Exhibit 10.1
EXECUTION COPY
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WACHOVIA AUTO OWNER TRUST 2004-A,
as Issuer,
POOLED AUTO SECURITIES SHELF LLC,
as Depositor,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Seller and Servicer
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SALE AND SERVICING AGREEMENT
Dated as of June 1, 2004
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. General Definitions.......................................................................... 1
Section 1.02. Other Definitional Provisions................................................................ 15
Section 1.03. Interpretive Provisions...................................................................... 15
ARTICLE TWO
CONVEYANCE OF TRUST PROPERTY
Section 2.01. Conveyance of Trust Property................................................................. 16
Section 2.02. Representations and Warranties of the Seller as to the Receivables........................... 17
Section 2.03. Representations and Warranties of the Depositor as to the Receivables........................ 18
Section 2.04. Repurchase of Receivables Upon Breach........................................................ 19
Section 2.05. Custody of Receivable Files.................................................................. 19
Section 2.06. Duties of Servicer as Custodian.............................................................. 20
Section 2.07. Instructions; Authority to Act............................................................... 21
Section 2.08. Indemnification by Custodian................................................................. 21
Section 2.09. Effective Period and Termination............................................................. 21
ARTICLE THREE
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.01. Duties of Servicer........................................................................... 23
Section 3.02. Subservicers................................................................................. 24
Section 3.03. Collection of Receivable Payments; Modification of Receivables............................... 25
Section 3.04. Realization Upon Receivables................................................................. 26
Section 3.05. Maintenance of Physical Damage Insurance Policies............................................ 26
Section 3.06. Maintenance of Security Interests in Financed Vehicles....................................... 27
Section 3.07. Covenants of Servicer........................................................................ 27
Section 3.08. Purchase of Receivables Upon Breach.......................................................... 27
Section 3.09. Servicing Compensation; Payment of Certain Expenses by Servicer.............................. 28
Section 3.10. Servicer's Certificate....................................................................... 28
Section 3.11. Annual Statement as to Compliance; Notice of Default......................................... 28
Section 3.12. Annual Accountants' Report................................................................... 29
Section 3.13. Access to Certain Documentation and Information Regarding Receivables........................ 29
Section 3.14. Reports to the Commission.................................................................... 30
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Section 3.15. Reports to Rating Agencies................................................................... 30
ARTICLE FOUR
DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS
Section 4.01. Establishment of Accounts.................................................................... 31
Section 4.02. Collections.................................................................................. 32
Section 4.03. Application of Collections................................................................... 32
Section 4.04. Advances..................................................................................... 33
Section 4.05. Additional Deposits.......................................................................... 33
Section 4.06. Determination Date Calculations; Application of Available Funds.............................. 34
Section 4.07. Reserve Fund................................................................................. 35
Section 4.08. Net Deposits................................................................................. 36
Section 4.09. Statements to Securityholders................................................................ 37
Section 4.10. Control of Accounts.......................................................................... 38
ARTICLE FIVE
THE DEPOSITOR
Section 5.01. Representations and Warranties of Depositor.................................................. 39
Section 5.02. Liability of Depositor; Indemnities.......................................................... 40
Section 5.03. Merger, Consolidation or Assumption of the Obligations of Depositor; Certain Limitations..... 41
Section 5.04. Limitation on Liability of Depositor and Others.............................................. 44
Section 5.05. Seller Not to Resign......................................................................... 44
Section 5.06. Depositor May Own Securities................................................................. 44
ARTICLE SIX
THE SERVICER
Section 6.01. Representations and Warranties of Servicer................................................... 45
Section 6.02. Liability of Servicer; Indemnities........................................................... 46
Section 6.03. Merger, Consolidation or Assumption of the Obligations of Servicer........................... 48
Section 6.04. Limitation on Liability of Servicer and Others............................................... 48
Section 6.05. Wachovia Bank Not to Resign as Servicer...................................................... 49
Section 6.06. Servicer May Own Securities.................................................................. 49
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ARTICLE SEVEN
SERVICER TERMINATION EVENTS
Section 7.01. Servicer Termination Events.................................................................. 50
Section 7.02. Appointment of Successor Servicer............................................................ 51
Section 7.03. Effect of Servicing Transfer................................................................. 52
Section 7.04. Notification to Noteholders, Certificateholders and Rating Agencies.......................... 53
Section 7.05. Waiver of Past Servicer Termination Events................................................... 53
Section 7.06. Repayment of Advances........................................................................ 53
ARTICLE EIGHT
TERMINATION
Section 8.01. Optional Purchase of All Receivables......................................................... 54
ARTICLE NINE
MISCELLANEOUS
Section 9.01. Amendment.................................................................................... 55
Section 9.02. Protection of Title to Issuer................................................................ 56
Section 9.03. Notices...................................................................................... 58
Section 9.04. Assignment................................................................................... 58
Section 9.05. Severability................................................................................. 59
Section 9.06. Further Assurances........................................................................... 59
Section 9.07. No Waiver; Cumulative Remedies............................................................... 59
Section 9.08. Third-Party Beneficiaries.................................................................... 59
Section 9.09. Actions by Noteholder or Certificateholders.................................................. 59
Section 9.10. Separate Counterparts........................................................................ 60
Section 9.11. Headings..................................................................................... 60
Section 9.12. GOVERNING LAW................................................................................ 60
Section 9.13. Nonpetition Covenants........................................................................ 60
Section 9.14. Limitation of Liability of Owner Trustee and Indenture Trustee............................... 60
SCHEDULES
Schedule A - Location of Receivable Files............................................................ SA-1
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EXHIBITS
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Exhibit A - Representations and Warranties as to the Receivables............................................ A-1
Exhibit B - Form of Distribution Statement.................................................................. B-1
Exhibit C - Form of Servicer's Certificate.................................................................. C-1
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This Sale and Servicing Agreement, dated as of June 1, 2004, is among
Pooled Auto Securities Shelf LLC, a Delaware limited liability company
("PASS"), as depositor (the "Depositor"), Wachovia Bank, National Association,
a national banking association ("Wachovia Bank"), as seller (in such capacity,
the "Seller") and as servicer (in such capacity, the "Servicer"), and Wachovia
Auto Owner Trust 2004-A, a Delaware statutory trust, as issuer (the "Issuer").
WHEREAS the Issuer desires to purchase from the Depositor a portfolio of
receivables arising in connection with motor vehicle retail installment sale
contracts (the "Receivables") purchased by Wachovia Bank in the ordinary
course of its business, which Receivables have been sold by Wachovia Bank to
the Depositor as of the date hereof;
WHEREAS, the Depositor is willing to sell the Receivables to the Issuer
pursuant to the terms hereof; and
WHEREAS, the Servicer is willing to service the Receivables pursuant to
the terms hereof.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and of other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. General Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Account Collateral" means, with respect to each Account, such Account,
together with all cash, securities, financial assets and investments and other
property from time to time deposited or credited to such Account and all
proceeds thereof, including, with respect to (i) the Reserve Fund, the Reserve
Fund Initial Deposit and (ii) the Yield Supplement Account, the Yield
Supplement Account Initial Deposit.
"Accounts" means the Collection Account, the Note Payment Account, the
Reserve Fund and the Yield Supplement Account.
"Administration Agreement" means the administration agreement, dated as
of June 1, 2004, among the Administrator, the Issuer, the Depositor and the
Indenture Trustee.
"Administrator" means Wachovia Bank, in its capacity as administrator
under the Administration Agreement, and its successors in such capacity.
"Advance" means, with respect to a Receivable, the amount, as of the last
day of a Collection Period, which is advanced with respect to such Receivable
by the Servicer pursuant to Section 4.04.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under common control
with such specified Person. For purposes of this definition, "control", when
used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Sale and Servicing Agreement.
"Amount Financed" means, with respect to any Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the related
Financed Vehicle and any related costs, including accessories, insurance
premiums, service and warranty contracts and other items customarily financed
as part of a motor vehicle retail installment sale contract.
"Available Collections" means, for any Distribution Date and the related
Collection Period, (i) all payments received on or in respect of the
Receivables during such Collection Period (other than amounts comprising the
Supplemental Servicing Fee), (ii) all Liquidation Proceeds and Recoveries
received with respect to the Receivables during such Collection Period, (iii)
in the event that collections on or in respect of the Receivables are required
to be deposited by the Servicer into the Collection Account on a daily basis
pursuant to Section 4.02, all investment earnings on funds on deposit in the
Collection Account, (iv) the aggregate Purchase Amount deposited in the
Collection Account on the related Deposit Date, (v) all Prepayments received
with respect to the Receivables during such Collection Period attributable to
any refunded item included in the Amount Financed (including amounts received
as a result of rebates of extended warranty contract costs and insurance
premiums and proceeds received under physical damage, theft, credit life and
credit disability insurance policies) and (vi) all Advances deposited into the
Collection Account by the Servicer on the related Deposit Date; provided,
however, that Available Collections shall not include any payments or other
amounts (including Liquidation Proceeds) received with respect to (a) any
Purchased Receivable, the Purchase Amount for which was included in Available
Collections for a previous Distribution Date and (b) any Receivable to the
extent that the Servicer has made an unreimbursed Advance with respect to such
Receivable and is entitled to reimbursement from payments in respect of such
Receivables or other Receivables or other amounts pursuant to Section 4.04.
"Available Funds" means, with respect to any Distribution Date, the sum
of (i) Available Collections, (ii) the Reserve Fund Draw Amount, if any, and
(iii) the Yield Supplement Account Draw Amount.
"Basic Documents" means this Agreement, the Administration Agreement, the
Indenture, the Note Depository Agreement, the Control Agreement, the
Receivables Purchase Agreement, the Trust Agreement and any other documents or
certificates delivered in connection herewith or therewith including, the
Power of Attorney pursuant to Section 1.02(c) of the Administration Agreement.
"Bankruptcy Code" means Title 11 of the United States Code, 11
U.S.C.ss.101 et seq.
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"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York,
Wilmington, Delaware, St. ▇▇▇▇, Minnesota or Charlotte, North Carolina are
authorized by law, regulation or executive order to be closed.
"Certificate" has the meaning specified in the Trust Agreement.
"Certificate Payment Account" means the account established and
maintained pursuant to Section 4.01.
"Certificate Percentage Interest" means, with respect to a Certificate,
the percentage specified on such Certificate as the Certificate Percentage
Interest, which percentage represents the beneficial interest of the holder of
such Certificate in the Issuer. The initial Certificate Percentage Interest
held by the Pass Holding, LLC shall be 100%.
"Certificateholder" has the meaning specified in the Trust Agreement.
"Class" has the meaning specified in the Indenture.
"Class A Notes" has the meaning specified in the Indenture.
"Class A-1 Noteholder" has the meaning specified in the Indenture.
"Class A-2 Noteholder" has the meaning specified in the Indenture.
"Class A-3 Noteholder" has the meaning specified in the Indenture.
"Class A-4 Noteholder" has the meaning specified in the Indenture.
"Class B Noteholder" has the meaning specified in the Indenture.
"Class B Notes" has the meaning specified in the Indenture.
"Class C Final Scheduled Distribution Date" has the meaning specified in
the Indenture.
"Class C Noteholder" has the meaning specified in the Indenture.
"Class C Notes" has the meaning specified in the Indenture.
"Closing Date" has the meaning specified in the Indenture.
"Code" has the meaning specified in the Indenture.
"Collection Account" means the account designated as such, and
established and maintained pursuant to Section 4.01.
"Collection Period" has the meaning specified in the Indenture.
"Commission" means the Securities and Exchange Commission.
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"Contract Rate" means, with respect to any Receivable, the annual
percentage rate of interest stated in such Receivable.
"Control" has the meaning specified in Section 8-106 of the UCC.
"Control Agreement" means the control agreement, dated as of June 1,
2004, among the Issuer, the Servicer, Wachovia Bank and the Indenture Trustee,
relating to the Accounts.
"Controlling Class" has the meaning specified in the Indenture.
"Corporate Trust Office" has the meaning specified in the Indenture or
the Trust Agreement, depending on whether reference is made to the Indenture
Trustee or the Owner Trustee.
"Cutoff Date" means the close of business on May 31, 2004.
"Dealer" means the dealer of motor vehicles who sold a Financed Vehicle
and who originated and assigned the Receivable relating to such Financed
Vehicle to the Seller under an existing agreement between such dealer and the
Seller.
"Dealer Agreement" means an agreement between the Seller and a Dealer,
entered into by the Seller in the ordinary course of its business, providing
for the sale of Receivables by the Dealer to the Seller.
"Dealer Recourse" means, with respect to a Receivable, all recourse
rights against the Dealer which originated the Receivable, and any successor
to such Dealer.
"Defaulted Receivable" means a Receivable as to which, the earlier of (i)
any payment, or any part of any payment, due under such Receivable has become
120 days or more delinquent (whether or not the Servicer has repossessed the
related Financed Vehicle), (ii) the Servicer has repossessed and sold the
related Financed Vehicle or (iii) the Servicer has determined in accordance
with its customary practices that such Receivable is uncollectible; provided,
however, that a Receivable will not become a Defaulted Receivable until the
last day of the Collection Period during which one of the foregoing events
first occurs; and, provided further, that a Purchased Receivable will not be
deemed to be a Defaulted Receivable.
"Deposit Date" means, with respect to any Distribution Date and the
related Collection Period, the Business Day immediately preceding such
Distribution Date.
"Depositor" has the meaning specified in the Trust Agreement.
"Determination Date" means, with respect to any Distribution Date, the
third Business Day preceding such Distribution Date, commencing on July 15,
2004.
"Distribution Date" has the meaning specified in the Indenture.
"Dollars" or "$" mean the lawful currency of the United States.
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"Eligible Account" means either (i) a segregated deposit account over
which the Indenture Trustee or the Owner Trustee, as the case may be, and the
Paying Agent has sole signature authority, maintained with an Eligible
Institution meeting the requirements of clause (i) of the definition of the
term "Eligible Institution" or (ii) a segregated trust account maintained with
the trust department of an Eligible Institution meeting the requirements of
clause (ii) of the definition of the term "Eligible Institution", in each case
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Securityholders, the Noteholders or the
Certificateholders, as the case may be.
"Eligible Institution" means (i) Wachovia Bank, the corporate trust
department of the Indenture Trustee or the corporate trust department of the
Owner Trustee or (ii) any other depository institution organized under the
laws of the United States or any State or incorporated under the laws of a
foreign jurisdiction with a branch or agency located in the United States or
any State qualified to take deposits and subject to supervision and
examination by federal or state banking authorities which at all times has
either a long-term unsecured debt rating of at least "Baa3" from Moody's or a
long-term unsecured debt rating, a short-term unsecured debt rating or a
certificate of deposit rating acceptable to Moody's and whose deposits are
insured by the Federal Deposit Insurance Corporation; provided, however, that
(a) the commercial paper, short-term debt obligations or other short-term
deposits of the depository institution described in clause (ii) above must be
rated at least "Prime-1" by Moody's and at least "A-1+" by Standard & Poor's
if deposits are to be held in an account maintained with such depository
institution pursuant to this Agreement for fewer than 30 days and (b) the
long-term unsecured debt obligations of the depository institution described
in clause (ii) above must be rated at least "AA-" by Standard & Poor's if
deposits are to be held in an account maintained with such depository
institution pursuant to this Agreement for more than 30 days.
"Eligible Servicer" means a Person which, at the time of its appointment
as Servicer, (i) has a net worth of not less than $50,000,000, (ii) is
servicing a portfolio of motor vehicle retail installment sale contracts or
motor vehicle loans, (iii) is legally qualified, and has the capacity, to
service the Receivables, (iv) has demonstrated the ability to service a
portfolio of motor vehicle retail installment sale contracts or motor vehicle
loans similar to the Receivables professionally and competently in accordance
with standards of skill and care that are consistent with prudent industry
standards and (v) is qualified and entitled to use pursuant to a license or
other written agreement, and agrees to maintain the confidentiality of, the
software which the Servicer uses in connection with performing its duties and
responsibilities under this Agreement or obtains rights to use, or develops at
its own expense, software which is adequate to perform its duties and
responsibilities under this Agreement.
"Entitlement Holder" has the meaning specified in Section 8-102 of the
UCC.
"Entitlement Order" has the meaning specified in Section 8-102 of the
UCC.
"Excess Collections" has the meaning specified in the Indenture.
"Exchange Act" has the meaning specified in the Indenture.
"FDIC Rule" has the meaning specified in the Receivables Purchase
Agreement.
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"Final Scheduled Distribution Date" means the Class C Final Scheduled
Distribution Date.
"Financed Vehicle" means, with respect to any Receivable, the related new
or used motor vehicle, together with all accessions thereto, securing the
related Obligor's indebtedness under such Receivable.
"Financial Asset" has the meaning specified in Section 8-102(a)(9) of the
UCC.
"Holders" has the meaning specified in the Indenture.
"Indenture" means the indenture, dated as of June 1, 2004, between the
Issuer and the Indenture Trustee.
"Indenture Trustee" has the meaning specified in the Indenture.
"Independent" has the meaning specified in the Indenture.
"Initial Note Balance" means, as the context may require, with respect to
(i) all of the Notes, $2,000,000,000 or (ii) any Note, an amount equal to the
initial denomination of such Note.
"Interest Distributable Amount" has the meaning specified in the
Indenture.
"Interest Period" has the meaning specified in the Indenture.
"Interest Rate" has the meaning specified in the Indenture.
"Issuer" has the meaning specified in the Indenture.
"Lien" means any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' or materialmen's
liens, judicial liens and any liens that may attach to a Financed Vehicle by
operation of law.
"Liquidation Proceeds" means all amounts received by the Servicer with
respect to any Defaulted Receivable during the Collection Period in which such
Receivable became a Defaulted Receivable, net of the sum of (i) any amount
required by law to be remitted to the related Obligor and (ii) any expenses
incurred by the Servicer in connection with collection of such Receivable and
the disposition of the related Financed Vehicle (to the extent not previously
reimbursed).
"Monthly Payment" means, with respect to any Receivable, the amount of
each fixed monthly payment payable to the obligee under such Receivable in
accordance with the terms thereof, net of any portion of such monthly payment
that represents late payment charges, extension fees or similar items.
"Monthly Remittance Condition" means that (i) (a) Wachovia Bank is the
Servicer, (b) Wachovia Bank's short-term unsecured debt is rated at least
"Prime-1" by Moody's and
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"A-1" by Standard & Poor's and (c) no Servicer Termination Event shall have
occurred and be continuing or (ii) each Rating Agency has agreed that the
deposit of collections on or in respect of the Receivables into the Collection
Account may be made by the Servicer on a monthly, rather than a daily, basis.
"Monthly Servicing Fee" means, for any Collection Period, the fee payable
to the Servicer on the related Distribution Date for services rendered during
such Collection Period as determined pursuant to Section 3.09.
"Monthly Trustee Fees" has the meaning specified in the Indenture.
"Moody's" has the meaning specified in the Indenture.
"Motor Vehicle Receivables" has the meaning specified in Section
5.03(b)(ii)(A).
"Motor Vehicle Securities" has the meaning specified in Section
5.03(b)(ii)(B).
"Net Losses" means, with respect to any Collection Period, the excess, if
any, of (i) the aggregate Principal Balance of all Receivables that became
Defaulted Receivables during such Collection Period over (ii) the aggregate
Liquidation Proceeds and Recoveries received by the Servicer during such
Collection Period.
"Nonrecoverable Advance" means an Advance which the Servicer determines
in its sole discretion is not recoverable from payments made on or in respect
of the related Receivable.
"Note Balance" has the meaning specified in the Indenture.
