Exhibit 10.1
EXECUTION COPY
SALE AND SERVICING AGREEMENT
among
BMW VEHICLE OWNER TRUST 1999-A,
Issuer,
SSB VEHICLE SECURITIES INC.,
Depositor,
BMW FINANCIAL SERVICES NA, INC.,
Seller, Servicer, Administrator and Custodian,
BMW FS FUNDING CORPORATION,
Seller
and
THE CHASE MANHATTAN BANK,
Indenture Trustee
Dated as of September 1, 1999
Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................................................1
Section 1.02. Other Definitional Provisions.........................................................20
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables.............................................................22
ARTICLE III
THE RECEIVABLES
Section 3.01. Representations and Warranties of the Sellers.........................................25
Section 3.02. Representations and Warranties of the Depositor.......................................25
Section 3.03. Repurchase Upon Breach................................................................26
Section 3.04. Custody of Receivable Files...........................................................26
Section 3.05. Duties of Servicer as Custodian.......................................................26
Section 3.06. Instructions; Authority to Act........................................................27
Section 3.07. Custodian's Indemnification...........................................................27
Section 3.08. Effective Period and Termination......................................................27
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Duties of Servicer....................................................................29
Section 4.02. Collection of Receivable Payments; Modifications of Receivables.......................30
Section 4.03. Realization upon Receivables..........................................................31
Section 4.04. Physical Damage Insurance.............................................................31
Section 4.05. Maintenance of Security Interests in Financed Vehicles................................31
Section 4.06. Covenants of Servicer.................................................................32
Section 4.07. Purchase of Receivables Upon Breach...................................................32
Section 4.08. Servicing Fee.........................................................................33
Section 4.09. Servicer's Certificate................................................................33
Section 4.10. Annual Statement as to Compliance; Notice of Servicer Termination Event...............33
Section 4.11. Annual Independent Accountants' Report................................................34
Section 4.12. Access to Certain Documentation and Information Regarding Receivables.................34
Section 4.13. Term of Servicer......................................................................34
Section 4.14. Access to Information Regarding Trust and Basic Documents.............................34
ARTICLE V
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
Section 5.01. Establishment of Accounts.............................................................35
Section 5.02. Collections...........................................................................37
Section 5.03. Application of Collections............................................................37
Section 5.04. Purchase Amounts......................................................................37
Section 5.05. Reserved..............................................................................38
Section 5.06. Distributions.........................................................................38
Section 5.07. Reserve Account.......................................................................39
Section 5.08. Statements to Securityholders.........................................................40
Section 5.09. Pre-Funding Account...................................................................41
Section 5.10. Capitalized Interest Account..........................................................42
Section 5.11. Certificate Interest Reserve Account..................................................42
Section 5.12. Advances by the Servicer..............................................................43
ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations of Depositor..........................................................44
Section 6.02. Corporate Existence...................................................................45
Section 6.03. Liability of Depositor; Indemnities...................................................45
Section 6.04. Merger or Consolidation of, or Assumption of the Obligations of, Depositor............45
Section 6.05. Limitation on Liability of Depositor and Others.......................................46
Section 6.06. Depositor May Own Securities..........................................................46
Section 6.07. Depositor to Provide Copies of Relevant Securities Filings............................46
Section 6.08. Amendment of Depositor's Organizational Documents.....................................46
ARTICLE VII
THE SERVICER
Section 7.01. Representations of Servicer...........................................................47
Section 7.02. Indemnities of Servicer...............................................................48
Section 7.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer.............49
Section 7.04. Limitation on Liability of Servicer and Others........................................49
Section 7.05. Appointment of Subservicer............................................................50
Section 7.06. Servicer Not to Resign................................................................50
ARTICLE VIII
DEFAULT
Section 8.01. Servicer Termination Events...........................................................51
Section 8.02. Consequences of a Servicer Termination Event..........................................51
Section 8.03. Appointment of Successor Servicer.....................................................52
Section 8.04. Notification to Securityholders.......................................................52
Section 8.05. Waiver of Past Defaults...............................................................53
ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase of All Receivables..................................................54
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment.............................................................................55
Section 10.02. Protection of Title to Trust..........................................................56
Section 10.03. Notices...............................................................................57
Section 10.04. Assignment by the Depositor or the Servicer...........................................58
Section 10.05. Limitations on Rights of Others.......................................................58
Section 10.06. Severability..........................................................................58
Section 10.07. Counterparts..........................................................................58
Section 10.08. Headings..............................................................................58
Section 10.09. GOVERNING LAW.........................................................................58
Section 10.10. Assignment by Issuer..................................................................58
Section 10.11. Nonpetition Covenants.................................................................58
Section 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee........................59
Section 10.13. Depositor Payment Obligation..........................................................59
This SALE AND SERVICING AGREEMENT, dated as of September 1, 1999, among
BMW VEHICLE OWNER TRUST 1999-A, a Delaware business trust (the "Issuer"), SSB
VEHICLE SECURITIES INC., a Delaware corporation (the "Depositor"), BMW
FINANCIAL SERVICES NA, INC., a Delaware corporation, as a seller (in such
capacity, a "Seller"), as servicer (in such capacity, the "Servicer"), as
administrator (in such capacity, the "Administrator") and as custodian (in
such capacity, the "Custodian"), BMW FS FUNDING CORPORATION, as a seller (a
"Seller"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as
indenture trustee (the "Indenture Trustee").
WHEREAS, the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by BMW Financial Services NA, Inc. in the ordinary course of its
business and sold by BMW Financial Services NA, Inc. and BMW FS Funding
Corporation to the Depositor;
WHEREAS, the Depositor is willing to sell such receivables to the Issuer;
and
WHEREAS, BMW Financial Services NA, Inc. is willing to service such
receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Trust pursuant to Section 2.01, notice of the Depositor's
election to transfer Subsequent Receivables to the Trust, such notice to
designate the Subsequent Transfer Date and the (1) Principal Balance of the
Subsequent Receivables and (2) the Reserve Account Subsequent Deposit Amount
to be transferred on the Subsequent Transfer Date.
"Advance" means, as to any Distribution Date, the aggregate of all
scheduled payments of interest which were due during the related Collection
Period that remained unpaid at the end of such Collection Period and were not
collected during such Collection Period, exclusive of any such scheduled
payment which the Servicer has determined would be a Nonrecoverable Advance if
an advance in respect of such scheduled payment were made.
"Advance Reimbursement Amount" means any amount received or deemed to be
received by the Servicer pursuant to Section 5.12 in reimbursement of a
Advance made out of its own funds.
"Agreement" means this Sale and Servicing Agreement, as the same may be
amended or supplemented from time to time.
"Amount Financed" means with respect to a Receivable, the amount advanced
under the Receivable toward the purchase price of the Financed Vehicle and any
related costs, exclusive of any amount allocable to the premium of
force-placed physical damage insurance covering the Financed Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the related Contract.
"Balloon Payment" means, with respect to each Owners Choice Receivable,
the amount referred to in the Contract relating to such Receivable as the
"Balloon Payment".
"Basic Documents" means the Trust Agreement, the Indenture, this
Agreement, the Receivables Purchase Agreement, the Administration Agreement,
and the Note Depository Agreement and other documents and certificates
delivered in connection therewith.
"BMW Capital" means BMW US Capital Corp., a Delaware corporation.
"BMW FS" means BMW Financial Services NA, Inc., a Delaware corporation.
"BMW Receivables" means BMW FS Receivables Corporation, a Delaware
corporation.
"BMW Funding" means BMW FS Funding Corporation, a Delaware corporation.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which a national banking association or a commercial banking institution in
the State of New Jersey, the State of Delaware or the State of New York are
authorized or obligated by law or executive order to remain closed.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.01(c)(iii).
"Capitalized Interest Account Required Amount" shall mean the product of
(A) the product of (i) 3.8543% times 30/360 (or 26/360 in the case of the
initial Distribution Date) and (ii) the amount in the Pre-Funding Account and
(B) the number of months remaining in the Funding Period plus one month.
"Capitalized Interest Distribution Amount" shall mean for each
Determination Date and related Distribution Date during the Funding Period,
the amount equal to (A) the product of (i) 1/12, (ii) the Weighted Average
Security Rate less 2.5% and (iii) the amount on deposit in the Pre-Funding
Account as of the first day of the related Collection Period.
"Capitalized Interest Initial Deposit" shall mean $2,509,221.
"Certificate" means a certificate evidencing the beneficial interest of a
Certificateholder in the Trust.
"Certificate Balance" equals the Initial Certificate Balance reduced by
all amounts allocable to principal previously distributed to
Certificateholders.
"Certificate Distribution Account" has the meaning assigned to such term
in the Trust Agreement.
"Certificate Final Scheduled Distribution Date" means the Distribution
Date in May 2006.
"Certificate Interest Reserve Account" means the account designated as
such, established and maintained pursuant to Section 5.01(c)(iv).
"Certificate Interest Reserve Account Required Amount" means, on any
Distribution Date prior to the date on which the Notes are retired,
$1,153,970, and thereafter, zero.
"Certificate Pool Factor" means, as of the close of business on the last
day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made
on the immediately following Distribution Date) divided by the Initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Closing Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificateholder Interest Shortfall" shall have the meaning ascribed
thereto in Section 5.11(b).
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Interest Carryover Shortfall" means, with respect to
any Distribution Date after the first Distribution Date, the amount, if any,
by which the sum of the Certificateholders' Monthly Interest Distributable
Amount for the immediately preceding Distribution Date and any outstanding
Certificateholders' Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest actually deposited
in the Certificate Distribution Account on such preceding Distribution Date,
plus interest on the amount of interest due but not paid to the
Certificateholders on such preceding Distribution Date, to the extent
permitted by law, at the Pass-Through Rate.
"Certificateholders' Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date.
"Certificateholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, interest accrued from and including the 25th
day of the preceding calendar month (or, in the case of the first Distribution
Date, from and including the Closing Date) to and including the 24th day of
the calendar month in which such Distribution Date occurs, on the Certificates
at the Pass-Through Rate on the Certificate Balance on the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
the Closing Date), after giving effect to all distributions of principal to
the Certificateholders on or prior to such preceding Distribution Date.
