, executed and
delivered by the Originator and the Transferor and constitutes the legal,
valid, binding obligation of each such entity, enforceable against it in
accordance with its terms. The Purchase Agreement (including, without
limitation, the provisions of Section 6.2 thereof relating to the
reacquisition of the Receivables in certain events) is in full force and
effect and there have been no defaults thereunder by the Transferor or the
Originator, and the Originator and the Transferor have performed all of
their obligations thereunder as of the Closing Date and the Subsequent
Transfer Date, as applicable. The full purchase price payable by the
Transferor for the Initial Receivables and the Subsequent Receivables as
provided in the Purchase Agreement will be paid in full by the Transferor
for the purchase thereof on or prior to the Closing Date or the related
Subsequent Transfer Date, as applicable. All right, title and interest of
the Originator in or to the Initial Receivables has been sold by Originator
to the Transferor pursuant to the Purchase Agreement and the Initial
Assignment in accordance with the terms thereof, and the Originator does
not claim any right, title or interest in or to any of the Receivables. All
right, title and interest of the Originator in or to the Subsequent
Receivables will be sold by Originator to the Transferor pursuant to the
Purchase Agreement and the related Subsequent Assignment in accordance with
the terms thereof, and the Originator will not claim any right, title or
interest in or to any of the Receivables.
(li) The Originator, at the time of origination of each Receivable and
as of Closing Date, with respect to the Initial Receivables, and as of the
applicable Subsequent Transfer Date, with respect to the Subsequent
Receivables, was in possession of all state and local licenses (including
all debt collection licenses) required for it to acquire and own such
Receivable and service such Receivable in accordance with the Originator's
collection policies and procedures in effect on such date and to perform
its services as Subservicer (including, without limitation, the services to
be performed by the Servicer) hereunder, and none of such licenses has been
suspended, revoked or terminated, except where the failure of the
Originator to obtain and maintain any such license could not have a
material adverse effect on the Issuer, the Note Insurer, the Noteholders or
any Receivable or the Originator's ability to perform its obligations as
Originator and Subservicer under the Basic Documents.
SECTION 3.02 Repurchase Upon Breach.
(a) The Originator, the Transferor, the Servicer, the Master Servicer, the
Trust Collateral Agent or the Issuer, as the case may be, shall inform the other
parties to this Agreement and the Note Insurer promptly, in writing, upon the
discovery of any breach of the Transferor's representations and warranties
pursuant to Section 3.01 hereof (which, in the case of the Trust Collateral
Agent shall mean actual knowledge of a Responsible Officer of the Trust
Collateral Agent or receipt of written notice of such breach) without regard to
any limitation set forth therein concerning the knowledge of the Transferor as
to the facts stated therein. Unless the breach shall have been cured by the last
day of the first full Collection Period following the discovery by, or notice
to, the Transferor, the Transferor shall have an obligation, and the Trust
Collateral Agent shall at the expense of the Transferor enforce such obligation
of the Transferor, and, if necessary, the obligation of the Originator under the
Purchase Agreement to repurchase any nonconforming Receivable that is materially
and adversely affected by the breach or which
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materially and adversely affects the interest of the Noteholders or the Note
Insurer, as of such last day. In consideration of the purchase of the
Receivable, the Transferor shall remit, or cause the Originator to remit, the
Purchase Amount, in the manner specified in Section 4.10 hereof. The sole
remedies of the Trust Collateral Agent, the Issuer, the Indenture Trustee, the
Noteholders and the Certificateholder with respect to a breach of the
Transferor's representations and warranties pursuant to Section 3.01 hereof
shall be to require the Transferor to repurchase the related Receivables
pursuant to this Section or to enforce the obligation of the Originator to
repurchase such Receivables pursuant to the Purchase Agreement. The Trust
Collateral Agent shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the purchase of any Receivable
pursuant to this Section. Upon receipt of the Purchase Amount and any related
indemnity payments, the Trust Collateral Agent shall release to the Transferor,
the Originator or such party's designee, as applicable, the related Receivable
File and shall execute and deliver all instruments of transfer or assignment,
without recourse, as are prepared by such party and delivered to the Trust
Collateral Agent and are necessary to vest in the Transferor, the Originator or
such designee the Issuer's right, title and interest in the Receivable.
(b) If the Transferor fails to repurchase any Receivable which it is so
required to reacquire pursuant to this Agreement by the date specified, the
Trust Collateral Agent shall be obligated promptly to notify the Originator of
such failure and the Originator shall be obligated to purchase the Receivable
within five (5) Business Days following such notification and to deposit the
Purchase Amount into the Collection Account or make such payment, as applicable.
(c) Pursuant to Section 2.01 and Section 2.02, the Transferor conveys to
the Issuer all of the Transferor's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement
including the Transferor's rights under the Purchase Agreement and the delivery
requirements, representations and warranties and the cure, repurchase and
indemnity obligations of the Originator thereunder. The Transferor hereby
represents and warrants to the Issuer that such assignment is valid, enforceable
and effective to permit the Issuer to enforce such obligations of the Originator
and the Transferor under the Purchase Agreement.
SECTION 3.03 Custody of Receivable Files.
(a) The Trust Collateral Agent shall hold each Receivable File.
(b) No later than forty-five (45) days following the Closing Date or the
related Subsequent Transfer Date, as applicable, the Trust Collateral Agent
shall provide an Officer's Certificate dated as of such date(s) to the Indenture
Trustee and the Note Insurer confirming that the Trust Collateral Agent has
received, and is in possession of, the Receivable File for each Receivable
listed on Schedule A hereto (or with respect to a Subsequent Transfer Date, each
Subsequent Receivable included on Schedule A hereto as of such date and Schedule
A to the related Transfer Agreement).
SECTION 3.04 Acceptance of Receivable Files By Trust Collateral Agent. The
Trust Collateral Agent acknowledges receipt of files which the Transferor has
represented are the Receivable Files relating to the Initial Receivables. The
Trust Collateral Agent shall hold
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the Receivable Files subject to the terms and conditions of this Agreement. The
Trust Collateral Agent may perform its duties in respect of custody of the
Receivable Files by or through its agents or employees, provided, that such
performance shall not relieve the Trust Collateral Agent of its responsibilities
with respect to such duties. The Trust Collateral Agent has reviewed the
Receivable Files relating to the Initial Receivables and has determined that it
has received a file for each Initial Receivable identified in Schedule A to this
Agreement. The Trust Collateral Agent declares that it holds and will continue
to hold such files, any Receivable Files relating to Subsequent Receivables and,
in each case, any amendments, replacements or supplements thereto and all other
Trust Property as custodian, agent and bailee in trust for the use and benefit
of all present and future Noteholders and the Note Insurer. The Trust Collateral
Agent shall review each Receivable File delivered to it no later than the
Closing Date or the related Subsequent Transfer Date, as applicable, to
determine whether such Receivable Files contain the documents referred to in the
definition of the term "Receivable File" and shall certify on the Closing Date
or the related Subsequent Transfer Date, as applicable, to such effect. If the
Trust Collateral Agent finds during its review of the Receivable Files or at any
time thereafter that a Receivable File for a Receivable has not been received or
that any of the documents referred to in the definition of the term "Receivable
File" are not contained in a Receivable File, the Trust Collateral Agent shall
promptly inform the Originator, the Transferor, the Master Servicer, the Back-up
Servicer and the Note Insurer, in writing, of the failure to receive a
Receivable File with respect to such Receivable (or of the failure of any of the
aforementioned documents to be included in the Receivable File) (it being
understood that the Trust Collateral Agent's obligation to review the contents
of any Receivable File shall be limited as set forth in the preceding sentence).
Unless any such defect with respect to such Receivable shall have been cured by
the last day of the first complete Collection Period following discovery thereof
by the Trust Collateral Agent, the Originator shall repurchase any such
Receivable as of such last day. In consideration of the purchase of the
Receivable, the Originator shall remit the Purchase Amount, in the manner
specified in Section 5.05(a). The sole remedy of the Indenture Trustee, the
Trust Collateral Agent, the Issuer, the Noteholders and the Certificateholder
with respect to a breach pursuant to this Section 3.04 shall be to require the
Originator to repurchase the Receivable. The Transferor shall have no obligation
to repurchase any Receivable upon a breach pursuant to this Section 3.04. The
Transferor shall have no liability for any action taken or omitted to be taken
by the Originator pursuant to this Section 3.04.
SECTION 3.05 Covenants of the Trust Collateral Agent.
(a) The Trust Collateral Agent, either directly or by acting through an
agent or nominee (which agent shall not be the Originator, the Transferor or any
Affiliate thereof) shall hold the Receivable File and all other documents
relating to any Receivable that comes into its possession for the exclusive use
and benefit of the Issuer and shall make disposition thereof only in accordance
with the provisions of this Agreement. The Trust Collateral Agent shall maintain
continuous custody of the Receivable Files and such other documents received by
it in secure facilities in accordance with customary standards for such custody
and shall not release such documents or transfer such documents to any other
party, including any subcustodian, except as otherwise expressly provided
herein.
(b) The Trust Collateral Agent covenants and warrants to the Issuer, the
Servicer and the Note Insurer that to the knowledge of its Responsible Officers,
as of the related
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date on which the Trust Collateral Agent makes the certification required under
Section 3.04 with respect to the Receivable Files, it holds no adverse interest,
by way of security or otherwise, in any Receivable.
(c) Instructions to the Trust Collateral Agent relating to this Agreement
will be carried out by the Trust Collateral Agent, in accordance with the terms
and provisions of this Agreement. The Trust Collateral Agent is authorized to
conclusively rely on any such instruction that it believes in good faith to have
been given by the Servicer pursuant to and in accordance with the terms and
provisions of this Agreement. Any such instructions given by telephone shall be
confirmed to the Trust Collateral Agent in writing.
(d) The Trust Collateral Agent shall physically segregate the Receivable
Files for the Receivables from all other instruments similar in nature to such
Receivable Files in its possession, and shall hold the Receivable Files so as to
reflect the ownership of the Issuer and security interest of the Indenture
Trustee. The Trust Collateral Agent shall mark its books, accounts and records
to reflect such fact. At its own expense, the Trust Collateral Agent shall
maintain at all times during which this Agreement is in effect, fidelity
insurance in amounts customary for similar transactions. Such insurance may be
maintained by the Trust Collateral Agent in the form of self-insurance.
SECTION 3.06 Representations, Warranties and Covenants of the Originator.
The Originator hereby makes each of the representations, warranties and
covenants, for the benefit of the other parties hereto and the Note Insurer, set
forth in Section 3.2 of the Purchase Agreement, as if they were set forth in
full herein.
ARTICLE IV
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 4.01 Duties of Servicer.
(a) The Servicer. Commencing as of the Closing Date, the Subservicer shall
perform all duties, assume all obligations and liabilities and have all rights
of the "Servicer" hereunder. If the Subservicer's term has not been extended or
if the Subservicer has been removed pursuant to Section 4.04 or 8.01 hereof, the
Master Servicer shall automatically become the successor Servicer (unless and
until such other Person is appointed as successor Servicer pursuant to Section
8.03). If the Master Servicer has been removed pursuant to Section 8.02 hereof,
the Back-up Servicer shall automatically become the successor Servicer (unless
and until such other Person is appointed as successor Servicer pursuant to
Section 8.03). All services, duties and responsibilities of the Servicer under
this Agreement shall be performed and carried out by the Servicer as an
independent contractor for the benefit of the Trust, the Trust Collateral Agent,
the Collateral Agent and the Note Insurer, and none of the provisions of this
Agreement shall be deemed to make, authorize or appoint the Servicer as agent or
representative of the Transferor, the Trust Collateral Agent, the Collateral
Agent, the Trust, the Note Insurer or any Noteholder.
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(b) Standard of Care; Types of Duties. The Servicer shall manage, service,
administer, and make collections on the Receivables with reasonable care, using
that degree of skill and attention that prudent servicers in the retail
automotive financing industry customarily exercise with respect to all
comparable receivables that they service for themselves or others and, to the
extent more exacting, that the Servicer exercises with respect to all comparable
motor vehicle contracts that it services for itself or others; provided,
however, that the Servicer shall not materially change its servicing standards
and procedures without prior written consent of the Note Insurer. The Servicer's
duties shall, subject to the terms of the Lock-Box Agreement, include collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons or statements
to Obligors, reporting tax information to Obligors, accounting for collections,
and furnishing monthly and annual statements to the Trust Collateral Agent and
the Note Insurer with respect to distributions. The Servicer shall follow
prudent standards, policies, and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
hereby granted a limited power of attorney by the Trust Collateral Agent to
execute and deliver, on behalf of itself, the Trust, the Noteholders, or the
Trust Collateral Agent or any of them, any and all instruments of satisfaction
or cancellation, or partial or full release or discharge, and all other
comparable instruments, with respect to such Receivables or to the Financed
Vehicles securing such Receivables in accordance with the terms of this
Agreement; provided, however, that notwithstanding the foregoing, the Servicer
shall not release an Obligor from payment of any unpaid amount under any
Receivable or waive the right to collect the unpaid balance of any Receivable
from the Obligor, except (i) pursuant to an order from a court of competent
jurisdiction, (ii) in accordance with its customary procedures or (iii) in
accordance with Section 4.05. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Receivable on the ground that
it shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Trust Collateral Agent shall be deemed to have automatically
assigned such Receivable to the Servicer, solely for the purpose of collection.
The Trust Collateral Agent shall furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder. The
Servicer, unless __________ is then acting as Servicer, in which case the
Back-up Servicer (if the Subservicer is acting as the Servicer, at its expense,
otherwise at the expense of the Trust), shall obtain on behalf of the Trust all
licenses, if any, required by the laws of any jurisdiction to be held by the
Trust in connection with ownership of the Receivables, and shall make all
filings and pay all fees as may be required in connection therewith during the
term hereof.
(c) Additional Information to be Furnished regarding the Trust. The
Servicer shall furnish to the Owner Trustee, the Indenture Trustee, the Trust
Collateral Agent, the Collateral Agent and the Note Insurer from time to time
such additional information regarding the Trust or the Basic Documents as the
Owner Trustee, the Indenture Trustee, the Trust Collateral Agent, the Collateral
Agent or the Note Insurer shall reasonably request.
SECTION 4.02 The Master Servicer.
(a) Unless acting as the Servicer hereunder, the Master Servicer shall only
be responsible to perform those duties specifically imposed upon it by the
provisions hereof, and
49
shall have no obligations or duties under any agreement to which it is not a
party, including, but not limited to, the other Basic Documents.
(b) Subject to the Master Servicer's obligations pursuant to Section 7.03
hereof, prior to assuming any of the Servicer's rights and obligations
hereunder, the Master Servicer shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the expenditure or
risk of such funds or incurrence of financial liability. Notwithstanding any
provision to the contrary, the Master Servicer, in its capacity as such, and not
in its capacity as successor Servicer, shall not be liable for any obligation of
the Subservicer contained in this Agreement so long as the Master Servicer
performs in such capacity, and the parties shall look only to the Subservicer to
perform such obligations.
(c) The Servicer shall have no liability, direct or indirect, to any party,
for the acts or omissions of the Master Servicer, whenever such acts or
omissions occur or whenever such liability is imposed.
(d) Notwithstanding anything to the contrary herein, the Controlling Party
shall have the right in its sole and absolute discretion to remove and replace
the Master Servicer in accordance with Section 8.02. In the event that the
Controlling Party exercises its right to remove and replace __________ as Master
Servicer, the Bank shall have no further obligation to perform the duties of the
Master Servicer under this Agreement except as set forth in Section 7.03.
(e) The Master Servicer shall additionally perform the services set forth
in Exhibit C hereto. In furtherance thereof, the Subservicer shall, no later
than the 10th day of each calendar month, until the earlier of the date the
Master Servicer assumes the duties of Servicer under this Agreement or the
termination of this Agreement in accordance with its terms, provide the Master
Servicer with a Computer Tape and such other information and data required under
Exhibit C hereto in order for the Master Servicer to perform its duties as set
forth in Exhibit C hereto.
SECTION 4.03 The Back-up Servicer.
(a) Prior to assuming any of the Servicer's rights and obligations
hereunder, the Back-up Servicer shall only be responsible to perform those
duties specifically imposed upon it by the provisions hereof, and shall have no
obligations or duties under any agreement to which it is not a party, including
but not limited to any other Basic Document to which it is not a party.
(b) Prior to assuming any of the Servicer's rights and obligations
hereunder, the Back-up Servicer shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the expenditure or
risk of such funds or incurrence of financial liability. Notwithstanding any
provision to the contrary, the
50
Back-up Servicer, in its capacity as such, and not in its capacity as successor
Servicer, shall not be liable for any obligation of the Master Servicer or the
Subservicer contained in this Agreement so long as the Back-up Servicer performs
in such capacity, and the parties shall look only to the Master Servicer and the
Subservicer to perform such obligations.
(c) The Servicer shall have no liability, direct or indirect, to any party,
for the acts or omissions of the Back-up Servicer, whenever such acts or
omissions occur or whenever such liability is imposed.
(d) Notwithstanding anything to the contrary herein, the Controlling Party
shall have the right, with or without cause, to remove the Back-up Servicer in
its sole discretion and replace the Back-up Servicer. In the event that the
Controlling Party exercises its right to remove and replace the Back-up
Servicer, such Person shall have no further obligation to perform the duties of
the Back-up Servicer under this Agreement except as set forth in Section 7.03.
SECTION 4.04 Retention and Termination of Subservicer.
The Subservicer, if any is named hereunder, shall covenant and agree to act
as such under this Agreement for an initial term set forth in a Subservicing
Agreement, which term may be extended by written notice delivered by the Note
Insurer for successive ninety (90) day periods ending on each successive ninety
(90) day period (or, pursuant to revocable written standing instructions from
time to time to the Subservicer and the Trust Collateral Agent, extended for any
specified number of terms greater than one), until the termination of the
Issuer. Any such notice (including each notice pursuant to standing
instructions, which, if delivered, shall be deemed delivered at the end of
successive ninety (90) day terms for so long as such instructions are in effect)
(a "Servicer Extension Notice") shall be delivered by the Note Insurer to the
Trust Collateral Agent and the Subservicer. The Subservicing Agreement, if
applicable, shall provide that the Subservicer agrees that upon its receipt of
any such Servicer Extension Notice, the Subservicer shall become bound, for the
initial term beginning on the date of such receipt and for the duration of the
term covered by such Servicer Extension Notice, to continue as the Subservicer
subject to and in accordance with the other provisions of this Agreement. The
Subservicer's terms shall not be extended unless a Servicer Extension Notice is
received on or before the last day of such term. This Section shall not apply to
the Master Servicer or the Back-up Servicer.
SECTION 4.05 Collection and Application of Receivable Payments.
Consistent with standards, policies and procedures required by this
Agreement, the Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable motor vehicle contracts that it services for
itself or others and, in any event, with no less degree of skill and care than
would be exercised by a prudent servicer of similar motor vehicle retail
installment sales contracts; provided, however, that the Servicer shall notify
each Obligor no later than 30 days after the Closing Date or the related
Subsequent Transfer Date to make all payments with respect to the Receivables to
the Lock-Box and shall make reasonable efforts to cause Obligors to make all
51
such payments to such Lock-Box. The Servicer may in its discretion grant
extensions, rebates, or adjustments on a Receivable, and amend or modify any
Receivable [which shall not modify the APR or the number or amounts of the
Scheduled Receivable Payments], in accordance with the customary servicing
procedures it employs with respect to all comparable motor vehicle contracts
that it services; provided that in no event shall a Receivable be extended such
that any payment thereon would be due after the month immediately preceding the
month in which the Stated Final Maturity Date occurs; provided, further, that no
extensions may be granted by the Servicer until at least six Scheduled
Receivable Payments have been received by the Servicer under the related
Receivable and thereafter only one extension not to exceed one month may be
granted each twelve months; provided, however, that no more than three
extensions shall be permitted on any Receivable; provided, however, that not
more than [__]% (by Principal Balance of the Receivables as a percentage of the
Pool Balance) may be extended in any monthly period. The Servicer may in its
discretion waive any late payment charge or any other fees, not including
interest on the outstanding principal balance, that may be collected in the
ordinary course of servicing a Receivable.
SECTION 4.06 Realization Upon Receivables.
(a) On behalf of the Trust, the Noteholders and the Note Insurer, the
Servicer shall use its best efforts, consistent with prudent servicing
procedures set forth herein, to repossess or otherwise convert the ownership of
the Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow such
customary practices and procedures as it may deem necessary or advisable in its
servicing of motor vehicle contracts, consistent with the standards of care set
forth herein, which may include reasonable efforts to realize upon any Dealer
Recourse [(provided, that if the Bank is performing the duties of Servicer
hereunder, the Originator agrees to use commercially reasonable efforts to
cooperate with the Bank in realizing upon such Dealer Recourse)] and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine
that there is a reasonable likelihood that such repair and/or repossession will
increase the Liquidation Proceeds by an amount greater than the amount of such
expenses.
(b) The Servicer agrees that within 45 days from the Closing Date or the
related Subsequent Transfer Date, as applicable, it shall make such filings and
effect such notices as are necessary under Section [__________] of the Indiana
UCC (or comparable section of the UCC of any applicable state) to preserve the
Trust's ownership interest (or security interest, as the case may be) in any
repossessed Financed Vehicles delivered for sale to Dealers.
(c) The Servicer agrees that at any time after 45 days from the Closing
Date there will be (i) no more than 25 repossessed Financed Vehicles in the
aggregate delivered for sale to any Dealer and (ii) no more than 50 repossessed
Financed Vehicles in the aggregate delivered for the sale to all Dealers with
respect to which the actions referred to in paragraph (b) above have not been
effected. The Servicer agrees that prior to delivering additional Financed
Vehicles for sale to any such Dealer, it shall make such filings and effect such
notices as are necessary under Section [__________] of the
52
Indiana UCC (or comparable section of the applicable UCC) to preserve its
ownership interest (or security interest, as the case may be) in any such
repossessed Financed Vehicle.
SECTION 4.07 Insurance.
(a) The Servicer, in accordance with customary servicing procedures, shall
require that (i) each Obligor shall have obtained insurance covering the
Financed Vehicle as of the date of execution of the Receivable insuring against
loss and damage due to fire, theft, transportation, collision and other risks
generally covered by comprehensive and collision coverage and each Receivable
requires the Obligor to maintain such physical loss and damage insurance naming
the Originator and its successors and assigns as an additional insured or loss
payee, (ii) each Receivable that finances the cost of premiums for credit life
and credit accident and health insurance is covered by an insurance policy or
certificate naming the Originator as policyholder (creditor) or loss payee and
(iii) as to each Receivable that finances the cost of an extended service
contract, the respective Financed Vehicle which secures the Receivable is
covered by such extended service contract. The Servicer shall, in accordance
with its customary servicing procedures, monitor such insurance coverage.
(b) To the extent applicable, the Servicer shall not take any action which
would result in noncoverage under any of the insurance policies referred to in
Section 4.07(a) which, but for the actions of the Servicer, would have been
covered thereunder. The Servicer, on behalf of the Trust Collateral Agent, shall
take such reasonable action as shall be necessary to permit recovery under any
of the foregoing insurance policies. Any amounts collected by the Servicer under
any of the foregoing insurance policies shall be deposited in the Collection
Account pursuant to Section 5.03. In the event of the cancellation or
non-renewal of the insurance referred to in Section 4.07(a)(i) above with
respect to any Financed Vehicle, the Servicer will endeavor, in accordance with
its customary servicing standards and procedures, to cause the related Obligor
to obtain a replacement insurance policy. In no event shall the Servicer be
required to force-place insurance on a Financed Vehicle.
SECTION 4.08 Maintenance of Security Interests in Financed Vehicles.
(a) Consistent with the policies and procedures required by this Agreement,
the Servicer shall take such steps as are necessary to maintain perfection of
the first priority security interest created in the name of the Originator by
each Receivable in the related Financed Vehicle. The Servicer shall take such
steps as are necessary to reperfect such security interest on behalf of the
Trust in the event of the relocation of a Financed Vehicle or for any other
reason.
(b) Upon the occurrence of an Insurance Agreement Event of Default, the
Servicer, at the written direction of the Note Insurer (if no Insurer Default
shall have occurred and be continuing), shall take or cause to be taken such
action as may, in the opinion of counsel to the Note Insurer, which opinion
shall not be an expense of the Note Insurer, be necessary or desirable to
perfect or re-perfect the security interests in the Financed Vehicles securing
the Receivables in the name of the Trust Collateral Agent on behalf of the
Issuer, the Noteholders and the Note Insurer by amending the title documents of
such Financed Vehicles or by such other reasonable means as may, in the opinion
of counsel to the Note Insurer, which opinion shall not be an expense of the
Note Insurer, be necessary or prudent and shall deliver to the Trust
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Collateral Agent any Receivable File or portion thereof that has been released
by the Trust Collateral Agent to the Servicer and is then in the possession of
the Servicer, including any original certificates of title. The Subservicer
shall, and if the Subservicer has been removed or otherwise fails to, the
Originator shall pay all costs and expenses related to such perfection or
re-perfection (the "Reliening Expenses"). In addition, prior to the occurrence
of an Insurance Agreement Event of Default, the Note Insurer may (unless an
Insurer Default shall have occurred and be continuing) instruct the Trust
Collateral Agent and the Servicer to take or cause to be taken such action as
may, in the opinion of counsel to the Note Insurer, be necessary to perfect or
reperfect the security interest in the Financed Vehicles securing the
Receivables in the name of the Trust Collateral Agent on behalf of the Issuer,
including by amending the title documents of such Financed Vehicles to reflect
the security interest of the Trust Collateral Agent in the related Financed
Vehicle or by such other reasonable means as may, in the opinion of counsel to
the Note Insurer, be necessary or prudent; provided, however, that if the Note
Insurer requests (unless an Insurer Default shall have occurred and be
continuing) that the title documents be amended prior to the occurrence of an
Insurance Agreement Event of Default, the out-of-pocket expenses of the Servicer
or the Trust Collateral Agent in connection with such action shall be reimbursed
to the Servicer or the Trust Collateral Agent, as applicable, by the Note
Insurer.