"Note Depository Agreement" has the meaning specified in the Indenture.
"Note Owner" has the meaning specified in the Indenture.
"Note Payment Account" means the account designated as such, and
established and maintained pursuant to Section 4.01.
"Note Pool Factor" means, with respect to each Class of Notes as of any
Distribution Date, a seven-digit decimal figure equal to the Note Balance of
such Class of Notes as of such Distribution Date (after giving effect to any
reductions thereof to be made on such Distribution Date) divided by the
original principal amount of such Class of Notes.
"Noteholder" has the meaning specified in the Indenture.
"Notes" has the meaning specified in the Indenture.
"Obligor" means, with respect to any Receivable, the purchaser or
co-purchasers of the related Financed Vehicle purchased in part or in whole by
the execution and delivery of a Receivable or any other Person who owes or may
be liable for payments under a Receivable.
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"Officer's Certificate" means a certificate signed by the chairman, the
president, any Vice President, the treasurer or the secretary of the Depositor
or the Servicer, as the case may be, and delivered to the Indenture Trustee or
the Owner Trustee.
"Opinion of Counsel" means a written opinion of counsel (who may be an
employee of or outside counsel to the Depositor or the Servicer), which
counsel shall be acceptable to the related Trustee or the Rating Agencies, as
the case may be.
"Outstanding" has the meaning specified in the Indenture.
"Overcollateralization Target Amount" has the meaning specified in the
Indenture.
"Owner Trust Estate" has the meaning specified in the Trust Agreement.
"Owner Trustee" has the meaning specified in the Trust Agreement.
"PASS" has the meaning specified in the Receivables Purchase Agreement.
"Paying Agent" has the meaning specified in the Indenture.
"Permitted Investments" means, at any time, any one or more of the
following obligations, instruments, investments and securities:
(i) direct obligations of, and obligations fully guaranteed by, the
United States or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States;
(ii) demand deposits, time deposits, bankers' acceptances or
certificates of deposit, having maturities of not more than 365 days, of
any depository institution or trust company incorporated under the laws
of the United States or any State (or any domestic branch of a foreign
bank) and subject to supervision and examination by federal or State
banking or depository institution authorities; provided, however, that
such investment shall not have an `r' highlighter affixed to its rating
and its terms shall have a predetermined fixed dollar amount of principal
due at maturity that cannot vary or change; and, provided further, that,
at the time of the investment, the commercial paper or other short-term
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) of such depository institution or trust
company shall have a rating from Standard & Poor's of at least "A-1+" and
from Moody's of at least "Prime-1";
(iii) repurchase obligations, having maturities of not more than 365
days, with respect to any security that is a direct obligation of, or
fully guaranteed by, the United States or any agency or instrumentality
thereof the obligations of which are backed by the full faith and credit
of the United States, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(ii) above;
(iv) short-term corporate securities bearing interest or sold at a
discount issued by any corporation incorporated under the laws of the
United States or any State thereof;
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provided, however, that such investment shall not have an `r' highlighter
affixed to its rating and its terms shall have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change;
and, provided further, that, at the time of the investment, the
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such
corporation) of such corporation shall have a rating from Standard &
Poor's of at least "AAA" and from Moody's of at least "Aaa";
(v) commercial paper having, maturities of not more than 365 days,
at the time of the investment, a rating from Standard & Poor's of at
least "A-1+" and from Moody's of at least "Prime-1"; provided, however,
that such investment shall not have an `r' highlighter affixed to its
rating and its terms shall have a predetermined fixed dollar amount of
principal due at maturity that cannot vary or change;
(vi) guaranteed investment contracts issued by an insurance company
or other corporation as to which the Rating Agency Condition shall have
been satisfied;
(vii) investments in money market funds having a rating from
Standard & Poor's of at least "AAA-m" or "AAAm-G" and from Moody's of at
least "Aaa" (including funds for which the Indenture Trustee, the Owner
Trustee or the Paying Agent or any of their respective Affiliates is
investment manager or advisor); and
(viii) any other investment as to which the Rating Agency Condition
shall have been satisfied; provided, however, that in no event shall any
such investment have a long-term rating of less than "AA" by Standard &
Poor's or "Aa3" by Moody's or a short-term rating of less than "A-1" by
Standard & Poor's or "Prime-1" by Moody's;
provided, that, except as otherwise provided in Section 4.07(b), each of the
foregoing investments shall mature no later than the Deposit Date immediately
following the Collection Period in which such investment was made (other than
in the case of the investment of monies in instruments of which the entity at
which the related Account, as the case may be, is located is the obligor,
which may mature on the related Distribution Date following the Collection
Period in which such investment was made), and shall be required to be held to
such maturity.
Notwithstanding anything to the contrary contained in this definition,
(a) no Permitted Investment may be purchased at a premium and (b) no
obligation or security is a "Permitted Investment" unless (i) the Indenture
Trustee has Control over such obligation or security and (ii) at the time such
obligation or security was delivered to the Indenture Trustee or the Indenture
Trustee became the related Entitlement Holder, the Indenture Trustee did not
have notice of any adverse claim with respect thereto within the meaning of
Section 8-102 of the UCC.
For purposes of this definition, any reference to the highest available
credit rating of an obligation means the highest available credit rating for
such obligation, or such lower credit rating (as approved in writing by each
Rating Agency) as will not result in the qualification, downgrading or
withdrawal of the rating then assigned to any Securities by such Rating
Agency.
"Person" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
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liability company, limited liability partnership, trust, unincorporated
organization or government or any agency or political subdivision thereof, or
any other entity of whatever nature.
"Pool Balance" means, as of the first or last day of any Collection
Period, the aggregate Principal Balance of the Receivables as of such first or
last day, as the case may be; provided, however, that if the Receivables are
purchased by the Servicer pursuant to Section 8.01(a) or are sold or otherwise
liquidated by the Indenture Trustee following an Event of Default pursuant to
Section 5.04 of the Indenture, the Pool Balance shall be deemed to be zero as
of the last day of the Collection Period during which such purchase, sale or
other liquidation occurs.
"Prepayment" means any prepayment, whether in part or in full, in respect
of such Receivable.
"Principal Balance" means, with respect to any Receivable as of any date,
the Amount Financed under such Receivable minus the sum of (i) that portion of
all Monthly Payments actually received on or prior to such date allocable to
principal using the Simple Interest Method (to the extent collected), (ii) any
rebates of extended warranty contract costs or physical damage, theft, credit
life or credit disability insurance premiums included in the Amount Financed
and (iii) any Prepayment applied to reduce the unpaid principal balance of
such Receivable; provided, however, that the Principal Balance of a (a)
Defaulted Receivable shall be zero as of the last day of the Collection Period
during which it became a Defaulted Receivable and (b) Purchased Receivable
shall be zero as of the last day of the Collection Period during which it
became a Purchased Receivable.
"Priority Principal Distributable Amount" has the meaning specified in
the Indenture.
"Purchase Amount" means the price at which the Seller must repurchase or
the Servicer must purchase a Receivable in an amount equal to the sum of (i)
the Principal Balance of such Receivable plus (ii) the amount of accrued but
unpaid interest on such Principal Balance at the related Contract Rate to the
last day of the month of repurchase.
"Purchased Receivable" means a Receivable repurchased as of the last day
of a Collection Period as to which payment of the Purchase Amount has been
made by the Seller pursuant to Section 2.04 or by the Servicer pursuant to
Section 3.08 or 8.01.
"Rating Agency" has the meaning specified in the Indenture.
"Rating Agency Condition" has the meaning specified in the Indenture.
"Receivable" has the meaning specified in the Receivables Purchase Agreement.
"Receivable Files" has the meaning specified in Section 2.05.
"Receivables Purchase Agreement" means the receivables purchase
agreement, dated as of June 1, 2004, between the Seller and PASS.
"Receivables Schedule" means the schedule of Receivables attached as
Schedule A to the Receivables Purchase Agreement.
10
"Recoveries" means, with respect to any Collection Period following the
Collection Period in which a Receivable became a Defaulted Receivable, all
amounts received by the Servicer with respect to such Defaulted Receivable
during such Collection Period, net of the sum of (i) any amount required by
law to be remitted to the related Obligor and (ii) any expenses incurred by
the Servicer in connection with collection of such Receivable and the
disposition of the related Financed Vehicle (to the extent not previously
reimbursed).
"Registrar of Titles" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.
"Regular Principal Distributable Amount" has the meaning specified in the
Indenture.
"Representative" means Wachovia Capital Markets, LLC, as representative
of the Underwriters.
"Required Payment Amount" has, with respect to each Distribution Date,
the meaning specified in Section 4.06(a)(x).
"Required Rating" means, with respect to any entity, the short-term
credit rating of the related entity is at least equal to "Prime-1" by Moody's
and "A-1+" by Standard & Poor's.
"Required Reserve Fund Amount" means, for any Distribution Date, the
greater of $25,033,932.57 and an amount equal to 2.25% of the Pool Balance as
of the last day of the related Collection Period; provided, however, that the
Required Reserve Fund Amount (i) may not exceed the Note Balance and (ii) will
be zero if the Pool Balance as of the last day of the related Collection
Period is zero.
"Reserve Fund" means the account designated as such, and established and
maintained pursuant to Section 4.07.
"Reserve Fund Amount" means, with respect to any Distribution Date, the
amount on deposit in and available for withdrawal from the Reserve Fund on
such Distribution Date (after giving effect to all deposits to and withdrawals
from the Reserve Fund on such Distribution Date), including all interest and
other investment earnings (net of losses and investment expenses) earned on
such amount during the related Collection Period.
"Reserve Fund Deficiency" has the meaning specified in Section
4.06(b)(iii).
"Reserve Fund Draw Amount" has the meaning specified in Section
4.06(b)(i).
"Reserve Fund Initial Deposit" means $25,033,932.57.
"Reserve Fund Property" has the meaning specified in Section 4.07(a).
"Responsible Officer" means, in the case of (i) the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any principal, managing director, president, Vice President,
assistant treasurer, assistant secretary or any other officer of the
11
Indenture 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 whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject and (ii)
the Owner Trustee, any officer in the Corporate Trust Administration
department of the Owner Trustee with direct responsibility for the
administration of the Issuer and, with respect to a particular corporate trust
matter, any other officer of the Owner Trustee to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Secondary Principal Distributable Amount" has the meaning specified in
the Indenture.
"Securitization Trust" has the meaning specified in Section 5.03(b)(ii).
"Security" means a Note or a Certificate, as the case may be.
"Security Entitlement" has the meaning specified in Section 8-102(a)(17)
of the UCC.
"Securityholders" means the Noteholders and the Certificateholders.
"Seller" has the meaning specified in the Receivables Purchase Agreement.
"Sequential Payment Trigger" has the meaning specified in the Indenture.
"Servicer" means Wachovia Bank, in its capacity as servicer of the
Receivables under this Agreement, and its successors in such capacity.
"Servicer's Certificate" means an Officer's Certificate signed by a
Servicing Officer of the Servicer delivered pursuant to Section 3.10,
substantially in the form of Exhibit C.
"Servicer Termination Event" has the meaning specified in Section 7.01.
"Servicer Termination Notice" has the meaning specified in Section 7.01.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers attached to an Officer's
Certificate furnished on the Closing Date to the Trustees by the Servicer, as
such list may be amended from time to time by the Servicer in writing.
"Servicing Rate" means 1.00% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment between principal and interest, pursuant to which a portion of such
payment is allocated to interest in an amount equal to the product of the
Contract Rate of the related Receivable multiplied by the unpaid Principal
Balance of such Receivable multiplied by the period of time (expressed as a
fraction of a year, based on the actual number of days in the applicable
calendar month and a 365-day year) elapsed since the preceding payment was
made and the remainder of such payment is allocated to principal.
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"Simple Interest Receivable" means any Receivable under which each
payment is allocated between principal and interest in accordance with the
Simple Interest Method.
"Standard & Poor's" has the meaning specified in the Indenture.
"State" has the meaning specified in the Indenture.
"Successor Servicer" means any entity appointed as a successor to the
Servicer pursuant to Section 7.02.
"Supplemental Servicing Fee" has the meaning specified in Section 3.09.
"Tertiary Principal Distributable Amount" has the meaning specified in
the Indenture.
"Total Servicing Fee" means, for any Collection Period and the related
Distribution Date, the sum of (i) the Monthly Servicing Fee for such
Collection Period and (ii) all accrued but unpaid Monthly Servicing Fees for
one or more previous Collection Periods.
"Total Trustee Fees" has the meaning specified in the Indenture.
"Transition Costs" has the meaning specified in Section 7.01.
"Trust Agreement" means the amended and restated trust agreement, dated
as of June 1, 2004, between the Depositor and the Owner Trustee.
"Trust Fees and Expenses" means all accrued and unpaid fees of the
Trustees and the Paying Agent, any amounts due to the Trustees or the Paying
Agent for reimbursement of expenses or in respect of indemnification and other
administrative fees of the Issuer.
"Trust Property" has the meaning specified in Section 2.01(a).
"Trustees" has the meaning specified in the Indenture.
"UCC" has the meaning specified in the Indenture.
"Underwriters" means the underwriters named in Schedule A to the
Underwriting Agreement.
"Underwriting Agreement" means the underwriting agreement, dated June 15,
2004, between PASS and the Representative, relating to the purchase of the
Class A Notes by the Underwriters from PASS.
"United States" has the meaning specified in the Indenture.
"Vice President" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President", who is a duly elected officer of such Person.
"Wachovia Bank" means Wachovia Bank, National Association.
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"Yield Supplement Account" means the account designated as such, and
established and maintained pursuant to Section 4.01(a).
"Yield Supplement Account Initial Deposit" means $4,564,385.16.
"Yield Supplement Account Amount" means, with respect to any Distribution
Date, the amount listed below for that Distribution Date.
Yield Yield
Supplement Supplement
Account Account
Distribution Date Amount Distribution Date Amount
--------------------- --------------- -------------------------- ------------
Closing Date $4,564,385.16 September 2006 $976,502.66
July 2004 $4,386,651.90 October 2006 $893,203.29
August 2004 $4,212,285.06 November 2006 $813,546.49
September 2004 $4,041,294.49 December 2006 $737,542.88
October 2004 $3,873,690.06 January 2007 $665,203.17
November 2004 $3,709,481.67 February 2007 $596,538.07
December 2004 $3,548,679.24 March 2007 $531,558.33
January 2005 $3,391,292.74 April 2007 $470,274.73
February 2005 $3,237,332.14 May 2007 $412,698.07
March 2005 $3,086,807.47 June 2007 $358,839.21
April 2005 $2,939,728.77 July 2007 $308,709.02
May 2005 $2,796,106.11 August 2007 $262,318.41
June 2005 $2,655,949.60 September 2007 $219,678.32
July 2005 $2,519,269.37 October 2007 $180,799.72
August 2005 $2,386,075.59 November 2007 $145,693.61
September 2005 $2,256,378.45 December 2007 $114,371.04
October 2005 $2,130,188.18 January 2008 $86,843.07
November 2005 $2,007,515.02 February 2008 $63,120.81
December 2005 $1,888,369.27 March 2008 $43,204.78
January 2006 $1,772,761.23 April 2008 $27,106.14
February 2006 $1,660,701.26 May 2008 $14,836.05
March 2006 $1,552,199.73 June 2008 $6,230.16
April 2006 $1,447,267.04 July 2008 $1,299.28
May 2006 $1,345,913.64 August 2008 $54.25
June 2006 $1,248,149.98 On and after September 2008 $0.00
July 2006 $1,153,986.58
August 2006 $1,063,433.95
"Yield Supplement Account Draw Amount" means, with respect to any
Distribution Date, the amount equal to the difference between (i) the amount
on deposit in the Yield Supplement Account and (ii) the Yield Supplement
Account Amount for such Distribution Date.
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Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein that are not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
Section 1.03. Interpretive Provisions. With respect to all terms in this
Agreement, unless the context otherwise requires: (i) a term has the meaning
assigned to it; (ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as
in effect from time to time in the United States; (iii) "or" is not exclusive;
(iv) "including" means including without limitation; (v) words in the singular
include the plural and words in the plural include the singular; (vi) any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
(vii) references to a Person are also to its successors and permitted assigns;
(viii) the words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; (ix) Section,
subsection, Schedule and Exhibit references in this Agreement are references
to Sections, subsections, Schedules and Exhibits in or to this Agreement
unless otherwise specified; (x) references to "writing" include printing,
typing, lithography and other means of reproducing words in a visible form;
and (xi) the term "proceeds" has the meaning set forth in the applicable UCC.
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ARTICLE TWO
CONVEYANCE OF TRUST PROPERTY
Section 2.01. Conveyance of Trust Property.
(a) In consideration of the Issuer's delivery to or upon the order of the
Depositor on the Closing Date of authenticated Notes, in authorized
denominations in aggregate principal amounts equal to the Initial Note
Balance, and authenticated Certificates, the Depositor hereby irrevocably
sells, transfers, assigns and otherwise conveys to the Issuer, without
recourse (subject to the obligations of the Depositor set forth herein), all
right, title and interest of the Depositor, whether now owned or hereafter
acquired or arising in, to and under the following (collectively, the "Trust
Property"):
(i) the Receivables and all amounts due and collected on or in
respect of the Receivables (including proceeds of the repurchase of
Receivables by the Seller pursuant to Section 2.04 or the purchase
of Receivables by the Servicer pursuant to Section 3.08 or 8.01)
after the Cutoff Date;
(ii) the security interests in the Financed Vehicles granted by
the Obligors pursuant to the Receivables;
(iii) all proceeds from claims on or refunds of premiums with
respect to any physical damage or theft insurance policies and
extended warranties covering the Financed Vehicles and any proceeds
of or refunds of premiums of any credit life or credit disability
insurance policies relating to the Receivables, the Financed
Vehicles or the Obligors;
(iv) the Receivable Files;
(v) any proceeds of Dealer Recourse;
(vi) the Collection Account, the Note Payment Account, the
Certificate Payment Account, the Reserve Fund and the Yield
Supplement Account and all amounts, securities, financial assets,
investments and other property deposited in or credited to any of
the foregoing and all proceeds thereof;
(vii) all rights of the Depositor, but none of the obligations,
under the Receivables Purchase Agreement, including the right to
require the Seller to repurchase Receivables from the Depositor;
(viii) the right to realize upon any property (including the
right to receive future Liquidation Proceeds and Recoveries) that
shall have secured a Receivable and have been repossessed by or on
behalf of the Issuer; and
(ix) all present and future claims, demands, causes of action
or choses in action in respect of any or all of the foregoing and
all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
16
proceeds of the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all accounts, general intangibles,
chattel paper, instruments, documents, money, investment property,
deposit accounts, letters of credit, letter of credit rights,
insurance proceeds, condemnation awards, rights to payment of any
and every kind and other forms of obligations and all other property
which at any time constitutes all or part of, or is included in, the
proceeds of any of the foregoing.
(b) The Depositor and the Issuer intend that the transfer of the Trust
Property contemplated by Section 2.01(a) constitute a sale of the Trust
Property from the Depositor to the Issuer, conveying good title to the Trust
Property free and clear of any liens and, in the event of the filing of a
bankruptcy petition by or against the Depositor under any bankruptcy or
similar law, that the Trust Property shall not be part of the Depositor's
estate. However, in the event that such transfer is deemed to be a pledge, the
Depositor hereby grants to the Trust a first priority security interest in all
of the Depositor's right, title and interest in, to and under the Trust
Property, and all proceeds thereof, to secure the payment of the Notes, and in
such event, this Agreement shall constitute a security agreement under
applicable law.