Interest with respect to the Certificates shall be computed on the basis of a
360-day year consisting of twelve 30-day months for all purposes of this
Agreement and the Basic Documents.
"Certificateholders' Principal Distributable Amount" means (a) on any
Distribution Date prior to the date on which the Notes have been retired, zero
and (b) on any Distribution Date on and after the Distribution Date on which
the Notes have been retired, the excess, if any, of (x) the aggregate
Outstanding Amount of the Certificates as of the day immediately prior to such
Distribution Date over (y) the sum of the Pool Balance as of the end of the
related Collection Period and the amount, if any, on deposit in the
Pre-Funding Account less the Yield Supplement Overcollateralization Amount
with respect to such Distribution Date; provided, however, that the
Certificateholders' Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Certificate Final Scheduled
Distribution Date, the principal required to be included in the
Certificateholders' Principal Distributable Amount will include the amount
that is necessary (after giving effect to the other amounts to be Certificate
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Certificate Balance to zero.
"Class" means any one of the classes of Notes.
"Class A-1 Final Scheduled Distribution Date" means the Distribution Date
in August 2000.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-1
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-1 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-1
Notes actually deposited in the Note Distribution Account on such preceding
Distribution Date, plus interest on the amount of interest due but not paid to
the Class A-1 Noteholders on such preceding Distribution Date, to the extent
permitted by law, at the Class A-1 Rate.
"Class A-1 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-1 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-1 Interest Carryover
Shortfall for such Distribution Date.
"Class A-1 Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued from and including the prior
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to and including the day immediately prior to such
Distribution Date, on the Class A-1 Notes at the Class A-1 Rate on the
Outstanding Amount of the Class A-1 Notes on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date), after giving effect to all distributions of principal to the Class A-1
Noteholders on or prior to such preceding Distribution Date. For all purposes
of this Agreement and the other Basic Documents, interest with respect to the
Class A-1 Notes shall be computed on the basis of the actual number of days in
the related Interest Accrual Period and a 360-day year.
"Class A-1 Note Balance" means, as of any date of determination, the
Initial Class A-1 Note Balance less all amounts distributed to Class A-1
Noteholders on or prior to such date and allocable to principal.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is
registered in the Note Register.
"Class A-1 Notes" means the 5.64% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" means 5.64% per annum.
"Class A-2 Final Scheduled Distribution Date" means the Distribution Date
in December 2001.
"Class A-2 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-2
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-2 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-2
Notes actually deposited in the Note Distribution Account on such preceding
Distribution Date, plus interest on the amount of interest due but not paid to
the Class A-2 Noteholders on such preceding Distribution Date, to the extent
permitted by law, at the Class A-2 Rate.
"Class A-2 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-2 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-2 Interest Carryover
Shortfall for such Distribution Date.
"Class A-2 Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued from and including the 25th day of the
preceding calendar month (or, in the case of the first Distribution Date, from
and including the Closing Date) to and including the 24th day of the calendar
month in which such Distribution Date occurs, on the Class A-2 Notes at the
Class A-2 Rate on the Outstanding Amount of the Class A-2 Notes on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date), after giving effect to all distributions
of principal to the Class A-2 Noteholders on or prior to such preceding
Distribution Date. For all purposes of this Agreement and the other Basic
Documents, interest with respect to the Class A-2 Notes shall be computed on
the basis of a 360-day year consisting of twelve 30-day months.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is
registered in the Note Register.
"Class A-2 Notes" means the 6.16% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2 to the Indenture.
"Class A-2 Rate" means 6.16% per annum.
"Class A-3 Final Scheduled Distribution Date" means the Distribution Date
in April 2003.
"Class A-3 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-3
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-3 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-3
Notes actually deposited in the Note Distribution Account on such preceding
Distribution Date, plus interest on the amount of interest due but not paid to
the Class A-3 Noteholders on such preceding Distribution Date, to the extent
permitted by law, at the Class A-3 Rate.
"Class A-3 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-3 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-3 Interest Carryover
Shortfall for such Distribution Date.
"Class A-3 Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued from and including the 25th day of the
preceding calendar month (or, in the case of the first Distribution Date, from
and including the Closing Date) to and including the 24th day of the calendar
month in which such Distribution Date occurs, on the Class A-3 Notes at the
Class A-3 Rate on the Outstanding Amount of the Class A-3 Notes on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date), after giving effect to all distributions
of principal to the Class A-3 Noteholders on or prior to such preceding
Distribution Date. For all purposes of this Agreement and the other Basic
Documents, interest with respect to the Class A-3 Notes shall be computed on
the basis of a 360-day year consisting of twelve 30-day months.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is
registered in the Note Register.
"Class A-3 Notes" means the 6.41% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A-3 to the Indenture.
"Class A-3 Rate" means 6.41% per annum.
"Class A-4 Final Scheduled Distribution Date" means the Distribution Date
in April 2004.
"Class A-4 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-4
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-4 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-4
Notes actually deposited in the Note Distribution Account on such preceding
Distribution Date, plus interest on the amount of interest due but not paid to
the Class A-4 Noteholders on such preceding Distribution Date, to the extent
permitted by law, at the Class A-4 Rate.
"Class A-4 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-4 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-4 Interest Carryover
Shortfall for such Distribution Date.
"Class A-4 Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued from and including the 25th day of the
preceding calendar month (or, in the case of the first Distribution Date, from
and including the Closing Date) to and including the 24th day of the calendar
month in which such Distribution Date occurs, on the Class A-4 Notes at the
Class A-4 Rate on the Outstanding Amount of the Class A-4 Notes on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date), after giving effect to all distributions
of principal to the Class A-4 Noteholders on or prior to such preceding
Distribution Date. For all purposes of this Agreement and the other Basic
Documents, interest with respect to the Class A-4 Notes shall be computed on
the basis of a 360-day year consisting of twelve 30-day months.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is
registered in the Note Register.
"Class A-4 Notes" means the 6.54% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" means 6.54% per annum.
"Closing Date" means September 29, 1999.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a).
"Collection Period" means with respect to any Distribution Date, the
calendar month preceding such Distribution Date. Any amount stated as of the
last day of a Collection Period or as of the first day of a Collection Period
shall give effect to the following calculations as determined as of the close
of business on such last day: (i) all applications of collections and (ii) all
distributions to be made on the following Distribution Date.
"Contract" means a motor vehicle retail installment sale contract.
"Controlling Party" means (i) if the Notes have not been paid in full,
the Indenture Trustee acting at the direction of at least a majority in
Outstanding Amount of the Noteholders and (ii) if the Notes have been paid in
full, the Owner Trustee for the benefit of the Certificateholders.
"Conveyed Assets" shall have the meaning set forth in Section 2.01.
"Corporate Trust Administration Department" shall have the meaning set
forth in the Trust Agreement.
"Corporate Trust Office" shall have the meaning set forth in the
Indenture.
"Custodian" means BMW FS, in its capacity as custodian of the
Receivables.
"Cutoff Date" means the Initial Cutoff Date or the Subsequent Cutoff
Date, as the context may require.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
the related Receivable and assigned it to BMW FS pursuant to a Dealer
Agreement.
"Dealer Agreement" means an agreement between BMW FS and a Dealer
pursuant to which such Dealer sells Contracts to BMW FS, substantially in the
form of Exhibit D hereto.
"Delinquent Receivable" means a Receivable with respect to which more
than 20% of any Scheduled Payment is more than 29 days delinquent as of the
last day of the related Collection Period, excluding Receivables with respect
to which the related Financed Vehicle has been repossessed and Liquidated
Receivables.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Indenture Trustee by physical
delivery to the Indenture Trustee endorsed to, or registered in the name of,
the Indenture Trustee or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the UCC) transfer
thereof (i) by delivery of such certificated security endorsed to, or
registered in the name of, the Indenture Trustee or (ii) by delivery thereof
to a "clearing corporation" (as defined in Section 8-102 of the UCC) and the
making by such clearing corporation of appropriate entries on its books
reducing the appropriate securities account of the transferor and increasing
the appropriate securities account of the Indenture Trustee by the amount of
such certificated security and the identification by the clearing corporation
of the certificated securities for the sole and exclusive account of the
Indenture Trustee (all of the foregoing, "Physical Property"), and, in any
event, any such Physical Property in registered form shall be in the name of
the Indenture Trustee or its nominee; and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Indenture Trustee or
its nominee or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury, the Federal
Home Loan Mortgage Corporation or by the Federal National Mortgage Association
that is a book-entry security held through the Federal Reserve System pursuant
to federal book-entry regulations, the following procedures, all in accordance
with applicable law, including applicable federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Trust Account Property to an
appropriate book-entry account maintained with a Federal Reserve Bank by a
securities intermediary that is also a "depository" pursuant to applicable
federal regulations; the making by such securities intermediary of entries in
its books and records crediting such Trust Account Property to the Indenture
Trustee's security account at the securities intermediary and identifying such
book-entry security held through the Federal Reserve System pursuant to
federal book-entry regulations as belonging to the Indenture Trustee; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Trust Account Property to
the Indenture Trustee, consistent with changes in applicable law or
regulations or the interpretation thereof;
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof
in the name of the Indenture Trustee or its nominee or custodian who either
(i) becomes the registered owner on behalf of the Indenture Trustee or (ii)
having previously become the registered owner, acknowledges that it holds for
the Indenture Trustee; and
(d) with respect to any item of Trust Account Property that is a security
entitlement causing the securities intermediary to indicate on its books and
records that such security entitlement has been credited to a securities
account of the Indenture Trustee.
"Depositor" means SSB and its successors in interest.
"Determination Date" means, with respect to each Distribution Date, the
earlier of (i) the eighteenth calendar day of the month in which such
Distribution Date occurs (or if such eighteenth day is not a Business Day, the
next succeeding Business Day) and (ii) the fifth Business Day preceding such
Distribution Date.
"Distribution Date" means, with respect to each Collection Period, the
twenty-fifth day of the following month or, if such day is not a Business Day,
the immediately following Business Day, commencing on October 25, 1999.