In addition to the foregoing, in the event any of the Servicer Defaults
described in Section 8.01 (ii) or (iii) shall have occurred, or in the event the
Subservicer shall have been removed or replaced as Servicer pursuant to Section
7.02, Section 7.04, or otherwise pursuant to Section 8.01, then the Subservicer
and/or the Servicer shall immediately cause each certificate of title for a
Financed Vehicle to be marked to reflect the security interest of the Trust
Collateral Agent in the Financed Vehicle at the expense of the Subservicer.
The Servicer hereby makes, constitutes and appoints the Trust Collateral
Agent acting through its duly appointed officers or any of them, its true and
lawful attorney, for it and in its name and on its behalf, for the sole and
exclusive purpose of authorizing said attorney to execute and deliver as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to show
the Trust Collateral Agent as lienholder or secured party on the certificate of
title relating to a Financed Vehicle.
SECTION 4.09 Covenants of Servicer.
The Servicer hereby makes the following covenants to the other parties
hereto and the Note Insurer on which the Trust Collateral Agent shall rely in
accepting the Receivables in trust and on which the Note Insurer shall rely in
issuing the Note Policy. Except for a release to an insurer in exchange for
insurance proceeds paid by such insurer resulting from a claim for the total
insured value of a vehicle, the Servicer shall not (i) release the Financed
Vehicle securing each such Receivable from the security interest granted by such
Receivable in whole or in part except in the event of payment in full by or on
behalf of the Obligor thereunder or repossession, (ii) impair the rights of the
Noteholders or the Note Insurer in the Receivables, (iii) change the Annual
Percentage Rate with respect to any Receivable, except as may be required by
applicable law and (iv) otherwise modify any contract except as permitted by
this Agreement. In addition, the Servicer shall service the Receivables as
required by the terms of this Agreement and in
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material compliance with its current servicing procedures for servicing all of
its comparable motor vehicle contracts.
SECTION 4.10 Purchase of Receivables Upon Breach.
The Servicer, the Transferor, the Issuer or the Trust Collateral Agent
shall inform the other parties to this Agreement and the Note Insurer promptly,
in writing, upon the discovery of any breach of Section 4.01, 4.05, 4.06, 4.07,
4.08 or 4.09 hereof; provided, however, that the failure to give such notice
shall not affect any obligation of the Servicer hereunder. Unless the breach
shall have been cured by the last day of the first full Collection Period
following such actual knowledge or receipt of notice by an Authorized Officer of
the Servicer, the Servicer shall purchase as of the Business Day preceding the
Determination Date relating to the respective Collection Period any Receivable
that is materially and adversely affected by such breach or which materially and
adversely affects the interests of the Note Insurer (which shall include any
Receivable as to which a breach of Section 4.06 has occurred); provided that if
__________ shall have become the Servicer, it will not be so obligated to
purchase such nonconforming Receivables. __________'s only obligation to the
Trust shall be to make the indemnity in Section 7.03 hereof. In consideration of
the purchase of such Receivable, the Servicer shall remit the Purchase Amount in
the manner specified in Section 5.05. The Trust Collateral Agent shall have no
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section.
The purchase obligation set forth in this Section shall, except as provided
below, be the sole remedy of the Trust Collateral Agent, the Issuer, the Note
Insurer and the Noteholders with respect to any of the aforementioned breaches
by the applicable Servicer; provided, however, that the Servicer shall indemnify
the Note Insurer, the Issuer and the Noteholders and each of their respective
officers, employees, directors, agents and representatives against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such breach. No predecessor nor successor Servicer shall be responsible for the
acts or omissions of such Servicer. Upon receipt of the Purchase Amount and any
related indemnity payments, the Trust Collateral Agent shall release to the
Servicer or its designee the related Receivable File and shall execute and
deliver all instruments of transfer or assignment, without recourse, as are
prepared by the Servicer and delivered to the Trust Collateral Agent and are
necessary to vest in the Servicer or such designee the Issuer's right, title and
interest in the Receivable.
SECTION 4.11 Servicer Fee.
(a) The Master Servicer shall be entitled to a Master Servicing Fee as
defined herein. Once it has become the Servicer, the Master Servicer will be
entitled to the Successor Servicer Fee.
(b) The Servicer shall be entitled to a Servicing Fee as defined herein.
The Servicer shall be entitled to all late fees, prepayment charges and other
administrative fees and expenses or similar charges allowed by applicable law
with respect to the Receivables, collected (from whatever source) on the
Receivables during such Collection Period (the "Supplemental Servicing Fee").
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(c) So long as it has not become the Servicer, the Back-up Servicer will be
entitled to the Back-up Servicer Fee. If it becomes the Servicer, the Back-up
Servicer will be entitled to the Successor Servicing Fee.
SECTION 4.12 Servicer's Certificate.
By 4 p.m. EST on the Determination Date in each calendar month, the
Servicer shall deliver to, without duplication, the Trust Collateral Agent, the
Note Insurer, the Master Servicer, the Underwriters and the Back-up Servicer, a
Servicer's Certificate in the form of Exhibit B hereto containing all
information necessary to make the transfers, deposits and distributions pursuant
to Sections 5.05 through 5.15 hereof for the Collection Period immediately
preceding the date of such Servicer's Certificate and as of the last day of such
Collection Period, and all information necessary (including whether a Trigger
Event or Event of Default under the Insurance Agreement has occurred) for the
Trust Collateral Agent to send statements to Noteholders and the Note Insurer
pursuant to Section 5.15 hereof. Receivables purchased by the Trust shall be
identified by the Servicer by the Obligor's account number and certain other
information with respect to such Receivable (as specified in Schedule A to this
Agreement). In addition to the information set forth in the preceding sentence,
the Servicer's Certificate shall also contain the following information: (a) the
Delinquency Ratio, Average Delinquency Rate, Cumulative Default Rate and
Cumulative Net Loss Rate, Average Default Rate and Average Net Loss Rate (as
such terms are defined in the Insurance Agreement) for such Determination Date;
(b) whether any Trigger Event has occurred as of such Determination Date; (c)
whether any Trigger Event that may have occurred as of a prior Determination
Date is Deemed Cured (as such term is defined in the Insurance Agreement) as of
such Determination Date; and (d) whether to the knowledge of the Servicer an
Insurance Agreement Event of Default has occurred.
SECTION 4.13 Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to, the Trust Collateral Agent, the Owner
Trustee, the Rating Agencies, the Indenture Trustee, the Note Insurer, the
Master Servicer, the Back-up Servicer, and the Noteholders, on or before
______________ of each year beginning in the year _____, an Officer's
Certificate, dated as of the preceding December 31st, stating that (i) a review
of the activities of the Servicer during the preceding 12-month (or for the
initial certificate, for such shorter period as may have elapsed from the
Closing Date to such December 31st) period and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year, or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to, without duplication, the Trust
Collateral Agent, the Indenture Trustee, the Owner Trustee, the Note Insurer,
the Master Servicer, the Back-up Servicer, and to the Rating Agencies, promptly
after having obtained knowledge thereof, but in no event later than 2 Business
Days thereafter, written notice in an Officer's Certificate of any event which
with the giving of notice or lapse of time, or both, would become a Servicer
Default (if the Subservicer is the Servicer) under Section 8.01 or Master
Servicer
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Default (if the Master Servicer is the Servicer) under Section 8.02. The
Transferor shall deliver to the Trust Collateral Agent, the Indenture Trustee,
the Note Insurer and to such Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than 2 Business Days thereafter,
written notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under clause
(ii) of Section 8.01. The Trust Collateral Agent shall forward a copy of each
Officer's Certificate so received to each Noteholder.
SECTION 4.14 Annual Independent Certified Public Accountant's Report.
The Servicer will deliver to, without duplication, the Trust Collateral
Agent, the Owner Trustee, the Indenture Trustee, each Noteholder, the Note
Insurer, the Master Servicer, the Back-up Servicer, and the Rating Agencies, on
or before April 30th of each year beginning in the year _____, a report prepared
by Independent Accountants, who may also render other services to the Servicer
or any of its Affiliates or to the Transferor addressed to the Board of
Directors of the Servicer or any of its Affiliates, the Indenture Trustee and
the Note Insurer and dated during the current year, to the effect that such firm
has audited the consolidated financial statements of the Servicer's holding
company and issued its report therefore and that such audit (a) was made in
accordance with generally accepted auditing standards, and accordingly included
such tests of the accounting records and such other auditing procedures as such
firm considered necessary in the circumstances; (b) included tests relating to
automotive loans serviced for others in accordance with the requirements of the
Uniform Single Attestation Program for Mortgage Bankers (the "Program"), to the
extent the procedures in the Program are applicable to the servicing obligations
set forth in this Agreement; (c) included an examination of the delinquency and
loss statistics relating to the Servicer's portfolio of automobile, sport
utility vehicle, light duty truck, van and mini-van installment sale contracts;
and (d) except as described in the report, disclosed no exceptions or errors in
the records relating to automobile, sport utility vehicle, light duty truck, van
and min-van loans serviced for others that, in the firm's opinion, the Program
requires such firm to report. The accountant's report shall further state that
(1) a review in accordance with agreed upon procedures was made of three
randomly selected Servicer's Certificates; (2) except as disclosed in the
report, no exceptions or errors in the Servicer's Certificates were found; and
(3) the delinquency and loss information relating to the Receivables contained
in the Servicer's Certificates were found to be accurate.
Such report shall also indicate that the firm is independent of the
Servicer and its Affiliates within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.
In the event such firm requires the Indenture Trustee or the Trust
Collateral Agent to agree to the procedures performed by such firm, the Servicer
shall direct each such Person in writing to so agree; it being understood and
agreed that each such Person will deliver such letter of agreement in conclusive
reliance upon the direction of the of the Servicer, and neither such Person
shall make any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures. Delivery of such reports, information and documents to the
Indenture Trustee and the Trust Collateral Agent is for informational purposes
only, and the Indenture Trustee's and the Trust Collateral Agent's receipt of
such shall not constitute constructive notice of any information contained
therein or
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determinable from information contained therein, including the Servicer's
compliance with any of its covenants hereunder.
If the Master Servicer is then acting as the successor Servicer, it shall
only be required to provide a copy of its annual SAS 70 report and its audited
financial statements.
SECTION 4.15 Access to Certain Documentation and Information Regarding
Receivables.
The Servicer shall provide to each Noteholder and the Note Insurer access
to its records, computer systems and information pertaining to the Receivables.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
SECTION 4.16 Servicer Expenses.
The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder, including fees and disbursements of
independent accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to Noteholders, the Trust Collateral
Agent and the Note Insurer; provided, however, that any successor Servicer shall
be entitled to be reimbursed for any transition expenses, in each case such
expenses not to exceed the sum of $20,000; provided, further, that if __________
is performing the duties of Servicer hereunder, __________ shall be entitled to
reimbursement of expenses set forth on Schedule C attached hereto for so long as
__________ is performing such duties.
SECTION 4.17 Fidelity Bond.
Each of the Master Servicer, the Subservicer and any successor Servicer
(other than __________) hereby represent and covenant that it has obtained, and
shall continue to maintain in full force and effect, a fidelity bond and errors
and omissions policy covering it of a type and in such amount as is customary
for prudent servicers engaged in the business of servicing motor vehicle retail
installment sales contracts similar to the Receivables.
SECTION 4.18 Delegation of Duties.
The Servicer may at any time delegate duties under this Agreement to
sub-contractors who are in the business of servicing motor vehicle contracts
with the prior written consent of the Controlling Party; provided, however, that
no such delegation or sub-contracting of duties by the Servicer shall relieve
the Servicer of its responsibility with respect to such duties. In the event the
Servicer shall for any reason no longer be the servicer of the Receivables
(including by reason of a Servicer Default or a Master Servicer Default, as
applicable), the successor Servicer shall assume all of the rights and
obligations of the predecessor Servicer under one or more subservicing
agreements that may have been entered into by the predecessor Servicer by giving
notice of such assumption to the related subservicer or subservicers within ten
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(10) Business Days of the termination of such Servicer as servicer of the
Receivables; provided, however, that a successor Servicer may elect to terminate
a subservicing agreement with the prior written consent of the Note Insurer, so
long as no Insurer Default is then continuing. If the successor Servicer does
not elect to assume any subservicing agreement, any and all costs of termination
shall be at the predecessor Servicer's expense. Upon the giving of such notice,
the successor Servicer shall be deemed to have assumed all of the predecessor
Servicer's interest therein and to have replaced the predecessor Servicer as a
party to the subservicing agreement to the same extent as if the subservicing
agreement had been assigned to the assuming party except that the predecessor
Servicer and the subservicer, if any, shall not thereby be relieved of any
liability or obligations accrued up to the date of the replacement of the
Servicer under the subservicing agreement and the subservicer, if any, shall not
be relieved of any liability or obligation to the predecessor Servicer that
survives the assignment or termination of the subservicing agreement. The
successor Servicer shall notify each Rating Agency and the Note Insurer if any
subservicing agreement is assumed by such successor Servicer. The predecessor
Servicer shall, upon request of the Trust Collateral Agent or any successor
Servicer, but at the expense of the predecessor Servicer, deliver to the
assuming party all documents and records relating to the subservicing agreement
and the Receivables then being serviced and an accounting of amounts collected
and held by it and otherwise use its reasonable best efforts to effect the
orderly and efficient transfer of the subservicing agreement to the assuming
party.
ARTICLE V
TRUST ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
AND NOTEHOLDERS
SECTION 5.01 Lock-Box Account.
(a) No later than five (5) Business Days after the Closing Date, the
Subservicer shall establish the Lock-Box Account as an Eligible Account with the
Lock-Box Bank, all in accordance with the terms of the Lock-Box Agreement;
provided that the Servicer, with the prior written consent of the Note Insurer,
may from time to time (a) establish additional or substitute Lock-Box Accounts,
each of which shall be an Eligible Account, and (b) close or terminate the use
of such account or any subsequently established accounts, each of which
accounts, at such time, shall no longer be deemed to be a Lock-Box Account;
provided, further, that pursuant to the Lock-Box Agreement, the Lock-Box
Processor and no other person, save the Trust Collateral Agent or the Servicer,
shall have authority to direct disposition of funds related to the Receivables
on deposit in the Lock-Box Account consistent with the provisions of this
Agreement and the Lock-Box Agreement. The Trust Collateral Agent shall have no
liability or responsibility with respect to the Lock-Box Processor's or the
Servicer's directions or activities as set forth in the preceding sentence. The
Lock-Box Account shall be established pursuant to and maintained in accordance
with the Lock-Box Agreement and shall be a demand deposit account which shall at
all times be an Eligible Account. In conjunction with the establishment of the
Lock-Box Account, the Subservicer shall establish and maintain the Lock-Box at a
United States Post Office Branch. Notwithstanding the Lock-Box Agreement or any
of the provisions of this Agreement relating to the Lock-Box and the Lock-Box
Agreement, the Servicer shall remain obligated and liable to the Trust
Collateral Agent and the Noteholders for servicing and
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administering the Receivables and the other Trust Property in accordance with
provisions of this Agreement without diminution of such obligation or liability
by virtue thereof.
(b) In the event the Servicer shall for any reason no longer be acting as
such, the Lock-Box Agreement shall terminate in accordance with its terms and
funds on deposit in the Lock-Box Account shall be distributed by the Lock-Box
Bank, as agent for the beneficial owners of funds in the Lock-Box Account at
such time (including the Issuer), and the Lock-Box Bank shall deposit any such
funds relating to the Receivables to such other account as shall be identified
by the Back-up Servicer or successor Servicer for deposit therein; provided,
however, that the outgoing Servicer shall not thereby be relieved of any
liability or obligations on the part of the outgoing Servicer to the Lock-Box
Bank under such Lock-Box Agreement. The outgoing Servicer shall, upon request of
the Trust Collateral Agent, but at the expense of the outgoing Servicer, deliver
to the successor Servicer all documents and records relating to the Lock-Box
Agreement and an accounting of amounts collected and held in the Lock-Box
Account or held by the Lock-Box Processor in respect of the Receivables and
otherwise use its best efforts to effect the orderly and efficient transfer of
any Lock-Box Agreement to the successor Servicer. In the event that the Lock-Box
Account fails at any time to qualify as an Eligible Account, the Servicer, at
its expense, shall cause the Lock-Box Bank to deliver, at the direction of the
Controlling Party to the Trust Collateral Agent or a successor Lock-Box Bank,
all documents and records relating to the Receivables and all amounts held (or
thereafter received) on deposit in the Lock Box Account or held by the Lock-Box
Processor in respect of the Receivables (together with an accounting of such
amounts) and shall otherwise use its best efforts to effect the orderly and
efficient transfer of the Lock-Box arrangements, and the Servicer shall promptly
notify the Obligors to make payments to any new Lock-Box.
(c) Until such time as the Lock-Box Collection Percentage with respect to
any Determination Date equals or exceeds [__]%, the Subservicer (i) shall, no
later than ten (10) Business Days after the Closing Date, obtain and maintain an
employee dishonesty bond in the amount of $[___________] covering each employee
of the Subservicer responsible for opening, processing and depositing Receivable
payments received directly by the Subservicer, and (ii) shall prepare a weekly
reconciliation of Scheduled Receivable Payments which have been received by the
Subservicer during the prior calendar week and confirming that such payments
have been deposited to the Lock-Box Account or the Collection Account (the
"Reconciliation Report"), which Reconciliation Report shall be delivered to the
Note Insurer, the Indenture Trustee and the Trust Collateral Agent on Tuesday of
each week (or if such day is not a Business Day, the next succeeding Business
Day), with respect to collections received during the immediately preceding
calendar week. In addition, following satisfaction of such Lock-Box Collection
Percentage, upon the request of the Note Insurer, the Subservicer shall provide
the Note Insurer, the Indenture Trustee and the Trust Collateral Agent with the
Reconciliation Report on a monthly or less frequent basis, as so requested.
SECTION 5.02 Establishment of Trust Accounts.
(a) The Trust Collateral Agent, on behalf of the Indenture Trustee, for the
benefit of the Noteholders, the Note Insurer and the Certificateholders, shall
establish and maintain in the name of the Issuer a segregated trust account (the
"Collection Account") which is an Eligible Account, bearing a designation
clearly indicating that the funds deposited therein and
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the assets credited thereto are held for the benefit of the Trust Collateral
Agent on behalf of the Indenture Trustee for the benefit of the Noteholders, the
Note Insurer and the Certificateholders as their interests may appear. The
Collection Account shall initially be established with the Trust Collateral
Agent.
(b) The Trust Collateral Agent shall establish and maintain, on behalf of
the Indenture Trustee, (i) for the benefit of the Class A Noteholders and the
Note Insurer, in the name of the Issuer, a segregated trust account (the "Class
A Note Distribution Account") and (ii) for the benefit of the Class B
Noteholders, in the name of the Issuer, a segregated trust account (the "Class B
Note Distribution Account"), each of which is an Eligible Account, bearing a
designation clearly indicating that the funds deposited therein and the assets
credited thereto are held for the benefit of the Trust Collateral Agent on
behalf of the Indenture Trustee, with respect to the Class A Note Distribution
Account, for the benefit of the Class A Noteholders and the Note Insurer and,
with respect to the Class B Note Distribution Account, for the benefit of the
Class B Noteholders, as their interests may appear. The Class A Note
Distribution Account and the Class B Note Distribution Account shall initially
be established with the Trust Collateral Agent.
(c) The Trust Collateral Agent, on behalf of the Indenture Trustee, for the
benefit of the Certificateholder, shall establish and maintain in the name of
the Issuer a segregated account which is an Eligible Account (the "Certificate
Distribution Account"), bearing a designation clearly indicating that the funds
deposited therein and the assets credited thereto are held for the benefit of
the Trust Collateral Agent on behalf of the Indenture Trustee for the benefit of
the Certificateholder. The Certificate Distribution Account shall initially be
established with the Trust Collateral Agent.
(d) The Trust Collateral Agent, on behalf of the Indenture Trustee, for the
benefit of the Noteholders, the Note Insurer and the Certificateholder, shall
establish and maintain in the name of the Issuer a trust account (the
"Pre-Funding Account"), bearing a designation clearly indicating that the funds
deposited therein and the assets credited thereto are held by the Trust
Collateral Agent on behalf of the Indenture Trustee for the benefit of the
Noteholders, the Note Insurer and the Certificateholder. The Pre-Funding Account
shall initially be established with the Trust Collateral Agent.
(e) The Trust Collateral Agent, on behalf of the Indenture Trustee for the
benefit of Noteholders, the Note Insurer and the Certificateholder shall
establish and maintain in the name of the Issuer as a segregated trust account
(the "Capitalized Interest Account") which is an Eligible Account, bearing a
designation clearly indicating that the funds deposited therein and the assets
credited thereto are held for the benefit of the Trust Collateral Agent on
behalf of the Indenture Trustee for the benefit of the Noteholders, the Note
Insurer and the Certificateholder as their interests may appear. The Capitalized
Interest Account shall initially be established with the Trust Collateral Agent.
(f) The Trust Collateral Agent, on behalf of the Indenture Trustee for the
benefit of the Class A Noteholders and the Note Insurer shall establish and
maintain the Policy Payments Account in and the name of the Issuer as a
segregated trust account (the "Policy Payments Account") which is an Eligible
Account, bearing a designation clearly indicating that
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the funds deposited therein are held for the benefit of the Trust Collateral
Agent on behalf of the Indenture Trustee for the benefit of the Class A
Noteholders and the Note Insurer as their interests may appear. The Policy
Payments Account shall initially be established with the Trust Collateral Agent.
(g) Funds on deposit in the Collection Account, the Pre-Funding Account and
the Capitalized Interest Account shall each be invested by the Trust Collateral
Agent (or any custodian with respect to funds on deposit in any such account) in
Eligible Investments selected in writing by the Servicer (pursuant to standing
instructions or otherwise) (provided that, if the Master Servicer is then acting
as Servicer, such selection shall be made by the Transferor), bearing interest
or sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the next Distribution Date if a Person
other than the Trust Collateral Agent is the obligor thereon, and (ii) no later
than the next Distribution Date, if the Trust Collateral Agent is the obligor
thereon; provided, however, it is understood and agreed that the Trust
Collateral Agent shall not be liable for any loss arising from such investment
in Eligible Investments unless the Eligible Investment was a direct obligation
of the Trust Collateral Agent or unless such loss was caused by the Trust
Collateral Agent's negligence or willful misconduct (it being understood and
acknowledged that no loss on any such Eligible Investment which was made in
conformity with this Agreement and the instructions of the Servicer, or
Transferor, shall be considered "caused by the Trust Collateral Agent's
negligence or willful misconduct"). No investment may be sold prior to its
maturity. All such Eligible Investments shall be held by or on behalf of the
Trust Collateral Agent for the benefit of the Indenture Trustee on behalf of the
Noteholders, the Note Insurer and Certificateholders as their interests may
appear. Funds deposited in the Collection Account on the day immediately
preceding a Distribution Date upon the maturity of any Eligible Investments are
not required to be invested overnight. On each Distribution Date, all interest
income (net of investment losses and expenses) on funds on deposit in the
Collection Account and the Pre-Funding Account, as of the end of the Collection
Period shall be included in Available Funds. All investment income (net of
investment losses and expenses) on amounts on deposit in the Capitalized
Interest Account during each Collection Period shall be deposited in the
Capitalized Interest Account on the Distribution Date relating to such
Collection Period prior to making any transfers or distributions from the
Capitalized Interest Account on such Distribution Date in accordance with
Section 4.08 hereof. Funds in the Policy Payments Account, the Class A Note
Distribution Account, the Class B Note Distribution Account and the Certificate
Distribution Account shall not be invested. For purposes of this paragraph, the
Trust Collateral Agent will take delivery of the Eligible Investments in
accordance with Schedule B.
(h) If (i) the Servicer shall have failed to give investment directions for
any funds on deposit in the Collection Account, the Pre-Funding Account or the
Capitalized Interest Account to the Trust Collateral Agent by 2:00 p.m. Eastern
Time (or such other time as may be agreed by the Issuer and Trust Collateral
Agent) on any Business Day; or (ii) an Indenture Event of Default shall have
occurred and be continuing with respect to the Notes but the Notes shall not
have been declared due and payable, or, if such Notes shall have been declared
due and payable following an Indenture Event of Default, amounts collected or
receivable from the Trust Property are being applied as if there had not been
such a declaration; then the Trust Collateral Agent shall, to the fullest extent
practicable, invest and reinvest funds in the Collection Account, the
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Pre-Funding Account and the Capitalized Interest Account, as the case may be, in
one or more investments described in clause (f) of the definition of Eligible
Investments.