(c) The sale, transfer, assignment and conveyance of the Trust Property
made under Section 2.01(a) shall not constitute, and is not intended to result
in, an assumption by the Issuer of any obligation of the Depositor or the
Seller to the Obligors or any other Person in connection with the Receivables
and the other Trust Property or any obligation of the Depositor or the Seller
under any agreement, document or instrument related thereto.
(d) Each of the parties hereto intend that the (i) FDIC Rule shall apply
to the transactions contemplated by this Agreement and the other Basic
Documents and (ii) transactions contemplated by this Agreement and the other
Basic Documents, taken as a whole, constitute a "securitization" within the
meaning of the FDIC Rule.
Section 2.02. Representations and Warranties of the Seller as to the
Receivables. The Seller has made, under the Receivables Purchase Agreement,
each of the representations and warranties as to the Receivables set forth in
Exhibit A. The Issuer shall be deemed to have relied on such representations
and warranties in accepting the Receivables. The representations and
warranties set forth in Exhibit A speak as of the execution and delivery of
this Agreement, except to the extent otherwise provided, but shall survive the
sale, transfer, assignment and conveyance of the Receivables to the Issuer
pursuant to this Agreement and the pledge of the Receivables to the Indenture
Trustee pursuant to the Indenture. Pursuant to Section 2.01(a), the Depositor
has sold, transferred, assigned and otherwise conveyed to the Issuer, as part
of the Trust Property, its rights under the Receivables Purchase Agreement,
including its right to require the Seller to repurchase Receivables in
accordance with the Receivables Purchase Agreement upon a breach of the
representations and warranties set forth in Exhibit A.
The Seller hereby agrees that the Issuer shall have the right to enforce
any and all rights under the Receivables Purchase Agreement assigned to the
Issuer under this Agreement, including the right to require the Seller to
repurchase Receivables in accordance with the Receivables Purchase Agreement
upon a breach of the representations and warranties set forth in Exhibit A,
directly against the Seller as though the Issuer were a party to the
Receivables
17
Purchase Agreement and that the Issuer shall not be obligated to enforce any
such right indirectly through the Depositor.
Section 2.03. Representations and Warranties of the Depositor as to the
Receivables. The Depositor makes the following representations and warranties
as to the Receivables on which the Issuer shall be deemed to have relied in
accepting the Receivables. The representations and warranties speak as of the
execution and delivery of this Agreement, except to the extent otherwise
provided, but shall survive the sale, transfer, assignment and conveyance of
the Receivables to the Issuer pursuant to this Agreement and the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture.
(a) Title. The Depositor has purchased the Receivables from the Seller.
The Depositor intends that the transfer of the Receivables contemplated by
Section 2.01(a) constitute a sale of the Receivables from the Depositor to the
Issuer and that the beneficial interest in, and title to, the Receivables not
be part of the Depositor's estate in the event of the filing of a bankruptcy
petition by or against the Depositor under any bankruptcy law. The Depositor
has not sold, transferred, assigned or pledged any Receivable to any Person
other than the Issuer. The Depositor has not created, incurred or suffered to
exist any Lien, encumbrance or security interest on any Receivable except for
the Lien of (i) this Agreement and (ii) Indenture.
(b) Security Interest Matters. This Agreement creates a valid and
continuing "security interest" (as defined in the UCC) in the Receivables in
favor of the Issuer, which security interest is prior to all other Liens and
is enforceable as such as against creditors of and purchasers from the
Depositor. The Receivables constitute "tangible chattel paper" (as defined in
the UCC). The Depositor owns and has good and marketable title to the
Receivables free and clear of any Lien, claim or encumbrance of any Person.
The Depositor has caused or will cause prior to the Closing Date the filing of
all appropriate financing statements in the proper filing offices in the
appropriate jurisdictions under applicable law necessary to perfect the
security interest in the Receivables granted to the Issuer under this
Agreement. Other than the security interest granted to the Issuer under this
Agreement, the Depositor has not pledged, assigned, sold, granted a security
interest in or otherwise conveyed any of the Receivables. The Depositor has
not authorized the filing of and is not aware of any financing statements
against the Depositor that include a description of collateral covering the
Receivables other than any financing statement relating to the security
interest granted to the Issuer under this Agreement or that has been
terminated. The Depositor is not aware of any judgment or tax lien filings
against the Depositor. The security interest of the Seller in each Financed
Vehicle has been validly assigned by the Depositor to the Issuer.
(c) Financing Statements. All financing statements filed or to be filed
against the Depositor in favor of the Indenture Trustee (as assignee of the
Issuer) contain a statement substantially to the following effect: "A purchase
of or security interest in any collateral described in this financing
statement will violate the rights of the Indenture Trustee".
(d) No Transfer Restrictions. The Depositor has not created, incurred or
suffered to exist any restriction on transferability of the Receivables except
for the restrictions on transferability imposed by this Agreement. The
transfer of the Receivables and the Receivable
18
Files by the Depositor to the Issuer pursuant to this Agreement is not subject
to the bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
Section 2.04. Repurchase of Receivables Upon Breach. The Depositor, the
Seller, the Servicer or the Owner Trustee, as the case may be, shall inform
the other parties to this Agreement and the Indenture Trustee promptly, in
writing, upon the discovery of any breach or failure to be true of the
representations and warranties set forth in Exhibit A. If such breach or
failure shall not have been cured by the close of business on the last day of
the Collection Period which includes the 30th day after the date on which the
Seller becomes aware of, or receives written notice from the Depositor, the
Servicer or the Owner Trustee of, such breach or failure, and such breach or
failure materially and adversely affects the interest of the Issuer in a
Receivable, the Seller shall repurchase such Receivable from the Issuer on the
Distribution Date immediately following such Collection Period. In
consideration of the repurchase of a Receivable hereunder, the Seller shall
remit the Purchase Amount of such Receivable in the manner specified in
Section 4.05. The sole remedy of the Issuer, the Owner Trustee, the Indenture
Trustee, the Noteholders and the Certificateholders with respect to a breach
or failure to be true of the representations and warranties set forth in
Exhibit A shall be to require the Seller to repurchase Receivables pursuant to
this Section or Section 3.03(c) of the Receivables Purchase Agreement. Neither
the Owner Trustee nor the Indenture Trustee shall have any duty to conduct an
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section or the eligibility of
any Receivable for purposes of this Agreement.
Section 2.05. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer as its agent, and the Servicer hereby
accepts such appointment, to act as custodian on behalf of the Issuer and the
Indenture Trustee of the following documents or instruments which are hereby
constructively delivered to the Indenture Trustee, as pledgee of the Trust
Property pursuant to the Indenture with respect to each Receivable
(collectively, a "Receivable File"):
(i) the fully executed original of the Receivable;
(ii) the original (or image of the original) credit application with
respect to such Receivable fully executed by the related Obligor or a
photocopy thereof or a record thereof on a computer file or disc or on
microfiche;
(iii) the original certificate of title for the related Financed
Vehicle (or evidence that such certificate of title has been applied for)
or such other documents that the Seller or the Servicer shall keep on
file, in accordance with its customary practices and procedures,
evidencing the security interest of the Seller in such Financed Vehicle;
(iv) documents evidencing the commitment of the related Obligor to
maintain physical damage insurance covering the related Financed Vehicle;
and
(v) any and all other documents (including any computer file or disc
or microfiche) that the Seller or the Servicer shall keep on file, in
accordance with its
19
customary practices and procedures, relating to the Receivable, the
related Obligor or the related Financed Vehicle.
On the Closing Date, the Servicer shall deliver an Officer's Certificate
to the Issuer and the Indenture Trustee confirming that the Servicer has
received, on behalf of the Issuer and the Indenture Trustee, all the documents
and instruments necessary for the Servicer to act as the agent of the Issuer
and the Indenture Trustee for the purposes set forth in this Section,
including the documents referred to herein, and the Issuer and the Trustees
are hereby authorized to rely on such Officer's Certificate. In addition,
within 180 days after the Closing Date, the Servicer shall deliver to the
Issuer and the Indenture Trustee an Officer's Certificate certifying that the
Servicer has received the original certificate of title for each Financed
Vehicle except each Financed Vehicle securing an outstanding Receivable for
which the Servicer has not received the original certificate of title as shall
be identified in such Officer's Certificate (and indicating whether such
Financed Vehicle is subject to a certificate of title statute or motor vehicle
registration law that requires that the original certificate of title for such
Financed Vehicle be delivered to the Seller).
Section 2.06. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files for the benefit of the Issuer and the Indenture Trustee
and maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Servicer and the Issuer
to comply with this Agreement and the Indenture Trustee to comply with the
Indenture. In performing its duties as custodian, the Servicer shall act with
reasonable care, using that degree of skill and attention that it exercises
with respect to the files of comparable motor vehicle installment sale
contracts that the Servicer services for itself or others. The Servicer shall
conduct, or cause to be conducted, in accordance with its customary practices
and procedures, periodic examinations of the files of all receivables owned or
serviced by it which shall include the Receivable Files held by it under this
Agreement, and of the related accounts, records and computer systems, in such
a manner as shall enable the Issuer or the Indenture Trustee to verify the
accuracy of the Servicer's record keeping. The Servicer shall promptly report
to the Trustees any failure on its part to hold the Receivable Files and to
maintain its accounts, records and computer systems as herein provided and
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review of the
Receivable Files by the Issuer or the Trustees, and none of the Issuer or
either Trustee shall be liable or responsible for any action or failure to act
by the Servicer in its capacity as custodian hereunder.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of the locations specified in Schedule A or at
such other location as shall be specified to the Issuer and the Indenture
Trustee by 30 days' prior written notice. The Servicer may temporarily move
individual Receivable Files or any portion thereof without notice as necessary
to conduct collection and other servicing activities in accordance with its
customary practices and procedures. The Servicer shall make available to the
Issuer and the Indenture Trustee or its duly authorized representatives,
attorneys or auditors a list of locations of the Receivable Files, the
Receivable Files and the related accounts, records and computer systems
maintained by the Servicer at such times during normal business hours as the
Issuer and the Indenture Trustee shall reasonably request.
20
(c) Release of Documents. As soon as practicable after receiving written
instructions from the Indenture Trustee, the Servicer shall release any
document in the Receivable Files to the Indenture Trustee or its agent or
designee, as the case may be, at such place or places as the Indenture Trustee
may reasonably designate. The Servicer shall not be responsible for any loss
occasioned by the failure of the Indenture Trustee to return any document or
any delay in so doing.
(d) Title to Receivables. The Servicer shall not at any time have, or in
any way attempt to assert, any interest in any Receivable held by it as
custodian hereunder or in the related Receivable File, other than for
collecting or enforcing such Receivable for the benefit of the Issuer. The
entire equitable interest in such Receivable and the related Receivable File
shall at all times be vested in the Issuer.
Section 2.07. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee. A certified copy of excerpts of authorizing
resolutions of the board of directors of the Indenture Trustee shall
constitute conclusive evidence of the authority of any such Responsible
Officer to act and shall be considered in full force and effect until receipt
by the Servicer of written notice to the contrary given by the Indenture
Trustee.
Section 2.08. Indemnification by Custodian. The Servicer, in its capacity
as custodian of the Receivable Files, shall indemnify and hold harmless the
Issuer, the Trustees and each of their respective officers, directors,
employees and agents from and against any and all liabilities, obligations,
losses, compensatory damages, payments, costs or expenses (including
reasonable legal fees, if any) of any kind whatsoever that may be imposed on,
incurred or asserted against the Issuer, the Trustees and each of their
respective officers, directors, employees and agents as the result of any
improper act or omission in any way relating to the maintenance and custody of
the Receivable Files by the Servicer, as custodian; provided, however, that
the Servicer shall not be liable for any portion of any such liabilities,
obligations, losses, compensatory damages, payments, costs or expenses
resulting from the willful misfeasance, bad faith or negligence of either
Trustee.
Section 2.09. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section. If the Servicer shall resign as Servicer under Section 6.05, or if
all of the rights and obligations of the Servicer shall have been terminated
under Section 7.01, the appointment of the Servicer as custodian hereunder may
be terminated by (i) the Issuer, with the consent of the Indenture Trustee,
(ii) Holders of Notes evidencing not less than 25% of the Note Balance of the
Controlling Class or, if the Notes have been paid in full, by
Certificateholders evidencing not less than 25% of the aggregate Certificate
Percentage Interest or (iii) the Owner Trustee, with the consent of Holders of
Notes evidencing not less than 25% of the Note Balance of the Controlling
Class, in each case by notice then given in writing to the Depositor and the
Servicer (with a copy to the Trustees if given by the Noteholders or the
Certificateholders). As soon as practicable after any termination of such
appointment, the Servicer shall deliver, or cause to be delivered, the
Receivable Files and the related accounts and records maintained by the
Servicer to the Indenture Trustee, the Indenture Trustee's agent or the
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Indenture Trustee's designee, as the case may be, at such place as the
Indenture Trustee may reasonably designate or, if the Notes have been paid in
full, at such place as the Owner Trustee may reasonably designate.
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ARTICLE THREE
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.01. Duties of Servicer. The Servicer, acting alone or through
one or more subservicers to the extent permitted hereunder, for the benefit of
the Issuer, shall manage, service, administer and make collections on the
Receivables with reasonable care but in no event less than the Servicer
exercises with respect to all comparable motor vehicle receivables that it
services for itself or others. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors or by
federal, state or local government authorities with respect to the
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors in accordance with its customary
practices, policing the collateral, accounting for collections and furnishing
monthly and annual statements to the Trustees with respect to distributions,
providing collection and repossession services in the event of Obligor
default, generating federal income tax information and performing the other
duties specified herein. The Servicer shall have full power and authority to
do any and all things in connection with such managing, servicing,
administration and collection that it may deem necessary or desirable, it
being understood, however, that the Servicer shall at all times remain
responsible to the Issuer, the Paying Agent and the Indenture Trustee for the
performance of its duties and obligations hereunder. Subject to the foregoing
and to Section 3.02, the Servicer shall follow its customary standards,
policies, practices and procedures in performing its duties hereunder as
Servicer. Without limiting the generality of the foregoing, the Servicer shall
be authorized and empowered to execute and deliver, on behalf of itself, the
Depositor, the Issuer, the Trustees, the Securityholders or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Receivables and the Financed Vehicles. The Servicer is hereby authorized to
commence, in its own name or in the name of the Issuer, a legal proceeding to
enforce a Receivable pursuant to Section 3.04 or to commence or participate in
a legal proceeding (including a bankruptcy proceeding) relating to or
involving a Receivable, including a Defaulted Receivable. If the Servicer
commences or participates in such a legal proceeding in its own name, the
Issuer shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection on behalf of the party retaining an interest in such
Receivable, such Receivable and the other property conveyed to the Issuer
pursuant to Section 2.01 with respect to such Receivable to the Servicer for
purposes of commencing or participating in any such proceeding as a party or
claimant, and the Servicer is authorized and empowered by the Issuer to
execute and deliver in the Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. If in any enforcement suit or legal
proceeding it shall be held that the Servicer may not enforce a Receivable on
the grounds that it shall not be a real party in interest or a holder entitled
to enforce such Receivable, the Owner Trustee shall, at the Servicer's expense
and written direction, take steps to enforce such Receivable, including
bringing suit in the Servicer's or the Issuer's name or the name of the Owner
Trustee, the Indenture Trustee, the Noteholders, the Certificateholders or any
of them. The Owner Trustee, on behalf of the Issuer, shall furnish the
Servicer with any powers of attorney and other documents and take any other
steps which the Servicer may deem necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder. The
Servicer, at its expense, shall obtain on behalf of the Trust or the Owner
Trustee all licenses, if any, required by the laws of any jurisdiction to be
held by
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the Trust or the Owner Trustee in connection with ownership of the Receivables
and shall make all filings and pay all fees as may be required in connection
therewith during the term of this Agreement.
Section 3.02. Subservicers. The Servicer may enter into subservicing
agreements with one or more subservicers approved by the Indenture Trustee for
the servicing and administration of certain of the Receivables (including
holding the related Receivable Files as custodian). The Servicer shall notify
each Rating Agency promptly if a subservicer is hired. References herein to
actions taken or to be taken by the Servicer in servicing the Receivables
include actions taken or to be taken by a subservicer on behalf of the
Servicer. Each subservicing agreement will be upon such terms and conditions
as are not inconsistent with this Agreement and as the Servicer and the
subservicer have agreed. With the approval of the Servicer, a subservicer may
delegate its servicing obligations to third-party servicers, but such
subservicer will remain obligated under the related subservicing agreement.
The Servicer and a subservicer may enter into amendments thereto or different
forms of subservicing agreements; provided, however, that any such amendments
or different forms shall be consistent with and not violate the provisions of
this Agreement or materially adversely affect the rights of the
Securityholders hereunder.
The Servicer shall be entitled to terminate any subservicing agreement
that may exist in accordance with the terms and conditions of such
subservicing agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any subservicing
agreement by the Servicer or the related subservicer, the Servicer shall
either act directly as servicer of the related Receivable or enter into a
subservicing agreement with a successor subservicer approved by the Indenture
Trustee which will be bound by the terms of the related subservicing
agreement.
Notwithstanding any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer or a
subservicer or reference to actions taken through such Persons or otherwise,
the Servicer shall remain obligated and liable to the Indenture Trustee, the
Owner Trustee, the Issuer and the Securityholders for the servicing and
administering of the Receivables in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from a
subservicer and to the same extent and under the same terms and conditions as
if the Servicer alone were servicing and administering the Receivables. The
Servicer shall be entitled to enter into an agreement with a subservicer for
indemnification of the Servicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Receivables involving a
subservicer or an Affiliate of the Servicer in its capacity as such, and not
as an originator of Receivables, shall be deemed to be between the subservicer
or such Affiliate, as the case may be, and the Servicer alone, and none of the
Indenture Trustee, the Owner Trustee, the Issuer, the Noteholders nor the
Certificateholders shall be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the subservicer
except as set forth in the immediately succeeding paragraph.
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In the event the Servicer shall for any reason no longer be acting as
servicer under this Agreement (including by reason of a Servicer Termination
Event), the Indenture Trustee or its designee may, at the sole discretion of
the Indenture Trustee, thereupon assume all of the rights and obligations of
such Servicer under each subservicing agreement selected by the Indenture
Trustee in its sole discretion. In such event, the Indenture Trustee, its
designee or the Successor Servicer for the Indenture Trustee shall be deemed
to have assumed all of the Servicer's interest therein and to have replaced
the Servicer as a party to each such subservicing agreement to the same extent
as if such subservicing agreement had been assigned to the assuming party
except that the Servicer shall not thereby be relieved of any liability or
obligations under the subservicing agreement. The Servicer shall, upon request
of the Indenture Trustee but at the expense of the Servicer, deliver to the
assuming party all documents and records relating to each such subservicing
agreement and the Receivables then being serviced and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the subservicing agreement to the assuming
party.
The Servicer, each subservicer and any Successor Servicer shall at all
times comply with all applicable federal, State and local laws, rules,
regulations and ordinances governing or relating to the privacy rights of the
Obligors in connection with its performance of its duties under this Agreement
including the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. The Servicer, each subservicer and any
Successor Servicer shall implement such physical and other security measures
as shall be necessary to (i) ensure the security and confidentiality of the
"nonpublic personal information" of each Obligor, (ii) protect against any
threats or hazards to the security and integrity of such nonpublic personal
information and (iii) protect against any unauthorized access to or use of
such nonpublic personal information.