"Distribution Date Payment Shortfall" means, with respect to any
Distribution Date, the amount by which the Required Payment exceeds the Total
Distribution Amount for such Distribution Date.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any State, having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or the Owner Trustee or (b) a depository institution
organized under the laws of the United States of America or any State, that
(i) has either (A) a long-term unsecured debt rating of at least "AA-" by
Standard & Poor's and acceptable to Moody's or (B) a short-term unsecured debt
rating or certificate of deposit rating of at least "A-1+" by Standard &
Poor's and acceptable to Moody's and (ii) the deposits of which are insured by
the FDIC.
"Eligible Investments" means securities, negotiable instruments or
security entitlements that evidence:
(a) direct obligations of, and obligations fully guaranteed as to the
full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign
bank) and subject to supervision and examination by federal or state banking
or depository institution authorities; provided, however, that at the time of
the investment or contractual commitment to invest therein, the commercial
paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit
rating from each Rating Agency in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from each Rating Agency in the highest
investment category granted thereby;
(d) investments in money market funds having a rating from each Rating
Agency in the highest investment category granted thereby (including funds for
which the Indenture Trustee or the Owner Trustee or any of their respective
Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause; and
(g) any other investment with respect to which the Issuer, the Indenture
Trustee or the Servicer has received written notification from each Rating
Agency that the acquisition of such investment will satisfy the Rating Agency
Condition.
"Eligible Servicer" means BMW FS or any other Person that at the time of
its appointment as Servicer (i) is servicing a portfolio of motor vehicle
retail installment sale contracts or motor vehicle installment loans, (ii) is
legally qualified and has the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to service a portfolio
of motor vehicle retail installment sale contracts or motor vehicle
installment loans similar to the Receivables with reasonable skill and care
and (iv) has a minimum net worth of $50,000,000.
"Excess Mileage" shall mean, with respect to any Financed Vehicle
securing an Owners Choice Receivable, the amounts payable by the related
Obligor relating to the excess of the number of miles by which such Financed
Vehicle has been driven over the number of miles such Financed Vehicle may be
driven during the term of the related Owners Choice Receivable (as specified
in the Contract related to such Owners Choice Receivable) without incurring an
excess mileage charge pursuant to the related Contract, net of the amount, if
any, payable to a third party collection agency as payment of its fees and
expenses in connection with collecting such amounts from the related Obligor.
"Excess Wear and Tear" shall mean, with respect to any Financed Vehicle
securing an Owners Choice Receivable, all amounts payable by the related
Obligor relating to damages to such Financed Vehicle that are not the result
of normal wear and tear, as more specifically described in the Contract
related to such Owners Choice Receivable, net of the amount, if any, payable
to a third party collection agency as payment of its fees and expenses in
connection with collecting such amounts from the related Obligor.
"FDIC" means the Federal Deposit Insurance Corporation, and its
successors.
"Financed Vehicle" means a new or used automobile, sport utility vehicle
or motorcycle, together with all accessions thereto, securing an Obligor's
indebtedness under the related Contract.
"Funding Period" means the period beginning on and including the Closing
Date and ending on and including the first to occur of (a) the Determination
Date on which the amount on deposit in the Pre-Funding Account (after giving
effect to any transfers therefrom in connection with the transfer of
Subsequent Receivables to the Issuer on such Determination Date) is less than
or equal to $100,000, (b) the date of occurrence of a Servicer Termination
Event or an Event of Default under the Indenture, or (c) the last day of the
Collection Period in March 2000.
"Indenture" means the Indenture, dated as of September 1, 1999, between
the Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Certificate Balance" means $33,400,000.
"Initial Class A-1 Note Balance" means $190,000,000.
"Initial Class A-2 Note Balance" means $400,000,000.
"Initial Class A-3 Note Balance" means $300,000,000.
"Initial Class A-4 Note Balance" means $171,600,000.
"Initial Cutoff Date" means the close of business on August 31, 1999.
"Initial Pool Balance" means an amount equal to the aggregate Principal
Balance of the Initial Receivables as of the Initial Cutoff Date (including
the aggregate principal balance of the Balloon Payments).
"Initial Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche).
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure
by such Person generally to pay its debts as such debts become due, or the
taking of action by such Person in furtherance of any of the foregoing.
"Interest Accrual Period" means, with respect to the Class A-1 Notes, the
period from and including the most recent Distribution Date on which interest
has been paid (or, in the case of the first Distribution Date, the Closing
Date) to and including the day before the Distribution Date and, with respect
to the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the
Certificates, the period from and including the 25th day of the preceding
calendar month (or, in the case of the first Distribution Date, the Closing
Date) to and including the 24th day of the calendar month in which such
Distribution Date occurs.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the Receivables in respect of the Collection Period preceding such
Distribution Date: (a) that portion of all collections on Receivables
allocable to interest (including any Advances in respect thereof), (b) the
Purchase Amount of each Receivable that became a Purchased Receivable during
such Collection Period to the extent attributable to accrued interest on such
Receivable, (c) Recoveries for such Collection Period, (d) Investment Earnings
for the related Distribution Date, (e) Liquidation Proceeds for such
Collection Period to the extent allocable to interest, (f) Net Investment
Losses required to be deposited by the Servicer and (g) the Capitalized
Interest Distribution Amount; provided, however, that in calculating the
Interest Distribution Amount the following will be excluded: all payments and
proceeds (including Liquidation Proceeds) of any Purchased Receivables the
Purchase Amount of which has been included in the Interest Distribution Amount
in a prior Collection Period.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in a Trust Account (other than the Collection Account) to be applied
on such Distribution Date pursuant to Section 5.01(d).
"Issuer" means BMW Vehicle Owner Trust 1999-A.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.
"Liquidated Receivable" means a Receivable with respect to which the
earliest of the following shall have occurred: (i) the related Financed
Vehicle has been repossessed and liquidated, (ii) the related Financed Vehicle
has been repossessed in excess of 90 days and has not yet been liquidated,
(iii) in the case of an Owners Choice Receivable for which the Obligor has
exercised the Sale Option the related Financed Vehicle has been liquidated,
(iv) the Servicer has determined in accordance with its credit policies that
all amounts that it expects to receive with respect to the Receivable have
been received or (v) the end of the Collection Period in which the Receivable
becomes 150 days or more past due. For purposes of this definition and an
Owners Choice Receivable for which the Sale Option has been exercised, such
Receivable will be considered a Liquidated Receivable on the earlier to occur
of (a) the disposition of the related Financed Vehicles and (b) 90 days from
the date the Sale Option was exercised.
"Liquidation Proceeds" means, with respect to any Receivable that becomes
a Liquidated Receivable, the moneys collected in respect thereof, from
whatever source, during or after the Collection Period in which such
Receivable became a Liquidated Receivable, including liquidation of the
related Financed Vehicle, net of the sum of any out-of-pocket expenses of the
Servicer reasonably allocated to such liquidation and any amounts required by
law to be remitted to the Obligor on such Liquidated Receivable.
"Minimum Required Rating" means, with respect to BMW Capital, a
short-term unsecured debt rating of the commercial paper of BMW Capital (which
commercial paper is guaranteed by Bayerische Motoren Werke Aktiengesellschaff)
equal to or greater than "Prime-1" by Moody's and "A-1" by Standard & Poor's.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"Net Investment Losses" means, with respect to a Trust Account and any
Collection Period, the amount, if any, by which the aggregate of all losses
and expenses incurred during such period in connection with the investment of
funds in Eligible Investments in accordance with Section 5.01(d) exceeds the
aggregate of all interest and other income realized during such period on such
funds.
"Nonrecoverable Advance" means any advance made or proposed to be made
pursuant to Section 5.12, which the Servicer believes, in its good faith
judgment, is not, or if made would not be, ultimately recoverable from
Liquidation Proceeds or otherwise. In determining whether an advance is or
will be nonrecoverable, the Servicer need not take into account that it might
receive any amounts in a deficiency judgment.
"Note Balance" means, as of any date of determination, an amount equal to
the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial Class A-2
Note Balance, (iii) the Initial Class A-3 Note Balance and (iv) the Initial
Class A-4 Note Balance, less all amounts distributed to Noteholders on or
prior to such date and allocable to principal.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(b).
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the Outstanding Amount of such Class of Notes (after
giving effect to any reductions thereof to be made on the immediately
following Distribution Date) divided by the original Outstanding Amount of
such Class of Notes. The Note Pool Factor will be 1.0000000 as of the Closing
Date; thereafter, the Note Pool Factor will decline to reflect reductions in
the Outstanding Amount of such Class of Notes.
"Noteholders" shall mean the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders or the Class A-4 Noteholders.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Interest Distributable Amount
and the Noteholders' Principal Distributable Amount.
"Noteholders' Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-1 Interest Distributable Amount for
such Distribution Date, the Class A-2 Interest Distributable Amount for such
Distribution Date, the Class A-3 Interest Distributable Amount for such
Distribution Date and the Class A-4 Interest Distributable Amount for such
Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to any
Distribution Date, the greater of (1) the lesser of (a) the Regular Principal
Distributable Amount on such Distribution Date and (b) the Class A-1 Note
Balance immediately prior to that Distribution Date and (2) the excess, if
any, of (x) the aggregate Outstanding Amount of all Securities as of the day
immediately preceding such Distribution Date over (y) the sum of the Pool
Balance at the end of the related Collection Period and the amount, if any, on
deposit in the Pre-Funding Account less the Yield Supplement
Overcollateralization Amount with respect to such Distribution Date; provided,
however, that the Noteholders' Principal Distributable Amount shall not exceed
the Outstanding Amount of the Notes; and, provided, further, that:
(1) the Noteholders' Principal Distributable Amount on the Class A-1
Final Scheduled Distribution Date shall not be less that the amount
that is necessary to reduce the Outstanding Amount of the Class A-1
Notes to zero;
(2) the Noteholders' Principal Distributable Amount on the Class A-2
Final Scheduled Distribution Date shall not be less that the amount
that is necessary to reduce the Outstanding Amount of the Class A-2
Notes to zero;
(3) the Noteholders' Principal Distributable Amount on the Class A-3
Final Scheduled Distribution Date shall not be less that the amount
that is necessary to reduce the Outstanding Amount of the Class A-3
Notes to zero;
(4) the Noteholders' Principal Distributable Amount on the Class A-4
Final Scheduled Distribution Date shall not be less that the amount
that is necessary to reduce the Outstanding Amount of the Class A-4
Notes to zero.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle, and any other Person obligated to make payments
thereunder.