(i) (1) The Trust shall possess all right, title and interest in all funds
from time to time on deposit in, and assets credited to, the Trust Accounts and
in all proceeds thereof and all such funds, assets, investments, proceeds and
income shall be part of the Trust Property. Except as otherwise provided herein,
the Trust Accounts shall be under the sole dominion and control of the Trust
Collateral Agent for the benefit of the Noteholders, the Note Insurer and the
Certificateholders as their interests may appear.
(2) With respect to any Eligible Investments held from time to time in
any Trust Account, the Trust Collateral Agent agrees that:
(A) any Eligible Investment that is held in deposit accounts
shall be, except as otherwise provided herein, subject to the
exclusive custody and control of the Trust Collateral Agent, and the
Trust Collateral Agent shall have sole signature authority with
respect thereto;
(B) any other Eligible Investment shall be held, pending maturity
or disposition by the Trust Collateral Agent in accordance with the
terms of the definition of "Delivery";
(j) No Trust Account shall be maintained with an institution other than the
Trust Collateral Agent unless such institution agrees in writing to the
provisions of Section 5.02(i)(2) and Section 5.18 as if such institution were
the Trust Collateral Agent, except that pursuant to the first sentence of
Section 5.18, the Trust Collateral Agent shall continue to be the "entitlement
holder" of the related Trust Account.
SECTION 5.03 Collections.
(a) Upon establishment of the Lock-Box Account in accordance with Section
5.01(a) hereof, the Servicer shall use reasonable efforts to cause the Lock-Box
Processor to transfer any payments in respect of the Receivables from or on
behalf of Obligors received in the Lock-Box to the Lock-Box Account on the
Business Day on which such payments are received, pursuant to the Lock-Box
Agreement. Within two Business Days of receipt of such funds into the Lock-Box
Account, the Servicer shall cause the Lock-Box Bank to transfer available funds
related to the Receivables from the Lock-Box Account to the Collection Account,
and if such funds are not available funds, as soon thereafter as they clear
(i.e., become available for withdrawal from the Lock-Box Account). In addition,
the Servicer shall remit all payments by or on behalf of the Obligors received
by the Servicer with respect to the Receivables (other than Purchased
Receivables), and all Liquidation Proceeds, insurance proceeds and other
collections from whatever source, no later than the second Business Day
following receipt into the Lock-Box Account or the Collection Account, as
applicable. On the Closing Date and on each Subsequent Transfer Date, the
Servicer shall deposit in the Collection Account the foregoing amounts received
with respect to (i) the Initial Receivables during the first Collection Period
and (ii) the Subsequent Receivables during the related Collection Period with
respect to the applicable Subsequent Transfer Date.
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(b) With respect to each Receivable (other than a Purchased Receivable),
payments actually received from or on behalf of the Obligor shall be applied
hereunder, first, to interest and principal in accordance with the simple
interest method to the extent necessary to bring such Receivable current,
second, in connection with the redemption of a defaulted Receivable, to
reimburse the Servicer for reasonable and customary out-of-pocket expenses
incurred by the Servicer in connection with such Receivable, third, to late fees
and fourth, to principal in accordance with the simple interest method.
SECTION 5.04 Certain Reimbursements to the Servicer.
The Servicer will be entitled to be reimbursed from amounts on deposit in
the Collection Account with respect to a Collection Period for amounts
previously deposited in the Collection Account but later determined by the
Servicer to have resulted from mistaken deposits or postings or checks returned
for insufficient funds. The amount to be reimbursed hereunder shall be paid to
the Servicer on the next succeeding Business Day out of collections on
Receivables to be remitted to the Collection Account to the extent the net
amount to the Collection Account is greater than zero. The amount to be
reimbursed hereunder shall be paid to the Servicer on the related Distribution
Date pursuant to Section 5.12(a) upon certification by the Servicer of such
amounts and the provision of such information to the Trust Collateral Agent and
the Note Insurer as may be necessary in the opinion of the Note Insurer to
verify the accuracy of such certification. In the event that the Note Insurer
has not received evidence satisfactory to it of the Servicer's entitlement to
reimbursement pursuant to this Section, the Note Insurer shall (unless an
Insurer Default shall have occurred and be continuing) give the Trust Collateral
Agent notice to such effect, following receipt of which the Indenture Trustee
shall not make a distribution to the Servicer in respect of such amount pursuant
to Section 5.12(a), or if the Servicer prior thereto has been reimbursed
pursuant to Section 5.12(a), the Indenture Trustee shall withhold such amounts
from amounts otherwise distributable to the Servicer pursuant to Section 5.12(a)
on the next succeeding Distribution Date.
SECTION 5.05 Additional Deposits.
(a) The Originator, the Servicer or the Transferor, as applicable, shall
deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Receivables. All such deposits with
respect to a Collection Period shall be made, in immediately available funds, on
the Business Day immediately preceding the Determination Date related to such
Collection Period.
(b) The proceeds of any purchase or sale of the assets of the Trust
described in Section 10.01 hereof shall be deposited by the Servicer, as
applicable, in the Collection Account on the Business Day immediately preceding
the Distribution Date on which such purchase shall occur.
(c) Following the acceleration of the Notes pursuant to Section 5.2 of the
Indenture, any proceeds of the Trust Property shall be deposited in the
Collection Account to be distributed by the Indenture Trustee in accordance with
Section 5.2(b) of the Indenture.
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(d) On the Determination Date immediately succeeding the date on which the
Pre-Funding Period ends (or on the Determination Date on which the Pre-Funding
Period ends, if the Pre-Funding Period ends on a Determination Date), the Trust
Collateral Agent shall transfer the remaining Pre-Funded Amount on deposit in
the Pre-Funding Account to the Collection Account pursuant to Section 5.07(b).
(e) On or before each Distribution Date, the Trust Collateral Agent shall
transfer to the Collection Account any amounts transferred to the Trust
Collateral Agent by the Collateral Agent from the Spread Account.
(f) On or before the Redemption Date, the Trust Collateral Agent shall
deposit in the Collection Account the Redemption Amount paid by or on behalf of
the Issuer pursuant to Article X of the Indenture.
SECTION 5.06 Spread Account.
(a) The Transferor agrees, simultaneously with the execution and delivery
of this Agreement, to execute and deliver the Spread Account Agreement and,
pursuant to the terms thereof, to deposit the Spread Account Initial Deposit in
the Spread Account on the Closing Date. In addition, on each Subsequent Transfer
Date, pursuant to the terms of the Spread Account Agreement, the related Spread
Account Additional Deposit shall be deposited in the Spread Account. Although
the Transferor, as Certificateholder, has pledged the Spread Account to the
Collateral Agent and the Note Insurer pursuant to the Spread Account Agreement,
the Spread Account shall not under any circumstances be deemed to be a part of
or otherwise includible in the Issuer or the Trust Property.
(b) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that there is a Deficiency Claim Amount, then the
Trust Collateral Agent shall deliver to the Collateral Agent, the Note Insurer,
the Fiscal Agent (as such term is defined in the Insurance Agreement) and the
Servicer, by hand delivery or facsimile transmission, a written notice (a
"Deficiency Notice") specifying the Deficiency Claim Amount for such
Distribution Date. Any Deficiency Notice shall be delivered by 10:00 a.m.,
Eastern time, on the fourth Business Day preceding such Distribution Date. Such
Deficiency Notice shall direct the Collateral Agent to remit such Deficiency
Claim Amount (to the extent of the funds available to be distributed pursuant to
the Spread Account Agreement) to the Trust Collateral Agent for deposit of such
amount in the Collection Account pursuant to Section 5.05(e) on the related
Distribution Date.
SECTION 5.07 Pre-Funding Account.
(a) On the Closing Date, the Transferor will deposit in the Pre-Funding
Account an amount equal to the Original Pre-Funding Balance from the proceeds of
the sale of the Notes. On each Subsequent Transfer Date, the Servicer (or if
__________ is then performing the duties of Servicer hereunder, the Servicer
with the reasonable assistance of the Indenture Trustee) shall instruct the
Trust Collateral Agent in writing to withdraw from the Pre-Funding Account an
amount equal to the Principal Balance of the Subsequent Receivables (as of the
related Subsequent Cut-off Date) conveyed to the Trust on such Subsequent
Transfer Date and
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pay such amount to or upon the order of the Transferor upon satisfaction of the
conditions set forth in Section 2.02(b) hereof and in the related Transfer
Agreement with respect to such transfer.
(b) If the Pre-Funding Balance has not been reduced to zero on the Funding
Termination Date, the Servicer (or if __________ is then performing the duties
of Servicer hereunder, the Servicer with the reasonable assistance of the
Indenture Trustee) shall instruct the Trust Collateral Agent in writing to
withdraw such remaining portion of the Pre-Funding Balance from the Pre-Funding
Account and deposit it in the Collection Account to be applied on the next
succeeding Distribution Date as a partial principal prepayment of the Notes, in
addition to the payment of principal and interest that otherwise would be
payable with respect to the Notes on such Distribution Date. Amounts to be
distributed to Noteholders as a partial principal prepayment of the Notes shall
be distributed in the following order of priority: (i) first, to the Class A
Noteholders in an amount necessary to reduce the outstanding Class A-1 Note
Balance to zero, (ii) after the outstanding Class A-1 Note Balance is reduced to
zero, to the Class A-2 Noteholders in amount necessary to reduce the Class A-2
Note Balance to zero, (iii) after the outstanding Class A-2 Note Balance is
reduced to zero, to the Class A-3 Noteholders in amount necessary to reduce the
Class A-3 Note Balance to zero, and (iv) after the outstanding Class A-3 Note
Balance is reduced to zero, to the Class B Noteholders in amount necessary to
reduce the Class B Note Balance to zero.
SECTION 5.08 Capitalized Interest Account.
(a) On the Closing Date, the Transferor will deposit in the Capitalized
Interest Account an amount equal to $[__________] (such amount, the "Capitalized
Interest Account Deposit") from the proceeds of the sale of the Notes.
(b) On the Distribution Dates occurring in [month year], [month year] and
[month year], the Trust Collateral Agent shall withdraw at the written direction
of the Servicer (or if __________ is then performing the duties of Servicer
hereunder, at the written direction of the Servicer with the reasonable
assistance of the Indenture Trustee) from the Capitalized Interest Account the
Monthly Capitalized Interest Amount for such Distribution Date and deposit such
amount in the Collection Account for application pursuant to Section 5.12.
(c) On the Distribution Dates occurring in __________, the Servicer (or if
__________ is then performing the duties of Servicer hereunder, the Servicer
with the reasonable assistance of the Indenture Trustee) shall instruct the
Trust Collateral Agent in writing to withdraw from the Capitalized Interest
Account and pay to the Transferor on such Distribution Date an amount equal to
the Overfunded Capitalized Interest Amount for such Distribution Date. Any
amounts remaining in the Capitalized Interest Account on the Distribution Date
which immediately follows the end of the Funding Period after taking into
account any transfers pursuant to clause (b) above shall be remitted by the
Trust Collateral Agent to the Transferor. Upon any such distributions to the
Transferor, the Noteholders, the Certificateholder and the Note Insurer will
have no further rights in, or claims to, such amounts.
(d) Amounts held in the Capitalized Interest Account shall be invested by
the Trust Collateral Agent in Eligible Investments which shall mature no later
than the Business Day
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immediately preceding the next Distribution Date in accordance with written
instructions from the Transferor and such investments shall not be sold or
disposed of prior to their maturity.
SECTION 5.09 Claims under the Note Policy.
(a) In the event that the Trust Collateral Agent has delivered a Deficiency
Notice with respect to any Determination Date, the Trust Collateral Agent shall
determine on the related Draw Date whether the sum of (i) the Available Funds
with respect to such Determination Date (as stated in the Servicer's Certificate
with respect to such Determination Date) plus (ii) the amount of the Deficiency
Claim Amount, if any, available to be distributed pursuant to the Spread Account
Agreement by the Collateral Agent to the Trust Collateral Agent pursuant to a
Deficiency Notice delivered with respect to such Distribution Date (as stated in
the certificate delivered on the immediately preceding Deficiency Claim Date by
the Collateral Agent pursuant to Section 3.03(a) of the Spread Account
Agreement) plus (iii) the Insurer Optional Deposit, if any, with respect to such
Determination Date, would be insufficient, after giving effect to the payments
required by Section 5.12(a)(i) and (ii), to pay the Scheduled Payments (as
defined in the Note Policy) for the related Distribution Date, then in such
event the Trust Collateral Agent shall furnish to the Note Insurer no later than
12:00 noon New York City time on the related Draw Date a completed Notice of
Claim in the amount of the shortfall in amounts so available to pay the
Scheduled Payments with respect to such Distribution Date (the amount of such
shortfall being hereinafter referred to as the "Policy Claim Amount"). Amounts
paid by the Note Insurer under the Note Policy shall be deposited by the Trust
Collateral Agent into the Policy Payments Account and thereafter into the Class
A Note Distribution Account for payment to Class A Noteholders on the related
Distribution Date (or promptly following payment by the Note Insurer on a later
date as set forth in the Note Policy).
(b) Any notice delivered by the Trust Collateral Agent to the Note Insurer
pursuant to Section 5.09(a) shall specify the Policy Claim Amount claimed under
the Note Policy and shall constitute a "Notice of Claim" under the Note Policy.
In accordance with the provisions of the Note Policy, the Note Insurer is
required to pay to the Trust Collateral Agent the Policy Claim Amount properly
claimed thereunder by 12:00 noon, New York City time, on the later of (i) the
third Business Day (as defined in the Note Policy) following receipt on a
Business Day (as defined in the Note Policy) of the Notice of Claim, and (ii)
the applicable Distribution Date. Any payment made by the Note Insurer under the
Note Policy shall be applied solely to the payment of the Class A Notes, and for
no other purpose.
(c) The Trust Collateral Agent shall (i) receive as attorney-in-fact of
each Noteholder any Policy Claim Amount from the Note Insurer and (ii) deposit
the same in the Policy Payments Account for distribution to the Class A
Noteholders. Any and all Policy Claim Amounts disbursed by the Trust Collateral
Agent from claims made under the Note Policy shall not be considered payment by
the Trust or from the Spread Account with respect to such Class A Notes, and
shall not discharge the obligations of the Trust with respect thereto. The Note
Insurer shall, to the extent it makes any payment with respect to the Class A
Notes, become subrogated to the rights of the recipients of such payments to the
extent of such payments. Subject to and conditioned upon any payment with
respect to the Class A Notes by or on behalf of the Note Insurer, each Class A
Noteholder shall be deemed without further action, to have directed the Trust
Collateral Agent to assign to the Note Insurer all rights to the payment of
interest or
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principal with respect to the Class A Notes which are then due for payment to
the extent of all payments made by the Note Insurer, and the Note Insurer may
exercise any option, vote, right, power or the like with respect to the Class A
Notes to the extent that it has made payment pursuant to the Note Policy. To
evidence such subrogation, the Note Registrar shall note the Note Insurer's
rights as subrogee upon the register of Class A Noteholders upon receipt from
the Note Insurer of proof of payment by the Note Insurer of any Class A Interest
Distributable Amount or Class A Principal Distributable Amount. The foregoing
subrogation shall in all cases be subject to the rights of the Class A
Noteholders to receive all Scheduled Payments (as defined in the Note Policy) in
respect of the Class A Notes.
(d) The Trust Collateral Agent shall keep a complete and accurate record of
all funds received by it from the Note Insurer, amounts deposited by the Trust
Collateral Agent into the Policy Payments Account or the Collection Account and
the allocation of such funds to payment of interest on and principal paid in
respect of any Class A Note. The Note Insurer shall have the right to inspect
such records at reasonable times upon one Business Day's prior notice to the
Trust Collateral Agent.
(e) The Trust Collateral Agent shall be entitled, but not obligated, to
enforce on behalf of the Class A Noteholders the obligations of the Note Insurer
under the Note Policy. Notwithstanding any other provision of this Agreement or
any Basic Document, the Class A Noteholders are not entitled to institute
proceedings directly against the Note Insurer.
SECTION 5.10 Preference Claims; Direction of Proceedings.
(a) In the event that the Trust Collateral Agent has received a certified
copy of an order of the appropriate court that any Scheduled Payment (as defined
in the Note Policy) paid on a Class A Note has been avoided in whole or in part
as a preference payment under applicable bankruptcy law, the Trust Collateral
Agent shall so notify the Note Insurer, shall comply with the provisions of the
Note Policy to obtain payment by the Note Insurer of such avoided payment, and
shall, at the time it provides notice to the Note Insurer, notify Holders of the
Class A Notes by mail that, in the event that any Class A Noteholder's payment
is so recoverable, such Class A Noteholder will be entitled to payment pursuant
to the terms of the Note Policy. The Trust Collateral Agent shall furnish to the
Note Insurer its records evidencing the payments of principal and interest on
Class A Notes, if any, which have been made by the Trust Collateral Agent and
subsequently recovered from Class A Noteholders, and the dates on which such
payments were made. Pursuant to the terms of the Note Policy, the Note Insurer
will make such payment on behalf of the Class A Noteholder to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Order
(as defined in the Note Policy) and not to the Trust Collateral Agent or any
Class A Noteholder directly (unless a Class A Noteholder has previously paid
such payment to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy, in which case the Note Insurer will make such payment to the Trust
Collateral Agent for distribution in accordance with the instructions to be
provided by the Note Insurer, to such Class A Noteholder upon proof of such
payment reasonably satisfactory to the Note Insurer).
(b) Each Notice of Claim shall provide that the Trust Collateral Agent, on
its behalf and on behalf of the Class A Noteholders, thereby appoints the Note
Insurer as agent and attorney-in-fact for the Trust Collateral Agent and each
Class A Noteholder in any legal
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proceeding with respect to the Class A Notes. The Trust Collateral Agent shall
promptly notify the Note Insurer of any proceeding or the institution of any
action (of which a Responsible Officer of the Trust Collateral Agent has actual
knowledge) seeking the avoidance as a preferential transfer under applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (a
"Preference Claim") of any distribution made with respect to the Class A Notes.
Each Holder, by its purchase of Class A Notes, and the Trust Collateral Agent
hereby agree that so long as an Insurer Default shall not have occurred and be
continuing, the Note Insurer may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (i) the direction of any appeal
of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal at the expense
of the Note Insurer, but subject to reimbursement as provided in the Insurance
Agreement. In addition, and without limitation of the foregoing, as set forth in
Section 5.09(c), the Note Insurer shall be subrogated to, and each Class A
Noteholder and the Trust Collateral Agent hereby delegate and assign, to the
fullest extent permitted by law, the rights of the Trust Collateral Agent and
each Class A Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
SECTION 5.11 Surrender of the Note Policy.
The Trust Collateral Agent shall surrender the Note Policy to the Note
Insurer for cancellation upon its expiration in accordance with the terms
thereof.
SECTION 5.12 Transfers and Distributions.
(a) Subject to Section 5.16, on each Distribution Date, after making any
transfers and distributions required by Sections 5.04, 5.05, 5.06, 5.07 and
Section 5.08 hereof and any deposit pursuant to Section 5.17, the Trust
Collateral Agent shall (based solely on the information contained in the
Servicer's Certificate delivered on the related Determination Date) cause to be
made the following transfers and distributions for such Distribution Date:
(i) from the Amount Available, to the Servicer, the Servicer Fee, and
to the Master Servicer, the Master Servicer Fee (in each case, for such
Distribution Date, and together with, in each case, all such unpaid fees
and expenses from prior Collection Periods);
(ii) from the Amount Available, to the Trust Collateral Agent, the
Indenture Trustee and the Collateral Agent, the Trust Collateral Agent Fee
and any accrued and unreimbursed expenses incurred by the Trust Collateral
Agent, the Indenture Trustee or the Collateral Agent during the related
Collection Period, to the Owner Trustee, the Owner Trustee's Fee and any
accrued and unreimbursed expenses incurred by the Owner Trustee during the
related Collection Period, and to the Back-up Servicer, the Back-up
Servicer Fee (in each case, for such Distribution Date, and together with,
in each case, all such unpaid fees and expenses from prior Collection
Periods); provided, however, that in no event shall the aggregate amount of
all such expenses for all Distribution Dates to be reimbursed pursuant to
this clause (ii) exceed $50,000;
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(iii) from the Amount Available, to the Class A Note Distribution
Account, an amount equal to the Class A-1 Interest Distributable Amount,
the Class A-2 Interest Distributable Amount and the Class A-3 Interest
Distributable Amount plus any Class A-1 Interest Carryover Shortfall, Class
A-2 Interest Carryover Shortfall and Class A-3 Interest Carryover Shortfall
from prior Distribution Dates;
(iv) from the Amount Available, to the Class A Note Distribution
Account, an amount equal to the Class A-1 Principal Distributable Amount,
the Class A-2 Principal Distributable Amount and the Class A-3 Principal
Distributable Amount plus any Class A-1 Principal Carryover Shortfall,
Class A-2 Principal Carryover Shortfall and Class A-3 Principal Carryover
Shortfall from prior Distribution Dates, and, if such Distribution Date is
the first Distribution Date following the Funding Termination Date, an
amount equal to the Class A Percentage of any remaining Pre-Funding Balance
(net of investment earnings) transferred from the Pre-Funding Account for
payment to the Noteholders, until the Class A Note Balance has been reduced
to zero;
(v) from the Amount Available, to the Note Insurer, the Premium and
all other amounts due to it under the Insurance Agreement;
(vi) from Available Funds, to the Spread Account, the amount required
to bring the balance thereof to the Requisite Amount;
(vii) from Available Funds to the Trust Collateral Agent, the
Indenture Trustee, the Collateral Agent and the Owner Trustee, their
respective expenses, to the extent not paid under clause (ii) above;
(viii) from Available Funds, to the Master Servicer, the indemnity
payments due to the Master Servicer pursuant to Sections 7.03(a) and
8.03(i) hereof;
(ix) from the Available Funds and any Spread Account Release Amount,
to the Class B Note Distribution Account, an amount equal to the Class B
Interest Distributable Amount, plus any Class B Interest Carryover
Shortfall from prior Distribution Dates;
(x) from the Available Funds and any Spread Account Release Amount, to
the Class B Note Distribution Account, an amount equal to the Class B
Principal Distributable Amount plus any Class B Principal Carryover
Shortfall from prior Distribution Dates, and, if such Distribution Date is
the first Distribution Date following the Funding Termination Date, an
amount equal to the Class B Percentage of any remaining Pre-Funding Balance
(net of investment earnings) transferred from the Pre-Funding Account for
payment to the Class B Noteholders, until the Class B Note Balance has been
reduced to zero;
(xi) from Available Funds and any Spread Account Release Amount, the
Class B Accelerated Principal Payment Amount, until the Class B Note
Balance has been reduced to zero; and
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(xii) to the Certificate Distribution Account, any remaining Available
Funds, together with any remaining Spread Account Release Amount to the
Certificateholder, for payment to the Certificateholder.
(b) Amounts to be distributed to the Noteholders pursuant to clauses (iii),
(iv), (ix), (ix), (x) and (xi) of Section 5.12(a) shall be so distributed from
the Class A Note Distribution Account and Class B Note Distribution Account in
accordance with Section 5.13 and the portion of the Amount Available not
previously transferred to or deposited into the Class A Note Distribution
Account or Class B Note Distribution Account that is to be applied to the making
of such distributions shall first be transferred from the Collection Account,
the Pre-Funding Account, the Capitalized Interest Account, the Policy Payments
Account or the Spread Account, as the case may be, to the Class A Note
Distribution Account or Class B Note Distribution Account as specified in
Section 3.3 of the Indenture and Section 5.12(e) below.
(c) Amounts to be distributed to the Certificateholder pursuant to clause
(xiv) of Section 5.12(a) shall be so distributed from the Certificate
Distribution Account in accordance with Section 5.14 and the portion of the
Available Funds and any amounts to be released from the Spread Account not
previously transferred to or deposited in the Certificate Distribution Account
that is to be applied to the making of such distributions shall first be
transferred from the Collection Account or the Spread Account, as the case may
be, to the Certificate Distribution Account as specified in Section 5.12(e)
below. Amounts actually delivered to the Certificateholder out of the
Certificate Distribution Account pursuant to this Agreement shall be
automatically released from the Trust Property, and shall not be available to
the Collateral Agent, the Trust Collateral Agent or the Trust for the purpose of
making deposits to the Spread Account or making payments to the Noteholders, nor
shall the Certificateholder be required to refund any amount properly received
by them.
(d) In the event that the Collection Account is maintained with an
institution other than the Trust Collateral Agent, the Servicer shall instruct
the Trust Collateral Agent to (unless __________ is the Servicer, in which case
the Trust Collateral Agent shall, with the assistance of the Servicer) instruct
and cause such institution to make all transfers, deposits and distributions
pursuant to Section 5.12(a), (b), (c) and (e) on the related Distribution Date.
(e) Notwithstanding the foregoing, all transfers of funds between accounts
may occur on the Business Day immediately preceding the Distribution Date
related to such transfer; all distributions from accounts shall occur on the
Distribution Date.
SECTION 5.13 Distributions from the Note Distribution Account.