In those cases where a subservicer is servicing a Receivable pursuant to
a subservicing agreement, the Servicer shall cause the subservicer to remit to
the Servicer for deposit in the Collection Account, on a daily basis, within
two Business Days after receipt by the subservicer, all proceeds of the
Receivables and all Available Collections received by the subservicer.
Section 3.03. Collection of Receivable Payments; Modification of
Receivables. The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due and otherwise act with respect to the
Receivables and the other Trust Property in such manner as will, in the
reasonable judgment of the Servicer, maximize the amount to be received by the
Issuer with respect thereto and in accordance with the standard of care
required by Section 3.01. The Servicer shall allocate collections on or in
respect of the Receivables between principal and interest in accordance with
the Simple Interest Method and the customary servicing practices and
procedures it follows with respect to all comparable motor vehicle retail
installment sale contracts that it services for itself or others. The Servicer
shall not increase or decrease the number or amount of any Monthly Payment,
the Amount Financed under any Receivable or the Contract Rate of any
Receivable, or extend, rewrite or otherwise modify the payment terms of any
Receivable; provided, however, that the Servicer may extend the due date for
one or more payments due on any Receivable for credit-related reasons that
would be acceptable to the Servicer with respect to comparable motor vehicle
retail installment sale contracts that it services for itself or others and in
accordance with its customary standards, policies, practices and procedures if
the cumulative extensions with respect to any Receivable shall not cause the
term of such Receivable to extend beyond the last
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day of the Collection Period relating to the Class C Final Scheduled
Distribution Date. If the Servicer fails to comply with the provisions of the
preceding sentence, the Servicer shall be required to purchase each Receivable
affected thereby for the related Purchase Amount, in the manner specified in
Section 3.08, as of the close of business on the last day of the Collection
Period which includes the 30th day after the Servicer becomes aware of such
failure. The Servicer may, in its discretion (but only in accordance with its
customary standards, policies, practices and procedures), waive any late
payment charge or any other fee that may be collected in the ordinary course
of servicing a Receivable. In addition, in the event that any such extension
of a Receivable modifies the terms of such Receivable in such a manner as to
constitute a cancellation of such Receivable and the creation of a new motor
vehicle receivable that results in a deemed exchange thereof within the
meaning of Section 1001 of the Code, the Servicer shall purchase such
Receivable pursuant to Section 3.08, and the Receivable created shall not be
included in the Trust Property.
Section 3.04. Realization Upon Receivables.
(a) The Servicer shall use commercially reasonable efforts on behalf of
the Issuer, in accordance with the standard of care required under Section
3.01, to repossess or otherwise convert the ownership of each Financed Vehicle
securing a Defaulted Receivable. In taking such action, the Servicer shall
follow such customary and usual practices and procedures as it shall deem
necessary or advisable in its servicing of comparable motor vehicle
installment sale contracts, and as are otherwise consistent with the standard
of care required under Section 3.01. The Servicer shall be entitled to recover
all reasonable expenses incurred by it with respect to realizing on a
Defaulted Receivable, including such expenses incurred in the course of
repossessing and liquidating a Financed Vehicle into cash proceeds, but only
out of the cash proceeds of such Financed Vehicle and any deficiency amount
obtained from the Obligor. The foregoing is subject to the proviso that, in
any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with any repair or towards the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair or repossession shall increase the Liquidation
Proceeds or Recoveries of the related Receivable.
(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement, the act of commencement shall be deemed to be an automatic
assignment from the Issuer to the Servicer of the rights of recourse under
such Dealer Agreement. If, however, in any enforcement suit or legal
proceeding, it is held that the Servicer may not enforce a Dealer Agreement on
the grounds that it is not a real party in interest or a Person entitled to
enforce the Dealer Agreement, the Owner Trustee, at the Servicer's expense and
direction, shall take such steps as the Servicer deems necessary to enforce
the Dealer Agreement, including bringing suit in its name or the names of the
Indenture Trustee, the Securityholders or any of them.
Section 3.05. Maintenance of Physical Damage Insurance Policies. The
Servicer shall follow its customary practices and procedures to determine
whether or not each Obligor shall have maintained physical damage insurance
covering the related Financed Vehicle. In the event that the Servicer has
determined that an Obligor fails to maintain the required insurance, the
Servicer shall treat the Obligor as being in default under the related
Receivable.
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Section 3.06. Maintenance of Security Interests in Financed Vehicles. The
Servicer shall take such steps, in accordance with the standard of care
required under Section 3.01, as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Issuer hereby authorizes the Servicer, and the Servicer hereby agrees, to
take such steps as are necessary to re-perfect such security interest on
behalf of the Issuer and the Indenture Trustee in the event the Servicer
receives notice of, or otherwise has actual knowledge of, the fact that such
security interest is not perfected as a result of the relocation of a Financed
Vehicle or for any other reason. In the event that the assignment of a
Receivable to the Issuer is insufficient, without a notation on the related
Financed Vehicle's certificate of title, to grant to the Issuer a first
priority perfected security interest in the related Financed Vehicle, the
Servicer hereby agrees to serve as the agent of the Issuer for the purpose of
perfecting the security interest of the Issuer in such Financed Vehicle and
agrees that the Servicer's listing as the secured party on the certificate of
title is solely in its capacity as agent of the Issuer. The Servicer shall not
release, in whole or in part, any security interest in a Financed Vehicle
created by the related Receivable except as permitted herein or in accordance
with its customary standards, policies, practices and procedures.
Section 3.07. Covenants of Servicer. The Servicer makes the following
covenants:
(a) Liens in Force. Except upon the payment in full of a Receivable
or as otherwise contemplated by this Agreement or applicable law, the
Servicer shall not release in whole or in part any Financed Vehicle from
the security interest securing the related Receivable.
(b) No Impairment. The Servicer shall not impair in any material
respect the rights of the Depositor, the Issuer, the Trustees or the
Securityholders in the Receivables or, except as permitted under Section
3.03, otherwise amend or alter the terms of the Receivables and as a
result of such amendment or modification or alteration, the interests of
the Depositor, the Issuer, the Trustees or the Securityholder would be
materially adversely affected.
Section 3.08. Purchase of Receivables Upon Breach. The Depositor, the
Seller, the Servicer or the Owner Trustee, as the case may be, shall inform
the other parties to this Agreement and the Indenture Trustee promptly, in
writing, upon the discovery of any breach of Section 3.03, 3.06 or 3.07. If
such breach shall not have been cured by the close of business on the last day
of the Collection Period which includes the 30th day after the date on which
the Servicer becomes aware of, or receives written notice from the Depositor,
the Seller, the or Owner Trustee of, such breach, and such breach materially
and adversely affects the interest of the Issuer in a Receivable, the Servicer
shall purchase such Receivable from the Issuer on the Distribution Date
following such Collection Period; provided, however, that, with respect to a
breach of Section 3.03, the Servicer shall purchase the affected Receivable
from the Issuer at the end of the Collection Period in which such breach
occurs. In consideration of the purchase of a Receivable hereunder, the
Servicer shall remit the related Purchase Amount of such Receivable to the
Collection Account in the manner specified in Section 4.05. The sole remedy of
the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders with respect to a breach of Section 3.03, 3.06 or 3.07
shall be to require the Servicer to purchase Receivables pursuant to this
Section. Neither the Owner Trustee nor the Indenture Trustee shall
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have any duty to conduct an affirmative investigation as to the occurrence of
any condition requiring the purchase of any Receivable pursuant to this
Section.
Section 3.09. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall receive the Monthly Servicing Fee for servicing
the Receivables. The Monthly Servicing Fee for any Collection Period shall
equal the product of one-twelfth of the Servicing Rate and the Pool Balance as
of the first day of such Collection Period (or, in the case of the initial
Collection Period, as of the Cutoff Date). As additional servicing
compensation, the Servicer shall be entitled to receive or retain (i) all
extension fees charged in connection with extensions of Receivables, (ii) any
administration fees and charges and all late payment fees actually collected
(from whatever source) on the Receivables and (iii) in the event that
collections on or in respect of the Receivable are permitted to be deposited
by the Servicer into the Collection Account on a monthly basis pursuant to
Section 4.02, all investment earnings on funds on deposit in the Collection
Account (collectively, the "Supplemental Servicing Fee"). The Servicer shall
pay all expenses incurred by it in connection with the activities under this
Agreement (including fees and expenses of the Trustees and the Paying Agent,
the independent accountants and any subservicer, taxes imposed on the
Servicer, expenses incurred in connection with distributions and reports to
Securityholders and all other fees and expenses not expressly stated under
this Agreement to be for the account of the Securityholders), except expenses
incurred in realizing upon Receivables under Section 3.04.
Section 3.10. Servicer's Certificate. On or before each Determination
Date, the Servicer shall deliver to the Depositor, the Seller, the Trustees,
each Paying Agent and each Rating Agency a Servicer's Certificate containing
all information necessary to make the transfers and distributions required by
Sections 4.05, 4.06, 4.07 and 4.08 in respect of the related Collection Period
on the related Distribution Date and all information necessary for the
Trustees to send statements to Securityholders pursuant to Section 4.09 and
pursuant to Section 6.06 of the Indenture. The Servicer shall also specify to
the Trustees, no later than the Determination Date following the last day of a
Collection Period as of which the Seller shall separately identify (by account
number) in a written notice to the Depositor and the Trustees, the Receivables
to be repurchased by the Seller or purchased by the Servicer, as the case may
be, on the related Deposit Date and, upon request of one of the foregoing
parties, each Receivable that became a Defaulted Receivable during the related
Collection Period. The Servicer shall deliver to the Rating Agencies any
information, to the extent that it is available to the Servicer, that the
Rating Agencies reasonably request in order to monitor the Issuer.
Section 3.11. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Depositor, the Trustees and each
Rating Agency, within 90 days after each year end, beginning with the first
year end that is at least four months after the Closing Date, an Officer's
Certificate of the Servicer, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period ended December 31 (or, if
applicable, such shorter period in the case of the first such Officer's
Certificate) and of its performance under this Agreement has been made under
such officer's supervision and (ii) to such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such period, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officer and
the nature and status
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thereof. Notwithstanding the foregoing, to the extent that the Commission
adopts a rule requiring the delivery by the Servicer of an annual report on an
assessment of servicing compliance on the basis of detailed servicing
criteria, the delivery of a copy of such report to the Depositor, the Trustees
and each Rating Agency shall be deemed to satisfy the provisions of this
subsection.
(b) The Servicer shall deliver to the Depositor, the Trustees and each
Rating Agency, promptly after having obtained knowledge thereof, but in no
event later than five Business Days thereafter, an Officer's Certificate
specifying any event which constitutes or, with the giving of notice or lapse
of time, or both, would become, a Servicer Termination Event.
Section 3.12. Annual Accountants' Report. The Servicer shall cause a firm
of independent certified public accountants (who may also render other
services to the Servicer or to the Depositor or their respective Affiliates)
to deliver to the Depositor and the Trustees within 90 days after each year
end, beginning with the first year end that is at least four months after the
Closing Date, a report with respect to the preceding 12-month period ended
December 31 (or, if applicable, such shorter period in the case of the first
such report) to the effect that such accountants have examined, on a test
basis, evidence of the Servicer's compliance with the covenants and conditions
set forth in this Agreement. The report will express an opinion on the
Servicer's assertion that the Servicer complied in all material respects with
the aforementioned covenants and conditions is fairly stated, in all material
respects or the reason why such an opinion cannot be expressed. Such report
shall also indicate that the firm is independent with respect to the Depositor
and the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants. Notwithstanding the
foregoing, to the extent the Commission adopts a rule requiring the delivery
of an annual attestation of a firm of independent public accountants with
respect to the assessment of servicing compliance with specified servicing
criteria by the Servicer stating, among other things, that the Servicer's
assertion of compliance with the specified servicing criteria is fairly stated
in all material respects, or the reason why such an opinion cannot be
expressed, the delivery of a copy of such attestation to the Depositor and the
Trustees shall be deemed to satisfy the provisions of this Section.
Section 3.13. Access to Certain Documentation and Information Regarding
Receivables. Subject to Section 2.06(b), the Servicer shall provide the
Depositor, the Trustees and the Securityholders with access to the Receivables
Files in the cases where the related Trustee or such Securityholder is
required by applicable statutes or regulations to have access to such
documentation. Such access shall be afforded without charge but only upon
reasonable request and during normal business hours which does not
unreasonably interfere with the normal operations or customer or employee
relations of the Servicer, at the respective offices of the Servicer. Nothing
in this Section shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors,
and the failure of the Servicer to provide access to information as a result
of such obligation shall not constitute a breach of this Section. Each
Securityholder, by its acceptance of the related Security or a beneficial
interest therein, shall be deemed to have agreed to keep any information
obtained by it pursuant to this Section confidential, except as may be
required by applicable law.
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Section 3.14. Reports to the Commission. The Servicer shall, on behalf of
the Issuer, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act, and the rules
and regulations of the Commission thereunder. The Depositor shall, at its
expense, cooperate in any reasonable request made by the Servicer in
connection with such filings.
Section 3.15. Reports to Rating Agencies. The Servicer shall deliver to
each Rating Agency, at such address as such Rating Agency may request, a copy
of all reports or notices furnished or delivered pursuant to this Article and
a copy of any amendments, supplements or modifications to this Agreement and
any other information reasonably requested by such Rating Agency to monitor
this transaction.
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ARTICLE FOUR
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO SECURITYHOLDERS
Section 4.01. Establishment of Accounts.
(a) The Servicer shall establish, on or before the Closing Date, and
maintain an Eligible Account with, and in the name of the Indenture Trustee,
at an Eligible Institution (which shall initially be the Paying Agent) a
segregated trust account for the benefit of (i) the Securityholders, the
Servicer, the Trustees and the Paying Agent, designated as the "Wachovia Auto
Owner Trust 2004-A Collection Account" (the "Collection Account"), (ii) the
Noteholders, the Servicer, the Trustees and the Paying Agent, designated as
the "Wachovia Auto Owner Trust 2004-A Note Payment Account" (the "Note Payment
Account"), and (iii) the Securityholders, designated as the "Wachovia Auto
Owner Trust 2004-A Yield Supplement Account" (the "Yield Supplement Account"),
in each case bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the related Persons. On the
Closing Date, the Depositor shall deposit the Yield Supplement Account Initial
Deposit into the Yield Supplement Account from the net proceeds of the sale of
the Notes. The Collection Account, the Note Payment Account and the Yield
Supplement Account shall be under the sole dominion and control of the
Indenture Trustee; provided, however, that the Servicer may direct the Paying
Agent or the Indenture Trustee in writing to make deposits to and withdrawals
from the Collection Account, the Note Payment Account and the Yield Supplement
Account in accordance with this Agreement and the other Basic Documents. All
monies deposited from time to time in the Collection Account, the Note Payment
Account and the Yield Supplement Account shall be held by the Indenture
Trustee or the Paying Agent as part of the Trust Property, and all deposits to
and withdrawals therefrom shall be made only upon the terms and conditions of
the Basic Documents.
(b) If the Servicer is required to remit collections on a daily basis
pursuant to the first sentence of Section 4.02(a), (i) all amounts held in the
Accounts shall, to the extent permitted by applicable law, rules and
regulations, be either invested by the Indenture Trustee or the Paying Agent
in Permitted Investments selected in writing by the Servicer or maintained in
cash and (ii) all interest and other income (net of losses and investment
expenses) on funds on deposit in the Accounts shall be retained on deposit in
the related Account. In the event that the Servicer is permitted to remit
collections on a monthly basis pursuant to Section 4.02, all interest and
other income (net of losses and investment expenses) on funds on deposit in
(A) the Collection Account shall be payable to the Servicer as part of the
Supplemental Servicing Fee and (B) the Note Payment Account and the Yield
Supplement Account shall be retained on deposit therein.
(c) The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Owner Trustee at an Eligible Institution (which
shall initially be the Paying Agent) a segregated trust account designated as
the "Wachovia Auto Owner Trust 2004-A Certificate Payment Account" (the
"Certificate Payment Account"). The Certificate Payment Account shall be held
in trust for the benefit of the Certificateholders. The Certificate Payment
Account shall be under the sole dominion and control of the Owner Trustee;
provided, however, that the Servicer may direct the Indenture Trustee or the
Paying Agent in writing to make deposits to and
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withdrawals from the Certificate Payment Account in accordance with this
Agreement and the other Basic Documents. All monies deposited from time to
time in the Certificate Payment Account shall be held by the Owner Trustee as
part of the Trust Property and shall be applied as provided in the Basic
Documents. The amounts on deposit in the Certificate Payment Account shall not
be invested.
(d) In the event that the Paying Agent is no longer an Eligible
Institution, the Servicer shall, with the Paying Agent's assistance as
necessary, promptly (and in any case within ten calendar days) cause the
Collection Account, the Note Payment Account, the Yield Supplement Account and
the Certificate Payment Account to be moved to an Eligible Institution. The
Servicer shall promptly notify the Rating Agencies and the Trustees in writing
of any change in the account number or location of the Collection Account, the
Note Payment Account, the Yield Supplement Account and the Certificate Payment
Account.
Section 4.02. Collections. The Servicer shall remit to the Collection
Account all amounts received by the Servicer on or in respect of the
Receivables (including Liquidation Proceeds and all amounts received by the
Servicer in connection with the repossession and sale of a Financed Vehicle
(whether or not the related Receivable has been classified as a Defaulted
Receivable) but excluding payments with respect to Purchased Receivables) as
soon as practicable and in no event after the close of business on the second
Business Day after such receipt; provided, however, that for so long as the
Monthly Remittance Condition shall be satisfied, the Servicer may remit all
such amounts received on or in respect of the Receivables during any
Collection Period to the Collection Account in immediately available funds on
the related Deposit Date. As of the Closing Date, the Servicer shall make
remittances to the Collection Account on a monthly basis. Neither Trustee
shall be deemed to have knowledge of any event or circumstance under clause
(i) or (ii) of the definition of the term "Monthly Remittance Condition" that
would require daily remittances by the Servicer to the Collection Account
unless such Trustee has received notice of such event or circumstance from the
Depositor or the Servicer in an Officer's Certificate or from the Holders of
Notes evidencing not less than 25% of the Note Balance of the Controlling
Class or a Responsible Officer of such Trustee has actual knowledge of such
event or circumstance. The Servicer shall remit to the Collection Account on
the Closing Date all amounts received by the Servicer on or in respect of the
Receivables (including Liquidation Proceeds and all amounts received by the
Servicer in connection with the repossession and sale of a Financed Vehicle
(whether or not the related Receivable has been classified as a Defaulted
Receivable)) during the period from but excluding the Cutoff Date to and
including the second Business Day preceding the Closing Date.
Section 4.03. Application of Collections. For purposes of this Agreement,
all amounts received on or in respect of a Receivable during any Collection
Period (including Liquidation Proceeds and all amounts received by the
Servicer in connection with the repossession and sale of a Financed Vehicle
(whether or not the related Receivable has been classified as a Defaulted
Receivable) but excluding payments with respect to Purchased Receivables)
shall be applied by the Servicer, as of the last day of such Collection
Period, to interest and principal on such Receivable in accordance with the
Simple Interest Method.
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Section 4.04. Advances.