"Officers' Certificate" means a certificate signed by (a) the chairman of
the board, any vice president, the controller or any assistant controller and
(b) the president, a treasurer, assistant treasurer, secretary or assistant
secretary of the Depositor or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel, who
may be an employee of or counsel to the Depositor or the Servicer, which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or the
Rating Agencies, as applicable, and which shall be addressed to the Owner
Trustee and the Indenture Trustee and which shall be at the expense of the
person required to provide such an Opinion of Counsel.
"Outstanding Amount" means, as of any date of determination, the
aggregate principal amount of a Class of Notes outstanding as of such date of
determination.
"Outstanding Amount Advanced" means, as to any Distribution Date, the
aggregate of all Advances remitted by the Servicer out of its own funds
pursuant to Section 5.12, less the aggregate of all related Advance
Reimbursement Amounts actually received prior to such Distribution Date.
"Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement.
"Owners Choice Receivable" means any Receivable that was originated under
BMW FS' balloon payment financing program which provides Obligors with an end
of term option to purchase, refinance or return Financed Vehicles.
"Pass-Through Rate" means 6.91% per annum.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, with respect to any Distribution Date, an amount
equal to the aggregate Principal Balance of the Receivables (including the
aggregate Principal Balance of the Balloon Payments) at the end of the related
Collection Period, after giving effect to all payments of principal received
from Obligors and Purchase Amounts to be remitted by the Servicer for the
related Collection Period, and after reduction to zero of the aggregate
outstanding Principal Balance of all Receivables that became Liquidated
Receivables during such Collection Period.
"Pre-Funded Amount" means the amount on deposit in the Pre-Funding
Account, which shall initially be $112,777,957.15.
"Pre-Funded Percentage" means, with respect to a Class of Notes, the
ratio (expressed as a percentage), the numerator of which is the Outstanding
Amount of such Class of Notes as of the preceding Distribution Date and the
denominator of which is the Note Balance as of the preceding Distribution
Date.
"Pre-Funding Account" means the account designated as such, established
and maintained pursuant to Section 5.01(c)(ii).
"Principal Balance" means, with respect to any Receivable and a
Determination Date, the Amount Financed minus an amount equal to, as of the
close of business on the last day of the related Collection Period, that
portion of all amounts received on or prior to such day with respect to such
Receivable and allocable to principal using the Simple Interest Method.
"Purchase Amount" means, with respect to any Receivable that became a
Purchased Receivable, the unpaid principal balance owed by the Obligor thereon
plus unpaid interest on such amount at the applicable APR to the last day of
the month of repurchase.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by or on behalf of the
Servicer pursuant to Section 4.07 or by or on behalf of the Seller pursuant to
Section 3.03 and the Receivables Purchase Agreement.
"Rating Agency" means Moody's or Standard & Poor's, as the context may
require. If none of Moody's, Standard & Poor's or a successor thereto remains
in existence, "Rating Agency" shall mean any nationally recognized statistical
rating organization or other comparable Person designated by the Depositor.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall
be acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall not have notified the Issuer or the Indenture Trustee in writing
that such action will result in a reduction, withdrawal or down-grade of the
then-current rating of each class of Notes.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance thereof (including
the principal amount of any Balloon Payment) over the portion of related
Liquidation Proceeds allocable to principal.
"Receivable Files" means the following documents with respect to each
Financed Vehicle:
(i) the fully executed original of each Receivable (together with
any agreements modifying each such Receivable, including any deferment
agreement);
(ii) the original credit application, or an electronic copy thereof;
(iii) the original certificate of title or such other documents that
the Servicer or the Seller shall keep on file in accordance with its
customary procedures evidencing the security interest of the Seller in
the related Financed Vehicle; and
(iv) any and all other documents that the Servicer shall have kept
on file in accordance with its customary procedures relating to a
Receivable, an Obligor or a Financed Vehicle.
"Receivables" means the Initial Receivables and the Subsequent
Receivables.
"Receivables Purchase Agreement" means the Receivables Purchase Agreement
dated as of September 1, 1999, among BMW FS Funding Corporation, as a seller,
BMW FS, as a seller, and SSB, as Depositor.
"Record Date" means, as to any Distribution Date, the day immediately
preceding such Distribution Date.
"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Regular Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication, with
respect to the Receivables in respect of the related Collection Period: (i)
that portion of all collections on the Receivables allocable to principal
(including with respect to any Owners Choice Receivable, the amount owed by
the related Obligor with respect to a Balloon Payment), (ii) the aggregate
outstanding principal balance of all Receivables that became Liquidated
Receivables during such Collection Period, (iii) that portion allocable to
principal of the Purchase Amount of all Receivables that became Purchased
Receivables during or in respect of such Collection Period, (iv) on the
Distribution Date on or immediately following the end of the Funding Period,
the Remaining Pre-Funded Amount.
"Remaining Pre-Funded Amount" means the Pre-Funded Amount on deposit in
the Pre-Funding Account at the end of the Funding Period after the application
thereof to the purchase of any Subsequent Receivables.
"Required Payment" means, with respect to each Distribution Date, the
amount required to be distributed to the Securityholders pursuant to Section
5.06(b)(i), (ii), (iii), (iv) and (v).
"Reserve Account" means the account designated as such, established by
the Issuer and maintained by the Indenture Trustee pursuant to Section
5.01(c)(i).
"Reserve Account Initial Deposit" means $37,514,710.
"Reserve Account Required Amount" means (a) on the Closing Date, the
Reserve Account Initial Deposit and (b) with respect to any Distribution Date,
an amount equal to 5.0% of the sum of the Pool Balance and the amount, if any,
on deposit in the Pre-Funding Account as of the end of the related Collection
Period; provided, however, that in no event shall the Reserve Account Required
Amount be less than the lesser of (a) $11,131,702 and (b) the aggregate
principal amount of the Securities on such Distribution Date (after giving
effect to distributions on such date).
"Reserve Account Withdrawal Amount" means, with respect to each
Distribution Date, the lesser of the Distribution Date Payment Shortfall and
the amount on deposit in the Reserve Account for such Distribution Date.
"Responsible Officer" means the chairman of the board, the president, any
executive vice president, any vice president, the treasurer, any assistant
treasurer, the secretary, or any assistant secretary of the Servicer.
Responsible Officer of the Owner Trustee shall be as defined in the Indenture.
"Scheduled Payment" means, with respect to each Receivable, the scheduled
monthly payment amount set forth in the related Contract and required to be
paid by the Obligor during each Collection Period.
"Securities" means the Notes and the Certificates.
"Securities Intermediary" means The Chase Manhattan Bank, in its capacity
as the securities intermediary in the Securities Account Control Agreement
dated as of September 29, 1999.
"Securityholders" means the Noteholders and/or the Certificateholders, as
the context may require.
"Sellers" means BMW FS and BMW FS Funding Corporation and their
respective successors in interest, as sellers of the Receivables to the
Depositor pursuant to the Receivables Purchase Agreement.
"Servicer" means BMW FS, as the servicer of the Receivables, and each
successor to BMW FS (in the same capacity) pursuant to Section 7.03 or 8.03.
"Servicer Termination Event" shall have the meaning set forth in Section
8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.
"Servicing Fee" means an amount equal to the sum of (i) the product of
the Servicing Fee Rate and the Pool Balance as of the first day of the related
Collection Period, and (ii) any late fees, prepayment charges, extension fees
and other administrative fees or similar charges collected on the Receivables.
"Servicing Fee Rate" means 1.00% per annum.
"Simple Interest Method" means the method of allocating the monthly
payments received with respect to a Receivable to interest in an amount equal
to the product of (i) the applicable APR, (ii) the period of time (expressed
as a fraction of a year, based on the actual number of days in the calendar
month and 365 days in the calendar year) elapsed since the preceding payment
was made under such Receivable and (iii) the outstanding principal amount of
such Receivable, and allocating the remainder of each such monthly payment to
principal.
"SSB" means SSB Vehicle Securities Inc., a Delaware corporation, and its
successors.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Subsequent Closing Date" shall have the meaning assigned to such term in
the Subsequent Purchase Agreement.
"Subsequent Cutoff Date" means the date as of which Subsequent
Receivables are conveyed to the Trust pursuant to Section 2.01.
"Subsequent Purchase Agreement" shall have the meaning assigned to such
term in the Receivables Purchase Agreement.
"Subsequent Receivables" means the Contracts transferred to the Issuer
pursuant to Section 2.01, which shall be listed on Schedule A to the
Subsequent Transfer Agreement.
"Subsequent Transfer Agreement" shall have the meaning assigned hereto in
Section 2.01(b).
"Subsequent Transfer Date" means the date designated by the Depositor
during the Funding Period on which Subsequent Receivables are to be
transferred to the Issuer in accordance with Section 2.01 and pursuant to the
Subsequent Transfer Agreement.
"Total Distribution Amount" means, for each Distribution Date, the sum of
the related Interest Distribution Amount and the related Regular Principal
Distributable Amount (other than the portion thereof attributable to Realized
Losses).
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise) and all proceeds of the foregoing.
"Trust Accounts" shall mean the Collection Account, the Note Distribution
Account, the Capitalized Interest Account, the Pre-Funding Account and the
Reserve Account.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of September 1, 1999, between the Depositor and the Owner Trustee.
"Trustee Fee Rates" means the rates at which the fees and expenses are
due to the Indenture Trustee and the Owner Trustee.
"Trust Officer" means, in the case of the Indenture Trustee, any Officer
within the Global Trust Service Department of the Indenture Trustee, including
any Assistant Vice President, Assistant Treasurer, Assistant Secretary or any
other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the 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, in each case having direct responsibility for the
administration of the Basic Documents and, with respect to the Owner Trustee,
any officer in the Corporate Trust Administration Department of the Owner
Trustee with direct responsibility for the administration of the Trust
Agreement and the other Basic Documents on behalf of the Owner Trustee.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"Weighted Average Security Rate" means the percentage equivalent of a
fraction, the numerator of which is the sum of (1) the product of the Class
A-1 Rate times the Initial Class A-1 Note Balance, (2) the Product of the
Class A-2 Rate times the Initial Class A-2 Note Balance, (3) the product of
the Class A-3 Rate times the Initial Class A-3 Note Balance, (4) the product
of the Class A-4 Rate times the Initial Class A-4 Note Balance and (5) the
product of the Pass-Through Rate and the Initial Certificate Balance and the
denominator of which is the sum of the Initial Class A-1 Note Balance, the
Initial Class A-2 Note Balance, the Initial Class A-3 Note Balance, the
Initial Class A-4 Note Balance and the Initial Certificate Balance.