(a) On each Distribution Date, after making all transfers and distributions
required to be made on such Distribution Date by Sections 5.04, 5.05, 5.06, 5.07
and 5.08 hereof and Section 3.3 of the Indenture, the Trust Collateral Agent
shall distribute all amounts on deposit in the Class A Note Distribution Account
or the Class B Note Distribution Account, as the case may be, to Noteholders in
respect of the Notes in the following amounts:
(i) to the Class A Noteholders, a distribution of interest in an
amount equal to the amounts designated as such and transferred to the Class
A Note Distribution Account
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pursuant to Section 5.12(a)(iii) for such Distribution Date, provided,
however, that if there are not sufficient funds to pay such distribution,
the amounts so designated and transferred shall be payable to the Class
A-1, A-2 and A-3 Noteholders on a pro rata basis;
(ii) to the Class A Noteholders, a distribution of principal in an
amount equal to the amounts designated as such and transferred to the Class
A Note Distribution Account pursuant to Section 5.12(a)(iv) for such
Distribution Date, provided, however, that if there are not sufficient
funds to pay such distribution, the amounts so designated and transferred
shall be payable to the Class A Noteholders in the following order of
priority: (A) first, to the Class A Noteholders in an amount necessary to
reduce the outstanding Class A-1 Note Balance to zero, (B) after the
outstanding Class A-1 Note Balance is reduced to zero, to the Class A-2
Noteholders in amount necessary to reduce the Class A-2 Note Balance to
zero, and (C) after the outstanding Class A-2 Note Balance is reduced to
zero, to the Class A-3 Noteholders in amount necessary to reduce the Class
A-3 Note Balance to zero;
(iii) to the Class B Noteholders, a distribution of interest in an
amount equal to the amounts designated as such and transferred to the Class
B Note Distribution Account pursuant to Section 5.12(a)(xi) for such
Distribution Date;
(iv) to the Class B Noteholders, a distribution of principal in an
amount equal to the amounts designated as such and transferred to the Class
B Note Distribution Account pursuant to Section 5.12(a)(x) for such
Distribution Date; and
(v) to the Class B Noteholders, a distribution of principal in an
amount equal to the amounts designated as such and transferred to the Class
B Note Distribution Account pursuant to Section 5.12(a)(xi) for such
Distribution Date.
(b) In the event that any withholding tax is imposed on the Trust's payment
(or allocations of income) to a Noteholder, such withholding tax shall reduce
the amount otherwise distributable to the Noteholder in accordance with this
Section. The Trust Collateral Agent is hereby authorized and directed to retain
from amounts otherwise distributable to the Noteholders sufficient funds for the
payment of any withholding tax that is legally owed by the Trust as instructed
by the Servicer (provided that __________ shall have no duty to so instruct), in
writing in a Servicer's Certificate (but such authorization shall not prevent
the Trust Collateral Agent from contesting at the expense of the Transferor any
such withholding tax in appropriate proceedings, and withholding payment of
withholding such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to a
Noteholder shall be treated as cash distributed to such Noteholder at the time
it is withheld by the Trust and remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-US Noteholder), the Trust
Collateral Agent may in its sole discretion withhold such amounts in accordance
with this clause (b). In the event that a Noteholder wishes to apply for a
refund of any such withholding tax, the Trust Collateral Agent shall reasonably
cooperate with such Noteholder in making such claim so long as such Noteholder
agrees to reimburse the Trust Collateral Agent for any out-of-
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pocket expenses incurred. The Note Policy does not cover any shortfalls relating
to withholding taxes.
(c) Distributions required to be made to Noteholders on any Distribution
Date shall be made to each Noteholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefore, if (i)
such Noteholder shall have provided to the Note Registrar appropriate written
instructions at least ten Business Days prior to such Distribution Date and such
Holder's Notes in the aggregate evidence an original denomination of not less
than $500,000 or (ii) such Noteholder is the Transferor, or an Affiliate
thereof, or, if not, by check mailed to such Noteholder at the address of such
holder appearing in the Note Register. Notwithstanding the foregoing, the final
distribution in respect of any Note (whether on the Class A-1 Stated Final
Maturity Date, Class A-2 Stated Final Maturity Date, Class A-3 Stated Final
Maturity Date, Class B Stated Financial Maturity Date or otherwise) will be
payable only upon presentation and surrender of such Note at the office or
agency maintained for that purpose by the Note Registrar pursuant to Section 2.7
of the Indenture.
(d) Notwithstanding the foregoing, all transfers of funds between accounts
may occur on the Business Day immediately preceding the Distribution Date
related to such transfer; all distributions from accounts shall occur on the
Distribution Date.
(e) The Originator shall reimburse the Owner Trustee on demand for any
expenses or indemnity due to the Owner Trustee and not otherwise paid within 30
days after demand for payment or submission of an invoice by the Owner Trustee.
(f) Each Noteholder, by its acceptance of its Note, will be deemed to have
consented to the provisions of Sections 5.12(a) and 5.13 relating to the
priority of payments, and will be further deemed to have acknowledged that no
property rights in any amount or the proceeds of any such amount shall vest in
such Noteholder until such amounts have been distributed to such Noteholder
pursuant to such provisions; provided, that the foregoing shall not restrict the
right of any Noteholder, upon compliance with the provisions hereof, from
seeking to compel the performance of the provisions hereof by the parties
hereto. Each Noteholder, by its acceptance of its Note, will be deemed to have
further agreed that withdrawals of funds by the Collateral Agent from the Spread
Account for application hereunder and thereunder, shall be made in accordance
with the provisions of the Spread Account Agreement.
SECTION 5.14 Certificate Distribution Account.
(a) On each Distribution Date, the Trust Collateral Agent shall distribute
all amounts on deposit in the Certificate Distribution Account to the
Certificateholder.
(b) In the event that any withholding tax is imposed on the Trust's payment
(or allocations of income) to a Certificateholder, such tax shall reduce the
amount otherwise distributable to the Certificateholder in accordance with this
Section. The Trust Collateral Agent is hereby authorized and directed to retain
from amounts otherwise distributable to the Certificateholder sufficient funds
for the payment of any tax that is legally owed by the Trust as instructed in
writing by the Servicer (provided that __________ shall have no duty to so
instruct)
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(but such authorization shall not prevent the Trust Collateral Agent from
contesting, at the expense of the Transferor, any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-US
Certificateholder), the Trust Collateral Agent may in its sole discretion
withhold such amounts in accordance with this clause (b). In the event that a
Holder wishes to apply for a refund of any such withholding tax, the Trust
Collateral Agent shall reasonably cooperate with such Certificateholder in
making such claim so long as such Certificateholder agrees to reimburse the
Trust Collateral Agent for any out-of-pocket expenses incurred.
(c) Distributions required to be made to the Certificateholder on any
Distribution Date shall be made to the Certificateholder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefore, if (i) such Certificateholder shall have provided to the
Certificate Registrar appropriate written instructions at least ten Business
Days prior to such Distribution Date or (ii) such Certificateholder is the
Transferor, or an Affiliate thereof, or, if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register. Notwithstanding the foregoing, the final distribution in respect of
any Certificate will be payable only upon presentation and surrender of such
Certificate at the office or agency maintained for that purpose by the
Certificate Registrar pursuant to Section 3.4 of the Trust Agreement.
(d) Notwithstanding the foregoing, all transfers of funds between accounts
may occur on the Business Day immediately preceding the Distribution Date
related to such transfer; all distributions from accounts shall occur on the
Distribution Date.
(e) In furtherance of and not in limitation of the foregoing, the
Certificateholder by acceptance of the Certificate, specifically acknowledges
that no amounts shall be received by it, nor shall it have any right to receive
any amounts, unless and until such amounts have been distributed pursuant to
Section 5.12(a)(xiv) above for payment to the Certificateholder pursuant to the
priorities set forth in Section 5.12(a) above. The Certificateholder, by its
acceptance of the Certificate, further specifically acknowledges that it has no
right to or interest in any moneys at any time held pursuant to the Spread
Account Agreement prior to the release of such moneys as aforesaid, such moneys
being held in trust for the benefit of the Class A Noteholders, the Note Insurer
and each other Secured Party (as such term is defined in the Spread Account
Agreement) as their interests may appear prior to such release. Notwithstanding
the foregoing, in the event that it is ever determined that any property held in
the Spread Account constitutes a pledge of collateral, then the provisions of
this Agreement and the Spread Account Agreement shall be considered to
constitute a security agreement and the Certificateholder hereby grants to the
Collateral Agent and to the Trust Collateral Agent, respectively, a first
priority security interest in such amounts, to be applied as set forth in
Section 3.03(b) of the Spread Account Agreement. In addition, the
Certificateholder, by acceptance of its Certificate, hereby appoints the
Transferor as its agent to pledge a first priority security interest in the
Spread Account, and any property held therein from time to time
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to the Collateral Agent for the benefit of the Trust Collateral Agent and the
Note Insurer pursuant to the Spread Account Agreement and agrees to execute and
deliver such instruments of conveyance, assignment, grant, confirmation, etc.,
as well as any financing statements, in each case as the Note Insurer shall
consider reasonably necessary in order to perfect the Collateral Agent's
Security Interest in the Collateral (as such terms are defined in the Spread
Account Agreement).
SECTION 5.15 Statements to Certificateholders and Noteholders; Tax Returns.
(a) On or prior to each Determination Date, the Servicer shall provide to
the Note Insurer, each Noteholder of record, the Trust Collateral Agent, the
Collateral Agent and the Rating Agencies, and to each Certificateholder of
record, a statement, setting forth at least the following information as to the
Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal on the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class B
Notes;
(ii) the amount of such distribution allocable to interest on the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class B
Notes;
(iii) separately identified, the amount of such distribution payable
out of amounts withdrawn from the Spread Account or pursuant to a claim on
the Note Policy;
(iv) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(v) the Class A-1 Note Balance, the Class A-2 Note Balance and the
Class A-3 Note Balance and the Class A-1 Pool Factor, the Class A-2 Pool
Factor and the Class A-3 Pool Factor, after giving effect to payments
allocated to principal reported under (i) above;
(vi) the Class B Note Balance and the Class B Pool Factor, after
giving effect to payments allocated to principal reported under (i) above;
(vii) separately identified, the amount of the Servicer Fee (or
Successor Servicer Fee) paid to the Servicer, the amount of the Master
Servicer Fee paid to the Master Servicer and the amount of the Back-up
Servicer Fee paid to the Back-up Servicer, in each case, with respect to
the related Collection Period and/or due but unpaid with respect to such
Collection Period or prior Collection Periods, as the case may be;
(viii) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall and the Class A-3 Interest Carryover
Shortfall;
(ix) the Class B Interest Carryover Shortfall;
(x) the aggregate Purchase Amount for Purchased Receivables, if any,
that were acquired or reacquired in such period; and
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(xi) during the Funding Period, the remaining Subsequent Balance and
the amount remaining on deposit in the Capitalized Interest Account.
Each amount set forth pursuant to paragraph (i), (ii), (iii), (vi) and
(vii) above shall be expressed as a dollar amount per $1,000 of the Initial Note
Balance.
(b) The Trust Collateral Agent may make available to the Noteholders, via
the Trust Collateral Agent's Internet website, the Servicer's Certificate
available each month and, with the consent or at the direction of the Issuer,
such other information regarding the Notes and/or the Receivables as the Trust
Collateral Agent may have in its possession, but only with the use of a password
provided by the Trust Collateral Agent or its agent to such person upon receipt
by the Trust Collateral Agent from such Person of a certification in the form of
Exhibit I; provided, however, that the Trust Collateral Agent or its agent shall
provide such password to the parties to this Agreements, the Note Insurer and
the Rating Agencies without requiring such certification. The Trust Collateral
Agent will make no representation or warranties as to the accuracy or
completeness of such documents and will assume no responsibility therefore,
other than as to the accurate and complete posting thereof.
(c) The Trust Collateral Agent's Internet website shall be initially
located at [__________] or at such other address as shall be specified by the
Trust Collateral Agent from time to time in writing to the Noteholders and the
Note Insurer. In connection with providing access to the Trust Collateral
Agent's Internet website, the Trust Collateral Agent may require registration
and the acceptance of a disclaimer with respect to any Noteholder.
(d) No later than January 31 of each calendar year, commencing
_______________, _____, the Servicer shall send to the Indenture Trustee and the
Trust Collateral Agent, and the Trust Collateral Agent shall, provided it has
received the necessary information from the Servicer, promptly thereafter
furnish to each Person who at any time during the preceding calendar year was a
Noteholder of record and received any payment thereon (a) a report (prepared by
the Servicer, or if __________ is performing duties of Servicer hereunder,
prepared by the Trust Collateral Agent based on information provided by the
Servicer, to the extent the Servicer is in possession of, or can reasonably
obtain, such information with the cooperation of the Originator) as to the
aggregate of amounts reported pursuant to subclauses [(i), (ii), (iii), (iv),
(vii) and (ix)] of Section 5.12(a) for such preceding calendar year or
applicable portion thereof during which such person was a Noteholder, and (b)
such information (prepared by the Servicer or if __________ is performing duties
of Servicer hereunder, prepared by the Trust Collateral Agent based on
information provided by the Servicer, to the extent the Servicer is in
possession of, or can reasonably obtain, such information with the cooperation
of the Originator) as may be reasonably requested by the Noteholders or required
by the Code and regulations thereunder, to enable such Holders to prepare their
Federal and State income tax returns. The obligation of the Trust Collateral
Agent set forth in this paragraph shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Code.
(e) The Servicer (if the Subservicer is acting as Servicer, at its own
expense, otherwise at the expense of the Issuer) shall cause ________________ or
another firm of independent accountants acceptable to the Note Insurer, in its
sole and absolute discretion, to
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prepare any tax returns required to be filed by the Issuer, and the Issuer shall
execute and file such returns if requested to do so by the Servicer. The Trust
Collateral Agent, upon request, will furnish the Servicer with all such
information actually known to the Trust Collateral Agent as may be reasonably
requested by the Servicer in connection with the preparation of all tax returns
of the Issuer.
SECTION 5.16 Payments upon an Indenture Event of Default and Acceleration
of the Notes.
If an Indenture Event of Default occurs under the Indenture and the Notes
are accelerated pursuant to the Indenture, Section 5.2 of the Indenture shall
control.
SECTION 5.17 Optional Deposits by the Note Insurer.
The Note Insurer shall at any time, and from time to time, with respect to
a Distribution Date, have the option to deliver amounts (any such amount, an
"Insurer Optional Deposit") to the Trust Collateral Agent for deposit into the
Collection Account for any of the following purposes: (i) to provide funds in
respect of the payment of fees or expenses of any provider of services to the
Trust with respect to such Distribution Date, (ii) to distribute as a component
of the Class A-1 Principal Distributable Amount, the Class A-2 Principal
Distributable Amount and the Class A-3 Principal Distributable Amount to the
extent the Class A Note Balance exceeds the sum of the Pool Balance and the
remaining Pre-Funding Balance as of the related Determination Date, and (iii) to
include such amount as part of the Class A-1 Interest Distributable Amount,
Class A-2 Interest Distributable Amount and Class A-3 Interest Distributable
Amount for such Distribution Date to the extent that without such amount a draw
would be required to be made on the Note Policy.
SECTION 5.18 Securities Accounts.
The Trust Collateral Agent agrees that any Trust Account held by it
hereunder shall be maintained a "securities account" as defined in the Uniform
Commercial Code as in effect in __________ (the " UCC"), and that it shall be
acting as a "securities intermediary" for the Indenture Trustee itself as the
"entitlement holder" (as defined in Section 8-102(a)(7) of the __________ UCC)
with respect to each such Trust Account. The parties hereto agree that each
Trust Account shall be governed by the laws of the State of New York, and
regardless of any provision in any other agreement, the "securities
intermediary's jurisdiction" (within the meaning of Section 8-110 of the New
York UCC) shall be the State of New York. The Trust Collateral Agent
acknowledges and agrees that (a) each item of property (whether investment
property, financial asset, security, instrument or cash) credited to the
Accounts shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the New York UCC and (b) notwithstanding anything to the
contrary, if at any time the Trust Collateral Agent shall receive any order from
the Indenture Trustee directing transfer or redemption of any financial asset
relating to the Trust Accounts, the Trust Collateral Agent shall comply with
such entitlement order without further consent by the Transferor or any other
person. In the event of any conflict of any provision of this Section 5.18 with
any other provision of this Agreement or any other agreement or document, the
provisions of this Section 5.18 shall prevail.
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ARTICLE VI
THE TRANSFEROR
SECTION 6.01 Representations of Transferor.
The Transferor makes the following representations on which the Trust, the
Indenture Trustee and the Trust Collateral Agent relied in accepting the
Receivables in trust and in connection with the performance by the Trust
Collateral Agent of its obligations hereunder and the Note Insurer relied in
issuing the Note Policy. The representations speak as of the execution and
delivery of this Agreement, on the Closing Date and as of each Subsequent
Transfer Date, but shall survive each sale of the Receivables to the Trust and
the subsequent pledge thereof to the Indenture Trustee pursuant to the
Indenture:
(i) Organization and Good Standing. The Transferor is duly organized
and validly existing as a limited liability company in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and has and had at all
relevant times, full power, authority, and legal right to acquire and own
the Receivables.
(ii) Due Qualification. The Transferor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires such
qualifications.
(iii) Power and Authority. The Transferor has the power and authority
to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their respective terms. The Transferor
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust and has duly authorized such sale
and assignment to the Trust by all necessary corporate action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which it is a party have been duly authorized by the
Transferor by all necessary action.
(iv) Valid Sale; Binding Obligations. This Agreement evidences a valid
sale, transfer, and assignment of the Trust Property and upon execution of
the related Transfer Agreement and satisfaction of the conditions set forth
in the Section 2.02(b) hereof and in such Transfer Agreement, this
Agreement will effect a valid sale, transfer and assignment of the related
Subsequent Receivables and the other related property to be conveyed to the
Issuer on the related Subsequent Transfer Date, in each case, enforceable
against creditors of and purchasers from the Transferor; and this Agreement
and the other Basic Documents to which the Transferor is a party shall
constitute legal, valid and binding obligations of the Transferor
enforceable in accordance with their respective terms, subject to the
effects of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity.
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(v) No Violation. The execution and delivery by the Transferor of this
Agreement and the other Basic Documents to which it is a party and its
performance under this Agreement and the other Basic Documents to which it
is a party, the consummation of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
certificate of formation or operating agreement of the Transferor, or any
indenture, agreement, mortgage, deed of trust, or other instrument to which
the Transferor is a party or by which it is bound; nor 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 the Basic Documents); or violate any law or
any order, rule, or regulation applicable to the Transferor of any court or
of any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Transferor or its
properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or to the Transferor's best knowledge threatened, before any
court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Transferor or its properties:
(A) asserting the invalidity of this Agreement, any other Basic Document or
the Securities; (B) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by this Agreement
or, any other Basic Document to which it is a party; (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Transferor of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document to which it is
a party or the Securities; (D) which might adversely affect the federal
income tax attributes of the Securities; or (E) that could have a material
adverse effect on the Receivables.
(vii) No Consents. No consent, license, approval, authorization or
order of, or registration, declaration or filing with, any governmental
authority or other Person is required to be made in connection with the
execution, delivery or performance of the Basic Documents to which it is a
party or the consummation of the transaction contemplated thereby, except
such as have been duly made, effected or obtained;
(viii) Chief Executive Office. The chief executive office of the
Transferor is, and has at all times been, located at [_______________ ].
The Transferor shall give prior written notice to the other parties hereto
prior to any change of its chief executive office or its state of
incorporation.
(ix) Transferor's Intention. The Receivables and other Trust Property
are being transferred, and the Subsequent Receivables will be transferred,
with the intention of removing them from the Transferor's estate pursuant
to Section 541 of the United States Bankruptcy Code, as the same may be
amended from time to time.
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SECTION 6.02 Liability of Transferor; Indemnities.
The Transferor shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Transferor under this Agreement.
(i) The Transferor shall indemnify, defend, and hold harmless the
Trust Collateral Agent, the Indenture Trustee, the Note Insurer, the Master
Servicer, the Subservicer, the Collateral Agent, Back-up Servicer, the
Owner Trustee and the Trust from and against any taxes that may at any time
be asserted against the Trust Collateral Agent or the Trust with respect
to, and as of the Closing Date, with respect to the Initial Receivables,
and the related Subsequent Transfer Date, with respect to the Subsequent
Receivables, the sale of the related Receivables to the Trust or the
issuance and original sale of the Securities or asserted with respect to
ownership of the Receivables, including any sales, gross receipts, general
corporation, tangible personal property, privilege, or license taxes and
costs and expenses in defending against the same.
(ii) The Transferor shall indemnify, defend, and hold harmless the
Trust Collateral Agent, the Indenture Trustee, the Note Insurer, the
Collateral Agent, the Subservicer, the Master Servicer, the Back-up
Servicer, the Owner Trustee and the Trust and their respective officers,
directors, employees and agents, and the Trust from and against any loss,
liability, or expense incurred by reason of (a) the Transferor's bad faith,
willful misconduct or negligence in the performance of its duties under
this Agreement or any other Basic Document to which it is a party, or by
reason of reckless disregard of the Transferor's obligations and duties
under this Agreement or any other Basic Document to which it is a party, or
(b) the Transferor's violation of federal or state securities laws in
connection with the initial sale of the Securities.
Indemnification under this Section shall survive the termination of this
Agreement and shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If the Transferor shall have made any
indemnity payment to the Trust Collateral Agent, the Collateral Agent, the
Indenture Trustee, the Note Insurer, the Subservicer, the Master Servicer, the
Back-up Servicer, the Owner Trustee or the Trust pursuant to this Section and
any such Person thereafter shall collect any of such amounts from others, then
such Person shall repay such amounts to the Transferor, without interest. In
addition, the Transferor shall pay the costs as provided in the Indenture,
including Section 5.14 thereof. If the Transferor fails to indemnify pursuant to
this Section 6.02, the Trust Collateral Agent, the Indenture Trustee, the Note
Insurer or the Owner Trustee, as applicable, shall notify the Originator of such
failure and the Originator shall pay the amount of such indemnification to the
applicable person within three Business Days of receipt of such notice.
Notwithstanding anything to the contrary contained in this Agreement, the
obligations of the Transferor under this Section 6.02 are solely the corporate
obligations of the Transferor, and shall be payable by the Transferor, solely as
provided in this Section 6.02. The Transferor shall only be required to pay (a)
any fees, expenses, indemnities or other liabilities that it may incur under
this Section 6.02 to the extent the Transferor has funds available that would be
in excess of amounts that would be necessary to pay the debt and other
obligations of the Transferor incurred in accordance with the Transferor's
certificate of formation and operating
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agreement and all financing documents to which the Transferor is a party and (b)
any expenses, indemnities or other liabilities that it may incur under this
Section 6.02 only to the extent it receives funds designated for such purposes
or to the extent it has funds available that would be in excess of amounts that
would be necessary to pay the debt and other obligations of the Transferor
incurred in accordance with the Transferor's certificate of formation and
operating agreement and all financing documents to which the Transferor is a
party. In addition, no amount owing by the Transferor hereunder in excess of the
liabilities that it is required to pay in accordance with the preceding sentence
shall constitute a "claim" (as defined in Section 101(5) of the Bankruptcy Code)
against it. No recourse shall be had for the payment of any amount owing
hereunder or for the payment of any fee hereunder or any other obligation of, or
claim against, the Transferor arising out of or based upon this Section 6.02,
against any member, employee, officer, agent, director or authorized person of
the Transferor or of any Affiliate thereof (other than with respect to any
obligation of the Originator as set forth in the last sentence of the foregoing
paragraph); provided, however, that the foregoing shall not relieve any such
person or entity of any liability they might otherwise have as a result of
fraudulent actions or willful misconduct or omissions taken by them.
SECTION 6.03 Merger or Consolidation of, or Assumption of the Obligations
of, Transferor.
Subject to Section 6.06 hereof, any Person (i) into which the Transferor
may be merged or consolidated, (ii) resulting from any merger, conversion, or
consolidation to which the Transferor shall be a party, (iii) succeeding to the
business of the Transferor, or (iv) exercising control directly or indirectly of
the Transferor, which Person in any of the foregoing cases executes an agreement
of assumption acceptable, in their respective absolute discretion, to each of
the Note Insurer, the Trust Collateral Agent and the Indenture Trustee to
perform every obligation of the Transferor under this Agreement and the other
Basic Documents to which the Transferor is a party, will be the successor to the
Transferor under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties to this Agreement;
provided, however, that (u) immediately after giving effect to such transaction,
(A) no representation or warranty made pursuant to Section 6.01 would have been
breached (for purposes hereof, such representations and warranties shall speak
as of the date of the consummation of such transaction) and (B) no event that,
after notice or lapse of time, or both, would become a Servicer Default or
Master Servicer Default shall have occurred and be continuing, (v) the
Transferor shall have delivered to the Trust Collateral Agent, the Note Insurer
and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, conversion, merger, or succession and such
agreement or assumption comply with this Section and Section 6.06(a)(iii) and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, (w) the Transferor shall have
delivered to the Trust Collateral Agent, the Note Insurer 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 executed and filed that are necessary fully to preserve and
protect the interest of the Trust, the Noteholders and the Note Insurer in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such Counsel, no such action shall be necessary to preserve and
protect such interest, (x) immediately after giving effect to such transaction,
no Insurance Agreement Event of Default and no event that, after notice or lapse
of time, or both, would become an Insurance Agreement
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Event of Default shall have occurred and be continuing, (y) the organizational
documents of the Person surviving or resulting from such transaction shall
contain provisions the same in substantive effect as those of the Transferor's
certificate of formation and limited liability company agreement in respect of
the issuance of debt, the independent directors and bankruptcy remoteness and
(z) the Rating Agencies shall have confirmed the ratings of the Notes and, in
the case of the Class A Notes, without regard to the Note Policy. The Transferor
shall provide written notice of any merger, consolidation, conversion, or
succession pursuant to this Section and Section 6.06(a)(iii) to the Note Insurer
and the Rating Agencies then providing a rating for the Securities.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (u), (v), (w), (x), (y) and
(z) above shall be conditions to the consummation of the transactions referred
to in clauses (i), (ii), or (iii) or (iv) above.