(a) If, as of the end of any Collection Period, the payments received
during such Collection Period by or on behalf of an Obligor in respect of a
Receivable (other than a Purchased Receivable) shall be less than the related
Monthly Payment, whether as a result of any extension granted to the Obligor
or otherwise, then an amount equal to the product of the Principal Balance of
such Receivable as of the first day of the related Collection Period and
one-twelfth of its Contract Rate minus the amount of interest actually
received on such Receivable during such Collection Period (each, an "Advance")
may be deposited by the Servicer, at its option, into the Collection Account
on the related Deposit Date. If such a calculation in respect of a Receivable
results in a negative number, an amount equal to such negative amount shall be
paid to the Servicer in reimbursement of any outstanding Advances. In
addition, in the event that a Receivable becomes a Defaulted Receivable, the
amount of accrued and unpaid interest thereon (but not including interest for
the current Collection Period) shall, up to the amount of outstanding
Advances, be withdrawn from the Collection Account and paid to the Servicer in
reimbursement of such outstanding Advances. No Advances will be made with
respect to the Principal Balance of Receivables. The Servicer shall not be
required to make an Advance to the extent that the Servicer, in its sole
discretion, shall determine that such Advance is likely to become a
Nonrecoverable Advance.
(b) Notwithstanding the provisions of Section 4.02, the Servicer shall be
entitled to reimbursement for an outstanding Advance made in respect of a
Receivable, without interest, from the following sources with respect to such
Receivable: (i) subsequent payments made by or on behalf of the related
Obligor, (ii) Liquidation Proceeds and Recoveries and (iii) the Purchase
Amount. If the Servicer determines that it has made a Nonrecoverable Advance,
the Servicer shall reimburse itself, without interest, from unrelated amounts
received by the Servicer on or in respect of the Receivables (including
Liquidation Proceeds and all amounts received by the Servicer in connection
with the repossession and sale of a Financed Vehicle (whether or not the
related Receivable has been classified as a Defaulted Receivable)) to the
extent it shall, concurrently with the withholding of any such amounts from
deposit in or credit to the Collection Account, furnish to the Trustees a
certificate of a Servicing Officer setting forth the basis for the Servicer's
determination, the amount of, and Receivable with respect to which, such
Nonrecoverable Advance was made and the installment or installments or other
proceeds respecting which such reimbursement has been taken.
Section 4.05. Additional Deposits.
(a) The following additional deposits shall be made to the Collection
Account: (i) the Seller shall remit the aggregate Purchase Amount with respect
to Purchased Receivables pursuant to Section 2.04, (ii) the Servicer shall
remit (A) the aggregate Purchase Amount with respect to Purchased Receivables
pursuant to Section 3.08 and (B) the amount required upon the optional
purchase of all Receivables by the Servicer pursuant to Section 8.01 and (iii)
the Indenture Trustee, directly or through the Paying Agent, shall remit (A)
the Reserve Fund Draw Amount pursuant to Sections 4.06 and 4.07 and (B) the
Yield Supplement Account Draw Amount pursuant to Sections 4.06 and 4.07.
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(b) All deposits required to be made in respect of a Collection Period
pursuant to this Section by the Servicer, as the case may be, may be made in
the form of a single deposit and shall be made in immediately available funds,
no later than 5:00 p.m., New York City time, on the related Deposit Date.
Section 4.06. Determination Date Calculations; Application of Available
Funds.
(a) On each Determination Date, the Servicer shall calculate the
following amounts with respect to the related Distribution Date and Collection
Period
(i) the Available Collections;
(ii) the Total Servicing Fee;
(iii) the Total Trustee Fees;
(iv) the Interest Distributable Amount for each Class of Class A
Notes;
(v) the Priority Principal Distributable Amount;
(vi) the Interest Distributable Amount for the Class B Notes;
(vii) the Secondary Principal Distributable Amount;
(viii) the Interest Distributable Amount for the Class C Notes;
(ix) the Tertiary Principal Distributable Amount;
(x) the sum of the amounts described in clauses (ii) through (ix)
above (the "Required Payment Amount"); and
(xi) the Regular Principal Distributable Amount.
(b) On each Determination Date, the Servicer shall calculate the
following amounts with respect to the related Distribution Date and Collection
Period:
(i) the lesser of (A) the amount, if any, by which the Required
Payment Amount exceeds Available Collections and (B) the Reserve Fund
Amount (before giving effect to any deposits to or withdrawals from the
Reserve Fund on such Distribution Date) (such lesser amount, the "Reserve
Fund Draw Amount"); provided, however, that the Reserve Fund Draw Amount
will equal the Reserve Fund Amount if (1) Available Collections, the
amount on deposit in the Yield Supplement Account and the Reserve Fund
Amount equals or exceeds the Note Balance, accrued and unpaid interest
therein and all amounts on the related Distribution Date required to be
paid to the Servicer, the Trustees and the Paying Agent or (2) on the
last day of the related Collection Period the Pool Balance is zero;
(ii) the Required Reserve Fund Amount (after giving effect to the
withdrawal of the Reserve Fund Draw Amount for such Distribution Date);
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(iii) the amount, if any, by which the Required Reserve Fund Amount
exceeds the Reserve Fund Amount (after giving effect to the withdrawal of
the Reserve Fund Draw Amount for such Distribution Date) (such excess,
the "Reserve Fund Deficiency"); and
(iv) the Yield Supplement Account Draw Amount.
On each Distribution Date, the Servicer shall instruct the Indenture
Trustee or the Paying Agent to transfer and deposit into the Collection
Account (i) the Reserve Fund Draw Amount, if any, from the Reserve Fund and
(ii) the Yield Supplement Account Draw Amount from the Yield Supplement
Account.
(c) On each Distribution Date, the Servicer shall instruct the Indenture
Trustee and the Paying Agent in writing to apply the Available Funds for such
Distribution Date to make the related payments and deposits set forth in
Section 2.08 of the Indenture. Any distributions to be made by the Indenture
Trustee under the Basic Documents may be made by the Paying Agent.
Section 4.07. Reserve Fund.
(a) The Servicer shall establish, on or before the Closing Date, and
maintain in the name of the Indenture Trustee, at an Eligible Institution
(which shall initially be the Paying Agent) a segregated trust account
designated as the "Wachovia Auto Owner Trust 2004-A Reserve Fund" (the
"Reserve Fund"). The Reserve Fund shall be held in trust for the benefit of
the Securityholders. The Reserve Fund shall be under the sole dominion and
control of the Indenture Trustee; provided, however, that the Servicer may
direct the Indenture Trustee or the Paying Agent in writing to make deposits
to and withdrawals from the Reserve Fund in accordance with this Agreement and
the other Basic Documents. On the Closing Date, the Depositor shall deposit
the Reserve Fund Initial Deposit into the Reserve Fund from the net proceeds
of the sale of the Notes. The Reserve Fund and all amounts, securities,
investments, financial assets and other property deposited in or credited to
the Reserve Fund (the "Reserve Fund Property") has been conveyed by the
Depositor to the Issuer pursuant to Section 2.01(a). Pursuant to the
Indenture, the Issuer will pledge all of its right, title and interest in, to
and under the Reserve Fund and the Reserve Fund Property to the Indenture
Trustee on behalf of the Securityholders to secure its obligations under the
Notes and the Indenture.
(b) The Reserve Fund Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing by
the Servicer, by the bank or trust company then maintaining the Reserve Fund
in Permitted Investments that mature not later than the Deposit Date following
the date of investment. All such Permitted Investments shall be held to
maturity. All interest and other income (net of losses and investment
expenses) on funds on deposit in the Reserve Fund shall be retained on deposit
therein. If the Reserve Fund is no longer to be maintained at the Paying
Agent, the Servicer shall, with the Paying Agent's assistance as necessary,
promptly (and in any case within ten calendar days) cause the Reserve Fund to
be moved to an Eligible Institution. The Servicer shall promptly notify the
Rating Agencies and the Trustees in writing of any change in the account
number or location of the Reserve Fund.
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(c) With respect to any Reserve Fund Property:
(i) any Reserve Fund Property that is a Financial Asset shall be
physically delivered to, or credited to an account in the name of, the
Eligible Institution maintaining the Reserve Fund, in accordance with
such institution's customary procedures such that such institution
establishes a Securities Entitlement in favor of the Indenture Trustee
with respect thereto;
(ii) any Reserve Fund Property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one or more
depository institutions having the Required Rating and each such deposit
account shall be subject to the exclusive custody and control of the
Indenture Trustee and the Indenture Trustee either directly or through
the Paying Agent shall have sole signature authority with respect
thereto; and
(iii) except for any deposit accounts specified in clause (ii)
above, the Reserve Fund shall only be invested in securities or in other
assets which the Eligible Institution maintaining the Reserve Fund agrees
to treat as Financial Assets.
(d) If any Class of Notes has not been paid in full on any Distribution
Date on and after its Final Scheduled Distribution Date (after giving effect
to the distribution of Available Funds on such Distribution Date), the
Servicer shall instruct the Indenture Trustee and the Paying Agent to
distribute from amounts on deposit in the Reserve Fund to the Noteholders of
that Class of Notes, an amount equal to the lesser of (i) the amount on
deposit in the Reserve Fund and (ii) the outstanding principal amount of that
Class of Notes. If the Reserve Fund Amount for any Distribution Date (after
giving effect to the withdrawal of the Reserve Fund Draw Amount for such
Distribution Date and the distribution described in the preceding sentence)
exceeds the Required Reserve Fund Amount for such Distribution Date, the
Servicer shall instruct the Indenture Trustee and the Paying Agent in writing
to distribute the amount of such excess to the Certificate Payment Account for
payment to the Certificateholders. The Trustees hereby release, on each
Distribution Date, their security interest in, to and under Reserve Fund
Property distributed to the Certificateholders.
(e) If the Note Balance and all other amounts owing or to be distributed
hereunder or under the Indenture or the Trust Agreement to the Noteholders or
the Certificateholders have been paid in full and the Issuer has been
terminated, any remaining Reserve Fund Property shall be distributed to the
Certificateholders.
Section 4.08. Net Deposits. For so long as the Monthly Remittance
Condition is met, unless the Servicer is required to remit collections on a
daily basis pursuant to the first sentence of Section 4.02, the Depositor and
the Servicer may make any remittances pursuant to this Article with respect to
a Collection Period net of distributions or reimbursements to be made to the
Depositor or the Servicer with respect to such Collection Period; provided,
however, that such obligations shall remain separate obligations, no party
shall have a right of offset, and each such party shall account for all of the
above described remittances and distributions as if the amounts were deposited
or transferred separately.
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Section 4.09. Statements to Securityholders.
(a) On each Distribution Date, the Servicer shall provide to the Owner
Trustee (with copies to the Depositor, the Rating Agencies and each Paying
Agent) to forward to each Certificateholder of record, and to the Indenture
Trustee, either directly or through a Paying Agent, to forward to each
Noteholder of record a statement, based on the related Servicer's Certificate
setting forth at least the following information as to the Securities with
respect to the related Distribution Date and Collection Period, in
substantially the form of Exhibit B, to the extent applicable:
(i) the amount of such distribution allocable to principal for
each Class of Notes;
(ii) the Priority Principal Distributable Amount;
(iii) the Secondary Principal Distributable Amount;
(iv) the Tertiary Principal Distributable Amount;
(v) the Regular Principal Distributable Amount;
(vi) the amount of such distribution allocable to current and
overdue interest (including any interest on overdue interest) for each
Class of Notes;
(vii) the Total Servicing Fee;
(viii) the Total Trustee Fees;
(ix) the aggregate outstanding principal balance of each Class of
Notes and the Note Pool Factor with respect to each Class of Notes (in
each case after giving effect to payments allocated to principal reported
under clause (i) above);
(x) the Pool Balance as of the close of business on the last day of
the related Collection Period;
(xi) the Reserve Fund Amount on such Distribution Date (after giving
effect to all deposits to or withdrawals from the Reserve Fund on such
Distribution Date) and the Reserve Fund Draw Amount;
(xii) the aggregate Purchase Amount of Receivables repurchased by
the Seller or purchased by the Servicer, if any, with respect to the
related Collection Period;
(xiii) the number and aggregate Principal Balance of Receivables
that were 31-60 days, 61-90 days or 91 days or more delinquent as of the
last day of the related Collection Period;
(xiv) the Net Losses with respect to the related Collection Period;
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(xv) the Overcollateralization Target Amount and the amount by
which the Pool Balance exceeds the Note Balance (after giving effect to
any payments made to the Noteholders on such Distribution Date);
(xvi) the amount of Available Collections for the related Collection
Period;
(xvii) the Cumulative Net Loss Percentage and the Sequential Payment
Trigger;
(xviii) the Yield Supplement Account Draw Amount; and
(xix) the amount of Excess Collections.
(b) Within the prescribed period of time for tax reporting purposes after
the end of each calendar year during the term of the Issuer, but not later
than the latest date permitted by law, the related Trustee, upon receipt
thereof, shall mail to each Person who at any time during such calendar year
shall have been a Securityholder, a statement, prepared by the Servicer,
containing certain information for such calendar year or, in the event such
Person shall have been a Securityholder during a portion of such calendar
year, for the applicable portion of such year, for the purposes of such
Securityholder's preparation of federal income tax returns. In addition, the
Servicer shall furnish to the Trustees for distribution to such Person at such
time any other information necessary under applicable law for the preparation
of such income tax returns.
Section 4.10. Control of Accounts. Notwithstanding anything to the
contrary contained herein, the Issuer agrees that each Account will be
established only with an Eligible Institution which agrees substantially as
follows: (i) it will comply with Entitlement Orders related to such account
issued by the Indenture Trustee without further consent by the Servicer, (ii)
until termination of this Agreement, it will not enter into any other
agreement related to such account pursuant to which it agrees to comply with
Entitlement Orders of any Person other than the Indenture Trustee, (iii) all
Account Collateral delivered or credited to it in connection with such account
and all proceeds thereof will be promptly credited to such account, (iv) it
will treat all Account Collateral as Financial Assets and (v) all Account
Collateral will be physically delivered (accompanied by any required
endorsements) to, or credited to an account in the name of, the Eligible
Institution maintaining the related Account in accordance with such Eligible
Institution's customary procedures such that such Eligible Institution
establishes a Security Entitlement in favor of the Indenture Trustee with
respect thereto over which the Indenture Trustee (or such other Eligible
Institution) has Control.
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ARTICLE FIVE
THE DEPOSITOR
Section 5.01. Representations and Warranties of Depositor. The Depositor
makes the following representations and warranties on which the Issuer is
deemed to have relied in acquiring the Trust Property. The representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date, and shall survive the sale, transfer, assignment and
conveyance of the Trust Property to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted,
and had at all relevant times, and has, power, authority and legal right
to acquire, own and sell the Receivables.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing and has
obtained all necessary licenses and approvals in each jurisdiction in
which the failure to so qualify or to obtain such licenses and approvals
would, in the reasonable judgment of the Depositor, materially and
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement, each other
Basic Document to which the Depositor is a party, the Receivables, the
Notes or the Certificates.
(c) Power and Authority. The Depositor has the power and authority
to execute, deliver and perform its obligations under this Agreement and
each other Basic Document to which it is a party. The Depositor has the
power and authority to sell, assign, transfer and convey the property to
be transferred to and deposited with the Issuer and has duly authorized
such sale, assignment, transfer and conveyance by all necessary limited
liability company action; and the execution, delivery and performance of
this Agreement and each other Basic Document to which the Depositor is a
party has been duly authorized by the Depositor by all necessary limited
liability company action.
(d) Valid Sale; Binding Obligation. This Agreement effects a valid
sale, transfer, assignment and conveyance to the Issuer of the
Receivables and the other Trust Property, enforceable against all
creditors of and purchasers from the Depositor. Each of this Agreement
and each other Basic Document to which the Depositor is a party
constitutes a legal, valid and binding obligation of the Depositor
enforceable against the Depositor in accordance with its terms, except as
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability shall be considered in
a proceeding in equity or at law.
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(e) No Violation. The execution, delivery and performance by the
Depositor of this Agreement and the other Basic Documents to which the
Depositor is a party and the consummation of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof
and thereof does not conflict with, result in any breach of any of the
terms and provisions of, nor constitute (with or without notice or lapse
of time, or both) a default under, the certificate of formation or
limited liability company agreement of the Depositor, or conflict with or
violate any of the material terms or provisions of, or constitute (with
or without notice or lapse of time, or both) a default under, any
indenture, agreement or other instrument to which the Depositor is a
party or by which it shall be bound or to which any of its properties is
subject; nor result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than this Agreement); nor violate any law or, to
the Depositor's knowledge, any order, rule or regulation applicable to
the Depositor or of any federal or State regulatory body, court,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties, which breach, default,
conflict, Lien or violation would have a material adverse effect on the
earnings, business affairs or business prospects of the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Depositor's knowledge, threatened against the
Depositor, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor
or its properties: (i) asserting the invalidity of this Agreement, any
other Basic Document or the Securities, (ii) seeking to prevent the
issuance of the Securities or the consummation of any of the transactions
contemplated by the Basic Documents, (iii) seeking any determination or
ruling that, in the reasonable judgment of the Depositor, would
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, the Basic
Documents, the Receivables or the Securities or (iv) relating to the
Depositor and which might adversely affect the federal income tax
attributes of the Issuer or the Securities.
Section 5.02. Liability of Depositor; Indemnities.
(a) The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Depositor under this
Agreement.
(b) The Depositor shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee and the Indenture Trustee from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated by the Basic Documents, including any sales, gross
receipts, general corporation, tangible personal property, privilege or
license taxes (but not including any taxes asserted with respect to, and as of
the date of the sale of the Receivables to the Issuer or the issuance and
original sale of the Securities, or asserted with respect to ownership of the
Receivables or federal or other State income taxes arising out of
distributions on the Securities), and all costs and expenses in defending
against such taxes.
(c) The Depositor shall indemnify, defend and hold harmless the Issuer,
the Trustees and the Securityholders from and against any loss, liability,
claim, damage or expense incurred by reason of (i) the Depositor's willful
misfeasance, bad faith or negligence (other than errors in
40
judgment) in the performance of its duties under this Agreement or any other
Basic Document to which it is a party, or by reason of reckless disregard of
its obligations and duties under this Agreement or any other Basic Document to
which it is a party.
(d) The Depositor shall indemnify, defend and hold harmless the Trustees
from and against all losses, liabilities, claims, damages or expenses arising
out of or incurred in connection with the acceptance or performance of the
trusts and duties contained herein, in the Trust Agreement (in the case of the
Owner Trustee) and in the Indenture (in the case of the Indenture Trustee),
except to the extent that such loss, liability, claim, damage or expense (i)
shall be due to the willful misfeasance, bad faith or negligence of the Owner
Trustee or the Indenture Trustee, as applicable, (ii) in the case of the Owner
Trustee, shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in the Trust Agreement, (iii) in the
case of the Indenture Trustee, shall arise from the breach by the Indenture
Trustee of any of its representations and warranties set forth in the
Indenture or shall arise out of or be incurred in connection with the
performance by the Indenture Trustee of duties of a Successor Servicer
hereunder, (iv) shall be one as to which the Servicer is required to indemnify
the Owner Trustee or the Indenture Trustee, as the case may be, or (v) relates
to any tax other than the taxes with respect to which the Servicer shall be
required to indemnify the Owner Trustee or the Indenture Trustee, as the case
may be.
(e) The Depositor shall pay any and all taxes levied or assessed upon all
or any part of the Trust Property.
(f) Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee, as the case may be, and
the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Depositor shall have
made any indemnity payments pursuant to this Section and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
Depositor, without interest. Notwithstanding anything to the contrary
contained herein, the Depositor shall only be required to pay (i) any fees,
expenses, indemnities or other liabilities that it may incur under the Basic
Documents from funds available pursuant to, and in accordance with, the
payment priorities set forth in this Agreement and the other Basic Documents
and (ii) to the extent the Depositor has additional funds available (other
than funds described in the preceding clause (i)) that would be in excess of
amounts that would be necessary to pay the debt and other obligations of the
Depositor in accordance with the Depositor's certificate of formation,
operating agreement and all financing documents to which the Depositor is a
party. The agreement set forth in the preceding sentence shall constitute a
subordination agreement for purposes of Section 510(a) of the Bankruptcy Code.