"Yield Supplement Overcollateralization Amount" means, with respect to
any Distribution Date, the dollar amount set forth next to such Distribution
Date on Schedule D hereto.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Indenture or, if not defined
therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; Article, Section, Schedule and
Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; "or" shall include "and/or"; and the term "including" shall mean
"including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables.
(a) In consideration of the Issuer's delivery to or upon the order of the
Depositor of the Notes, the Certificates and the Residual Interest (as defined
in the Trust Agreement), the Depositor does hereby sell, transfer, assign, set
over and otherwise convey to the Issuer, without recourse (subject to the
obligations of the Depositor set forth herein), all right, title and interest
of the Depositor in and to:
(i) the Initial Receivables and all moneys received thereon after
the Initial Cutoff Date and the Subsequent Receivables listed on Schedule
A to the Subsequent Transfer Agreement and all moneys received therefrom
on or after the Subsequent Cutoff Date;
(ii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the Receivables and
any other interest of the Depositor in such Financed Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with respect
to the Receivables from claims on any physical damage, credit life or
disability insurance policies covering the Financed Vehicles or the
related Obligors, including any vendor's single interest or other
collateral protection insurance policy;
(iv) any property that shall have secured a Receivable and shall
have been acquired by or on behalf of the Depositor, the Servicer or the
Trust;
(v) all documents and other items contained in the Receivable Files;
(vi) all of the Depositor's rights (but not its obligations) under
the Receivables Purchase Agreement and the Subsequent Purchase Agreement;
(vii) all right, title and interest in all funds on deposit from
time to time in the Trust Accounts and the Certificate Distribution
Account and in all investments therein and proceeds thereof (including
all Investment Earnings thereon); and
(viii) the proceeds of any and all of the foregoing (collectively,
with the assets listed in clauses (i) through (vii) above, the "Conveyed
Assets").
It is the intention of the Depositor that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other related property from the Depositor to the Trust and the beneficial
interest in and title to the Receivables and the related property shall 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. In the event
that, notwithstanding the intent of the Depositor, the transfer and assignment
contemplated hereby is held not to be a sale, this Agreement shall constitute
a grant of a security interest in all accounts, money, chattel paper,
securities, instruments, documents, deposit accounts, certificates of deposit,
letters of credit, advices of credit, banker's acceptances, uncertificated
securities, general intangibles, contract rights, goods and other property
consisting of, arising from or relating to such Conveyed Assets, for the
benefit of the Securityholders as security for the Depositor's obligations
hereunder.
(b) The Depositor shall transfer to the Issuer the Subsequent Receivables
and the other property and rights related thereto described in paragraph (a)
above only upon the satisfaction of each of the following conditions and
satisfaction by the Seller of the conditions in Section 2.03 of the
Receivables Purchase Agreement on or prior to the Subsequent Transfer Date:
(i) the Depositor shall have delivered to the Owner Trustee and the
Indenture Trustee (A) a written transfer agreement in substantially the
form of Exhibit E hereto, which shall have been duly executed by each of
the parties thereto (the "Subsequent Transfer Agreement"), which shall
include supplements to Schedule A hereto listing the Subsequent
Receivables and (B) an Addition Notice;
(ii) on the Subsequent Transfer Date, (A) the Depositor was not
insolvent and will not become insolvent as a result of the transfer of
the related Subsequent Receivables on the Subsequent Transfer Date, (B)
the Depositor did not intend to incur or believe that it would incur
debts that would be beyond the Depositor's ability to pay as such debts
matured, (C) such transfer was not made with actual intent to hinder,
delay or defraud any Person and (D) the assets of the Depositor did not
constitute unreasonably small capital to carry out its business as
conducted;
(iii) the Funding Period shall not have terminated;
(iv) each of the representations and warranties made by the
Depositor pursuant to Section 3.02 with respect to the related Subsequent
Receivables shall be true and correct as of the Subsequent Transfer Date;
(v) the addition of any of the related Subsequent Receivables will
not result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(vi) the Depositor shall have delivered to each Rating Agency, the
Issuer and the Indenture Trustee, an Opinion of Counsel with respect to
the transfer of the related Subsequent Receivables substantially in the
form of, or confirming, the Opinion of Counsel delivered to each Rating
Agency on the Closing Date and any other opinions reasonably required by
the Rating Agencies;
(vii) the Rating Agency Condition shall be satisfied with respect to
the transfer of the Subsequent Receivables to the Trust; and
(viii) the Depositor shall have delivered to the Indenture Trustee
and the Owner Trustee an Officers' Certificate confirming the
satisfaction of each condition precedent on its part to be performed
specified in this paragraph.
(c) The Depositor covenants to transfer to the Issuer during the Funding
Period pursuant to, and subject to the conditions set forth in, paragraph (b)
above, all Subsequent Receivables transferred by BMW FS to the Depositor
pursuant to Section 2.03 of the Receivables Purchase Agreement.
ARTICLE III
THE RECEIVABLES
Section 3.01. Representations and Warranties of the Sellers.
(a) The Sellers have made each of the representations and warranties set
forth in Exhibit A hereto under the Receivables Purchase Agreement and have
consented to the assignment by the Depositor to the Issuer of the Depositor's
rights with respect thereto. Such representations and warranties speak as of
the execution and delivery of this Agreement and as of the Closing Date in the
case of the Initial Receivables and as of the Subsequent Transfer Date in the
case of the Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer and the pledge of such Receivables
to the Indenture Trustee. Pursuant to Section 2.01 of this Agreement, the
Depositor has sold, assigned, transferred and conveyed to the Issuer, as part
of the assets of the Issuer, its rights under the Receivables Purchase
Agreement, including the representations and warranties of the Sellers therein
as set forth in Exhibit A, upon which representations and warranties the
Issuer relies in accepting the Receivables and delivering the Securities,
together with all rights of the Depositor with respect to any breach thereof,
including the right to require the Sellers to repurchase Receivables in
accordance with the Receivables Purchase Agreement. It is understood and
agreed that the representations and warranties referred to in this Section
shall survive the sale and delivery of the Receivables to the Issuer or the
Custodian.
(b) The Sellers hereby agree that the Issuer shall have the right to
enforce any and all rights under the Receivables Purchase Agreement assigned
to the Issuer herein, including the right to cause the Sellers to repurchase
any Receivable with respect to which it is in breach of any of its
representations and warranties set forth in Exhibit A, directly against the
Sellers as though the Issuer were a party to the Receivables Purchase
Agreement, and the Issuer shall not be obligated to exercise any such rights
indirectly through the Depositor.
Section 3.02. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties, on which the
Issuer relies in accepting the Receivables and delivering the Securities. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date in the case of the Initial Receivables
and as of the Subsequent Transfer Date in the case of the Subsequent
Receivables, but shall survive the sale, transfer and assignment of the
Receivables by the Depositor to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture:
(a) Title. The Depositor shall convey to the Issuer all right, title and
interest of the Depositor in and to the Receivables.
(b) All Filings Made. The Depositor has caused all filings (including UCC
filings) to be made in New York and Delaware with respect to the sale of the
Receivables to the Issuer and the pledge contemplated in the Basic Agreements
to the Indenture Trustee.
(c) Liens. The Depositor has not taken any actions to create, incur or
suffer to exist any Lien on or restriction on transferability of any
Receivable except for the Lien of the Indenture and the restrictions on
transferability imposed by this Agreement.
Section 3.03. Repurchase Upon Breach. Each of the Depositor, the Owner
Trustee, the Indenture Trustee, the Sellers and the Servicer shall inform the
other parties to this Agreement promptly, in writing, upon the discovery by it
of any breach of the Sellers' representations and warranties made pursuant to
Section 3.01 of this Agreement or Section 3.02 of the Receivables Purchase
Agreement, without regard to any limitation set forth in such representation
or warranty concerning the knowledge of the Sellers as to the facts stated
therein. Unless any such breach shall have been cured by the last day of the
first Collection Period following the discovery or notice thereof, the Sellers
shall be obligated and, if necessary, the Issuer shall enforce the obligations
of the Sellers under the Receivables Purchase Agreement, to purchase as of
such last day any Receivable materially and adversely affected by any such
breach. In consideration of the repurchase of any such Receivable, the
repurchasing Sellers shall remit the Purchase Amount to the Collection Account
and notify in writing the Indenture Trustee of such deposit, in the manner
specified in Section 5.04. The sole remedy of the Issuer, the Indenture
Trustee, the Noteholders, or the Certificateholders with respect to the unpaid
balance plus accrued interest on any Receivable as to which a breach of a
representation or warranty has occurred pursuant to Section 3.01 of this
Agreement or Section 3.02 of the Receivables Purchase Agreement or the
agreement contained in this Section shall be to require the Sellers to
purchase such Receivable pursuant to this Section or to repurchase such
Receivable pursuant to the Receivables Purchase Agreement.
Section 3.04. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the Receivable Files, which are hereby constructively delivered
by the Issuer to the Indenture Trustee.
Section 3.05. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files as
custodian for the benefit of the Issuer and the Indenture Trustee, and shall
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Issuer to comply with
this Agreement. In performing its duties as custodian, the Servicer shall act
with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable automotive and motorcycle receivables that the Servicer services
for itself or others. The Servicer shall conduct, or cause to be conducted,
periodic reviews of the Receivable Files held by it under this Agreement in a
manner consistent with its reviews of other receivables serviced for its own
account 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 Issuer and the Indenture Trustee any material failure on its part to
hold the Receivable Files and maintain its accounts, records and computer
systems as herein provided and shall promptly take appropriate action to
remedy any such material failure. Nothing herein shall be deemed to require an
initial review or any periodic review by the Issuer or the Indenture Trustee
of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B to this
Agreement or at such other office as shall be specified to the Issuer and the
Indenture Trustee by written notice not later than 90 days after any change in
location. The Servicer shall make available to the Issuer and the Indenture
Trustee or their duly authorized representatives, attorneys or auditors a list
of locations of 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 shall reasonably instruct, which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations.