SECTION 6.04 Limitation on Liability of Originator, Transferor and Others.
Each of the Originator and the Transferor and any director or officer or
employee or agent of the Transferor may rely in good faith on the written advice
of counsel, Opinion of Counsel, Officer's Certificate, or on any document of any
kind, prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. Neither the Originator nor the Transferor shall 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; provided, however, that the
Originator or the Transferor, as the case may be, may undertake any reasonable
legal action that it may in good ▇▇▇▇▇ ▇▇▇▇ necessary or desirable in respect of
this Agreement and the rights and duties of the parties to this Agreement and
the interests of the Noteholders and the Certificateholders under this
Agreement. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs, and liabilities of the
Originator or the Transferor, as the case may be.
SECTION 6.05 Originator and Transferor May Own Securities.
The Originator or the Transferor and any Person controlling, controlled by,
or under common control with the Originator or the Transferor may in their
individual or any other capacities become the owner or pledgee of Securities
with the same rights as it would have if it were not the Originator or the
Transferor or an affiliate thereof, except as otherwise specifically provided
herein. Securities so owned by or pledged to the Originator and the Transferor
or such controlling, controlled or commonly controlled Person shall have an
equal and proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Securities.
SECTION 6.06 Additional Covenants of the Transferor.
The Transferor shall not do any of the following, without (i) the prior
written consent of the Note Insurer, (ii) the consent of the Rating Agencies
provided that such consent to any of the following shall not result in the
downgrading or withdrawal by such Rating Agencies of the "shadow ratings" then
assigned to any Securities without regard to the Note Policy and (iii) the prior
written consent of the Trust Collateral Agent, who shall, without any exercise
of its
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own discretion, also provide its written consent to the Transferor upon receipt
by it of the consent of the Rating Agencies and a copy of the written consent of
the Note Insurer:
(i) engage in any business or activity other than those set forth in
the certificate of formation and limited liability company agreement of the
Transferor or amend the Transferor's certificate of formation and operating
agreement other than in accordance with its terms as in effect on the date
hereof;
(ii) incur any indebtedness, or assume or guaranty any indebtedness of
any other entity, other than (A) any indebtedness incurred in connection
with Notes, (as defined in the Transferor's articles of incorporation) and
(B) any indebtedness to the Originator or any Affiliate thereof incurred in
connection with the acquisition of motor vehicle contracts similar to the
Receivables, which indebtedness shall be subordinated to all other
obligations of the Transferor and the Originator;
(iii) to the extent permitted by law, dissolve or liquidate, in whole
or in part, consolidate or merge with or into any other entity or convey or
transfer its properties and assets substantially as an entirety to any
entity; or
(iv) without the affirmative vote of 100% of the directors of the
board of directors of the Transferor, including the independent directors,
institute proceedings to be adjudicated bankrupt or insolvent, or consent
to the institution of bankruptcy or insolvency proceedings against it, or
file a petition seeking or consent to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Transferor or a substantial part of its
property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or
take limited liability company action in furtherance of any such action.
ARTICLE VII
THE MASTER SERVICER; SUBSERVICER; AND BACK-UP SERVICER
SECTION 7.01 Representations and Warranties.
(a) The Master Servicer. The Master Servicer makes the following
representations and warranties on which the Trust, the Indenture Trustee and the
Trust Collateral Agent rely in accepting the Receivables in trust and in
connection with the performance by each of the Trust Collateral Agent and the
Back-up Servicer of its obligations hereunder and the Note Insurer relies in
issuing the Note Policy. The representations and warranties speak as of the
execution and delivery of this Agreement, on the Closing Date, and as of each
Subsequent Transfer Date, but shall survive each sale of the Receivables to the
Trust and the subsequent pledge thereof to the Indenture Trustee pursuant to the
Indenture:
(i) The Master Servicer is duly organized and validly existing in good
standing as a corporation under the laws of the State of Delaware with the
corporate power and authority to own its properties and to conduct its
business as such properties
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shall be currently owned and such business is presently conducted, and had
at all relevant times, and has, the corporate power, authority and legal
right to acquire, own, sell and service the Receivables, and is duly
qualified and has all necessary licenses in all such jurisdictions as are
required by it to conduct its business (including the servicing of the
Receivables as required by this Agreement and the performance of its other
obligations under this Agreement.
(ii) The Master Servicer has the power and authority to execute and
deliver this Agreement and to carry out the terms hereof. This Agreement
and all other instruments or documents to be delivered hereunder or
pursuant hereto, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate proceedings of the Master Servicer.
This Agreement has been duly and validly executed and delivered by the
Master Servicer and, assuming due authorization, execution and delivery by
each other party hereto, this Agreement is a valid and legally binding
agreement of the Master Servicer enforceable in accordance with its terms.
(iii) The execution and delivery of this Agreement and performance
under this Agreement by the Master Servicer and the compliance by the
Master Servicer with all provisions of this Agreement do not conflict with
or violate any applicable law, regulation or order of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality and do not conflict with or result in a breach
of or (with or without notice or lapse of time) default under any of the
terms or provisions of any contract or agreement to which the Master
Servicer is subject or by which it or its property is bound, or result in
the creation or imposition of a Lien upon any of its properties pursuant to
the terms of any such contract or agreement, nor does such execution,
delivery or compliance violate the Charter or By-Laws of the Master
Servicer.
(iv) There are no proceedings or investigations pending or, to the
Master Servicer's knowledge, threatened against the Master Servicer before
any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Master Servicer
or its properties (A) asserting the invalidity of this Agreement, the other
Basic Documents to which the Master Servicer is a party, the Notes or the
Certificate, (B) seeking to prevent the issuance of the Notes or the
Certificate or the consummation of any of the transactions contemplated by
this Agreement, the Notes or the Certificate, or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Master Servicer of its obligations under, or the
validity or enforceability of, this Agreement, the Notes or the
Certificate, or (D) relating to the Master Servicer and which might
adversely affect the federal or state income, excise, franchise or similar
tax attributes of the Securities, or (E) that could have a material adverse
effect on the Receivables.
(v) No consent, approval, authorization or order of or declaration or
filing with any governmental authority is required for the issuance or sale
of the Notes or the consummation of the transactions contemplated by this
Agreement except such as have been duly made or obtained.
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(vi) The Master Servicer has filed on a timely basis all tax returns
required to be filed by it and paid all taxes to the extent that such taxes
have become due.
(vii) The Master Servicer hereby represents and warrants that the
Master Servicer's principal place of business and chief executive office
is, and for the four months preceding the date of this Agreement has been,
located at: [__________ address].
(viii) The practices used or to be used by the Master Servicer,
including as Successor Servicer to monitor collections with respect to the
Receivables and repossess and dispose of the Financed Vehicles related to
the Receivables will be, in all material respects, legal, proper and in
conformity with the requirements of all applicable federal and state laws,
rules and regulations, and this Agreement. The Master Servicer is in
possession of all state and local licenses (including all debt collection
licenses) required for it to perform its services hereunder, including as
Successor Servicer, and none of such licenses has been suspended, revoked
or terminated.
The representations and warranties contained in this Section 7.01(a) shall
survive the execution and delivery of this Agreement, the transfer of the
Initial Receivables on the Closing Date, the transfer of the Subsequent
Receivables on the related Subsequent Transfer Date and the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture.
(b) The Subservicer. The Subservicer makes the following representations
and warranties on which the Trust, the Indenture Trustee and the Trust
Collateral Agent rely in accepting the Receivables in trust and in connection
with the performance by each of the Trust Collateral Agent and the Back-up
Servicer of its obligations hereunder and the Note Insurer relies in issuing the
Note Policy. The representations and warranties speak as of the execution and
delivery of this Agreement, on the Closing Date, and as of each Subsequent
Transfer Date, but shall survive each sale of the Receivables to the Trust and
the subsequent pledge thereof to the Indenture Trustee pursuant to the
Indenture:
(i) Organization and Good Standing. The Subservicer is duly organized
and is validly existing as a federally-chartered savings association in
good standing under the laws of the United States, with power and authority
and legal right to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted,
and has and had at all relevant times, full power, authority, and legal
right to acquire, own, sell, and service the Receivables;
(ii) Due Qualification. The Subservicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Receivables as required by this Agreement and the
performance of its other obligations under this Agreement and the other
Basic Documents to which it is a party) requires such qualifications except
where such failure will not have a material adverse effect on the
Subservicer, its business or its properties, or the ability of the
Subservicer to perform its obligations under this Agreement or any other
Basic Document to which it is a party;
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(iii) Power and Authority. The Subservicer has the power and authority
to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their respective terms; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which it is a party have been duly authorized by the
Subservicer by all necessary corporate action;
(iv) Binding Obligations. This Agreement and the other Basic Documents
to which it is a party constitute legal, valid, and binding obligations of
the Subservicer enforceable in accordance with their respective terms,
subject to the effects of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally and
to general principles of equity;
(v) No Violation. The execution, delivery and performance by the
Subservicer of this Agreement and the other Basic Documents to which the
Subservicer is a party, and the consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which it is
a party and the fulfillment of the terms hereof and thereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or bylaws of the Subservicer, or any
indenture, agreement, or other instrument to which the Subservicer is a
party or by which it may be bound; nor result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, or other instrument (other than this Agreement); nor,
to the best of the Subservicer's knowledge, violate any law applicable to
the Subservicer or any order, rule, or regulation applicable to the
Subservicer of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over the Subservicer or its properties;
(vi) No Proceedings. There are no proceedings or investigations
pending, or, to the Subservicer's best knowledge, threatened, before any
court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Subservicer or its properties:
A) asserting the invalidity of this Agreement, any of the Basic Documents
or the Securities, B) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by this Agreement
or any of the Basic Documents, C) seeking any determination or ruling that
might materially and adversely affect the performance by the Subservicer of
its obligations under, or the validity or enforceability of, this
Agreement, any of the Basic Documents to which it is a party or the
Securities, D) relating to the Subservicer and which might adversely affect
the federal income tax attributes of the Securities or (E) that could have
a material adverse effect on the Receivables;
(vii) No Consents. No consent, license, approval, authorization or
order of, or registration declaration or filing with, any governmental
authority or other Person is required to be made in connection with the
issuance or sale of the Notes and Certificates or the execution, delivery
or performance of the Basic Documents to which it is a party or the
consummation of the transactions contemplated thereby, except such as have
been duly made, effected or obtained;
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(viii) Taxes. The Subservicer has filed on a timely basis all tax
returns required to be filed by it and paid all taxes, to the extent that
such taxes have become due;
(ix) Chief Executive Office. The principal place of business and chief
executive office of the Subservicer is, and for the four months preceding
the date of this Agreement has been, located at ▇▇ ▇.▇. Fourth Street,
Evansville, Indiana 47701;
(x) No Injunctions. There are no existing injunctions, writs,
restraining orders or other similar orders which might adversely affect the
performance by the Subservicer or its obligations under, or the validity
and enforceability of, this Agreement;
(xi) Compliance with Law. The Subservicer is in compliance with all
requirements of federal and state laws, rules, regulations and orders,
except where the failure so to comply would not have a material adverse
effect on the Subservicer, its business or its properties, or the ability
of the Subservicer to perform its obligations under this Agreement; and
(xii) Transfer of Data. The Subservicer shall make arrangements for
the prompt and safe transfer of, and the Subservicer shall provide to the
Master Servicer and the Back-up Servicer (or their designee), all necessary
servicing files and records, including (as deemed necessary by the Master
Servicer and the Back-up Servicer (or their designee) at such time): (A)
account documentation, (B) servicing system tapes, (C) account payment
history, (D) collections history and (E) the trial balances, as of the
close of business on the day immediately preceding conversion to the Master
Servicer and the Back-up Servicer (or their designee), reflecting all
applicable loan information.
(xiii) Practices. The practices used or to be used by the Subservicer,
to monitor collections with respect to the Receivables and repossess and
dispose of the Financed Vehicles related to the Receivables will be, in all
material respects, legal, proper and in conformity with the requirements of
all applicable federal and state laws, rules and regulations, and this
Agreement. The Subservicer is in possession of all state and local licenses
(including all debt collection licenses) required for it to perform its
services hereunder, and none of such licenses has been suspended, revoked
or terminated.
The representations and warranties contained in this Section 7.01(b) shall
survive the execution and delivery of this Agreement, the transfer of the
Initial Receivables on the Closing Date, the transfer of the Subsequent
Receivables on the related Subsequent Transfer Dates and the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture.
SECTION 7.02 Master Servicer, Subservicer and Back-up Servicer Not to
Resign.
Subject to the provisions of Section 8.01, none of the Master Servicer, the
Subservicer or the Back-up Servicer shall resign from the obligations and duties
imposed on it by this Agreement as Master Servicer, Subservicer or Back-up
Servicer, respectively, except upon a determination that by reason of a change
in legal requirements the performance of its duties under this Agreement would
cause it to be in violation of such legal requirements in a manner which would
result in a material adverse effect on the Master Servicer, Subservicer or the
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Back-up Servicer, as the case may be, and the Note Insurer (so long as an
Insurer Default shall not have occurred and be continuing) does not or the
Majority Noteholders (if an Insurer Default shall have occurred and be
continuing) do not (i) elect in its or their absolute discretion to waive the
obligations of the Master Servicer, Subservicer, or the Back-up Servicer, as the
case may be, to perform the duties that render it legally unable to act or (ii)
allow in its or their absolute discretion the Master Servicer, Subservicer or
the Back-up Servicer, as the case may be, to delegate those duties to another
Person. Any such determination permitting the resignation of the Master
Servicer, Subservicer or the Back-up Servicer shall be evidenced by an Opinion
of Counsel as to the legal requirements that would be violated delivered to the
Owner Trustee, the Indenture Trustee and the Note Insurer. No resignation of the
Master Servicer shall become effective, so long as no Insurer Default shall have
occurred and be continuing, until the Back-up Servicer or an entity acceptable
to the Note Insurer shall have assumed the responsibilities and obligations of
the Servicer or, if an Insurer Default shall have occurred and be continuing,
until the Master Servicer, the Back-up Servicer or a successor Servicer that is
an Eligible Servicer shall have assumed the responsibilities and obligations of
the Master Servicer. No resignation of the Subservicer shall become effective,
so long as no Insurer Default shall have occurred and be continuing, until the
Master Servicer, the Back-up Servicer or an entity acceptable to the Note
Insurer shall have assumed the responsibilities and obligations of the
Subservicer or, if an Insurer Default shall have occurred and be continuing,
until the Back-up Servicer, or a successor Servicer that is an Eligible Servicer
shall have assumed the responsibilities and obligations of the Subservicer. No
resignation of the Master Servicer, Subservicer or the Back-up Servicer shall
relieve the Master Servicer, Subservicer or the Back-up Servicer, as the case
may be, of any liability to which it has previously become subject under this
Agreement or any Basic Document.
SECTION 7.03 Indemnities of the Servicer, Master Servicer and the
Originator.
(a) The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Servicer under this Agreement
and the other Basic Documents to which it is a party, and no implied duties or
obligations shall be read into this Agreement against the Servicer.
(i) The Servicer shall defend, indemnify, and hold harmless the Trust
Collateral Agent, the Indenture Trustee, the Note Insurer, the Master
Servicer, the Subservicer, the Back-up Servicer and the Owner Trustee and
their respective officers, directors, employees and agents, the Trust and
the Noteholders from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising out of or resulting from the use,
ownership, or operation by the Servicer or any Affiliate thereof of a
Financed Vehicle.
(ii) The Servicer shall indemnify, defend, and hold harmless the Trust
Collateral Agent, the Indenture Trustee, the Owner Trustee, the Note
Insurer, the Master Servicer, the Subservicer, the Back-up Servicer, the
Trust and the Noteholders from and against any taxes that may at any time
be asserted against the Trust Collateral Agent or the Trust with respect to
the transactions contemplated herein, including, without limitation, any
sales, gross receipts, general corporation, tangible personal property,
privilege, franchise, or license taxes (but, in the case of the Trust, not
including any taxes
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asserted with respect to, and as of the date of, the sale of the
Receivables to the Trust or the issuance and original sale of the
Securities, or asserted with respect to ownership of the Receivables, or
federal or other income taxes arising out of the transactions contemplated
by this Agreement) and costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless the
Trust, the Indenture Trustee, the Note Insurer, the Master Servicer, the
Subservicer, the Back-up Servicer and the Noteholders from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the
extent that such cost, expense, loss, claim, damage, or liability arose out
of, or was imposed upon the Trust, the Indenture Trustee, the Master
Servicer, the Subservicer, the Back-up Servicer, the Trust Collateral
Agent, the Note Insurer or the Noteholders through the negligence, willful
misconduct or bad faith of the Servicer in the performance of its duties
under this Agreement or any other Basic Document to which it is a party, or
by reason of reckless disregard of the Servicer's obligations and duties
under this Agreement or any other Basic Document to which it is a party.
(iv) The Servicer shall indemnify, defend, and hold harmless the Trust
Collateral Agent, the Indenture Trustee, the Note Insurer, the Master
Servicer, the Subservicer, the Back-up Servicer and each of its officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages, and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein contained, except to the extent that such cost, expense, loss,
claim, damage, or liability: (A) shall be due to the willful misconduct,
bad faith, or negligence of such indemnified party or; (B) shall arise from
such indemnified party's breach of any of its representations or warranties
in any material respect set forth in the Indenture;
Notwithstanding the foregoing, clauses (ii) and (iv) shall not apply to the
Master Servicer in the event the Master Servicer becomes the successor Servicer
pursuant to Sections 4.01(a) or 8.03(a) hereof.
Indemnification by each of the Subservicer or the Master Servicer (or any
other successor Servicer), as Servicer, shall be made only with respect to the
period that it acts as Servicer and its acts and omissions while acting as such.
Indemnification under this Section by the Servicer, with respect to the period
such Person was (or was deemed to be) the Servicer, shall survive the
termination of such Person as Servicer or a resignation by such Person as
Servicer as well as the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts to the Servicer, without interest.
(b) The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Master Servicer in its
capacity as Master Servicer under this Agreement, and no implied duties or
obligations shall be read into this Agreement against the Master Servicer. The
Master Servicer shall indemnify, defend, and hold harmless the Trust, the Trust
Collateral Agent, the Indenture Trustee, the Note Insurer, the Subservicer, the
Back-up Servicer and the Noteholders from and against any and all costs,
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expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon the
Trust, the Indenture Trustee, the Subservicer, the Back-up Servicer, the Trust
Collateral Agent, the Note Insurer or the Noteholders through the negligence,
willful misconduct or bad faith of the Master Servicer in the performance of its
duties as Master Servicer under this Agreement, or by reason of reckless
disregard of the Master Servicer's obligations and duties as Master Servicer
under this Agreement. In the event that the Master Servicer becomes the
successor Servicer pursuant to Section 4.01 or 8.03, the Master Servicer, in its
capacity as successor Servicer, shall be liable in accordance with, and to the
extent set forth in, Section 7.03(a).
(c) To the extent that __________ shall be entitled to any indemnity
payment from the Servicer pursuant to Section 7.03(a)(iii), 8.03(a) or 8.03(i),
and such indemnity payment has not been made within 30 calendar days of demand
thereof, __________ shall be entitled to reimbursement for such unpaid amounts,
to the extent of available funds, under priority (_____) of Section 5.12(a)
hereof.
(d) The Originator shall indemnify, defend, and hold harmless the Indenture
Trustee, the Owner Trustee, the Note Insurer, the Master Servicer, the
Subservicer, the Back-up Servicer and each of their officers, directors,
employees and agents from and against all costs, expenses (including reasonable
legal fees and expenses), losses, claims, damages, and liabilities arising out
of, incurred or asserted against any such indemnified party in connection with
the acceptance or performance of the trusts and duties contained in the Trust
Agreement, except to the extent that such cost, expense, loss, claim, damage, or
liability: (i) shall be due to the willful misconduct, bad faith or gross
negligence of the Owner Trustee; (ii) shall arise from the Owner Trustee's
breach of any of its representations or warranties set forth in the Trust
Agreement; or (iii) shall be one as to which the Transferor has indemnified the
Owner Trustee.
SECTION 7.04 Merger or Consolidation of, or Assumption of the Obligations
of, the Subservicer, Master Servicer and Back-up Servicer.
(a) The Servicer shall not merge or consolidate with any other Person,
convey, transfer or lease substantially all its assets as an entirety to another
Person, or permit any other Person to become the successor to the Servicer's
business unless, after the merger, consolidation, conveyance, transfer, lease or
succession, the successor or surviving entity shall be an Eligible Servicer and
shall be capable of fulfilling the duties of the Servicer contained in this
Agreement and the other Basic Documents to which the Servicer is a party. Any
Person (i) into which the Servicer may be merged or consolidated, (ii) resulting
from any merger, conversion, or consolidation to which the Servicer shall be a
party which may succeed to the properties and assets of the Servicer
substantially as a whole or (iii) succeeding to the business of the Servicer (or
to substantially all of the Servicer's business insofar as it relates to the
servicing of the Receivables), which Person in any of the foregoing cases
executes an agreement of assumption acceptable to the Note Insurer in its sole
and absolute discretion to perform every obligation of the Servicer under this
Agreement and the other Basic Documents to which it is a party, will be the
successor to the Servicer under this Agreement and the other Basic Documents to
which it is a party without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement; provided, however, that
(w) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.01 hereof or made
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by the Originator in the Purchase Agreement shall have been breached (for
purposes hereof, such representations and warranties shall speak as of the date
of the consummation of such transaction), no Servicer Default or Insurance
Agreement Event of Default, and no event which, after notice or lapse of time,
or both, would become a Servicer Default or Insurance Agreement Event of Default
shall have occurred and be continuing, (x) the Servicer shall have delivered to
the Trust Collateral Agent, the Note Insurer and the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, conversion, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent provided for in this
Agreement and the other Basic Documents to which it is a party relating to such
transaction have been complied with and (y) the Servicer shall have delivered to
the Trust Collateral Agent, the Note Insurer 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 executed and filed that are necessary fully to preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables, and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such interest
and (z) the Rating Agencies shall have confirmed the "shadow ratings" of the
Notes, and in the case of the Class A Notes, without regard to the Note Policy.
The Servicer shall provide notice of any merger, conversion, consolidation or
succession pursuant to this Section to the Note Insurer and the Rating Agencies
then providing a rating for the Securities. The Trust Collateral Agent shall
forward a copy of each such notice to each Noteholder. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (w), (x), (y) and (z) above shall be conditions to
the consummation of the transactions referred to in clauses (i), (ii) or (iii)
above. The Opinion of Counsel required by this Section shall not be an expense
of the Indenture Trustee, the Trust Collateral Agent or the Note Insurer.
(b) Any Person (i) into which the Back-up Servicer may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Back-up Servicer shall be a party, (iii) which may succeed to the properties
and assets of the Back-up Servicer substantially as a whole or (iv) succeeding
to the business of the Back-up Servicer, shall execute an agreement of
assumption to perform every obligation of the Back-up Servicer hereunder, and
whether or not such assumption agreement is executed, shall be the successor to
the Back-up Servicer under this Agreement without further act on the part of any
of the parties to this Agreement; provided, however, that nothing herein shall
be deemed to release the Back-up Servicer from any obligation. In connection
with any transaction described above, the Back-up Servicer must comply with the
provisions of Section 7.04 as if it were then acting as Servicer.
(c) Any Person (i) into which the Master Servicer may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Master Servicer shall be a party, (iii) which may succeed to the properties
and assets of the Master Servicer substantially as a whole or (iv) succeeding to
the business of the Master Servicer, shall execute an agreement of assumption to
perform every obligation of the Master Servicer hereunder, and whether or not
such assumption agreement is executed, shall be the successor to the Master
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that nothing herein shall be
deemed to release the Master Servicer from any obligation. In connection with
any transaction described above, the Master Servicer must comply with the
provisions of Section 7.04 as if it were then acting as Servicer.
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(d) Any Person (i) into which the Subservicer or the Originator may be
merged or consolidated, (ii) which may result from any merger or consolidation
to which the Subservicer or the Originator shall be a party, (iii) which may
succeed to the properties and assets of the Subservicer or the Originator
substantially as a whole or (iv) succeeding to the business of the Subservicer
or the Originator, shall execute an agreement of assumption to perform every
obligation of the Subservicer or the Originator hereunder, as the case may be,
and whether or not such assumption agreement is executed, shall be the successor
to the Subservicer or the Originator, as the case may be, under this Agreement
without further act on the part of any of the parties to this Agreement;
provided, however, that nothing herein shall be deemed to release the
Subservicer or the Originator from any obligation. In connection with any
transaction described above, the Subservicer or the Originator, as the case may
be, must comply with the provisions of Section 7.04 as if it were then acting as
Servicer.