In addition, no amount owing by the Depositor hereunder in excess of
liabilities that it is required to pay in accordance with the preceding
sentence shall constitute a "claim" (as defined in Section 101(5) of the
Bankruptcy Code) against it.
Section 5.03. Merger, Consolidation or Assumption of the Obligations of
Depositor; Certain Limitations.
(a) Any Person (i) into which the Depositor shall be merged or
consolidated, (ii) resulting from any merger, conversion or consolidation to
which the Depositor shall be a
41
party or (iii) that shall succeed by purchase and assumption to all or
substantially all of the business of the Depositor, which Person in any of the
foregoing cases executes an agreement of assumption to perform every
obligation of the Depositor under this Agreement, shall be the successor to
the Depositor under this Agreement without the execution or filing of any
other document or any further act on the part of any of the parties to this
Agreement; provided, however, that (A) the Depositor shall have delivered to
the Trustees an Officer's Certificate and an Opinion of Counsel each stating
that such merger, conversion, consolidation or succession and such agreement
of assumption comply with this Section, (B) the Depositor shall have delivered
to the Trustees an Opinion of Counsel stating that, in the opinion of such
counsel, either (1) all financing statements and continuation statements and
amendments thereto have been authorized and filed that are necessary to fully
preserve and protect the interest of the Issuer and the Indenture Trustee,
respectively, in the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or (2)
no such action shall be necessary to fully preserve and protect such interest
and (C) the Rating Agency Condition shall have been satisfied. Notwithstanding
anything to the contrary contained herein, the execution of the foregoing
agreement of assumption and compliance with clauses (A), (B) and (C) above
shall be conditions to the consummation of the transactions referred to in
clauses (i), (ii) and (iii) above.
(b) (i) Subject to paragraph (ii) below, the purpose of the Depositor
shall be to engage in any lawful activity for which a limited liability
company may be organized under the general limited liability company law of
Delaware other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the Delaware Limited
Liability Company Act.
(ii) Notwithstanding paragraph (b)(i) above, the purpose of the
Depositor shall be limited to the conduct or promotion of the following
activities: (A) to acquire retail installment sales contracts, purchase
money notes or other notes between motor vehicle dealers or lenders and
purchasers of new and used automobiles, minivans, sport utility vehicles,
light-duty trucks, motorcycles or commercial vehicles (the "Motor Vehicle
Receivables"); (B) to act as settlor or grantor of one or more trusts or
special purpose entities (each, a "Securitization Trust") formed pursuant
to a trust agreement or other agreement for the purpose of issuing one or
more series or classes of certificates, bonds, notes or other evidences
of interest or indebtedness (collectively, the "Motor Vehicle
Securities") secured by or representing beneficial interests in the Motor
Vehicle Receivables; (C) to acquire, lease, own, hold, sell, transfer,
convey, dispose of, pledge, assign, borrow money against, finance,
refinance or otherwise deal with, publicly or privately and whether with
unrelated third parties or with affiliated entities, retail installment
sales contracts, purchase money notes or other notes between motor
vehicle dealers or lenders and purchasers of Motor Vehicle Receivables;
(D) to acquire Motor Vehicle Securities or other property of a
Securitization Trust (including remainder interests in collateral or
reserve accounts) or any interest in any of the foregoing; (E) to issue,
authorize, sell and deliver Motor Vehicle Securities or other instruments
secured or collateralized by the Motor Vehicle Securities; (F) to own
equity interests in other limited liability companies or partnerships
whose purposes are substantially restricted to those described in clauses
(A) through (E) above; (G) to borrow money other than pursuant to clause
(C) above, but only to the extent that such borrowing is permitted by the
terms of
42
the transactions contemplated by clauses (A) through (F) above; and (H)
to (1) negotiate, authorize, execute, deliver or assume or perform the
obligations under any agreement, instrument or document relating to the
activities set forth in clauses (A) through (G) above, including the
Basic Documents and (2) engage in any lawful act or activity and to
exercise any powers permitted to limited liability companies organized
under the laws of the State of Delaware that are incidental to and
necessary, convenient or advisable for the accomplishment of the
above-mentioned purposes, including the entering into of interest rate or
basis swap, cap, floor or collar agreements, currency exchange agreements
or similar hedging transactions and referral, management, servicing and
administration agreements. So long as any outstanding debt of the
Depositor or securities are rated by any nationally recognized
statistical rating organization, the Depositor shall not issue notes or
otherwise borrow money unless (A) the Depositor has made a written
request to the related nationally recognized statistical rating
organization to issue notes or incur borrowings, which notes or
borrowings are rated by the related nationally recognized statistical
rating organization the same as or higher than the rating afforded any
outstanding rated debt or securities, or (B) such notes or borrowings (1)
are fully subordinated (and which shall provide for payment only after
payment in respect of all outstanding rated debt or securities) or are
nonrecourse against any assets of the Depositor other than the assets
pledged to secure such notes or borrowings, (2) do not constitute a claim
against the Depositor in the event such assets are insufficient to pay
such notes or borrowings and (3) where such notes or borrowings are
secured by the rated debt or securities, are fully subordinated (and
which shall provide for payment only after payment in respect of all
outstanding rated debt or securities) to such rated debt or securities.
(c) Notwithstanding any other provision of this Section and any provision
of law, the Depositor shall not do any of the following:
(i) engage in any business or activity other than as set forth in
Section 5.03(a);
(ii) without the unanimous written consent of the members of the
Depositor and the members of the Board of Directors of the Depositor
(including all independent directors of the Depositor), (A) consolidate
or merge the Depositor with or into any Person or sell all or
substantially all of the assets of the Depositor, (B) institute
proceedings to have the Depositor be adjudicated bankrupt or insolvent,
or consent to the institution of bankruptcy or insolvency proceedings
against Depositor, (C) file a petition seeking, or consent to,
reorganization or relief with respect to the Depositor under any
applicable federal or state law relating to bankruptcy, (D) consent to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Depositor or a substantial
part of its property, (E) make any assignment for the benefit of
creditors of the Depositor, (F) admit in writing the Depositor's
inability to pay its debts generally as they become due, (G) take any
action in furtherance of any action set forth in clauses (A) through (F)
above or (H) to the fullest extent permitted by law, dissolve or
liquidate the Depositor; or
43
(iii) change the current number of independent special members under
the limited liability company agreement of the Depositor.
(d) The Depositor shall not amend its organizational documents except in
accordance with the provisions thereof.
Section 5.04. Limitation on Liability of Depositor and Others. The
Depositor and any director or officer or employee or agent of the Depositor
may rely in good faith on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and any director or officer or employee or agent of the
Depositor shall be reimbursed by the Owner Trustee or the Indenture Trustee,
as the case may be, for any contractual damages, liability or expense incurred
by reason of the Owner Trustee's or the Indenture Trustee's willful
misfeasance, bad faith or negligence (except for errors in judgment) in the
performance of their respective duties hereunder, or by reason of reckless
disregard of their respective obligations and duties hereunder. The Depositor
shall not be under any obligation to appear in, prosecute or defend any legal
action that shall not be incidental to its obligations under this Agreement,
and that in its opinion may involve it in any expense or liability. The
indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement.
Section 5.05. Seller Not to Resign. Subject to the provisions of Section
5.03, the Seller shall not resign from the obligations and duties hereby
imposed on it as Seller hereunder.
Section 5.06. Depositor May Own Securities. The Depositor and any of its
Affiliates may, in its individual or any other capacity, become the owner or
pledgee of Securities with the same rights as it would have if it were not the
Depositor or an Affiliate of the Depositor, except as otherwise expressly
provided herein or in any other Basic Document (including in the definition of
the term "Note Balance"). Except as otherwise expressly provided herein or in
the other Basic Documents (including in the definition of the term "Note
Balance"), Securities so owned by or pledged to the Depositor or such
Affiliate shall have an equal and proportionate benefit under the provisions
of this Agreement and the other Basic Documents, without preference, priority
or distinction as among the Notes and the Certificates as the case may be.
44
ARTICLE SIX
THE SERVICER
Section 6.01. Representations and Warranties of Servicer. The Servicer
makes the following representations and warranties on which the Issuer is
deemed to have relied in acquiring the Trust Property. The representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date, and shall survive the sale, transfer, assignment and
conveyance of the Trust Property to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture:
(a) Organization and Good Standing. The Servicer is a national
banking association duly organized and validly existing as a banking
institution under the laws of the United States and continues to hold a
valid certificate to do business as such. It is duly authorized to own
its properties and transact its business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
any properties owned or leased by it requires such authorization and in
which the failure to be so authorized would have a material adverse
effect on its business, properties, assets, or condition (financial or
other) and those of its subsidiaries, considered as one enterprise. The
Servicer has, and at all relevant times had, the power, authority and
legal right to acquire, own, and service the Receivables and to hold the
Receivable Files as custodian on behalf of the Issuer.
(b) Due Qualification. The Servicer is duly qualified to do business
in good standing and has obtained all necessary licenses and approvals in
each jurisdiction in which the failure to so qualify or to obtain such
licenses and approvals would, in the reasonable judgment of the Servicer,
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement,
each other Basic Document to which the Servicer is a party, the
Receivables, the Notes or the Certificates.
(c) Power and Authority. The Servicer has the power and authority to
execute, deliver and perform its obligations under this Agreement and
each other Basic Document to which it is a party; and the execution,
delivery and performance of this Agreement and each other Basic Document
to which it is a party have been duly authorized by the Servicer by all
necessary action.
(d) Binding Obligation. This Agreement and each other Basic Document
to which the Servicer is a party constitute legal, valid and binding
obligations of the Servicer, enforceable against the Servicer in
accordance with their respective terms, except that such enforceability
may be subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer and other similar laws
relating to or affecting creditors generally, and creditors of national
banking associations and financial institutions the accounts of which are
insured by the Federal Deposit Insurance Corporation in particular, and
to general equitable principles (regardless of whether considered in a
proceeding in equity or at law), including concepts of commercial
45
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief.
(e) No Violation. The execution, delivery and performance by the
Servicer of this Agreement and each other Basic Document to which the
Servicer is a party, the consummation of the transactions contemplated
hereby and thereby and the fulfillment of their respective terms shall
not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, the articles of association or bylaws of the
Servicer, or any material indenture, agreement, mortgage, deed of trust
or other instrument to which the Servicer is a party, by which the
Servicer is bound or to which any of its properties are subject; or
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement
and the other Basic Documents, or violate any law, order, rule or
regulation applicable to the Servicer or its properties of any federal or
state regulatory body, court, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the knowledge of the Servicer, threatened, against the
Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having jurisdiction over
the Servicer or its properties: (i) asserting the invalidity of this
Agreement or any of the other Basic Documents, (ii) seeking to prevent
the issuance of the Securities or the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic
Documents, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Servicer, would materially and adversely
affect the performance by it of its obligations under, or the validity or
enforceability of, this Agreement or the Receivables or (iv) seeking to
adversely affect the federal income tax or other federal, State or local
tax attributes of the Securities.
Section 6.02. Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement. Such obligations
shall include the following:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Trustees, the Securityholders and the Depositor from and
against all losses, liabilities, claims, damages and expenses arising out
of or incurred in connection with the use, ownership or operation by the
Servicer or any Affiliate of the Servicer of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Depositor and the Trustees from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents,
including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but not including any
taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of the
Securities, or asserted with respect to ownership of the
46
Receivables, or federal or other State income taxes arising out of
distributions on the Securities) and costs and expenses in defending
against such taxes.
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Trustees, the Securityholders and the Depositor from and
against any loss, liability, claim, damage or expense incurred by reason
of the Servicer's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement or any other Basic
Document to which it is a party or by reason of a reckless disregard of
its obligations and duties under this Agreement or any other Basic
Document to which it is a party.
(d) The Servicer shall indemnify, defend and hold harmless the
Trustees and their respective officers, directors, employees and agents
from and against all losses, liabilities, claims, damages and expenses
arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein and contained in the Trust
Agreement (in the case of the Owner Trustee) and contained in the
Indenture (in the case of the Indenture Trustee), except to the extent
that such loss, liability, claim, damage or expense: (i) shall be due to
the willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Owner Trustee or the Indenture Trustee, as applicable,
(ii) in the case of the Owner Trustee, shall arise from the breach by the
Owner Trustee of any of its representations or warranties set forth in
Section 7.03 of the Trust Agreement, (iii) in the case of the Indenture
Trustee, shall arise from the breach by the Indenture Trustee of any of
its representations and warranties set forth in the Indenture or shall
arise out of or be incurred in connection with the performance by the
Indenture Trustee of the duties of a Successor Servicer hereunder or (iv)
relates to any tax other than to the taxes with respect to which either
the Depositor or the Servicer shall be required to indemnify the Owner
Trustee or the Indenture Trustee, as applicable.
(e) The Servicer shall pay the Owner Trustee compensation,
reimbursement or other payments owed to it pursuant to Sections 8.01 and
8.02 of the Trust Agreement.
In addition to the foregoing indemnities, if the Owner Trustee or the
Indenture Trustee is entitled to indemnification by the Depositor pursuant to
Section 5.02 and the Depositor is unable for any reason to provide such
indemnification to the Owner Trustee or the Indenture Trustee, then the
Servicer shall be liable for any indemnification that the Owner Trustee or the
Indenture Trustee is entitled to under Section 5.02. For purposes of this
Section, in the event of a termination of the rights and obligations of the
Servicer (or any Successor Servicer) pursuant to Section 7.01 or a resignation
by such Servicer pursuant to Section 6.05, such Servicer shall be deemed to be
the Servicer pending appointment of a Successor Servicer (other than the
Indenture Trustee) pursuant to Section 7.02. Indemnification under this
Section by the Servicer (or any Successor Servicer), with respect to the
period such Person was (or was deemed to be) the Servicer, shall survive the
termination of each Person as Servicer or a resignation by such Person as
Servicer, as well as the resignation or removal of the Owner Trustee or the
Indenture Trustee, as the case may be, or the termination of this Agreement
and shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are
47
made thereafter collects any of such amounts from others, such Person shall
promptly repay such amounts to the Servicer, as the case may be, without
interest.
Section 6.03. Merger, Consolidation or Assumption of the Obligations of
Servicer. Any Person (i) into which the Servicer shall be merged or
consolidated, (ii) which may result from any merger, conversion or
consolidation to which the Servicer shall be a party or (iii) which may
succeed to all or substantially all of the business of the Servicer, which
Person in any of the foregoing cases is an Eligible Servicer and executes an
agreement of assumption to perform every obligation of the Servicer under this
Agreement, shall be the successor to the Servicer under this Agreement without
the execution or filing of any other document or any further act on the part
of any of the parties hereto; provided, however, (a) the Servicer shall have
delivered to the Depositor and the Trustees an Officer's Certificate and an
Opinion of Counsel each stating that such merger, conversion or consolidation
and such agreement of assumption comply with this Section and (b) the Servicer
shall have delivered to the Depositor and the Trustees an Opinion of Counsel
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been
authorized and filed that are necessary to preserve and protect the interest
of the Issuer and the Indenture Trustee, respectively, in the assets of the
Issuer and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given or (B) no such action shall be
necessary to preserve and protect such interest. Notwithstanding anything to
the contrary contained herein, the execution of the foregoing agreement of
assumption and compliance with clauses (a) and (b) above shall be conditions
to the consummation of the transactions referred to in clauses (i), (ii) and
(iii) above. The Servicer shall provide prior written notice of any merger,
conversion, consolidation or succession pursuant to this Section to the
Trustees and the Rating Agencies.
Section 6.04. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer or any Securityholders for
any action taken or for refraining from the taking of any action pursuant
hereto, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Servicer and any of its respective
directors, officers, employees or agents may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
in respect of any matters arising under this Agreement.
(b) Except as provided herein, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to administer and service the Receivables in
accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; provided, however, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties to this Agreement and the
interests of the Noteholders and the Certificateholders under this Agreement.
In such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Servicer.
48
Section 6.05. Wachovia Bank Not to Resign as Servicer. Subject to the
provisions of Section 6.03, Wachovia Bank shall not resign from the
obligations and duties imposed on it pursuant hereto as Servicer under this
Agreement except upon determination that the performance of its duties
hereunder is no longer permissible under applicable law. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Depositor and the
Trustees. No such resignation shall become effective until the Indenture
Trustee or a Successor Servicer shall have (i) assumed the obligations and
duties of the Servicer in accordance with Section 8.02 and (ii) become the
Administrator under the Administration Agreement pursuant to Section 8
thereof.
Section 6.06. Servicer May Own Securities. The Servicer and any of its
Affiliates may, in its individual or other capacity, become the owner or
pledgee of Securities with the same rights as it would have if it were not the
Servicer or an Affiliate of the Servicer, except as otherwise expressly
provided herein or in any other Basic Document (including in the definition of
the term "Note Balance"). Except as otherwise expressly provided herein or in
the other Basic Documents (including in the definition of the term "Note
Balance"), Securities so owned by or pledged to the Servicer or such Affiliate
shall have an equal and proportionate benefit under the provisions of this
Agreement and the other Basic Documents, without preference, priority or
distinction as among the Notes and the Certificates, as the case may be.
49
ARTICLE SEVEN
SERVICER TERMINATION EVENTS
Section 7.01. Servicer Termination Events. The occurrence of any one of
the following events shall constitute an event of servicing termination
hereunder (each, a "Servicer Termination Event"):
(a) any failure by the Servicer to deliver to the Owner Trustee or
the Indenture Trustee the Servicer's Certificate for any Collection
Period, which failure shall continue unremedied beyond the earlier of
three Business Days following the date such Servicer's Certificate was
required to be delivered and the Business Day preceding the related
Distribution Date, or any failure by the Servicer to make any required
payment or deposit under this Agreement, which failure shall continue
unremedied beyond the earlier of five Business Days following the date
such payment or deposit was due and, in the case of a payment or deposit
to be made no later than a Distribution Date or the related Deposit Date,
such Distribution Date or Deposit Date, as applicable;
(b) any failure by the Servicer to duly observe or to perform in any
material respect any other covenant or agreement of the Servicer set
forth in this Agreement, which failure shall materially and adversely
affect the rights of the Depositor or the Noteholders and shall continue
unremedied for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
(i) to the Servicer by the Depositor, the Owner Trustee or the Indenture
Trustee or (ii) to the Depositor, the Servicer and the Trustees by the
Holders of Notes evidencing not less than 25% of the Note Balance of the
Controlling Class;
(c) any representation or warranty of the Servicer made in this
Agreement, or in any certificate delivered pursuant hereto or in
connection herewith, other than any representation or warranty relating
to a Receivable that has been purchased by the Servicer, proving to have
been incorrect in any material respect as of the time when the same shall
have been made, and the circumstance or condition in respect of which
such representation or warranty was incorrect shall not have been
eliminated or otherwise cured for a period of 30 days after the date on
which written notice of such circumstance or condition, requiring the
same to be eliminated or cured, shall have been given (i) to the Servicer
by the Depositor, the Owner Trustee or the Indenture Trustee or (ii) to
the Depositor, the Servicer and the Trustees by the Holders of Notes
evidencing not less than 25% of the Note Balance of the Controlling
Class;
(d) the entry of a decree or order by a court or agency or
supervisory authority of competent jurisdiction for the appointment of a
conservator, receiver, liquidator or trustee for the Servicer in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceeding, or for the winding up or liquidation of its
affairs, which decree or order continues unstayed and in effect for a
period of 60 consecutive days; or
(e) the consent by the Servicer to the appointment of a conservator,
receiver, liquidator or trustee in any insolvency, readjustment of debt,
marshalling of assets and
50
liabilities or similar proceeding of or relating to the Servicer or
relating to substantially all of its property, the admission in writing
by the Servicer of its inability to pay its debts generally as they
become due, the filing by the Servicer of a petition to take advantage of
any applicable insolvency or reorganization statute, the making by the
Servicer of an assignment for the benefit of its creditors or the
voluntary suspension by the Servicer of payment of its obligations.