Section 3.06. 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 Trust Officer of
the Indenture Trustee or, if the Notes have been paid in full, of the Owner
Trustee.
Section 3.07. Custodian's Indemnification. The Servicer, as custodian,
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and
each of their officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs, or
expenses of any kind whatsoever that may be imposed on, incurred by or
asserted against the Trust, the Owner Trustee or the Indenture Trustee or any
of their officers, directors, employees or agents as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer as custodian of the Receivable Files; provided, however, that the
Servicer shall not be liable to the Owner Trustee, the Indenture Trustee or
any such officer, director, employee or agent of the Owner Trustee or the
Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Owner Trustee or the
Indenture Trustee, as the case may be, or any such officer, director, employee
or agent of the Owner Trustee or the Indenture Trustee, as the case may be.
Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts or omissions of such Servicer preceding such resignation or removal and
shall include reasonable fees and expenses of counsel and expenses of
litigation, each of which is duly documented. 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 made thereafter collects any of such amounts from
others, such Person shall promptly repay such amounts to the Servicer, without
interest.
Section 3.08. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
and shall continue in full force and effect unless and until terminated
pursuant to this Section 3.08. If BMW FS or any successor Servicer shall
resign as Servicer in accordance with the provisions of this Agreement or if
all of the rights and obligations of BMW FS or any successor Servicer shall
have been terminated under Section 8.02, the appointment of such Servicer as
custodian may be terminated by the Issuer or by the Holders of Notes
evidencing not less than 50% of the Outstanding Amount of the Notes, by the
Owner Trustee or by Holders (other than the Seller or an affiliate thereof) of
Certificates evidencing not less than 50% of the Certificate Balance, in the
same manner as the Indenture Trustee or such Securityholders may terminate the
rights and obligations of the Servicer under Section 8.02. As soon as
practicable after any termination of such appointment (but in no event more
than ten (10) Business Days after any such termination of appointment), the
Servicer shall deliver the Receivable Files to the Indenture Trustee or the
Indenture Trustee's agent at such place or places as the Indenture Trustee may
reasonably designate. Notwithstanding the termination of BMW FS as custodian,
the Indenture Trustee and the Owner Trustee agree that, upon any such
termination and for so long as BMW FS remains the Servicer hereunder, the
Indenture Trustee or the Owner Trustee, as the case may be, shall provide, or
cause its agent to provide, access to the Receivable Files to the Servicer for
the purpose of enabling the Servicer to perform its obligations under this
Agreement with respect to the servicing of the Receivables.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Duties of Servicer. The Servicer, for the benefit of the
Issuer and the Indenture Trustee, shall manage, service, administer and make
collections on the Receivables and perform the other actions required by the
Servicer under this Agreement. The Servicer shall service the Receivables in
accordance with its customary and usual procedures. The Servicer's duties
shall include the collection and posting of all payments, responding to
inquiries of Obligors, investigating delinquencies, sending payment coupons to
Obligors, reporting any required tax information to Obligors, monitoring the
Collateral, accounting for collections, furnishing monthly and annual
statements to the Owner Trustee, and the Indenture Trustee with respect to
distributions and performing the other duties specified herein. The Servicer
also shall administer and enforce all rights of the holder of the Receivables
under the Receivables and the Dealer Agreements. To the extent consistent with
the standards, policies and procedures otherwise required hereby, the Servicer
shall follow its customary standards, policies and procedures and shall have
full power and authority, acting alone, to do any and all things in connection
with the managing, servicing, administration and collection of the Receivables
that it may deem necessary or desirable. Without limiting the generality of
the foregoing, the Servicer is hereby authorized and empowered to execute and
deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture
Trustee, the Certificateholders and the Noteholders, 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 with respect to the Financed Vehicles; provided, however,
that, notwithstanding the foregoing, the Servicer shall not, except pursuant
to an order from a court of competent jurisdiction, release an Obligor from
payment of any unpaid amount due under any Receivable, reduce the related APR
or waive the right to collect the unpaid balance of any Receivable from an
Obligor. The Servicer is hereby authorized to commence, in its own name or in
the name of the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders or the Noteholders, a legal proceeding to enforce a
Receivable pursuant to Section 4.03 or to commence or participate in any other
legal proceeding (including a bankruptcy proceeding) relating to or involving
a Receivable, an Obligor or a Financed Vehicle or self help as permitted by
applicable law. If the Servicer commences or participates in any such legal
proceeding in its own name, the Indenture Trustee or the Issuer shall
thereupon be deemed to have automatically assigned the applicable Receivable
to the Servicer solely for purposes of commencing or participating in such
proceeding as a party or claimant, and the Servicer is authorized and
empowered by the Indenture Trustee or the Issuer to execute and deliver in the
Indenture Trustee's or the Issuer'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 ground 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 direction, take steps to enforce such Receivable, including bringing suit
in its name or the name of the Issuer, the Indenture Trustee, the
Certificateholders or the Noteholders. The Owner Trustee and the Indenture
Trustee shall upon the written request of the Servicer furnish the Servicer
with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
Section 4.02. Collection of Receivable Payments; Modifications of
Receivables.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due, and shall follow such collection procedures as
it follows with respect to all comparable motor vehicle receivables that it
services for itself and otherwise act with respect to the Receivables in such
a manner as will, in the reasonable judgment of the Servicer, maximize the
amount to be received by the Trust with respect thereto. The Servicer is
authorized in its discretion to waive any prepayment charge, late payment
charge or any other similar fees that may be collected in the ordinary course
of servicing any Receivable.
(b) The Servicer may grant payment extensions only to the extent
permissible in its Collection and Servicing Guidelines as in effect from time
to time; provided, that no such extension shall extend the final payment date
on any Receivable beyond the last day of the Collection Period ending six
months prior to the Certificate Final Scheduled Distribution Date.
(c) Upon any extension not in accordance with this Section, the Servicer
shall be required to purchase the related Receivable in accordance with
Section 4.07.
(d) With respect to each Owners Choice Receivable, the Servicer, in
accordance with its customary servicing standards, policies, practices and
procedures, shall contact the Obligor on or before the due date of the Balloon
Payment specified in the related Contract. If, at such time, the Obligor under
the Owners Choice Receivable has notified BMW FS on behalf of the Trust that
it elects to sell the Financed Vehicle to BMW FS, on behalf of the Trust, in
accordance with the terms of the Receivable, the Servicer shall, upon delivery
of the Financed Vehicle by the Obligor to BMW FS on behalf of the Trust,
inspect or cause to be inspected the Financed Vehicle for excess wear and tear
and excess mileage, and to determine the necessity of any repairs. Pursuant to
its normal servicing programs, the Servicer may offer to any Obligor the right
to sell the Financed Vehicle prior to the maturity date of the related
Receivable.
(e) In connection with an Obligor's transfer of a Financed Vehicle to BMW
FS on behalf of the Trust in satisfaction of its obligation to pay the Balloon
Payment under an Owners Choice Receivable, pursuant to the terms of the
Contract related to such Balloon Payment, the Servicer shall require the
Obligor to pay a disposition fee (which the Servicer will retain as servicing
compensation), whereupon the Servicer shall take possession of the related
Financed Vehicle and shall prepare such Financed Vehicle for sale at auction
or otherwise in accordance with the Servicer's customary servicing standards,
policies, practices and procedures.
(f) Proceeds received by the Servicer from the payment by an Obligor of a
Financed Vehicle of amounts attributable to Balloon Payments and other amounts
(including Excess Wear and Tear and Excess Mileage) owed by the Obligor or
from the sale of a Financed Vehicle at auction or otherwise constitute
proceeds of Balloon Payments and collections on the Receivables, and shall be
deposited into the Collection Account. Following the sale of the Financed
Vehicle, the Servicer, on behalf of the Trust, shall deliver the related
certificate of title to the purchaser of such Financed Vehicle. Following the
Servicer's receipt of proceeds from the sale of such Financed Vehicle and
amounts to be paid by the Obligor, the Servicer shall record on its books and
records the termination of the Trust's ownership and security interest in the
related Owners Choice Receivable (and shall deliver copies thereof to the
Indenture Trustee and the Owner Trustee upon written request within ten days
of receipt of such request).
(g) If the Obligor under any Owners Choice Receivable has notified the
Dealer that it desires to refinance the amount that it owes on termination of
the Receivable, BMW FS will, in accordance with its customary servicing
standards, policies, practices and procedures, make a decision to grant or
deny credit, except for Contracts for which the Obligors have the right to
refinance without such an assessment, in which case BMW FS shall honor the
Obligor's right to refinance. If credit is denied, the Servicer shall require
the Obligor to satisfy its obligation to pay the remaining amounts owed in
accordance with the terms of the Owners Choice Receivable. If credit is
granted, BMW FS shall deposit an amount equal to the total amount owed by the
Obligor on the Receivable to the Collection Account. Upon deposit of such
amount into the Collection Account, the Trust's ownership and security
interest in the related Financed Vehicle shall terminate, and the Trust will
assign all interest in, to and under the Receivable and the related Financed
Vehicle to BMW FS. The Servicer shall record such termination on its books and
records (and shall deliver copies thereof to the Indenture Trustee and the
Owner Trustee upon written request within ten Business Days of receipt of such
request).
(h) Notwithstanding anything herein or in any contract to the contrary,
in the event that the Obligor elects to sell a Financed Vehicle to BMW FS
pursuant to an Owners Choice Receivable, the Servicer shall have no
responsibility to the Trust for any excess of the Balloon Payment over the
proceeds of sale of the Financed Vehicle by the Servicer minus the disposition
fee.
Section 4.03. Realization upon Receivables. Consistent with its customary
procedures, the Servicer shall use its best efforts to repossess or otherwise
convert the ownership of and liquidate any Financed Vehicle securing a
Receivable with respect to which the Servicer shall have determined that
eventual payment in full is unlikely and with respect to which the Servicer
determines that such repossession or other action to be in the best interest
of the Trust.