SECTION 7.05 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or
agents of the Servicer shall be under any liability to the Trust, the Trust
Collateral Agent or the Noteholders or the Certificateholders, except as
provided under this Agreement or any other Basic Document to which it is a
party, for any action taken or omitted to be taken pursuant to this Agreement in
the good faith business judgment of the Servicer; provided, however, that this
provision shall not protect the Servicer against any liability that would
otherwise be imposed by reason of bad faith, willful misconduct in the
performance of duties, or by reason of negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement or any other Basic Document to which it is a party. The Servicer
and any director, officer or employee or agent of the Servicer may rely in good
faith on any written advice of counsel, Opinion of Counsel or on any Officer's
Certificate of the Transferor or certificate of auditors or other document of
any kind reasonably believed to be genuine and to have been signed by the proper
party in respect of any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute, or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable legal action
in accordance with the servicing standard that it may in good ▇▇▇▇▇ ▇▇▇▇
necessary or desirable in respect of this Agreement and the rights and duties of
the parties to this Agreement and the interests of the Noteholders and the
Certificateholders under this Agreement. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs, and liabilities of the Servicer.
SECTION 7.06 Delegation of Duties.
The Servicer may at any time perform specific duties or all the duties
enumerated herein as servicer under this Agreement through sub-contractor
acceptable to the Controlling Party; provided that no such delegation or
subcontracting shall relieve the Servicer of its responsibilities with respect
to such duties and the Servicer shall remain primarily responsible with respect
thereto.
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SECTION 7.07 Verification of Servicer's Certificate.
(a) On or before the fifth Business Day of each month, the Servicer will
deliver to the Back-up Servicer a Computer Tape containing such information with
respect to the Receivables as of the close of business on the last day of the
immediately preceding Collection Period as is necessary for preparation of the
Servicer's Certificate. The Back-up Servicer shall use such Computer Tape to
verify the information specified in Section 7.07(b)(iii) contained in the
Servicer's Certificate delivered by the Servicer, and the Back-up Servicer shall
certify to the Note Insurer that it has verified the Servicer's Certificate in
accordance with this Section 7.07 and shall notify the Servicer, the Note
Insurer and the Trust Collateral Agent of any discrepancies, in each case, on or
before the related Determination Date. In the event that the Back-up Servicer
reports any discrepancies, the Servicer and the Back-up Servicer shall attempt
to reconcile such discrepancies prior to the related Deficiency Claim Date, but
in the absence of a reconciliation, the Servicer's Certificate shall control for
the purpose of calculations and payments with respect to the related
Distribution Date. In the event that the Back-up Servicer and the Servicer are
unable to reconcile [material] discrepancies with respect to a Servicer's
Certificate by the related Distribution Date, (i) the Back-up Servicer will
notify the Note Insurer and the Trust Collateral Agent, and (ii) the Servicer
shall cause a firm of independent certified public accountants, at the
Servicer's expense, to audit the Servicer's Certificate and, prior to the fifth
calendar day of the following month, reconcile the discrepancies. The effect, if
any, of such reconciliation shall be reflected in the Servicer's Certificate for
such next succeeding Determination Date. In addition, the Servicer shall, if so
requested by the Note Insurer (unless an Insurer Default shall have occurred and
be continuing) deliver to the Back-up Servicer (i) within five (5) Business Days
of demand therefore a Computer Tape containing as of the close of business on
the date of demand all of the data maintained by the Servicer in a format
acceptable to the Back-up Servicer in connection with servicing the Receivables
and (ii) within fifteen (15) Business Days of demand therefore a copy of such
other information as is reasonably requested by the Note Insurer for the purpose
of reconciling such discrepancies. Other than the duties specifically set forth
in this Agreement, the Back-up Servicer shall have no obligations hereunder,
including, without limitation, to supervise, verify, monitor or administer the
performance of the Servicer. The Back-up Servicer shall have no liability for
any actions taken or omitted by the Servicer so long as it is not acting as
such. The duties and obligations of the Back-up Servicer shall be determined
solely by the express provisions of this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Back-up Servicer.
(b) The Back-up Servicer shall review each Servicer's Certificate delivered
pursuant to Section 7.07(a) and shall, based upon the information provided from
the Servicer under Section 7.07(a):
(i) confirm that such Servicer's Certificate is complete on its face;
(ii) load the computer diskette (which shall be in a format acceptable
to the Back-up Servicer) received from the Servicer pursuant to Section
7.07(a) hereof, confirm that such computer diskette is in a readable form
and calculate the Principal Balance of the Receivables based on the
aggregate Principal Balance of the Receivables as of the preceding
Distribution Date (as set forth in such Servicer's Certificate) and the
principal portion of the Scheduled Receivable Payment or Modified Scheduled
Receivable
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Payment for the Receivables (as set forth in such Servicer's Certificate)
and compare such calculation to that set forth in the Servicer's
Certificate (and give notice of any discrepancy to the Note Insurer); and
(iii) recalculate the Available Funds, the Class A-1 Interest
Distributable Amount, the Class A-2 Interest Distributable Amount, the
Class A-3 Interest Distributable Amount, the Class A-1 Principal
Distributable Amount, the Class A-2 Principal Distributable Amount, the
Class A-3 Principal Distributable Amount, the Class B Interest
Distributable Amount, the Class B Principal Distributable Amount, the
Back-up Servicer Fee, the Servicing Fee, the Successor Servicer Fee, the
Master Servicer Fee, the Trust Collateral Agent Fee, the amounts on deposit
in the Spread Account, the Collection Account, the Pre-Funded Account and
the Capitalized Interest Account, the Premium, the Lock-Box Collection
Percentage, the Delinquency Ratio, Average Delinquency Rate, Cumulative
Default Rate, Cumulative Net Loss Rate, Average Default Rate and Average
Net Loss Rate (as such ratio and such rates are defined in the Spread
Account Agreement) in the Servicer's Certificate for such Determination
Date, based solely on the balances and calculations specifically set forth
in the Servicer's Certificate, and compare such recalculations to those set
forth in the Servicer's Certificate. To the extent of any discrepancy, the
Back-up Servicer shall give notice thereof to the Note Insurer. The Back-up
Servicer's obligation shall be limited to the mathematical recalculation of
the amounts set forth in this Section 7.07(b)(iii) based on the Servicer's
Certificate.
ARTICLE VIII
SERVICER AND MASTER SERVICER DEFAULTS
SECTION 8.01 Servicer Default.
While the Subservicer, the Back-up Servicer or any successor Servicer
(other than the Master Servicer) is acting as the Servicer hereunder, any one of
the following events shall constitute a "Servicer Default":
(i) Any failure by the Servicer (x) to deposit, or to deliver to the
Trust Collateral Agent for deposit, to any Trust Account or the Spread
Account any [material] amount required to be so delivered or deposited
therein by the Servicer that shall continue unremedied for a period of five
Business Days or (y) to deliver to the Trust Collateral Agent or the Note
Insurer the Servicer's Certificate on the related Determination Date that
shall continue unremedied for a period of two Business Days or the
statement required by Section 4.13 or the report required by Section 4.14
shall not have been delivered within five (5) days after the date such
statement or report, as the case may be, is required to be delivered; or
(ii) Failure on the part of the Servicer, and for so long as the
Subservicer is obligated to perform as the Servicer, failure on the part of
the Transferor or the Originator, as the case may be, to repurchase a
Receivable in accordance with Section
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3.02(a), Section 3.02(b) or Section 4.10 hereof and, in the case of the
Originator pursuant to Section 5.5 and Section 6.2 of the Purchase
Agreement, as the case may be, which failure shall continue unremedied for
a period of two Business Days after the same is required to be delivered in
accordance with such Sections; or
(iii) Failure on the part of the Servicer to observe its covenants and
agreements set forth in Section 7.04 or, for so long as the Subservicer is
obligated to perform as the Servicer, failure on the part of the Transferor
to observe its covenants and agreements in Section 6.03; or
(iv) Failure on the part of the Servicer, and for so long as the
Subservicer is obligated to perform as the Servicer, failure on the part of
the Transferor or the Originator duly to observe or to perform any other
covenants or agreements of the Servicer, the Transferor or the Originator
(as the case may be) set forth in the Securities or in this Agreement or
any other Basic Document, which failure shall (a) materially and adversely
affect the rights of Noteholders or the Note Insurer and (b) continue
unremedied for a period of 30 days after the date on which written notice
of such failure requiring the same to be remedied, shall have been given
(1) to the Servicer, the Transferor or the Originator (as the case may be)
by the Note Insurer or the Trust Collateral Agent, or (2) to the Servicer,
the Transferor or the Originator (as the case may be), and to the Trust
Collateral Agent and the Note Insurer by the Noteholders evidencing (x) so
long as the Class A Notes remain Outstanding, not less than 25% of the
Outstanding Class A Note Balance or (y) if the Class A Notes are no longer
Outstanding, not less than 25% of the Outstanding Class B Note Balance; or
(v) The entry of a decree or order for relief by a court or regulatory
authority having jurisdiction in respect of the Originator or the Servicer
(or, so long as the Subservicer is obligated to perform as the Servicer,
the Transferor or any of the Servicer's other Affiliates, if the Servicer's
ability to service the Receivables is adversely affected thereby) in an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal or state, bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator,
conservator, assignee, trustee, custodian, sequestrator or other similar
official of the Originator, the Servicer (or the Transferor or any other
Affiliate of the Originator, if applicable) or of any substantial part of
their respective properties or ordering the winding up or liquidation of
the affairs of the Originator or the Servicer (or the Transferor or any
other Affiliate of the Originator, if applicable) or the commencement of an
involuntary case under the federal or state bankruptcy, insolvency or
similar laws, as now or hereafter in effect, or another present or future,
federal or state bankruptcy, insolvency or similar law with respect to the
Originator or the Servicer (or the Transferor or any other Affiliate of the
Originator, if applicable) and such case is not dismissed within 60 days;
or
(vi) The commencement by the Originator or the Servicer (or, so long
as the Subservicer is obligated to perform as the Servicer, the Transferor
or any of the Servicer's other Affiliates, if the Servicer's ability to
service the Receivables is adversely affected thereby) of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future, federal or state, bankruptcy, insolvency or
similar
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law, or the consent by the Originator or the Servicer (or the Transferor or
any other Affiliate of the Originator, if applicable) to the appointment of
or taking possession by a receiver, liquidator, conservator, assignee,
trustee, custodian, sequestrator or other similar official of the
Originator or the Servicer (or the Transferor or any other Affiliate of the
Originator, if applicable) or of any substantial part of its property or
the making by the Originator or the Servicer (or the Transferor or any
other Affiliate of the Originator, if applicable) of an assignment for the
benefit of creditors or the failure by the Originator or the Servicer (or
the Transferor or any other Affiliate of the Originator, if applicable)
generally to pay its debts as such debts become due or the taking of
corporate action by the Originator or the Servicer (or the Transferor or
any other Affiliate of the Originator, if applicable) in furtherance of any
of the foregoing; or
(vii) Any representation, warranty or statement of the Servicer or,
for so long as the Subservicer is obligated to perform as the Servicer, the
Originator or the Transferor made in this Agreement and, with respect to
the Originator and the Transferor, the Purchase Agreement, any Transfer
Agreement or in each case any certificate, report or other writing
delivered pursuant hereto or thereto shall prove to be incorrect as of the
time when the same shall have been made (excluding, however, any
representation or warranty set forth in Section 3.2(b) of the Purchase
Agreement, Section 3.01 of this Agreement or Section 4 of any Transfer
Agreement), and the incorrectness of such representation, warranty or
statement has a material adverse effect on the Issuer, the Note Insurer or
the Noteholders and, within 30 days after written notice thereof shall have
been given (1) to the Originator, the Servicer or the Transferor (as the
case may be) by the Trust Collateral Agent or the Note Insurer or (2) to
the Originator, the Servicer or the Transferor (as the case may be), and to
the Trust Collateral Agent and the Note Insurer by the Noteholders
evidencing (x) so long as the Class A Notes remain Outstanding, not less
than 25% of the Outstanding Class A Note Balance or (y) if the Class A
Notes are no longer Outstanding, not less than 25% of the Outstanding Class
B Note Balance, the circumstances or condition in respect of which such
representation, warranty or statement was incorrect shall not have been
eliminated or otherwise cured; or
(viii) An Insurance Agreement Event of Default has occurred; or
(ix) A claim is made under the Note Policy; or
(x) So long as an Insurer Default shall not have occurred and be
continuing, the Note Insurer shall not have delivered a Servicer Extension
Notice pursuant to Section 4.04 hereof; or
(xi) The occurrence of a "Servicer Default" under and as defined in
any sale and servicing agreement, pooling and servicing agreement or any
similar agreement with respect to which (x) the Originator or any of its
Affiliates is designated as servicer, subservicer, master servicer or any
similar capacity (irrespective of whether it is then acting in such
capacity) and (y) the Note Insurer has issued a financial guaranty
insurance policy relating to one or more classes of securities issued under
or otherwise relating to such agreement.
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If a Servicer Default shall occur and be continuing then, and in each and every
case, the Trust Collateral Agent shall, (x) at the direction of the Note Insurer
in its sole and absolute discretion, so long as an Insurer Default shall not
have occurred and be continuing, or (y) at the direction of the Majority
Noteholders if an Insurer Default has occurred and is continuing, by notice then
given in writing to the Servicer (and to the Trust Collateral Agent if given by
the Noteholders or the Note Insurer) or (z) upon the Note Insurer's failure to
deliver a Servicer Extension Notice pursuant to Section 4.04 hereof, terminate
all of the rights and obligations of the Servicer under this Agreement. Upon
sending or receiving any such notice, the Trust Collateral Agent shall promptly
send a copy thereof to the Indenture Trustee, the Owner Trustee, the Rating
Agencies, the Note Insurer, the Master Servicer, the Back-up Servicer and to
each Noteholder. On or after the receipt by the Servicer of such written notice
(unless otherwise directed by the Note Insurer and subject to Section 8.03(a)),
all authority and power of the Servicer as the Servicer under this Agreement,
whether with respect to the Securities or the Receivables or otherwise, shall,
without further action, pass to and be vested in the Master Servicer or any such
successor Servicer as may be appointed under Section 8.03; and, without
limitation, the Master Servicer any such successor Servicer and the Trust
Collateral Agent are hereby authorized and empowered to execute and deliver, on
behalf of the predecessor servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the successor Servicer and the Trust Collateral Agent in effecting the
termination of the responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held or
should have been held by the predecessor Servicer for deposit, or shall
thereafter be received with respect to a Receivable and the delivery to the
successor Servicer of all files and records concerning the Receivable and a
Computer Tape in readable form containing all information necessary to enable
the successor Servicer to service the Receivables and the other property of the
Issuer. All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Receivable Files to the successor Servicer
and amending this Agreement to reflect such succession as Servicer pursuant to
this Section 8.01 shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. In addition, any successor
Servicer shall be entitled to payment from the immediate predecessor Servicer
for reasonable transition expenses incurred in connection with acting as
successor Servicer. The predecessor Servicer shall grant the Transferor, the
Trust Collateral Agent, the Back-up Servicer, the Master Servicer and the Note
Insurer reasonable access to the predecessor Servicer's premises, computer
files, personnel, records and equipment at the predecessor Servicer's expense.
If requested by the Note Insurer, the Back-up Servicer or any other successor
Servicer shall terminate any arrangements relating to (i) the Lock-Box Account
with the Lock-Box Bank, (ii) the Lock-Box or (iii) the Lock-Box Agreement, and
direct the Obligors to make all payments under the Receivables directly to the
Servicer at the predecessor Servicer's expense (in which event the successor
Servicer shall process such payments directly, or, through a Lock-Box Account
with a Lock-Box Bank at the direction of the Note Insurer). The Trust Collateral
Agent shall send copies of all notices given pursuant to this Section 8.01 to
the Note Insurer so long as no Insurer Default shall have occurred and be
continuing, and to the Noteholders if an Insurer Default shall have occurred and
be continuing.
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SECTION 8.02 Master Servicer Default.
(a) Any one of the following events shall constitute a "Master Servicer
Default" with respect to the Master Servicer acting in its capacity as Master
Servicer hereunder and in its capacity as successor Servicer hereunder (unless
specifically stated otherwise):
(i) Any failure by the Master Servicer (so long as the Master Servicer
is obligated to perform as the Servicer) (x) to deposit, or to deliver to
the Trust Collateral Agent for deposit, to any Trust Account or the Spread
Account any amount required to be so delivered or deposited therein by the
Servicer that shall continue unremedied for a period of one Business Day or
(y) to deliver to the Trust Collateral Agent or the Note Insurer the
Servicer's Certificate on the related Determination Date that shall
continue unremedied for a period of two Business Days or the statement
required by Section 4.13 or the report required by Section 4.14 shall not
have been delivered within five (5) days after the date such statement or
report, as the case may be, is required to be delivered; or
(ii) Failure on the part of the Master Servicer to observe its
covenants and agreements set forth in Section 7.04; or
(iii) Failure on the part of the Master Servicer duly to observe or to
perform any other covenants or agreements of the Master Servicer set forth
in the Securities or in this Agreement (except as otherwise specifically
referred to in this Section 8.02(a)), which failure shall (x) materially
and adversely affect the rights of Noteholders or the Note Insurer and (y)
continue unremedied for a period of 30 days after the date on which written
notice of such failure requiring the same to be remedied, shall have been
given (A) to the Master Servicer by the Note Insurer or the Trust
Collateral Agent, or (B) to the Master Servicer and to the Trust Collateral
Agent and the Note Insurer by the Noteholders evidencing (x) so long as the
Class A Notes remain Outstanding, not less than 25% of the Outstanding
Class A Note Balance or (y) if the Class A Notes are no longer Outstanding,
not less than 25% of the Outstanding Class B Note Balance; or
(iv) The entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Master Servicer
or any of the Master Servicer's Affiliates, if the Master Servicer's
ability to service the Receivables is adversely affected thereby, in an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal or state, bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Master
Servicer or any such Affiliate or of any substantial part of their
respective properties or ordering the winding up or liquidation of the
affairs of Master Servicer or any such Affiliate or the commencement of an
involuntary case under the federal or state bankruptcy, insolvency or
similar laws, as now or hereafter in effect, or another present or future,
federal or state bankruptcy, insolvency or similar law with respect to the
Master Servicer or any such Affiliate and such case is not dismissed within
60 days; or
(v) The commencement by the Master Servicer or any of the Master
Servicer's Affiliates, if the Master Servicer's ability to service the
Receivables is adversely affected
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thereby, of a voluntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future, federal or state,
bankruptcy, insolvency or similar law, or the consent by Master Servicer or
any such Affiliate to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Master Servicer or any such Affiliate or of any
substantial part of its property or the making by the Master Servicer or
any such Affiliate of an assignment for the benefit of creditors or the
failure by the Master Servicer or any such Affiliate generally to pay its
debts as such debts become due or the taking of corporate action by the
Master Servicer or any such Affiliate in furtherance of any of the
foregoing; or
(vi) Any representation, warranty or statement of the Master Servicer
made in this Agreement or in any certificate, report or other writing
delivered pursuant hereto shall prove to be incorrect as of the time when
the same shall have been made, and the incorrectness of such
representation, warranty or statement has a material adverse effect on the
Issuer, the Note Insurer or the Noteholders and, within 30 days after
written notice thereof shall have been given (1) to the Master Servicer by
the Trust Collateral Agent or the Note Insurer or (2) to the Master
Servicer, and to the Trust Collateral Agent and the Note Insurer by the
Noteholders evidencing (x) so long as the Class A Notes remain Outstanding,
not less than 25% of the outstanding Class A Note Balance or (y) if the
Class A Notes are no longer Outstanding, not less than 25% of the
outstanding Class B Note Balance, the circumstances or condition in respect
of which such representation, warranty or statement was incorrect shall not
have been eliminated or otherwise cured; or
(vii) For so long as the Master Servicer is acting as Master Servicer
hereunder, the failure of the Master Servicer to comply with the duties and
services set forth in Exhibit C attached hereto; or
(viii) For so long as the Master Servicer is obligated to perform as
the Servicer, the occurrence and continuance of a Trigger Event (as such
Trigger Events shall have been modified by the Master Servicer and the Note
Insurer prior to the Master Servicer assuming the duties of Servicer
hereunder);
then, and in each and every case, subject to the notice and cure provisions of
paragraph (b) below, the Trust Collateral Agent shall, at the direction of the
Controlling Party, by notice then given in writing to the Master Servicer (and
to the Trust Collateral Agent if given by the Noteholders) shall terminate all
of the rights and obligations of the Master Servicer under this Agreement. Upon
sending or receiving any such notice, the Trust Collateral Agent shall promptly
send a copy thereof to the Indenture Trustee, the Owner Trustee, the Rating
Agencies, the Note Insurer, the Servicer, the Back-up Servicer and to each
Noteholder. On or after the receipt by the Master Servicer of such written
notice (unless otherwise directed by the Note Insurer and subject to Section
8.03(a)), all authority and power of the Master Servicer as the Servicer and as
the Master Servicer under this Agreement, whether with respect to the Securities
or the Receivables or otherwise, shall, without further action, pass to and be
vested in any such successor Master Servicer or successor Servicer, as
applicable, as may be appointed under Section 8.03; and, without limitation, any
such successor Master Servicer or successor Servicer, is hereby authorized and
empowered to execute and deliver, on behalf of the predecessor
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servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise.
The Master Servicer shall cooperate with the successor Master Servicer or
successor Servicer, as applicable, in effecting the termination of its
responsibilities and rights under this Agreement, including the transfer to the
successor Master Servicer or successor Servicer, as applicable, for
administration by it of all cash amounts that shall at the time be held by it
for deposit, or shall thereafter be received by it with respect to any
Receivable, and the related accounts and records maintained by the Master
Servicer.
(b) The Note Insurer, the Majority Noteholders or the Trust Collateral
Agent shall provide the Master Servicer with written notice of any Master
Servicer Default, which notice must grant the Master Servicer an opportunity to
cure any such event of termination as follows: (i) in the case of any failure of
the Master Servicer to properly administer or deliver any monies as required
pursuant to this Agreement, for a period of three (3) Business Days after
receipt of the notice by the Master Servicer; or (ii) in the case of any failure
pursuant to this Agreement that is non-monetary in nature, for a period of
thirty (30) days after receipt of the notice by the Master Servicer. Such notice
must explicitly provide that if any such failure by the Master Servicer giving
rise to the event of termination is not cured within the applicable cure period,
then the Controlling Party shall have the right to terminate the appointment of
the Master Servicer effective as of a date no sooner than the end of the
applicable cure period.
(c) The Master Servicer may be released from its obligations under this
Agreement if it does not receive payment of its Master Servicer Fee or Successor
Servicer Fee required to be made under the terms of this Agreement, which
failure continues unremedied for a period of thirty (30) days after receipt by
the Note Insurer of written notice of such failure and that __________ intends
to terminate its appointment as Master Servicer if such failure to pay is not
remedied within such thirty (30) day period, which written notice shall
explicitly state that failure to pay any Master Servicer Fee or Successor
Servicer Fee owing to the Master Servicer, if not cured within thirty (30) days
of the date of receipt of notice thereof, will give the Master Servicer the
right to terminate its appointment as Master Servicer.
SECTION 8.03 Appointment of Successors.
(a) Upon the Subservicer's receipt of notice of termination pursuant to
Section 8.01 or the Subservicer's resignation in accordance with the terms of
this Agreement, the Subservicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the date thirty (30) days from the delivery
to the Master Servicer, as successor Servicer, and the Trust Collateral Agent,
the Indenture Trustee and the Note Insurer of written notice of such resignation
(or the date of written confirmation of such notice prior to the expiration of
the thirty (30) days) in accordance with the terms of this Agreement and (y) the
date upon which the Subservicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Subservicer's
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resignation or termination hereunder, and unless the Controlling Party directs
otherwise, the Master Servicer shall automatically be the successor Servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Master Servicer as Servicer by the terms and provisions
hereof; provided, however, that neither the Master Servicer nor any other
successor Servicer shall be liable for any actions of the Subservicer or any
other predecessor Servicer prior to such succession or for any breach by the
Subservicer or any other predecessor Servicer of any of its representations,
warranties or covenants contained in this Agreement or in any related document
or agreement.
(b) To the extent that __________ shall be entitled to any indemnity
payment from the Subservicer pursuant to Sections 7.03(a)(iii), 8.03(a) or
8.03(i) and such indemnity payment has not been made within 30 calendar days of
demand thereof, __________ shall be entitled to reimbursement for such unpaid
amounts, to the extent of available funds, under priority (_____) of Section
5.12(a) hereof.
(c) If the Master Servicer becomes aware of any error or continuing error
which in the opinion of the Master Servicer impairs its ability to perform its
services hereunder, the Master Servicer may undertake such data or records
reconstruction as it deems appropriate to correct any such error or continued
error and to prevent future continuing error. To the extent it is not otherwise
reimbursed under this Agreement, the Master Servicer shall be entitled to
recover its costs incurred in correcting any such error or continuing error.