If a Servicer Termination Event shall have occurred and not have been
remedied, either the Indenture Trustee or the Holders of Notes evidencing not
less than 51% of the Note Balance of the Controlling Class, in each case by
notice then given in writing to the Depositor, the Owner Trustee and the
Servicer (and to the Trustees if given by the Noteholders) (each, a "Servicer
Termination Notice") may terminate all the rights and obligations of the
Servicer under this Agreement; provided, however, that the indemnification
obligations of the Servicer under Section 6.02 shall survive such termination.
On or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Notes, the Certificates, the Trust Property or otherwise, shall, without
further action, pass to and be vested in the Indenture Trustee or such
Successor Servicer as may be appointed under Section 7.02; and, without
limitation, the Trustees are hereby authorized and empowered to execute and
deliver, on behalf of the outgoing Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, whether to complete the transfer and endorsement of the
Receivable Files or the certificates of title to the Financed Vehicles, or
otherwise. The outgoing Servicer shall cooperate with the Indenture Trustee,
the Owner Trustee and such Successor Servicer in effecting the termination of
the responsibilities and rights of the outgoing Servicer under this Agreement,
including the transfer to the Indenture Trustee or such Successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
outgoing Servicer for deposit, or have been deposited by the outgoing
Servicer, in the Accounts or thereafter received with respect to the
Receivables, all Receivable Files and all information or documents that the
Indenture Trustee or such Successor Servicer may require. In addition, the
Servicer shall transfer its electronic records relating to the Receivables to
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred or payable by the Successor Servicer in connection
with the transfer of servicing (whether due to termination, resignation or
otherwise), including allowable compensation of employees and overhead costs
incurred or payable in connection with the transfer of the Receivable Files or
any amendment to this Agreement required in connection with the transfer of
servicing (the "Transition Costs") shall be paid by the outgoing Servicer (or
by the initial Servicer if the outgoing Servicer is the Indenture Trustee
acting on an interim basis) upon presentation of reasonable documentation of
such costs and expenses.
The Trustees shall have no obligation to notify the Noteholders, the
Certificateholders or any other Person of the occurrence of any event
specified in this Section prior to the continuance of such event through the
end of any cure period specified in this Section.
Section 7.02. Appointment of Successor Servicer. Upon the resignation of
the Servicer pursuant to Section 6.05 or the termination of the Servicer
pursuant to Section 7.01, the Indenture Trustee shall be the successor in all
respects to the Servicer in its capacity as Servicer
51
under this Agreement and shall be subject to all the obligations and duties
placed on the Servicer by the terms and provisions of this Agreement;
provided, however, that the Indenture Trustee, as Successor Servicer, shall
not, in any event, be required to make any Advances pursuant to Section 4.04
and shall have no obligations pursuant to Section 3.09 with respect to the
fees and expenses of the Owner Trustee or the Indenture Trustee, the fees and
expenses of the Owner Trustee's attorneys or the Indenture Trustee's
attorneys, the fees and expenses of any custodian appointed by the Trustees,
the fees and expenses of independent accountants or expenses incurred in
connection with distributions and reports to the Certificateholders and the
Noteholders. As compensation therefor, the Indenture Trustee shall be entitled
to such compensation (whether payable out of the Collection Account or
otherwise) as the Servicer would have been entitled to under this Agreement if
no such resignation or termination had occurred, except that all collections
on or in respect of the Receivables shall be deposited in the Collection
Account within two Business Days of receipt and shall not be retained by the
Servicer. Notwithstanding the foregoing, the Indenture Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint, or petition a court of competent jurisdiction to appoint, an Eligible
Servicer as the successor to the terminated Servicer under this Agreement. In
connection with such appointment, the Indenture Trustee may make such
arrangements for the compensation of such Successor Servicer out of
collections on or in respect of the Receivables as it and such successor shall
agree; provided, however, that such compensation shall not be greater than
that payable to Wachovia Bank as Servicer hereunder without the prior consent
of the Holders of Notes evidencing not less than 51% of the Note Balance of
the Controlling Class. The Indenture Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Indenture Trustee shall not be relieved of
its duties as Successor Servicer under this Section until a newly appointed
Servicer shall have assumed the obligations and duties of the terminated
Servicer under this Agreement. Notwithstanding anything to the contrary
contained herein, in no event shall the Indenture Trustee be liable for any
servicing fee or for any differential in the amount of the servicing fee paid
hereunder and the amount necessary to induce any Successor Servicer to act as
Successor Servicer hereunder.
Section 7.03. Effect of Servicing Transfer.
(a) After a transfer of servicing hereunder, the Indenture Trustee or
Successor Servicer shall notify the Obligors to make directly to the Successor
Servicer payments that are due under the Receivables after the effective date
of such transfer.
(b) Except as provided in Section 7.02, after a transfer of servicing
hereunder, the outgoing Servicer shall have no further obligations with
respect to the administration, servicing, custody or collection of the
Receivables and the Successor Servicer shall have all of such obligations,
except that the outgoing Servicer will transmit or cause to be transmitted
directly to the Successor Servicer for its own account, promptly on receipt
and in the same form in which received, any amounts or items held by the
outgoing Servicer (properly endorsed where required for the Successor Servicer
to collect any such items) received as payments upon or otherwise in
connection with the Receivables.
(c) Any Successor Servicer shall provide the Depositor with access to the
Receivable Files and to the Successor Servicer's records (whether written or
automated) with respect to the
52
Receivable Files. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Successor Servicer. Nothing in this Section shall affect the obligation of the
Successor 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.
(d) Any transfer of servicing hereunder shall not constitute an
assumption by the related Successor Servicer of any liability of the related
outgoing Servicer arising out of any breach by such outgoing Servicer of such
outgoing Servicer's duties hereunder prior to such transfer of servicing.
Section 7.04. Notification to Noteholders, Certificateholders and Rating
Agencies. Upon any notice of a Servicer Termination Event or upon any
termination of, or any appointment of a successor to, the Servicer pursuant to
this Article, the Indenture Trustee shall give prompt written notice thereof
to the Noteholders and the Owner Trustee shall give prompt written notice
thereof to the Certificateholders and to the Rating Agencies.
Section 7.05. Waiver of Past Servicer Termination Events. The Noteholders
evidencing not less than 51% of the Note Balance of the Controlling Class may,
on behalf of all Noteholders, waive any Servicer Termination Event and its
consequences, except an event resulting from the failure to make any required
deposits to or payments from the Collection Account, the Note Payment Account,
the Certificate Payment Account or the Reserve Fund in accordance with this
Agreement. Upon any such waiver of a Servicer Termination Event, such event
shall cease to exist, and shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other event or impair any right arising therefrom, except to the extent
expressly so waived.
Section 7.06. Repayment of Advances. If the identity of the Servicer
shall change, the outgoing Servicer shall be entitled to receive reimbursement
for outstanding and unreimbursed Advances made pursuant to Section 4.04 by the
outgoing Servicer.
53
ARTICLE EIGHT
TERMINATION
Section 8.01. Optional Purchase of All Receivables.
(a) If, as of the last day of any Collection Period, the Pool Balance
shall be less than or equal to 10% of the initial Pool Balance, the Servicer
shall have the option to purchase on the following Distribution Date the Owner
Trust Estate, other than the Collection Account, the Note Payment Account, the
Certificate Payment Account, the Yield Supplement Account or the Reserve Fund.
To exercise such option, the Servicer shall notify the Depositor, the Seller,
the Owner Trustee, the Indenture Trustee and the Rating Agencies no later than
30 days prior to the Distribution Date on which such repurchase is to be
effected and shall deposit into the Collection Account on the related Deposit
Date an amount equal to the lesser of the (i) fair market value of the
Receivables and (ii) aggregate Purchase Amount for the Receivables (including
Receivables that became Defaulted Receivables during the related Collection
Period); provided, however, that the Servicer shall not be permitted to
exercise such option unless the amount to be deposited in the Collection
Account pursuant to this Section is at least equal to the sum of all amounts
due to the Servicer under this Agreement plus the Note Balance plus all
accrued but unpaid interest (including any overdue interest) on the Notes plus
all amounts due to the Servicer for any outstanding and unreimbursed Advances
and Nonrecoverable Advances plus all accrued but unpaid Total Trustee Fees.
Upon such payment, the Servicer shall succeed to and own all interests in and
to the Issuer. The aggregate amount so deposited in respect of such
Distribution Date, plus, to the extent necessary, all amounts in the Reserve
Fund, shall be used to make payments in full to the Noteholders in the manner
set forth in Article Four.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders shall succeed to the rights of the Noteholders hereunder
and the Indenture Trustee shall continue to carry out its obligations
hereunder with respect to the Certificateholders, including making
distributions from the Collection Account in accordance with Section 4.06(c)
and making withdrawals from the Reserve Fund in accordance with Sections
4.06(b) and 4.07.
54
ARTICLE NINE
MISCELLANEOUS
Section 9.01. Amendment.
(a) This Agreement may be amended from time to time by the Depositor, the
Seller, the Servicer and the Owner Trustee, on behalf of the Issuer, with the
consent of the Indenture Trustee, but without the consent of any of the
Noteholders, to cure any ambiguity, to correct or supplement any provision in
this Agreement that may be inconsistent with any other provisions in this
Agreement or any offering document used in connection with the initial offer
and sale of the Notes, to add, change or eliminate any other provisions with
respect to matters or questions arising under this Agreement that are not
inconsistent with the provisions of this Agreement; provided, however, that
(i) no such amendment may materially adversely affect the interests of any
Noteholder and (ii) no such amendment will be permitted unless an Opinion of
Counsel is delivered to the Depositor, the Owner Trustee and the Indenture
Trustee to the effect that such amendment will not cause the Issuer to be
characterized for federal income tax purposes as an association taxable as a
corporation or otherwise have any material adverse impact on the federal
income taxation of any Notes Outstanding or any Noteholder.
(b) This Agreement may also be amended from time to time by the
Depositor, the Seller, the Servicer and the Owner Trustee, on behalf of the
Issuer, with the consent of the Indenture Trustee and the consent of the
Holders of Notes evidencing at least 66 2/3% of the Note Balance of the
Controlling Class, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Noteholders; provided, however, that
no such amendment (1) will be permitted unless an Opinion of Counsel is
delivered to the Depositor and the Trustees to the effect that such amendment
will not cause the Issuer to be characterized for federal income tax purposes
as an association taxable as a corporation or otherwise have any material
adverse impact on the federal income taxation of any Notes Outstanding or any
Noteholder and (2) may:
(i) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, or change the allocation or priority of, collections
of payments on or in respect of the Receivables or distributions that are
required to be made for the benefit of the Noteholders or change any
Interest Rate or the Required Reserve Fund Amount, without the consent of
100% of the Noteholders of Notes then Outstanding; or
(ii) reduce the percentage of the Note Balance of the Controlling
Class, the consent of the Noteholders of which is required for any
amendment to this Agreement without the consent of 100% of the
Noteholders of Notes then Outstanding.
(c) An amendment to this Agreement shall be deemed not to materially
adversely affect the interests of any Noteholder if (i) the Person requesting
such amendment obtains and delivers to the Trustees an Opinion of Counsel to
that effect or (ii) the Rating Agency Condition is satisfied.
55
(d) Prior to the execution of any amendment or consent pursuant to this
Section, the Servicer shall provide written notification of the substance of
such amendment or consent to each Rating Agency.
(e) Promptly after the execution of any amendment or consent pursuant to
Section 9.01(b), the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder. It shall not
be necessary for the consent of the Noteholders pursuant to Section 9.01(b) to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof. The manner
of obtaining such consents (and any other consents of the Noteholders provided
for in this Agreement) and of evidencing the authorization of the execution
thereof by the Noteholders shall be subject to such reasonable requirements as
the Trustees may prescribe.
(f) Prior to the execution of any amendment pursuant to this Section, the
Depositor and the Trustees shall be entitled to receive and rely upon (i) an
Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement and (ii) an Officer's Certificate of the
Servicer that all conditions precedent provided for in this Agreement to the
execution of such amendment have been complied with. The Owner Trustee or the
Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects such Owner Trustee's or Indenture Trustee's own
rights, duties or immunities under this Agreement or otherwise.
Section 9.02. Protection of Title to Issuer.
(a) The Depositor or the Servicer, or both, shall authorize and file such
financing statements and cause to be authorized and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Issuer and of the
Indenture Trustee for the benefit of the Noteholders in the Receivables and in
the proceeds thereof. The Depositor or the Servicer, or both, shall deliver
(or cause to be delivered) to the Trustees file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or organizational structure in any manner that would make any
financing statement or continuation statement filed in accordance with Section
9.02(a) seriously misleading within the meaning of Section 9-506 of the UCC,
unless it shall have given the Trustees at least 60 days' prior written notice
thereof and shall have promptly filed such amendments to previously filed
financing statements or continuation statements or such new financing
statements as may be necessary to continue the perfection of the interest of
the Issuer and the Indenture Trustee for the benefit of the Noteholders in the
Receivables and the proceeds thereof.
(c) Each of the Seller, the Depositor and the Servicer shall give the
Trustees at least 60 days' prior written notice of any change in its name,
identity, organizational structure or jurisdiction of organization or any
relocation of its principal place of business or chief executive office if, as
a result of such change or relocation, the applicable provisions of the UCC
would require the filing of any amendment to any previously filed financing
statement or continuation statement or of any new financing statement and
shall promptly file any such amendment,
56
continuation statement or new financing statement. The Depositor shall at all
times maintain its jurisdiction of organization, its principal place of
business and its chief executive office within the United States. The Servicer
shall at all times maintain each office from which it shall service
Receivables, and each office at which the Receivable Files are located, within
the United States.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account and held by the Reserve Fund in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of transfer of the Receivables to the Trust pursuant to this
Agreement, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly and unambiguously
the interest of the Issuer and the Indenture Trustee in such Receivable and
that such Receivable is owned by the Issuer and has been pledged to the
Indenture Trustee pursuant to the Indenture. Indication of the Issuer's and
the Indenture Trustee's interest in a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, such
Receivable shall have been paid in full or repurchased by the Seller or
purchased by the Servicer.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in any motor
vehicle retail installment sale contract to any prospective purchaser, lender
or other transferee, the Servicer shall give to such prospective purchaser,
lender or other transferee computer tapes, CDs, records or printouts
(including any restored from back-up archives) that, if they shall refer in
any manner whatsoever to any Receivable, shall indicate clearly and
unambiguously that such Receivable has been sold and is owned by the Issuer
and has been pledged to the Indenture Trustee (unless such Receivable has been
paid in full or repurchased by the Seller or purchased by the Servicer).
(g) The Servicer shall permit the Trustees and their respective agents at
any time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) If the Seller has repurchased one or more Receivables from the Issuer
pursuant to Section 2.04 or the Servicer has purchased one or more Receivables
from the Issuer pursuant to Section 3.08, the Servicer shall, upon request,
furnish to the Owner Trustee or to the Indenture Trustee, within ten Business
Days, a list of all Receivables (by contract number and name of Obligor) then
held as part of the Issuer, together with a reconciliation of such list to the
Receivables Schedule and to each of the Servicer's Certificates furnished
before such request indicating removal of Receivables from the Issuer.
(i) The Servicer shall deliver to the Depositor and the Trustees:
(i) promptly after the authorization and delivery of each amendment
to any financing statement delivered pursuant to this Agreement, an
Opinion of Counsel stating
57
that, in the opinion of such counsel, either (A) all financing statements
and continuation statements have been authorized and filed that are
necessary fully to preserve and protect the interest of the Depositor (in
the case of an opinion delivered by the Servicer) or the Issuer and the
Indenture Trustee (in the case of an opinion delivered by the Depositor)
in the Receivables, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest; and
(ii) within 90 days after the beginning of each calendar year
(beginning with the first year beginning more than three months after the
Cutoff Date) an Opinion of Counsel, dated as of a date during such 90-day
period, stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements have been authorized and
filed that are necessary fully to preserve and protect the interest of
the Depositor (in the case of an opinion delivered by the Servicer) or
the Issuer and the Indenture Trustee (in the case of an opinion delivered
by the Depositor) in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to preserve and
protect such interest.
Each Opinion of Counsel referred to in clause (i) or (ii) above shall
specify any action necessary (as of the date of such opinion) to be taken on
or before March 31 of the following year to preserve and protect such
interest.
(j) The Depositor shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
Section 9.03. Notices. All demands, notices and communications under this
Agreement shall be in writing, personally delivered, sent by telecopier,
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt in the case of (i) the
Depositor, at One Wachovia Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel, (ii) the
Seller or the Servicer, at One Wachovia Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel, (iii) the
Issuer or the Owner Trustee, at the Corporate Trust Office (as such term is
defined in the Trust Agreement), (iv) the Indenture Trustee, at the Corporate
Trust Office, (v) Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ABS Monitoring
Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (vi) Standard &
Poor's, to Standard & Poor's Ratings Services, a Division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset
Backed Surveillance Department or (vii) as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
Section 9.04. Assignment.
(a) Notwithstanding anything to the contrary contained herein, except as
provided in the remainder of this Section or as provided in Sections 6.03 and
7.02, this Agreement may not
58
be assigned by the Depositor or the Servicer without the prior written consent
of the Trustees and the Holders of Notes evidencing at least 66 2/3% of the
Note Balance of the Controlling Class.
(b) The Depositor hereby acknowledges and consents to the mortgage,
pledge, assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders
of all right, title and interest of the Issuer in, to and under the Trust
Property and the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
Section 9.05. Severability. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
and terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions and terms of
this Agreement.
Section 9.06. Further Assurances. The Depositor, the Seller, the Servicer
and the Issuer agree to do and perform, from time to time, any and all acts
and to authorize or execute any and all further instruments required or
reasonably requested by the Owner Trustee or the Indenture Trustee more fully
to effect the purposes of this Agreement, including the authorization and
execution of any financing statements or continuation statements relating to
the Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 9.07. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Depositor, the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided in this Agreement are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
Section 9.08. Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Owner Trustee, the
Noteholders, the Certificateholders and their respective successors and
permitted assigns. Except as otherwise provided in this Article, no other
Person shall have any right or obligation hereunder. The parties hereto hereby
acknowledge and consent to the pledge of this Agreement by the Issuer to the
Indenture Trustee for the benefit of the Noteholders pursuant to the
Indenture.
Section 9.09. Actions by Noteholder or Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a notice, demand or instruction given by the Noteholders or the
Certificateholders, such action, notice or instruction may be taken or given
by any Noteholder or any Certificateholder, as applicable, unless such
provision requires a specific percentage of the Noteholders or the
Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Noteholder or a Certificateholder shall bind such
Noteholder or Certificateholder and every
59
subsequent Holder of the related Note or Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Owner Trustee, the
Indenture Trustee or the Servicer in reliance thereon, whether or not notation
of such action is made upon such Note or Certificate.
Section 9.10. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 9.11. Headings. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect
the meaning or interpretation of the terms or provisions hereof.