Section 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require each Obligor to
obtain and maintain physical loss damage insurance covering the related
Financed Vehicle as of the execution of the related Receivable.
Section 4.05. Maintenance of Security Interests in Financed Vehicles.
(a) The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are reasonably necessary to maintain perfection
of the security interest created by each Receivable in the related Financed
Vehicle. The Servicer is hereby authorized to take such steps as are necessary
to re-perfect such security interest in the event 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, or without fulfilling any additional
administrative requirements under the laws of the State in which such Financed
Vehicle is located, to perfect a security interest in the related Financed
Vehicle in favor of the Issuer, the Servicer hereby agrees that the
designation of BMW FS as the secured party on the certificate of title is in
its capacity as agent of the Issuer.
(b) The Depositor, the Owner Trustee, the Indenture Trustee and the
Servicer hereby agree that, upon the occurrence of a Servicer Termination
Event, the Controlling Party may take or cause to be taken such actions as
may, in the opinion of counsel to the Controlling Party, be necessary to
perfect or re-perfect the security interests in the Financed Vehicles in the
name of the Issuer, including by amending the title documents of the Financed
Vehicles. The Servicer hereby agrees to pay all expenses related to such
perfection or reperfection and to take all action necessary therefor. If such
expenses are not paid within 15 days after delivery of any invoice for such
expenses to the Servicer, such expenses shall be paid pursuant to Section
5.06(b)(ix).
Section 4.06. Covenants of Servicer. By its execution and delivery of
this Agreement, the Servicer hereby covenants as follows (upon which covenants
the Issuer, the Indenture Trustee and the Owner Trustee rely in accepting the
Receivables and delivering the applicable Securities):
(a) Liens in Force. No Financed Vehicle securing a Receivable shall be
released in whole or in part from the security interest granted by such
Receivable, except upon payment in full of such Receivable or as otherwise
contemplated herein;
(b) No Impairment. The Servicer shall do nothing to impair the rights of
the Trust in the property of the Trust;
(c) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Receivable, except in accordance with Section 4.02; and
(d) Restrictions on Liens. The Servicer shall not (A) create, incur or
suffer to exist, or agree to create, incur or suffer to exist, or consent to
or permit in the future (upon the occurrence of a contingency or otherwise)
the creation, incurrence or existence of any Lien on or restriction on
transferability of any Receivable except for the Lien of the Indenture and the
restrictions on transferability imposed by this Agreement or (B) other than as
contemplated herein, sign or file any UCC financing statements in any
jurisdiction that names BMW FS or the Depositor as a debtor, and any Person
other than the Depositor, the Indenture Trustee or the Issuer as a secured
party, or sign any security agreement authorizing any secured party thereunder
to file any such financing statement, in each case with respect to the
Receivables or the related property.
Section 4.07. Purchase of Receivables Upon Breach. Upon discovery by any
of the Servicer, the Sellers, the Depositor, the Owner Trustee or the
Indenture Trustee of a breach of any of the covenants set forth in Sections
4.02(b), 4.05(a) or 4.06, the party discovering such breach shall give prompt
written notice to the other; provided, however, that the failure to give any
such notice shall not affect any obligation of the Servicer under this Section
4.07. On or before the last day of the first Collection Period following its
discovery or receipt of notice of the breach of any covenant set forth in
Sections 4.02(b), 4.05(a) or 4.06 that materially and adversely affects the
interests of the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders or the Noteholders in any Receivable, the Servicer shall,
unless such breach shall have been cured in all material respects by such
date, purchase from the Issuer the Receivable affected by such breach. In
consideration of the purchase of any such Receivable, the Servicer shall remit
the related Purchase Amount into the Collection Account, with written notice
to the Indenture Trustee of such deposit, in the manner specified in Section
5.04. Subject to Section 7.02, it is understood and agreed that the obligation
of the Servicer to purchase any Receivable with respect to which such a breach
has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against the Servicer for such breach available to
the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders
or the Noteholders.
Section 4.08. Servicing Fee. The Servicing Fee shall be payable to the
Servicer on each Distribution Date. That part of the Servicing Fee based on
the Servicing Fee Rate shall be calculated on the basis of a 360-day year
comprised of twelve 30-day months. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities under this Agreement
(including taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports made by the Servicer to the Owner Trustee and
the Indenture Trustee).
Section 4.09. Servicer's Certificate. Not later than 10:00 a.m. (New York
City time) on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee and the Depositor, with a copy to each Rating
Agency and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., a Servicer's Certificate containing all
information necessary to make the distributions to be made on the related
Distribution Date pursuant to Section 5.06 for the related Collection Period
and any other information the Indenture Trustee may reasonably request. Such
Servicer's Certificate shall be certified by a Responsible Officer of the
Servicer that the information provided is complete and no defaults have
occurred. Receivables to be purchased by the Servicer or to be repurchased by
either Seller and each Receivable that became a Liquidated Receivable shall be
identified by the Servicer by account number with respect to such Receivable
(as specified in the applicable Schedule of Receivables).
Section 4.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, within 120 days after the end of the
Servicer's fiscal year, an Officer's Certificate signed by a Responsible
Officer of the Servicer, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period (or such shorter period in the
case of the first such Officer's Certificate) and of the performance of its
obligations 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 thereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, promptly after having obtained knowledge
thereof, but in no event later than two Business Days thereafter, written
notice in an Officer's Certificate of any event that is a Servicer Termination
Event under Section 8.01.
Section 4.11. Annual Independent Accountants' Report. The Servicer shall
cause a firm of independent certified public accountants, which may also
render other services to the Servicer or its Affiliates, to deliver to the
Owner Trustee, the Indenture Trustee and each Rating Agency, within 120 days
after the end of each fiscal year, a report addressed to the Board of
Directors of the Servicer, the Owner Trustee and the Indenture Trustee, to the
effect that (i) the firm is independent of the Depositor and the Servicer
within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants; (ii) a review in accordance with
agreed-upon procedures was made of the Servicer's Certificates relating to
such fiscal year, including the delinquency, default and loss statistics
required to be specified therein and, except as disclosed in the accountants'
report, no exceptions or errors in the Servicer's Certificates were found; and
(iii) a review in accordance with agreed-upon procedures was made of the
Servicer's compliance with its servicing obligations in this Agreement,
including without limitation the obligations of the Servicer set forth in
Section 4.02(b) hereof, and, except as disclosed in the accountants' report,
no exceptions to such compliance were found.
Section 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to representatives of the Owner
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders
reasonable access to the documentation regarding the Receivables and the
related Trust property. Access shall be afforded without charge, but only upon
reasonable request, which does not unreasonably interfere with the Servicer's
normal business operations or employee or customer relations, and during the
normal business hours at the offices of the Servicer. Nothing in this Section
shall affect the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure
of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
Section 4.13. Term of Servicer. The Servicer hereby covenants and agrees
to act as Servicer under, and for the term of, this Agreement.
Section 4.14. Access to Information Regarding Trust and Basic Documents.
The Servicer shall furnish to the Owner Trustee from time to time such
information regarding the Trust or the Basic Documents as the Owner Trustee
shall reasonably request. The Indenture Trustee shall furnish to the Owner
Trustee annually a copy of the Note Register. The Servicer shall furnish to
the Owner Trustee copies of all documents and reports required to be provided
by the Servicer pursuant to this Article IV of the Sale and Servicing
Agreement.
ARTICLE V
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
Section 5.01. Establishment of Accounts.
(a) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Noteholders and the Certificateholders.
(b) The Issuer, for the benefit of the Noteholders, shall cause the
Indenture Trustee to establish with and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Note Distribution Account"), bearing
a designation clearly indicating that the funds deposited therein are held for
the benefit of the Noteholders.
(c) The Issuer, for the benefit of the Noteholders and the
Certificateholders, shall cause the Indenture Trustee to establish with and
maintain in the name of the Indenture Trustee:
(i) an Eligible Deposit Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Noteholders and the Certificateholders.
(ii) an Eligible Deposit Account (the "Pre-Funding Account"),
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders and the Certificateholders.
(iii) an Eligible Deposit Account (the "Capitalized Interest
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders.
(iv) an Eligible Deposit Account (the "Certificate Interest Reserve
Account") bears a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(d) Funds on deposit in the Collection Account, the Capitalized Interest
Account, the Pre-Funding Account, the Certificate Interest Reserve Account and
the Reserve Account shall be invested by the Indenture Trustee in Eligible
Investments selected in writing by the Servicer; provided, however, that if
the Servicer fails to select any Eligible Investment, the Indenture Trustee
shall invest such funds in an Eligible Investment described in clause (d) of
the definition of "Eligible Investment" herein. All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders
and/or the Certificateholders, as applicable; provided, that such amount shall
be calculated on the Determination Date and on each Distribution Date all
interest and other investment income (net of Net Investment Losses) on funds
on deposit in the Collection Account for the related Collection Period shall
be paid to the Servicer as part of the servicing compensation or to the
Indenture Trustee as compensation. Other than as permitted in writing by the
Rating Agencies, funds on deposit in the Trust Accounts shall be invested in
Eligible Investments that will mature not later than the Business Day
immediately preceding the next Distribution Date. Funds deposited in a Trust
Account on a day that immediately precedes a Distribution Date upon the
maturity of any Eligible Investments are not required to be invested
overnight.
(e) In the event that there are Net Investment Losses in Eligible
Investments chosen by the Servicer, the Servicer shall deposit into the
Collection Account, no later than one (1) Business Day prior to the
Distribution Date, the amount of the Net Investment Losses. The Indenture
Trustee shall not be held liable in any way for any Net Investment Losses,
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as Indenture Trustee, in
accordance with their terms.