(d) Upon the Master Servicer's receipt of notice of termination following a
Master Servicer Default or the Master Servicer's resignation in accordance with
the terms of this Agreement, the Master Servicer shall continue to perform its
functions as Master Servicer or Servicer, as applicable, under this Agreement,
in the case of termination, only until the date specified in such termination
notice or, if no such date is specified in a notice of termination, until
receipt of such notice and, in the case of resignation, until the later of (x)
the date 30 days from the delivery to the Back-up Servicer, the Trust Collateral
Agent, the Indenture Trustee and the Note Insurer of written notice of such
resignation (or the date of written confirmation of such notice prior to the
expiration of the 30 days) in accordance with the terms of this Agreement and
(y) the date upon which the Master Servicer shall become unable to act as
Servicer, as specified in the notice of resignation and accompanying Opinion of
Counsel. In the event of the Master Servicer's resignation or termination
hereunder, and if the Controlling Party so directs, the Back-up Servicer shall
be the successor in all respects to the Master Servicer in its capacity as
Master Servicer and, if applicable, Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer and, if applicable, the Servicer by the terms and provisions hereof;
provided, however, that the Back-up Servicer shall not be liable for any actions
of the Master Servicer prior to such succession or for any breach by the Master
Servicer of any of its representations, warranties and covenants contained in
this Agreement or in any related document or agreement.
(e) Upon receipt by any successor Servicer (other than the Master Servicer
in accordance with Section 8.03(d) above) of notice of termination or such
successor Servicer's resignation in accordance with the terms of this Agreement,
such successor Servicer shall
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continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 30 days
from the delivery to the Back-up Servicer, if any, the Trust Collateral Agent,
the Indenture Trustee and the Note Insurer of written notice of such resignation
(or the date of written confirmation of such notice prior to the expiration of
the 30 days) in accordance with the terms of this Agreement and (y) the date
upon which such successor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of such successor Servicer's resignation or termination hereunder, and
if the Controlling Party so directs, the Back-up Servicer, if any, shall be the
successor in all respects to the Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof; provided, however, that the Back-up Servicer
shall not be liable for any actions of the predecessor Servicer prior to such
succession or for any breach by the predecessor Servicer of any of its
representations, warranties and covenants contained in this Agreement or in any
related document or agreement.
(f) Notwithstanding the above, if the Back-up Servicer is legally unable to
so act or the Controlling Party otherwise directs in accordance with Section
4.03(d), the Controlling Party shall appoint a successor Servicer, successor
Master Servicer or successor Back-up Servicer. Otherwise, the Trust Collateral
Agent shall appoint (after soliciting bids from potential servicers), or
petition a court of competent jurisdiction to appoint, a Servicer (as successor
Servicer), Master Servicer (as successor Master Servicer) or Back-up Servicer
(as successor Back-up Servicer) hereunder, in each case acceptable to the
Controlling Party, in the assumption of all or any part of the responsibilities,
duties or liabilities of the outgoing Servicer, Master Servicer or Back-up
Servicer, as applicable, hereunder. The outgoing Servicer, Master Servicer or
Back-up Servicer shall continue to act as such hereunder until a successor
acceptable to the Controlling Party is appointed and assumes the obligations as
successor Servicer, Master Servicer or Back-up Servicer, as applicable.
(g) Upon appointment, the successor Servicer, Master Servicer or Back-up
Servicer, as applicable, shall be the successor in all respects to the
predecessor Servicer, Master Servicer or Back-up Servicer, as applicable, and
shall be subject to all the responsibilities, duties, and liabilities arising
thereafter relating thereto placed on the predecessor Servicer, Master Servicer
or Back-up Servicer, as applicable, and shall be entitled to compensation in
accordance with Section 8.03(h) and Section 4.11, and all of the rights granted
to the predecessor Servicer, Master Servicer or Back-up Servicer, as applicable,
by the terms and provisions of this Agreement, provided that successor Servicer,
Master Servicer or Back-up Servicer, as applicable, shall not be liable for the
acts or omissions of any predecessor.
(h) If __________ is the successor Servicer, __________ shall be entitled
to the Successor Servicer Fee as compensation. If __________ is the successor
Servicer, it shall be entitled to the Successor Servicer Fee as compensation. In
all other cases, in connection with such appointment, the Trust Collateral Agent
may make such arrangements for the compensation of such successor Servicer out
of payments on Receivables as it, the Controlling Party and such successor
Servicer shall agree. The Trust Collateral Agent and any such successor Servicer
shall
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take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(i) Any successor Servicer may accept and reasonably rely on all accounting
and servicing records and other documentation provided to such successor
Servicer in connection with succession to Servicer duties, including documents
prepared or maintained by the Originator, the Transferor, or the Subservicer, or
any party providing services related to the Receivables (each, a "Third Party").
The Subservicer shall indemnify and hold harmless the successor Servicer and its
officers, employees and agents, the Issuer, the Noteholders and the Note Insurer
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
successor Servicer, the Issuer, the Noteholders and the Note Insurer may sustain
in any way (i) solely related to the negligence or misconduct of the Subservicer
or any such Third Party based upon any matter related to or arising out of this
Agreement except for any claims, losses, penalties, fines, forfeitures, legal
fees, and related costs and judgments arising from such successor Servicer's own
negligence or willful misconduct; or (ii) solely related to the conduct of such
successor Servicer undertaken at the direction of any party hereto or which
relate to the transfer of servicing to the successor Servicer. The successor
Servicer shall have no duty, responsibility, obligation or liability
(collectively "liability") for the acts or omissions of any Third Party. If any
error, inaccuracy or omission (collectively "error") exists in any information
provided to a successor Servicer and such error causes or materially contributes
to such successor Servicer making or continuing any error (a "continuing
error"), such successor Servicer shall have no liability for such continuing
error; provided, however, that this provision shall not protect such successor
Servicer against any liability arising from its willful misconduct, bad faith or
gross negligence in discovering or correcting or failing to discover or correct
any error or in the performance of its other duties contemplated herein.
SECTION 8.04 Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, the Servicer,
the Master Servicer or the Back-up Servicer pursuant to this Article VIII, the
Trust Collateral Agent shall promptly upon its receipt of notice thereof give
prompt written notice thereof to the Noteholders and the Certificateholders at
their respective addresses appearing in the Note Register and the Certificate
Register, to each of the Rating Agencies then rating the Notes and to the Note
Insurer.
SECTION 8.05 Waiver of Past Defaults.
The Controlling Party may, on behalf of all Noteholders and all
Certificateholders, waive any Servicer Default, Master Servicer Default or
default by the Back-up Servicer or the Transferor in the performance of its
obligations hereunder and its consequences, except a default in making any
required deposits to or payments from a Trust Account in accordance with this
Agreement. No such waiver shall extend to any subsequent default or impair any
right consequent thereon.
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ARTICLE IX
THE TRUST COLLATERAL AGENT
SECTION 9.01 Duties of the Trust Collateral Agent.
(a) If an Indenture Event of Default has occurred and is continuing, the
Trust Collateral Agent shall exercise the rights and powers vested in it by this
Agreement and the Basic Documents and use the same degree of care and skill in
its exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs; provided, however, that, if
__________, as Back-up Servicer, shall assume the duties of the Servicer
pursuant to Section 8.01 or Section 8.03 of this Agreement, __________, as
Back-up Servicer, in performing such duties shall use the degree of skill and
attention customarily exercised by a servicer with respect to motor vehicle
contracts that it services for itself or others and in any event, with no less
degree of skill and care than would be exercised by a prudent servicer of
similar motor vehicle retail installment sales contracts.
(b) Except during the continuance of an Indenture Event of Default:
(i) the Trust Collateral Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement and the
Basic Documents and no implied covenants or obligations shall be read into
this Agreement or the Basic Documents against the Trust Collateral Agent;
and
(ii) in the absence of bad faith or willful misconduct on its part,
the Trust Collateral Agent may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trust Collateral Agent and
conforming to the requirements of this Agreement and the Basic Documents;
however, the Trust Collateral Agent shall examine the certificates and
opinions to determine whether or not they conform on their face to the
requirements of this Agreement and the Basic Documents.
(c) The Trust Collateral Agent may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own bad faith or
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 9.01; and
(ii) the Trust Collateral Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Trust
Collateral Agent unless it is proved that the Trust Collateral Agent was
negligent in ascertaining the pertinent facts.
(d) Money held in trust by the Trust Collateral Agent need not be
segregated from other funds except to the extent required by law or the terms of
this Agreement.
(e) No provision of this Agreement shall require the Trust Collateral Agent
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its
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duties hereunder or in the exercise of any of its rights or powers, if it shall
have reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability reasonably satisfactory to it is not
reasonably assured to it.
(f) Every provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Trust Collateral Agent shall be
subject to the provisions of this Section.
(g) The Trust Collateral Agent shall, and hereby agrees that it will,
perform all of the obligations and duties required of it under this Agreement.
(h) Without limiting the generality of this Section, the Trust Collateral
Agent shall have no duty (A) to see to any recording, filing or depositing of
this Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest in the Financed Vehicles,
or to see to the maintenance of any such recording or filing or depositing or to
any re-recording, refiling or redepositing of any thereof, (B) to see to any
insurance on the Financed Vehicles or Obligors or to effect or maintain any such
insurance, (C) to see to the payment or discharge of any tax, assessment or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the Trust, (D) to confirm or
verify the contents of any reports or certificates delivered to the Trust
Collateral Agent pursuant to this Agreement believed by the Trust Collateral
Agent to be genuine and to have been signed or presented by the proper party or
parties, or (E) to inspect the Financed Vehicles at any time or ascertain or
inquire as to the performance or observance of any of the Issuer's, the
Transferor's, the Master Servicer's, the Servicer's or the Back-up Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer under this Agreement.
(i) In no event shall __________, in any of its capacities hereunder, be
deemed to have assumed any duties of the Owner Trustee under the Delaware
Business Trust Statute, common law, or the Trust Agreement.
(j) __________ by its execution hereof accepts its appointment as Trust
Collateral Agent under the Indenture and this Agreement. The Trust Collateral
Agent shall act upon and in compliance with the written instructions of the
Indenture Trustee delivered pursuant to the Indenture promptly following receipt
of such written instructions; provided that the Trust Collateral Agent shall not
act in accordance with any instructions (i) which are not authorized by, or in
violation of the provisions of, the Indenture or this Agreement, (ii) which are
in violation of any applicable law, rule or regulation or (iii) for which the
Trust Collateral Agent has not received indemnity reasonably satisfactory to it.
Receipt of such instructions shall not be a condition to the exercise by the
Trust Collateral Agent of its express duties hereunder, except where the
Indenture or this Agreement provides that the Trust Collateral Agent is
permitted to act only following and in accordance with such instructions.
(k) At all times the capacities of Indenture Trustee and Trust Collateral
Agent shall be performed by the same person.
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(l) Except for actions expressly authorized by this Agreement, the Trust
Collateral Agent shall not take action reasonably likely to impair the security
interests created or existing under any Receivable or Financed Vehicle or to
impair the value of any Receivable or Financed Vehicle.
(m) The Trust Collateral Agent shall, and hereby agrees that it will, hold
the Note Policy in trust, and will hold any proceeds of any claim on the Note
Policy in trust, solely for the use and benefit of the Class A Noteholders.
SECTION 9.02 Rights of the Trust Collateral Agent.
Except as otherwise provided in Section 9.01:
(a) before the Trust Collateral Agent acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Trust Collateral
Agent shall not be liable for any action it takes or omits to take in good faith
in reliance on an Officer's Certificate or Opinion of Counsel.
(b) the Trust Collateral Agent may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee,
(c) the Trust Collateral Agent shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trust Collateral Agent's conduct
does not constitute willful misconduct, negligence or bad faith.
(d) the Trust Collateral Agent may consult with counsel, and the written
advice or opinion of counsel with respect to legal matters relating to this
Agreement and the Notes or Certificates shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the written advice
or opinion of such counsel.
(e) the Trust Collateral Agent shall be under no obligation to exercise any
of the rights and powers vested in it by this Agreement or the other Basic
Documents, or to institute, conduct or defend any litigation under this
Agreement or in relation to this Agreement, at the request, order or direction
of any of the Holders of Notes or Certificates, pursuant to the provisions of
this Agreement, unless such Holders of Notes or Certificates shall have offered
to the Trust Collateral Agent security or indemnity reasonably satisfactory to
it against the costs, expenses and liabilities that may be incurred therein or
thereby; provided, however, that the Trust Collateral Agent shall, upon the
occurrence of an Indenture Event of Default, exercise the rights and powers
vested in it by this Agreement with the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(f) except after the occurrence of an Indenture Event of Default, the Trust
Collateral Agent shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order,
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approval, bond or other paper or document, unless requested in writing to do so
by the Controlling Party; provided, however, that, if the payment within a
reasonable time to the Trust Collateral Agent of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trust Collateral Agent, not reasonably assured to the
Trust Collateral Agent by the security afforded to it by the terms of this
Agreement, the Trust Collateral Agent may require indemnity reasonably
satisfactory to it against such cost, expense or liability as a condition to so
proceeding; the reasonable expense of every such examination shall be paid by
the requesting Person, or, if paid by the Trust Collateral Agent, shall be
reimbursed by the requesting Person upon demand.
SECTION 9.03 Individual Rights of Trust Collateral Agent.
The Trust Collateral Agent in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with the Issuer or
its Affiliates with the same rights it would have if it were not Trust
Collateral Agent.
SECTION 9.04 Reports by Trust Collateral Agent to Holders.
The Trust Collateral Agent shall on behalf of the Issuer deliver to each
Noteholder such information as may be reasonably required to enable such Holder
to prepare its Federal and state income tax returns.
SECTION 9.05 Compensation.
(a) In accordance with Section 5.12(a), the Trust Collateral Agent shall on
each Distribution Date receive the Trust Collateral Agent Fee as compensation
for its services as Trust Collateral Agent, Indenture Trustee and Collateral
Agent under this Agreement and the other Basic Documents. In accordance with
Section 5.12(a), the Trust Collateral Agent shall be entitled to be reimbursed
for all reasonable out-of-pocket expenses incurred or made by it, including
costs of collection, in addition to the compensation for its services, except
any such expense as may be attributable to its willful misconduct, negligence or
bad faith. Such expenses shall include securities transaction charges relating
to the investment of funds on deposit in the Trust Accounts and the reasonable
compensation and reasonable expenses, disbursements and advances of the Trust
Collateral Agent's counsel and of all persons not regularly in its employ;
provided, however, that the securities transaction charges referred to above
shall, in the case of certain Eligible Investments selected by the Servicer, or
Transferor, as the case may be, be waived for a particular investment in the
event that any amounts are received by the Trust Collateral Agent from a
financial institution in connection with the purchase of such Eligible
Investments.
The Trust Collateral Agent shall receive the Trust Collateral Agent Fee as
compensation for its duties as detailed in Exhibit F hereto.
(b) The Issuer's payment obligations to the Trust Collateral Agent pursuant
to this Section shall survive the discharge of this Agreement. When the Trust
Collateral Agent incurs expenses after the occurrence of an Indenture Event of
Default specified in Section 5.1(v) or (vi) of the Indenture with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable
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Federal or state bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Agreement or the Basic Documents, the Trust Collateral
Agent agrees that the obligations of the Issuer or the Transferor to the Trust
Collateral Agent hereunder and under the Basic Documents shall not be recourse
to the assets of the Issuer, the Transferor or any Noteholder.
SECTION 9.06 Eligibility.
The Trust Collateral Agent under this Agreement shall at all times be a
corporation or banking association having an office in the same state as the
location of the Corporate Trust Office as specified in this Agreement;
acceptable to the Note Insurer; organized and doing business under the laws of
such state or the United States of America; authorized under such laws to
exercise corporate trust powers; having a combined capital and surplus of at
least $250,000,000; having long-term unsecured debt obligations rated at least
Baa3 by ▇▇▇▇▇'▇ and BBB- by Standard and Poor's; and subject to supervision or
examination by federal or state authorities. If such Person shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trust Collateral Agent shall
cease to be eligible in accordance with the provisions of this Section, the
Trust Collateral Agent shall resign immediately, provided that such resignation
shall not be effective until a successor Trust Collateral Agent accepts
appointment in accordance with Section 9.10(d) hereof.
SECTION 9.07 Trust Collateral Agent's Disclaimer.
The Trust Collateral Agent shall not be responsible for and makes no
representation as to the validity or adequacy of this Agreement, the Trust
Property or the Securities, shall not be accountable for the Issuer's use of the
proceeds from the Securities, and shall not be responsible for any statement of
the Issuer in this Agreement or in any document issued in connection with the
sale of the Securities or in the Securities.
SECTION 9.08 Limitation on Liability.
Neither the Trust Collateral Agent nor any of its directors, officers or
employees shall be liable for any action taken or omitted to be taken by it or
them in good faith hereunder, or in connection herewith, except that the Trust
Collateral Agent shall be liable for its negligence, bad faith or willful
misconduct; nor shall the Trust Collateral Agent be responsible for the
validity, effectiveness, value, sufficiency or enforceability against the Issuer
of this Agreement or any of the Trust Property (or any part thereof).
Notwithstanding any term or provision of this Agreement, the Trust Collateral
Agent shall incur no liability to the Issuer for any action taken or omitted by
the Trust Collateral Agent in connection with the Trust Property, except for the
negligence, bad faith or willful misconduct on the part of the Trust Collateral
Agent, and, further, shall incur no liability to the Issuer except for
negligence, bad faith or willful misconduct in carrying out its duties to the
Issuer. Subject to Section 9.09, the Trust Collateral Agent shall be protected
and shall incur no liability to any such party in relying upon the accuracy,
acting in reliance upon the contents, and assuming the genuineness of any
notice, demand, certificate, signature, instrument or other document reasonably
believed by the Trust
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Collateral Agent to be genuine and to have been duly executed by the appropriate
signatory, and (absent actual knowledge of a Responsible Officer of the Trust
Collateral Agent to the contrary) the Trust Collateral Agent shall not be
required to make any independent investigation with respect thereto. The Trust
Collateral Agent shall at all times be free independently to establish to its
reasonable satisfaction, but shall have no duty to independently verify, the
existence or nonexistence of facts that are a condition to the exercise or
enforcement of any right or remedy hereunder or under any of the Basic
Documents. The Trust Collateral Agent may consult with counsel, and shall not be
liable for any action taken or omitted to be taken by it hereunder in good faith
and in accordance with the written advice of such counsel.
SECTION 9.09 Reliance Upon Documents.
In the absence of bad faith or willful misconduct on its part, the Trust
Collateral Agent shall be entitled to rely on any communication, instrument,
paper or other document reasonably believed by it to be genuine and correct and
to have been signed or sent by the proper Person or Persons and shall have no
liability in acting, or omitting to act, where such action or omission to act is
in reasonable reliance upon any statement or opinion contained in any such
document or instrument.
SECTION 9.10 Successor Trust Collateral Agent.
(a) Merger. Any Person into which the Trust Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Trust Collateral Agent is a party, shall (provided
it is otherwise qualified to serve as the Trust Collateral Agent hereunder) be
and become a successor Trust Collateral Agent hereunder and be vested with all
of the title to and interest in the Receivables and the other Trust Property in
its capacity as Trust Collateral Agent and all of the trusts, powers,
discretions, immunities, privileges and other matters as was its predecessor
without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding, except to the extent, if any, that any such action is
necessary to perfect, or continue the perfection of, the security interest of
the Noteholders and the Note Insurer in the Trust Property.
(b) Resignation. The Trust Collateral Agent and any successor Trust
Collateral Agent may resign at any time by giving sixty days prior written
notice to the Issuer and the Note Insurer; provided, that such resignation shall
not be effective until a successor Trust Collateral Agent is appointed and
accepts appointment in accordance with clause (d) below.
(c) Removal. The Trust Collateral Agent may be removed by the Note Insurer
(so long as the Note Insurer is the Controlling Party) and thereafter the Issuer
at any time, with or without cause, by an instrument or concurrent instruments
in writing delivered to the Trust Collateral Agent, the Indenture Trustee, the
Note Insurer, the Owner Trustee and the Noteholders. A temporary successor may
be removed at any time to allow a successor Trust Collateral Agent to be
appointed pursuant to subsection (d) below. Any removal pursuant to the
provisions of this subsection (c) shall take effect only upon the date which is
the latest of the
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effective date of the appointment of a successor Trust Collateral Agent and the
acceptance in writing by such successor Trust Collateral Agent of such
appointment and of its obligation to perform its duties hereunder in accordance
with the provisions hereof.
(d) Acceptance by Successor. The Note Insurer has the right to appoint a
successor Trust Collateral Agent and if it fails to, or if the Note Insurer is
no longer the Controlling Party, the Owner Trustee shall have the sole right to
appoint each successor Trust Collateral Agent that meets the qualifications
required hereunder. Every temporary or permanent successor Trust Collateral
Agent appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Owner Trustee, each Noteholder, each Certificateholder,
the Rating Agencies, the Note Insurer and the Issuer an instrument in writing
accepting such appointment hereunder and the relevant predecessor shall execute,
acknowledge and deliver such other documents and instruments as will effectuate
the delivery of all Trust Property to the successor Trust Collateral Agent,
whereupon such successor, without any further act, deed or conveyance, shall
become fully vested with all the estates, properties, rights, powers, duties and
obligations of its predecessor. Such predecessor shall, nevertheless, on the
written request of the Issuer, execute and deliver an instrument transferring to
such successor all the estates, properties, rights and powers of such
predecessor hereunder. In the event that any instrument in writing from the
Issuer is reasonably required by a successor Trust Collateral Agent to more
fully and certainly vest in such successor the estates, properties, rights,
powers, duties and obligations vested or intended to be vested hereunder in the
Trust Collateral Agent, any and all such written instruments shall, at the
request of the temporary or permanent successor Trust Collateral Agent, be
forthwith executed, acknowledged and delivered by the Owner Trustee or the
Issuer, as the case may be. The designation of any successor Trust Collateral
Agent and the instrument or instruments removing any Trust Collateral Agent and
appointing a successor hereunder, together with all other instruments provided
for herein, shall be maintained with the records relating to the Trust Property
and, to the extent required by applicable law, filed or recorded by the
successor Trust Collateral Agent in each place where such filing or recording is
necessary to effect the transfer of the Trust Property to the successor Trust
Collateral Agent or to protect or continue the perfection of the security
interests granted hereunder.
If no successor Trust Collateral Agent shall have been appointed and
accepted the appointment within 60 days after the giving of notice of
resignation, the resigning Trust Collateral Agent may petition any court of
competent jurisdiction for the appointment of a successor Trust Collateral Agent
that meets the qualifications required hereunder.
SECTION 9.11 Representations and Warranties of the Trust Collateral Agent.
The Trust Collateral Agent represents and warrants to the Issuer, the Note
Insurer and to the Noteholders as follows:
(i) The Trust Collateral Agent is a national banking association, duly
organized and validly existing under the laws of the United States and is
authorized to conduct and engage in a banking and trust business under such
laws.
(ii) The Trust Collateral Agent has full corporate power, authority,
and legal right to execute, deliver, and perform this Agreement and the
other Basic Documents to
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which it is a party, and has taken all necessary action to authorize the
execution, delivery, and performance by it of this Agreement and the other
Basic Documents to which it is a party.
(iii) This Agreement and the other Basic Documents to which it is a
party have been duly executed and delivered by the Trust Collateral Agent.
(iv) This Agreement and the other Basic Documents to which it is a
party are the legal, valid and binding obligations of the Trust Collateral
Agent enforceable in accordance with their respective terms, subject to the
effects of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity.
SECTION 9.12 Waiver of Setoffs.
Except with respect to the Certificate Distribution Account, the Trust
Collateral Agent hereby expressly waives any and all rights of setoff that the
Trust Collateral Agent may otherwise at any time have under applicable law with
respect to any Trust Account and agrees that amounts in the Trust Accounts shall
at all times be held and applied solely in accordance with the provisions
hereof.
SECTION 9.13 Trust Collateral Agent to Act for the Noteholders and Note
Insurer.
Prior to the payment in full of the Notes, payment in full to the Note
Insurer of any amounts due under this Agreement or the Insurance Agreement and
the expiration of the term of the Note Policy, the Trust Collateral Agent shall
act solely for the benefit of the Noteholders and the Note Insurer, as their
interests may appear herein.
SECTION 9.14 Rights of Note Insurer to Direct Trust Collateral Agent.
Subject to Section 9.02, unless an Insurer Default shall have occurred and
be continuing, the Note Insurer, after giving written notice to the Trust
Collateral Agent, shall have the right to direct the time, method and place at
or by which the Trust Collateral Agent conducts any proceeding for any remedy
available to the Trust Collateral Agent, or exercises any such trust or power
conferred upon the Trust Collateral Agent; provided, however, that subject to
Section 9.02, the Trust Collateral Agent shall have the right to decline to
follow any such direction of the Note Insurer if the Trust Collateral Agent,
being advised by counsel, determines that the action so directed may not
lawfully be taken, or if the Trust Collateral Agent in good faith shall, by a
Responsible Officer of the Trust Collateral Agent, determine that the
proceedings so directed would be in violation of any Basic Document or involve
it in personal liability against which its has not been provided indemnity in
form and substance satisfactory to it or be unduly prejudicial to the rights of
Noteholders; provided, that nothing in this Agreement shall impair the right of
the Trust Collateral Agent to take any action deemed proper by the Trust
Collateral Agent and which is not inconsistent with such direction of the Note
Insurer or this Agreement.
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ARTICLE X
TERMINATION
SECTION 10.01 Clean-up Call.