Section 9.12. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of NEW YORK, without reference to its
conflict of law provisions (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW), and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 9.13. Nonpetition Covenants. The Owner Trustee, the Indenture
Trustee and the Servicer each covenants and agrees that it will not at any
time institute against, or join any other Person in instituting against, the
Depositor or the Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any federal
or State bankruptcy or similar law. This Section shall survive the resignation
or removal of the Owner Trustee under the Trust Agreement and the Indenture
Trustee under the Indenture and shall survive the termination of the Trust
Agreement and the Indenture.
Section 9.14. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything to the contrary contained herein, this
Agreement has been executed by the Owner Trustee not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall the Owner Trustee in its individual capacity have any liability
for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles Six, Seven and Eight of the Trust Agreement.
(b) Notwithstanding anything to the contrary contained herein, this
Agreement has been accepted by the Indenture Trustee, not in its individual
capacity but solely as Indenture Trustee and in no event shall the Indenture
Trustee in its individual capacity have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the
Issuer.
60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers, thereunto duly authorized, as of
the day and year first above written.
WACHOVIA AUTO OWNER TRUST 2004-A
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as
Owner Trustee on behalf of the Issuer
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Financial Services Officer
POOLED AUTO SECURITIES SHELF LLC,
as Depositor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION,
as Seller and Servicer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Acknowledged and accepted as of
the day and year first above written:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Sale and Servicing Agreement
SCHEDULE A
LOCATION OF RECEIVABLE FILES
Wachovia Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Columbia, South Carolina 29226-0002
Wachovia Bank, National Association
Dealer Service Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SA-1
EXHIBIT A
REPRESENTATIONS AND WARRANTIES AS TO THE RECEIVABLES
(i) Characteristics of Receivables. Each Receivable (A) was originated in
the United States by a Dealer located in the United States for the retail sale
of a Financed Vehicle in the ordinary course of the applicable Dealer's
business in accordance with the Seller's credit policies as of the date of
origination or acquisition of the related Receivable, is payable in United
States dollars, has been fully and properly executed by the parties thereto,
has been purchased by the Seller from such Dealer under an existing Dealer
Agreement (or approved form of assignment) and has been validly assigned by
such Dealer to the Seller, (B) has created a valid, subsisting and enforceable
security interest in favor of the Seller in the Financed Vehicle, which
security interest shall be perfected and prior to any other interest in such
Financed Vehicle, and which security interest is assignable by the Seller and
reassignable by the assignee, (C) contains customary and enforceable
provisions such that the rights and remedies of the holder thereof are
adequate for realization against the collateral of the benefits of the
security, (D) shall, except as otherwise provided in the Sale and Servicing
Agreement, provide for level Monthly Payments (provided that the payment in
the first or last month in the life of the Receivable may be minimally
different from the level payment) that fully amortize the Amount Financed over
its original term and shall provide for a finance charge or shall yield
interest at its Contract Rate, (E) is a Simple Interest Receivable, (F) is due
from an Obligor with a mailing addresses within the United States or its
territories, (G) to the best of the Seller's knowledge, is due from an Obligor
who is a natural person and (H) to the best of the Seller's knowledge, is not
assumable by another person in a manner which would release the Obligor
thereof from such Obligor's obligations to the Seller with respect to such
Receivable.
(ii) Receivables Schedule. The information set forth in the Receivables
Schedule shall be true and correct in all material respects as of the close of
business on the Cutoff Date, and the Receivables were selected from those
motor vehicle receivables of the Seller which met the selection criteria set
forth in this Agreement.
(iii) Compliance with Law. Each Receivable complied at the time it was
originated or made, and at the Closing Date complies, in all material respects
with all requirements of applicable federal, State and, to the best knowledge
of the Seller, local laws, rulings and regulations thereunder.
(iv) Binding Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation in writing of the related Obligor,
enforceable by the holder thereof in accordance with its terms, except (A) as
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivable may be modified by
the application after the Cutoff Date of the Servicemembers Civil Relief Act
or by any similar applicable State law.
A-1
(v) No Government Obligor. No Receivable is due from the United States or
any State or any agency, department, subdivision or instrumentality thereof.
(vi) Obligor Bankruptcy. To the best of the Seller's knowledge, at the
Cutoff Date, no Obligor is the subject of a bankruptcy proceeding.
(vii) Security Interest in Financed Vehicles. Immediately prior to the
transfer of the Receivables by the Seller to the Depositor, each Receivable
was secured by a valid, binding and enforceable first priority perfected
security interest in favor of the Seller in the related Financed Vehicle,
which security interest has been validly assigned by the Seller to the
Depositor. The Servicer has received, or will receive within 180 days after
the Closing Date, the original certificate of title for each Financed Vehicle
(other than any Financed Vehicle that is subject to a certificate of title
statute or motor vehicle registration law that does not require that the
original certificate of title for such Financed Vehicle be delivered to the
Seller).
(viii) Receivables in Force. No Receivable shall have been satisfied,
subordinated or rescinded, nor shall any Financed Vehicle have been released
in whole or in part from the Lien granted by the related Receivable.
(ix) No Waivers. No provision of a Receivable shall have been waived in
such a manner that such Receivable fails to meet all of the other
representations and warranties made by the Seller herein with respect thereto.
(x) No Amendments. No Receivable shall have been amended or modified in
such a manner that the total number of Monthly Payments has been increased or
decreased or that the related Amount Financed has been increased or decreased
or that such Receivable fails to meet all of the other representations and
warranties made by the Seller herein with respect thereto.
(xi) No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of any Receivable, or the exercise of any right
thereunder, will not render such Receivable unenforceable in whole or in part
or subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and the Seller has not received written notice
of the assertion with respect to any Receivable of any such right of
rescission, setoff, counterclaim or defense.
(xii) No Liens. No Liens or claims shall have been filed, including Liens
for work, labor or materials or for unpaid local, State or federal taxes
relating to any Financed Vehicle that shall be prior to, or equal or
coordinate with, the security interest in such Financed Vehicle granted by the
related Receivable.
(xiii) No Defaults; Repossessions. Except for payment defaults that, as
of the Cutoff Date, have been continuing for a period of not more than 30
days, no default, breach or violation under the terms of any Receivable shall
have occurred as of the Cutoff Date and no continuing condition that with
notice or the lapse of time or both would constitute a default, breach or
violation under the terms of any Receivable shall have arisen; and the Seller
shall not have waived any of the foregoing except as otherwise permitted
hereunder. On or prior to the Cutoff Date, no Financed Vehicle has been
repossessed.
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(xiv) Insurance. Each Receivable requires the related Obligor to obtain
physical damage insurance covering the related Financed Vehicle and to
maintain such insurance.
(xv) Title. It is the intention of the Seller that the transfers and
assignments herein contemplated constitute a sale of the Receivables from the
Seller to the Purchaser and that the beneficial interest in and title to the
Receivables not be part of the debtor's estate in the event of the appointment
of a receiver or conservator for the Seller under any receivership, bankruptcy
law, insolvency or banking law; no Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than the Purchaser, and
no provision of a Receivable shall have been waived, except as provided in
clause (ix) above; immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Receivable free
and clear of all Liens and rights of others, except for Liens that shall be
released on or before the Closing Date; immediately upon the transfer and
assignment thereof, the Purchaser shall have good and marketable title to each
Receivable, free and clear of all Liens and rights of others; and the transfer
and assignment herein contemplated has been perfected under the UCC.
(xvi) Security Interest Matters. This Agreement creates a valid and
continuing "security interest" (as defined in the UCC) in the Receivables in
favor of the Depositor, which security interest is prior to all other Liens
and is enforceable as such as against creditors of and purchasers from the
Seller. With respect to each Receivable, the Seller has taken all steps
necessary to perfect its security interest against the related Obligor in the
related Financed Vehicle. The Receivables constitute "tangible chattel paper"
(as defined in the UCC). The Seller has caused or will cause prior to the
Closing Date the filing of all appropriate financing statements in the proper
filing offices in the appropriate jurisdictions under applicable law necessary
to perfect the security interest in the Receivables granted to the Depositor
under the Receivables Purchase Agreement. Other than the security interest
granted to the Depositor under the Receivables Purchase Agreement, the Seller
has not pledged, assigned, sold, granted a security interest in or otherwise
conveyed any of the Receivables. The Seller has not authorized the filing of
and is not aware of any financing statements against the Seller that include a
description of collateral covering the Receivables other than any financing
statement relating to the security interest granted to the Depositor under the
Sale and Servicing Agreement or that has been terminated. The motor vehicle
retail installment sale contracts that constitute or evidence the Receivables
do not have any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than the Depositor, the
Issuer or the Indenture Trustee. The Seller is not aware of any judgment or
tax lien filings against the Seller.
(xvii) Financing Statements. All financing statements filed or to be
filed against the Seller in favor of the Issuer (as assignee of the Depositor)
contain a statement substantially to the following effect: "A purchase of or
security interest in any collateral described in this financing statement will
violate the rights of the Issuer". All financing statements filed or to be
filed against the Seller in favor of the Indenture Trustee (as assignee of the
Issuer) contain a statement substantially to the following effect: "A purchase
of or security interest in any collateral described in this financing
statement will violate the rights of the Indenture Trustee".
(xviii) Lawful Assignment. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer,
assignment and conveyance of such Receivable under this Agreement or the Sale
and Servicing Agreement or the pledge of such
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Receivables hereunder or under the Indenture is unlawful, void or
voidable or under which such Receivable would be rendered void or
voidable as a result of any such sale, transfer, assignment, conveyance
or pledge. The Seller has not entered into any agreement with any account
debtor that prohibits, restricts or conditions the assignment of the
Receivables.
(xix) All Filings Made. All filings (including UCC filings) necessary in
any jurisdiction to give the Purchaser, the Issuer and the Indenture Trustee a
first priority security interest in the Receivables shall have been made or
will be made on the Closing Date.
(xx) One Original. There shall be only one original executed copy of each
Receivable.
(xxi) Location of Receivable Files. Each Receivable File shall be kept at
one of the locations listed in Schedule A.
(xxii) Custodial Agreements. Immediately prior to the transfer of the
Receivables by the Seller to the Purchaser, the Seller, an Affiliate of the
Seller or an agent on behalf of the Seller had possession of the Receivable
Files and there were no, and there will not be, any custodial agreements in
effect affecting the right or ability of the Seller to make, or cause to be
made, any delivery required under this Agreement.
(xxiii) Bulk Transfer Laws. The transfer of the Receivables and the
Receivable Files by the Seller to the Purchaser pursuant to this Agreement is
not subject to the bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.
(xxiv) Principal Balance. Each Receivable had an original Principal
Balance of not more than $98,113.77 and a remaining Principal Balance as of
the Cutoff Date of not less than $501.25.
(xxv) New and Used Vehicles. As of the Cutoff Date, approximately 65.92%
of the Pool Balance related to Receivables secured by new Financed Vehicles
and approximately 34.08% of the Pool Balance related to Receivables secured by
used Financed Vehicles.
(xxvi) Origination. Each Receivable was originated after December 31,
1998.
(xxvii) Original Term to Maturity. Each Receivable had an original term
to maturity of not more than 72 months and not less than 18 months and a
remaining term to maturity as of the Cutoff Date of not more than 67 months
and not less than 11 months.
(xxviii) Weighted Average Remaining Term to Maturity. As of the Cutoff
Date, the weighted average remaining term to maturity of the Receivables was
approximately 48.59 months.
(xxix) Annual Percentage Rate. Each Receivable has an Contract Rate of at
least 2.50% and not more than 11.99%.
(xxx) Simple Interest Method. All payments with respect to the
Receivables have been allocated consistently in accordance with the Simple
Interest Method.
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(xxxi) Marking Records. As of the Closing Date, the Seller will have
caused its computer and accounting records relating to each Receivable to be
marked to show that the Receivables have been sold to the Purchaser by the
Seller and transferred and assigned by the Purchaser to the Issuer in
accordance with the terms of the Sale and Servicing Agreement and pledged by
the Issuer to the Indenture Trustee in accordance with the terms of the
Indenture.
(xxxii) Chattel Paper. Each Receivable constitutes "tangible chattel
paper" within the meaning of the UCC as in effect in the State of origination;
provided, however, that upon satisfaction of the Rating Agency Condition, a
Receivable may constitute "electronic chattel paper" within the meaning of the
UCC as in effect in the State of origination.
(xxxiii) Final Scheduled Distribution Date. No Receivable has a final
scheduled payment date later than six months prior to the Class C Final
Scheduled Distribution Date.
(xxxiv) No Fleet Sales. None of the Receivables have been included in a
"fleet" sale (i.e., a sale to any single Obligor of more than eight Financed
Vehicles).
(xxxv) No Fraud or Misrepresentation. Each Receivable that was originated
by a Dealer and was sold by the Dealer to the Seller, to the best of the
Seller's knowledge, was so originated and sold without fraud or
misrepresentation on the part of such Dealer in either case.
(xxxvi) No Impairment. The Seller has not done anything to convey any
right to any Person that would result in such Person having a right to
payments due under a Receivable or otherwise to impair the rights of the
Depositor in any Receivable or the proceeds thereof.
(xxxvii) Servicing. Each Receivable has been serviced in conformity with
all applicable laws, rules and regulation and in conformity with the Seller's
policies and procedures which are consistent with customary, prudent industry
standards.
(xxxviii) No Consent. To the best of the Seller's knowledge, no notice to
or consent from any Obligor is necessary to effect the acquisition of the
Receivables by the Purchaser or the Issuer or the pledge of the Receivables by
the Issuer to the Indenture Trustee.
(xxxix) Other Receivables. To the best of the Seller's knowledge, neither
the Obligor on any Receivable nor any of its Affiliates is the obligor on
Receivables with an aggregate principal amount representing more than 0.05% of
the aggregate Principal Balance of the Receivables as of the Cutoff Date.
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EXHIBIT B
FORM OF DISTRIBUTION STATEMENT
Wachovia Auto Owner Trust 2004-A
Priority Principal Distributable Amount $__________
Secondary Principal Distributable Amount $__________
Tertiary Principal Distributable Amount $__________
Regular Principal Distributable Amount $__________
Interest Distributable Amount $__________
Class A-1 Notes: $ per $1,000 original principal amount
Class A-2 Notes: $ per $1,000 original principal amount
Class A-3 Notes: $ per $1,000 original principal amount
Class A-4 Notes: $ per $1,000 original principal amount
Class B Notes: $ per $1,000 original principal amount
Class C Notes: $ per $1,000 original principal amount
Available Collections $__________
Available Funds $__________
Pool Balance as of the close of business on the last day of the Collection Period $__________
(per $1,000 original principal amount)
Note Pool Factor $__________
Class A-1 Notes: $__________
Class A-2 Notes: $__________
Class A-3 Notes: $__________
Class A-4 Notes: $__________
Class B Notes: $__________
Class C Notes: $__________
Note Balance $__________
Class A-1 Notes: $__________
Class A-2 Notes: $__________
Class A-3 Notes: $__________
Class A-4 Notes: $__________
Class B Notes: $__________
Class C Notes: $__________
Class D Notes: $__________
Reserve Fund Amount $__________
change from immediately preceding Distribution Date $__________
Reserve Fund Draw Amount $__________
Total Servicing Fee $__________
Total Trustee Fees $__________
Required Payment Amount $__________
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Aggregate Amount of Defaulted Receivables $__________
Aggregate Purchase Amount of Purchased Receivables $__________
Purchase Amount $__________
Net Losses on the Receivables $__________
Aggregate Principal Balance of Receivables $__________
31 to 60 days past due (No. of Receivables ____) $__________
61 to 90 days past due (No. of Receivables ____) $__________
91 or more days past due (No. of Receivables ____) $__________
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EXHIBIT C
FORM OF SERVICER'S CERTIFICATE
Wachovia Auto Owner Trust 2004-A
Collection Period ____________________
Determination Date ____________________
Distribution Date ____________________
1. Pool Balance as of the close of business on the last day of the $__________
Collection Period (per $1,000 original principal amount)
2. Note Balance
a. Class A-1 Notes $
b. Class A-2 Notes $
c. Class A-3 Notes $
d. Class A-4 Notes $
e. Class B Notes $
f. Class C Notes $
3. Pool Factors
a. Class A-1 Notes
b. Class A-2 Notes
c. Class A-3 Notes
d. Class A-4 Notes
e. Class B Notes
f. Class C Notes
4. Available Funds $__________
5. Available Collections $__________
6. Total Servicing Fee $__________
a. Monthly Servicing Fee $__________
b. Amount Unpaid from prior months $__________
7. Total Trustee Fees $__________
a. Monthly Trustee Fees $__________
b. Amount Unpaid from prior months $__________
8. Priority Principal Distributable Amount $__________
9. Secondary Principal Distributable Amount $__________
10. Tertiary Principal Distributable Amount $__________
11. Regular Principal Distributable Amount $__________
12. Interest Distributable Amount (per $1,000 original principal amount) $__________
a. Class A-1 Notes (per $1,000 original principal amount) $__________
b. Class A-2 Notes (per $1,000 original principal amount) $__________
c. Class A-3 Notes (per $1,000 original principal amount) $__________
d. Class A-4 Notes (per $1,000 original principal amount) $__________
e. Class B Notes (per $1,000 original principal amount) $__________
f. Class C Notes (per $1,000 original principal amount) $__________
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13. Required Payment Amount $__________
14. Reserve Fund Amount $__________
Change from immediately preceding Distribution Date $__________
15. Reserve Fund Draw Amount $__________
16. The lesser of: (a or b)
a. The amount, if any, by which the Required Payment Amount for
the Distribution Date exceeds Available Collections
for such Distribution Date $__________
b. The Reserve Fund Amount for such Distribution Date (before
giving effect to any deposits to or withdrawals from the
Reserve Fun on the related Distribution Date) $__________
17. The amount by which the Required Payment Amount exceeds the sum of Available
Collections plus the Reserve Fund Draw Amount: $__________
18. Reserve Fund Amount $__________
19. The amount by which the Required Reserve Fund Amount exceeds
the Reserve Fund Amount $__________
20. Aggregate Amount of Defaulted Receivables $__________
Account No. ___ $__________
21. Aggregate Purchase Amount of Purchased Receivables $__________
Account No. ___ $__________
22. Trustee Fees and Expenses $__________
23. Purchase Amount $__________
24. Net Losses on the Receivables $__________
25. Aggregate Principal Balance of Receivables $__________
a. 31 to 60 days past due (No. of Receivables ____) $__________
b. 61 to 90 days past due (No. of Receivables ____) $__________
c. 91 or more days past due (No. of Receivables ____) $__________
26. Cumulative Losses and the Sequential Payment Trigger $__________
27. Yield Supplement Account Draw Amount $__________
Instructions to the Indenture Trustee or Paying Agent
-----------------------------------------------------
From the Collection Account:
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1. To the Servicer $__________
2. To the Trustees $__________
3. To the Note Payment Account $__________
4. To the Reserve Fund $__________
5. To the Certificate Payment Account $__________
From the Note Payment Account:
1. To the Class A-1 Noteholders $__________
2. To the Class A-2 Noteholders $__________
3. To the Class A-3 Noteholders $__________
4. To the Class A-4 Noteholders $__________
5. To the Class B Noteholders $__________
5. To the Class C Noteholders $__________
From the Certificate Payment Account:
1. To the Certificateholders $__________
From the Reserve Fund:
1. To the Collection Account $__________
2. To the Certificateholders $__________
From the Yield Supplement Account:
1. To the Collection Account $__________
2. To the Certificateholders $__________
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