(a) On the last day of any Collection Period as of which the Pool Balance
shall be less than or equal to 10% of the sum of the Initial Pool Balance and
the aggregate Principal Balances of the Subsequent Receivables (as of the
related Pre-Funding Receivable Cut-off Date), the Servicer shall have the option
to acquire the Trust Property, other than the Trust Accounts; provided, however,
that the amount to be paid for such reacquisition (as set forth in the following
sentence) shall be sufficient to pay the full amount of principal and interest
then due and payable on the Notes and all amounts due to the Note Insurer, the
Indenture Trustee, the Trust Collateral Agent and the Collateral Agent. To
exercise such option, the Servicer shall deposit pursuant to Section 5.05 in the
Collection Account an amount equal to (i) with respect to Receivables that are
less than thirty (30) days delinquent, the outstanding Principal Balance of the
Receivables and (ii) with respect to Receivables that are thirty (30) days or
more delinquent, the lower of (A) the estimated fair market value of the
Receivables or (B) the Principal Balance of the Receivables plus accrued
interest, plus the appraised value of any other property held by the Trust
(other than the Trust Accounts), such value to be determined by an appraiser
mutually agreed upon by the Servicer and the Note Insurer. Upon such deposit,
the Servicer shall succeed to all interests in and to the Trust (other than the
Trust Accounts).
(b) Notice of any termination of the Trust shall be given by the Servicer
to the Owner Trustee, the Indenture Trustee, the Trust Collateral Agent, the
Note Insurer and the Rating Agencies as soon as practicable after the Servicer
has knowledge or received notice thereof.
ARTICLE XI
ADMINISTRATION OF TRUST
SECTION 11.01 Administrative Trust Duties.
(a) Administrative Duties with Respect to the Basic Documents. The
Originator shall perform all its duties and, unless otherwise specified, the
administrative duties of the Trust under the Basic Documents. In addition, the
Originator shall consult with the Owner Trustee, the Indenture Trustee and the
Note Insurer (so long as the Note Insurer is the Controlling Party), as the
Originator deems appropriate regarding the duties of the Trust under the Basic
Documents. The Originator shall monitor the performance of the Trust and shall
advise the Owner Trustee, the Indenture Trustee and the Note Insurer (so long as
the Note Insurer is the Controlling Party), when action is necessary to comply
with the Trust's duties under the Basic Documents.
(b) Duties with Respect to the Trust and the Spread Account Depositor.
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(i) In addition to the duties of the Originator set forth in this
Agreement or any of the Basic Documents, the Originator shall perform such
calculations and shall prepare for execution by the Trust or the Owner
Trustee, as applicable, or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates
and opinions as it shall be the duty of the Trust or the Owner Trustee, as
applicable, to prepare, file or deliver pursuant to this Agreement or any
of the Basic Documents or under state or federal tax or securities laws and
shall take all appropriate action that it is the duty of the Trust to take
pursuant to this Agreement or any of the Basic Documents, including,
without limitation, pursuant to Section 5.1 (with respect to the
preparation and filing of tax returns) of the Trust Agreement Sections 3.9
and 11.1 of the Indenture and Section 2.2(c) of the Insurance Agreement.
(ii) [To be updated based on Lock-Box Agreement.] The Originator is
hereby authorized by the Trust and the Owner Trustee, and the Originator
hereby agrees, to establish the Lock-Box Account to be established and
maintained in the name of the Trust in accordance with the terms hereof and
the Lock-Box Agreement. The Originator shall perform each of the duties of
the Trust [under the "Standard Terms and Conditions" incorporated] in the
Lock-Box Agreement. [In addition, in connection with the Lock-Box
Agreement, the Originator ▇▇▇▇▇▇ agrees that:
(1) all notices to be provided by, on behalf of, or to the
Originator or the Trust, as applicable, under Sections 2(d), 3(a),
3(b) or 3(c) of the Lock-Box Agreement shall, in addition to any
delivery requirements set forth therein, be delivered by the
Originator to the Note Insurer promptly, but in no event later than
one (1) Business Day, after receipt thereof;
(2) no termination of the Lock-Box Agreement may be delivered by
or on behalf of the Originator or the Trust, as applicable, pursuant
to Section 2(d) or 3(a) of the Lock-Box Agreement without the
Originator obtaining the Note Insurer's prior written consent;
(3) no notices shall be sent under Section 8(a) of the Lock-Box
Agreement without the Originator obtaining the Note Insurer's prior
written consent for so long as the Note Policy has not expired in
accordance with its terms and the Note Insurer has not received
payment in full of all amounts owing to the Note Insurer hereunder and
under the Insurance Agreement;
(4) no additions may be made to the acceptable payees referred to
in Section 8(c) of the Lock-Box Agreement without the Originator
obtaining the Note Insurer's prior written consent; and
(5) no amendments may be made in accordance with Section 9 or
Section 13 of the Lock-Box Agreement or otherwise without the
Originator obtaining the Note Insurer's prior written consent.]
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(iii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Originator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transaction or dealings shall be in
accordance with any directions received from the Trust and shall be, in the
Originator's good faith business judgment, no less favorable to the Trust
in any material respect.
(c) Records. The Originator shall maintain appropriate books of account and
records relating to its duties performed under Section 11.01(a) and (b) hereof,
which books of account and records shall be accessible for inspection by the
Owner Trustee, the Indenture Trustee, the Note Insurer and the Trust Collateral
Agent at any time during normal business hours.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01 Amendment.
(a) This Agreement may be amended from time to time by the Issuer, the
Transferor, the Servicer, the Master Servicer, the Subservicer, the Back-up
Servicer, the Originator and the Trust Collateral Agent and, (i) so long as no
Insurer Default has occurred and is continuing, with the prior written consent
of the Note Insurer and, (ii) if an Insurer Default has occurred and is
continuing with the consent of the Majority Noteholders (which consent given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holders and on all future Holders of
such Notes and of any Notes issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Notes) for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Notes; provided, however, that, in the case
of either clause (i) or (ii) above, no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of, or
change the allocation or priority of, collections of payments on Receivables or
payments that shall be required to be made on any Note or Certificate or change
the applicable Note Rate without the consent of each Noteholder and
Certificateholder affected thereby, (b) reduce the aforesaid percentage of the
Note Balance required to consent to any such amendment, without the consent of
the Holders of all Notes then outstanding or eliminate the right of the
Noteholder or the Certificateholder to consent to any change described in clause
(a) affecting the Noteholder or the Certificateholder without the consent of the
Noteholder or the Certificateholder, as applicable, or (c) result in a downgrade
or withdrawal of the then current rating of the Notes by either of the Rating
Agencies without the consent of all the Noteholders; provided, further that in
the case of clause (ii) above, this Agreement may be amended from time to time
by the Issuer, the Transferor, the Servicer, the Master Servicer, the
Subservicer, the Back-up Servicer, the Originator and the Trust Collateral
Agent, with the prior written consent of the Note Insurer, for any of the
following purposes:
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(x) to correct or amplify the description of any property at any time
conveyed to the Issuer hereunder or under any Transfer Agreement, or better
to assure, convey and confirm unto the property conveyed pursuant hereto or
any Transfer Agreement;
(y) to add to the covenants of the Transferor, the Originator, the
Servicer, the Subservicer or the Master Servicer for the benefit of the
Holders of the Notes and the Note Insurer; or
(z) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or to make
any other provisions with respect to matters or questions arising under
this Agreement or any Transfer Agreement; provided that such action
pursuant to this subclause (z) shall not adversely affect in any material
respect the interests of the Holders of the Notes, as evidenced by written
confirmation that such amendment would not result in a downgrade or
withdrawal of the then current rating of the Notes by either of the Rating
Agencies.
(b) The Trust Collateral Agent shall furnish prior notice of any such
proposed amendment to each Rating Agency and promptly after the execution of any
such amendment or consent, the Trust Collateral Agent shall furnish a copy of
such amendment and/or consent, if applicable, to each Noteholder and each of the
Rating Agencies.
(c) Prior to the execution of any amendment to this Agreement, the Trust
Collateral Agent shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and the Opinion of Counsel referred to in Section 12.02(h)(1).
The Trust Collateral Agent may, but shall not be obligated to, enter into any
such amendment which affects the Trust Collateral Agent's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 12.02 Protection of Title to Trust.
(a) Each of the Transferor and the Originator, as to itself, shall execute
and file such financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Noteholders, the Note Insurer and the Trust Collateral Agent in the Receivables
and in the proceeds thereof and the sale of accounts and chattel paper. Each of
the Transferor and the Originator, as to itself, shall deliver (or cause to be
delivered) to the Trust Collateral Agent and the Note Insurer file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.
(b) Neither the Originator nor the Transferor shall change its name,
identity, or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by the Transferor or the
Originator in accordance with paragraph (a) above seriously misleading within
the meaning of [Section 9-402(7)] of the UCC, unless it shall have given the
Trust Collateral Agent and the Note Insurer at least fifteen days' prior written
notice thereof and shall have promptly filed appropriate amendments to all
previously filed financing statements or continuation statements and shall have
delivered an Opinion of Counsel (A) stating that, in the opinion of such
counsel, all amendments to all previously filed financing
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statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Trust Collateral
Agent in the Receivables and the other Trust 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 preserve and protect such interest.
(c) Each of the Transferor and the Originator shall give the Trust
Collateral Agent and the Note Insurer at least 60 days' prior written notice of
any relocation of its principal executive office, or jurisdiction of
organization, if, as a result of such relocation, the applicable provisions of
the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and shall
promptly file any such amendment and shall have delivered an Opinion of Counsel
(A) stating that, in the opinion of such counsel, all amendments to all
previously filed financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the interest
of the Trust Collateral Agent in the Receivables and the other Trust 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 preserve and protect such
interest. The Servicer shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trust, the
Servicer's master computer records (including any back-up archives) that refer
to a Receivable shall indicate clearly (including by means of tagging) the
interest of the Trust in such Receivable and that such Receivable is owned by
the Trust. Indication of the Trust's ownership of a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased.
If at any time the Originator or the Transferor or the Servicer shall
propose to sell, grant a security interest in, or otherwise transfer any
interest in automotive receivables to any prospective purchaser, lender, or
other transferee, the Servicer shall give to such prospective purchaser, lender,
or other transferee computer tapes, records, or print-outs (including any
restored from back-up archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly (including by means of
tagging) that such Receivable has been sold and is owned by the Trust.
(f) Upon reasonable prior notice, the Servicer shall permit the Trust
Collateral Agent, the Note Insurer and their respective agents at any time
during normal business hours to inspect, audit, and make copies of and abstracts
from the Servicer's records regarding any Receivable; provided, that such
inspection and audit shall not unreasonably interfere with the Servicer's daily
business operations.
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(g) Upon request, the Servicer shall furnish to the Trust Collateral Agent
and the Note Insurer, within five Business Days, a list of all Receivables (by
account number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the schedule of Receivables attached
hereto as Schedule A and to each of the Servicer's Certificates furnished before
such request indicating removal of Receivables from the Trust.
(h) The Servicer shall deliver to the Trust Collateral Agent and the Note
Insurer:
(1) upon the execution and delivery of this Agreement and of each
amendment thereto, an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements (and releases of
financing statements) and continuation statements have been filed that are
necessary fully to preserve and protect the interest of the Trust
Collateral Agent in the Receivables, and reciting the details of the
filings thereof 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
(2) within 90 days after the beginning of each calendar year beginning
with the first calendar year beginning more than three months after the
Cut-off Date, an Opinion of Counsel, dated as of a date during such 90-day
period, either (A) stating that, in the opinion of such Counsel, all
financing statements and continuation statements have been filed that are
necessary fully to preserve and protect the interest of the Trust
Collateral Agent in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such Counsel, no such action
shall be necessary to preserve and protect such interest. Such Opinion of
Counsel shall also describe the filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be
required to preserve and protect the interest of the Trust Collateral Agent
in the Receivables, until January 30 in the following calendar year.
Each Opinion of Counsel referred to in clause (h)(1) or (h)(2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(i) If the Master Servicer or the Back-up Servicer is acting as the
successor Servicer, it shall be reimbursed for any costs incurred by it in
performing its duties pursuant to this Section.
SECTION 12.03 Limitation on Rights of Noteholders and Certificateholders.
The death or incapacity of any Noteholder or Certificateholder shall not
operate to terminate this Agreement or the Trust, nor entitle such Noteholder's
or such Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations, and liabilities of the parties to this Agreement or any of them.
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No Noteholder shall have any right to vote (except as provided in this
Agreement) or in any manner otherwise control the operation and management of
the Trust, or the obligations of the parties to this Agreement, nor shall
anything in this Agreement set forth, or contained in the terms of the Notes be
construed so as to constitute the Noteholders from time to time as partners or
members of an association; nor shall any Noteholder be under any liability to
any third person by reason of any action taken pursuant to any provision of this
Agreement.
No Noteholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement, unless the
Note Insurer (so long as the Note Insurer is the Controlling Party) has given
its prior written consent and such Holder previously shall have given to the
Trust Collateral Agent a written notice of default and of the continuance
thereof, and unless also (i) the default arises from the Transferor's or the
Servicer's failure to remit payments when due hereunder, or (ii) the Majority
Noteholders shall have made written request upon the Trust Collateral Agent to
institute such action, suit or proceeding in its own name as Trust Collateral
Agent under this Agreement and such Holder shall have offered to the Trust
Collateral Agent such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trust
Collateral Agent, for 30 days after its receipt of such notice, request, and
offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding and during such 30-day period no request or waiver
inconsistent with such written request has been given to the Trust Collateral
Agent pursuant to this Section or Section 7.05; no one or more Holders of Notes
or Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the Notes or the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right, under this Agreement except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Noteholders of a given Class or all Certificateholders, as applicable.
For the protection and enforcement of the provisions of this Section, each
Noteholder, each Certificateholder and the Trust Collateral Agent shall be
entitled to such relief as can be given either at law or in equity. Nothing in
this Agreement shall be construed as giving the Noteholders any direct right to
make a claim on the Note Policy.
In the event the Trust Collateral Agent shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Securities, each representing less than the required amount of the Securities,
the Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Agreement.
SECTION 12.04 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 AND WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES (EXCEPT WITH REGARD TO THE UCC).
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SECTION 12.05 Notices.
All demands, notices, and communications upon or to the Originator, the
Transferor, the Servicer, the Master Servicer, the Subservicer, the Back-up
Servicer, the Trust Collateral Agent, the Owner Trustee, the Indenture Trustee,
the Note Insurer or any Rating Agency under this Agreement shall be in writing,
personally delivered, mailed by certified mail, return receipt requested or
delivered by overnight courier, and shall be deemed to have been duly given upon
receipt
(a) in the case of the Originator at the following address: United Fidelity
Bank, FSB, ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: President; at the following phone number: (▇▇▇) ▇▇▇-▇▇▇▇; and at the
following fax number (▇▇▇) ▇▇▇-▇▇▇▇.
(b) in the case of the Transferor at the following address: United Fidelity
Finance, LLC, ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
[_______________ ]; at the following phone number: [_______________ ]; and at
the following fax number [_______________ ].
(c) in the case of the Trust Collateral Agent, the Back-up Servicer and the
Indenture Trustee, at its Corporate Trust Office, Attention: Corporate Trust
Services/Asset Backed Administration;
(d) in the case of the Master Servicer at the following address:
[__________ address] Attention: __________; at the following phone number:
__________; and at the following fax number __________;
(e) in the case of the Servicer, to the Subservicer, the Master Servicer or
the Back-up Servicer, as applicable, or to the address of any successor Servicer
appointed in accordance with Section 8.03 hereof;
(f) in the case of the Owner Trustee, at its Corporate Trust Office;
(g) in the case of ▇▇▇▇▇'▇ at: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
(h) in the case of S&P, at: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
(i) in the case of the Note Insurer, to: ______________________________,
_________________________, _______________, __________ _____, Attention:
_______________, Confirmation: __________, Telecopy No. __________ (in each case
in which notice or other communication to __________ refers to an Event of
Default, a claim on the Policy or with respect to which failure on the part of
__________ to respond shall be deemed to constitute consent or acceptance, then
a copy of such notice of other communication should also be sent to the
attention of each of the General Counsel and the Head-Financial Guaranty Group
and shall be marked to indicate "URGENT MATERIAL ENCLOSED");
Any notice required or permitted to be mailed to a Noteholder or
Certificateholder, as the case may be shall be given by first class mail,
postage prepaid, at the
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address of such Holder as shown in the Note or Certificate Register. Any notice
so mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Noteholder or the
Certificateholder, as the case may be, shall receive such notice.
SECTION 12.06 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 Securities or the rights of the Holders thereof or of
the Note Insurer.
SECTION 12.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 7.03, 7.06 and 8.03 and as provided in the provisions of
this Agreement concerning the resignation of the Servicer, the Master Servicer,
the Subservicer and the Back-up Servicer, this Agreement may not be assigned by
the Transferor, the Servicer, the Subservicer, the Master Servicer or the
Back-up Servicer without the prior written consent of the Trust Collateral Agent
and the Controlling Party.
SECTION 12.08 Further Assurances.
The Transferor, the Servicer, the Master Servicer, the Subservicer and the
Back-up 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 Trust Collateral Agent or the Note Insurer more fully to effect the
purposes of this Agreement and the other Basic Documents, including, without
limitation, the execution of any financing statements or continuation statements
relating to the Receivables for filing under the provisions of the UCC of any
applicable jurisdiction.
SECTION 12.09 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the Trust
Collateral Agent, the Note Insurer, or the Noteholders or the
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges therein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 12.10 Third-Party Beneficiaries.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, the Indenture Trustee, the Noteholders and the Certificateholders,
respectively, and their respective successors and permitted assigns. Except as
may be otherwise provided in this
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Agreement, no other person will have any right or obligation hereunder. The
Owner Trustee (including in its individual capacity) and the Note Insurer are
each an express third party beneficiary of this Agreement. Each of the parties
to the Purchase Agreement hereby agrees that the Note Insurer shall be permitted
but not obligated to enforce the rights of the Transferor directly thereunder in
the place and stead of the Transferor but the Note Insurer shall have no
obligations under the Purchase Agreement.
SECTION 12.11 Actions by Noteholders or Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a notice, demand, or instruction given by Noteholders or by
Certificateholders, as the case may be, such action, notice, demand or
instruction may be taken or given by any Noteholder or by any Certificateholder,
unless such provision requires a specific percentage of Noteholders or
Certificateholders, as the case may be.
(b) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be taken or given by Noteholders
or Certificateholders, as the case may be, may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Noteholders or Certificateholders, as the case may be, in person or by an agent
duly appointed in writing.
(c) The fact and date of the execution by any Noteholder or any
Certificateholder of any instrument or writing may be proved in any reasonable
manner which the Trust Collateral Agent deems sufficient.
(d) Any request, demand, authorization, direction, notice, consent, waiver,
or other act by a Noteholder or a Certificateholder, as the case may be, shall
bind such Noteholder or Certificateholder, as the case may be, and every
subsequent holder of such Certificate or Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof in respect of
anything done or omitted to be done by the Trust Collateral Agent, the
Transferor, the Servicer, the Master Servicer, the Subservicer or the Back-up
Servicer in reliance thereon, whether or not notation of such action is made
upon such Certificate or Note.
(e) The Trust Collateral Agent may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 12.12 Corporate Obligation.
No recourse may be taken, directly or indirectly, against any partner,
incorporator, subscriber to the capital stock, stockholder, director, officer or
employee of the Transferor, the Servicer, the Master Servicer, the Subservicer
or the Back-up Servicer with respect to their respective obligations and
indemnities under this Agreement or any certificate or other writing delivered
in connection herewith.
SECTION 12.13 Covenant Not to File a Bankruptcy Petition.
The parties hereto agree that until one year and one day after such time as
the Notes issued under the Indenture are paid in full and all amounts due to the
Note Insurer under
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the Insurance Agreement are paid in full, they shall not (i) institute the
filing of an involuntary bankruptcy petition against the Transferor or the Trust
based upon any claim in its favor arising hereunder or under the Basic
Documents; (ii) file an involuntary petition or consent to an involuntary
petition seeking relief on behalf of the Transferor or the Trust under
Bankruptcy Law; or (iii) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or similar official) of the Transferor or the
Trust or a substantial portion of the property of the Transferor or the Trust.
The parties hereto agree that all obligations of the Issuer and the Transferor
are non-recourse to the Trust Property except as specifically set forth in the
Basic Documents.
SECTION 12.14 Independence of the Subservicer, Master Servicer and Back-up
Servicer.
For all purposes of this Agreement, each of the Subservicer, Master
Servicer and Back-up Servicer shall be an independent contractor and shall not
be subject to the supervision of the Trust, the Trust Collateral Agent or the
Owner Trustee with respect to the manner in which it accomplishes the
performance of its obligations hereunder. Unless expressly authorized by this
Agreement, the Subservicer, Master Servicer and Back-up Servicer shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 12.15 No Joint Venture.
Nothing contained in this Agreement (i) shall constitute the Subservicer,
the Master Servicer or the Back-up Servicer and either of the Trust or the Owner
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
SECTION 12.16 Consent to Jurisdiction.
(a) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE [SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK], AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN
CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN SUCH NEW YORK STATE COURT OR
IN SUCH FEDERAL COURT. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. TO
THE EXTENT PERMITTED BY
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APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO ASSERT BY WAY
OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THE RELATED
DOCUMENTS OR THE SUBJECT MATTER THEREOF MAY NOT BE LITIGATED IN OR BY SUCH
COURTS.
(b) To the extent permitted by applicable law, the parties hereto shall not
seek and hereby waive the right to any review of the judgment of any such court
by any court of any other nation or jurisdiction which may be called upon to
grant an enforcement of such judgment.
(c) Each of the Originator, the Subservicer, the Master Servicer and the
Transferor hereby agrees that until such time as the Notes and the Reimbursement
Obligations (as defined in the Insurance Agreement) have been paid in full and
the Note Policy has expired in accordance with its terms, each of the
Originator, the Subservicer, the Master Servicer and the Transferor shall have
appointed, with prior written notice to the Note Insurer, an agent registered
with the Secretary of State of the State of New York, with an office in the
County of New York in the State of New York, as its true and lawful attorney and
duly authorized agent for acceptance of service of legal process (which as of
the date hereof is CT Corporation System, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇). Each of the Originator, the Subservicer, the Master Servicer and the
Transferor agrees that service of such process upon such Person shall constitute
personal service of such process upon it.
SECTION 12.17 Headings.
The headings of articles and sections and the table of contents contained
in this Agreement are provided for convenience only. They form no part of this
Agreement and shall not affect its construction or interpretation. Unless
otherwise indicated, all references to articles and sections in this Agreement
refer to the corresponding articles and sections of this Agreement.
SECTION 12.18 Trial by Jury Waived.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR
INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS
OR THE TRANSACTION. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE
TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS
WAIVER.
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SECTION 12.19 Entire Agreement.
This Agreement sets forth the entire agreement between the parties with
respect to the subject matter hereof, and this Agreement supersedes and replaces
any agreement or understanding that may have existed between the parties prior
to the date hereof in respect of such subject matter.
SECTION 12.20 Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this Agreement
has been countersigned by ______________________________ not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall ______________________________ in its individual capacity or, except
as expressly provided in the Issuer Trust Agreement, as Owner Trustee, have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements of the Issuer delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer. For all purposes of this
Agreement, in the performance of its duties or obligations hereunder or in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of the Issuer Trust Agreement.
SECTION 12.21 Effect of Policy Expiration Date.
Notwithstanding anything to the contrary set forth herein, all references
to any right of the Note Insurer to direct, appoint, consent to, accept, approve
of, take or omit to take any action under this Agreement or any other Basic
Document shall be inapplicable at all times after the Policy Expiration Date,
and (i) if such reference provides for another party or parties to take or omit
to take such action following an Insurer Default, such party or parties shall
also be entitled to take or omit to take such action following the Policy
Expiration Date and (ii) if such reference does not provide for another party or
parties to take or omit to take such action following an Insurer Default, then
the Indenture Trustee acting at the direction of the Majority Noteholders shall
have the right to take or omit to take any such action following the Policy
Expiration Date. In addition, any other provision of this Agreement or any other
Basic Document which is operative based in whole or in part on whether an
Insurer Default has or has not occurred shall, at all times on or after the
Policy Expiration Date, be deemed to refer to whether or not the Policy
Expiration Date has occurred.
SECTION 12.22 Counterparts.
For the purpose of facilitating the execution of this Agreement and for
other purposes, this Agreement may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
[remainder of page intentionally left blank;
signature page follows]
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IN WITNESS WHEREOF, the Issuer, the Transferor, the Master Servicer, the
Originator, the Trust Collateral Agent and the Back-up Servicer have caused this
Sale and Servicing Agreement to be duly executed by their respective officers as
of the day and year first above written.
UNITED FIDELITY BANK, FSB,
as Originator and Subservicer
By:
-----------------------------------------------------------
Name:
Title:
UNITED FIDELITY FINANCE, LLC,
as Transferor
By:
-----------------------------------------------------------
Name:
Title:
UNITED FIDELITYAUTO RECEIVABLES TRUST [____-_],
as Issuer
By: ______________________________, not in its individual
capacity but solely as the Owner Trustee on behalf of
the Trust
By:
-----------------------------------------------------------
Name:
Title:
[Signature Page to Sale and Servicing Agreement]
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______________________________, as Trust Collateral Agent and
Back-up Servicer
By:
-----------------------------------------------------------
Name:
Title:
______________________________, as Master Servicer
By:
-----------------------------------------------------------
Name:
Title:
[Signature Page to Sale and Servicing Agreement]
126