(f) (i) The Indenture Trustee shall possess all right, title and interest
in all funds and investment property on deposit from time to time in or
credited to the Trust Accounts and in all proceeds thereof (including all
income thereon) and all such funds, investment property, proceeds and income
shall be part of the Trust Estate, except as otherwise set forth herein. The
Trust Accounts shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders, as
applicable. If, at any time, any Trust Account ceases to be an Eligible
Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Trust
Account as an Eligible Deposit Account and shall transfer any cash and/or any
investments from the account that is no longer an Eligible Deposit Account to
the Trust Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts, subject to the last
sentence of Section 5.01(f)(i); and each such Eligible Deposit Account shall
be subject to the exclusive custody and control of the Indenture Trustee, and
the Indenture Trustee shall have sole signature authority with respect
thereto;
(B) any Trust Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee in accordance with paragraph (a)
of the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a securities intermediary (as
such term is defined in Section 8-102 of the UCC) acting solely for the
Indenture Trustee;
(C) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations
shall be delivered in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, pending maturity
or disposition, through continued book-entry registration of such Trust
Account Property as described in such paragraph;
(D) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (C) above shall
be delivered to the Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued registration of the
Indenture Trustee's (or its nominee's) ownership of such security; and
(E) any Trust Account Property that is a security entitlement shall
be delivered in accordance with paragraph (d) of the definition herein of
"Delivery" and shall be held pending maturity or disposition by the Indenture
Trustee or a securities intermediary acting solely for the Indenture Trustee.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture
Trustee, following a Servicer Termination Event to instruct the Indenture
Trustee to make withdrawals and payments from the Trust Accounts, the
Certificate Interest Reserve Account and the Certificate Distribution
Account for the purpose of withdrawing any amounts deposited in error
into such accounts.
Section 5.02. Collections. The Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors with respect to the
Receivables (other than Purchased Receivables), all Liquidation Proceeds and
any subsequent Recoveries on the Business Day prior to the Distribution Date
for so long as BMW Capital has the Minimum Required Rating. So long as BMW
Capital has the Minimum Required rating, the Servicer will remit all such
amounts described in the preceding sentence within two (2) Business Days of
receipt to an account established and maintained by BMW Capital. If BMW
Capital no longer has the Minimum Required Rating, the Servicer shall remit to
the Collection Account all payments by or on behalf of the Obligors with
respect to the Receivables (other than Purchased Receivables), all Liquidation
Proceeds and any subsequent Recoveries within two Business Days of receipt
thereof. Notwithstanding anything herein to the contrary, so long as BMW FS is
the Servicer, BMW FS may withhold from the deposit into the Collection Account
any amounts indicated on the related Servicer's Certificate as being due and
payable to the Sellers or BMW Receivables and pay such amounts directly to the
Sellers or BMW Receivables, as applicable. For purposes of this Article V, the
phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer or the Sellers.
Section 5.03. Application of Collections.
All payments received from or on behalf of an Obligor during each
Collection Period with respect to each Receivable (other than a Purchased
Receivable), shall be applied to interest and principal in accordance with the
Simple Interest Method.
Section 5.04. Purchase Amounts. If BMW Capital has the Minimum Required
Rating, the Servicer and the Sellers shall deposit or cause to be deposited in
the Collection Account the Purchase Amount as described in the first sentence
of Section 5.02. So long as BMW Capital has the Minimum Required Rating, the
Servicer will deposit the Purchase Amount into an account established and
maintained by BMW Capital, such deposit being made within two (2) Business
Days of the event giving rise to such Purchase Amounts. If BMW Capital no
longer has the Minimum Required Rating, the Servicer or the Sellers shall
deposit or cause to be deposited in the Collection Account, on or prior to
each Determination Date, the aggregate Purchase Amount with respect to
Purchased Receivables and the Servicer shall deposit therein all amounts to be
paid under Section 4.07 and Section 9.01.
Section 5.05. Reserved.
Section 5.06. Distributions.
(a) On each Determination Date, the Servicer shall calculate all amounts
required to be deposited pursuant to this Section and deliver a Servicer's
Certificate pursuant to Section 4.09.
(b) On each Distribution Date, the Servicer shall instruct the Indenture
Trustee in writing (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.09) to make the following deposits and distributions from amounts on deposit
in the Collection Account, to the extent of the Total Distribution Amount for
such Distribution Date, including all amounts transferred to the Collection
Account from the Reserve Account pursuant to Section 5.07(b), to make required
payments and distributions on such date pursuant to clauses (i) through (x)
below, in the following order and priority:
(i) to the Servicer, the Servicing Fee (and any accrued and unpaid
Servicing Fees from prior Collection Periods) and following a Servicer
Termination Event, to the successor Servicer, reasonably incurred
Servicer transition costs up to an aggregate of $150,000 for all
Distribution Dates;
(ii) to the Note Distribution Account and distribution to the
Noteholders, from the Total Distribution Amount remaining after the
application of clause (i), the Noteholders' Interest Distributable
Amount;
(iii) to the Note Distribution Account and distribution to the
Noteholders, from the Total Distribution Amount remaining after the
application of clauses (i) and (ii), the Noteholders' Principal
Distributable Amount;
(iv) to the Certificate Distribution Account and distribution to the
Certificateholders, from the Total Distribution Amount remaining after
the application of clauses (i) through (iii), the Certificateholders'
Interest Distributable Amount;
(v) to the Certificate Distribution Account and distribution to the
Certificateholders, from the Total Distribution Amount remaining after
the application of clauses (i) through (iv), the Certificateholders'
Principal Distributable Amount;
(vi) to the Reserve Account, from the Total Distribution Amount
remaining after the application of clauses (i) through (v), any
deficiency in the Reserve Account Required Amount;
(vii) to the Certificate Interest Reserve Account, from the Total
Distribution Amount remaining after the application of clauses (i)
through (vi), any deficiency in the Certificate Interest Reserve Account
Required Amount;
(viii) to the Indenture Trustee and the Owner Trustee, from the
Total Distribution Amount remaining after the application of clauses (i)
through (vii), any accrued and unpaid fees, expenses and indemnification
expenses owed thereto under any of the Basic Documents to the extent not
otherwise paid (including legal fees and expenses) and to the Securities
Intermediary, any accrued and unpaid indemnification expenses owed to it;
(ix) from the Total Distribution Amount remaining after the
application of clauses (i) through (viii), any costs associated with the
perfection of security interests in the Financed Vehicles to the extent
not paid by the Servicer; and
(x) the remainder, if any, of the Total Distribution Amount to BMW
Receivables.
Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account hereunder until the
Certificate Balance is reduced to zero.
Section 5.07. Reserve Account.
(a) On or prior to the Closing Date, the Issuer shall cause to have
deposited an amount equal to the Reserve Account Initial Deposit into the
Reserve Account from the net proceeds of the sale of the Securities. The
Reserve Account shall be an asset of the Issuer.
(b) In the event that the Servicer's Certificate states that there is a
Distribution Date Payment Shortfall, then the Indenture Trustee shall withdraw
the Reserve Account Withdrawal Amount from the Reserve Account and deposit
such Reserve Account Withdrawal Amount into the Collection Account no later
than 12:00 noon, New York City time, on the Business Day prior to the related
Distribution Date.
(c) In the event that the amount on deposit in the Reserve Account (after
giving effect to all deposits thereto and withdrawals therefrom on such
Business Day prior to a Distribution Date) is greater than the Reserve Account
Required Amount on any Distribution Date, the Indenture Trustee shall release
and distribute all such amounts on such Distribution Date to BMW FS
Receivables Corporation. Upon any such distribution to BMW FS Receivables
Corporation, the Noteholders shall have no further rights in, or claims to,
such amounts.
(d) In the event that, on any Distribution Date, the amount on deposit in
the Reserve Account shall be less than the Reserve Account Required Amount,
the Total Distribution Amount remaining after the payment of the amounts set
forth in Section 5.06(b)(i) through (v), up to an amount equal to such
shortfall, shall be deposited by the Indenture Trustee to the Reserve Account
on such Distribution Date.
(e) Subject to Section 9.01, amounts will continue to be applied pursuant
to Section 5.06 following payment in full of both the Outstanding Amount of
the Notes and of the Certificate Balance of the Certificates until the Pool
Balance is reduced to zero. Following the payment in full of the aggregate
Outstanding Amount of the Notes and of the Certificate Balance and of all
other amounts owing or to be distributed hereunder or under the Indenture or
the Trust Agreement to Noteholders and the termination of the Trust, any
amount then allocated to the Reserve Account shall be paid to BMW FS
Receivables Corporation.
Section 5.08. Statements to Securityholders. On each Determination Date,
the Servicer shall provide to the Indenture Trustee (with a copy to each
Rating Agency, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and each Paying Agent (if any)) for
the Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date and to the Owner Trustee (with a copy to each Paying Agent
(if any)) for the Owner Trustee to forward to each Certificateholder of record
as of the most recent Record Date a statement substantially in the form of
Exhibit B setting forth at least the following information as to the
Securities to the extent applicable:
(a) the amount of collections received with respect to the Receivables
during the related Collection Period and allocable to principal allocable to
each Class of Notes and Certificates on such Distribution Date;
(b) the amount of collections received with respect to the Receivables
during the related Collection Period and allocable to interest allocable to
each Class of Notes and Certificates on such Distribution Date;
(c) the Outstanding Amount of each Class of Notes, the Note Pool Factor
for each such Class, the Certificate Balance and the Certificate Pool Factor
as of the close of business on the preceding Distribution Date, after giving
effect to payments allocated to principal reported under clause (a) above;
(d) the amount of the Servicing Fee paid to the Servicer and the amount
of any fees payable to the Owner Trustee, the Custodian or the Indenture
Trustee with respect to the related Collection Period;
(e) the aggregate amounts of Realized Losses, if any, with respect to the
related Collection Period;
(f) the Pool Balance as of the close of business on the last day of the
related Collection Period, after giving effect to payments allocated to
principal reported under clause (a) above;
(g) the balance of the Reserve Account and the Certificate Interest
Reserve Account on the related Determination Date after giving effect to
deposits and withdrawals to be made on such Distribution Date, if any;
(h) the amount of any deposit to the Reserve Account and the Certificate
Interest Reserve Account and the amount and application of any funds withdrawn
from the Reserve Account and the Certificate Interest Reserve Account, in each
case with respect to such Distribution Date;
(i) the aggregate principal balance of all Receivables that became
Liquidated Receivables or Purchased Receivables during the related Collection
Period;
(j) the aggregate principal balance and number of Receivables that are 30
to 59 days, 60 to 89 days or 90 days or more delinquent as of the last day of
the related Collection Period;
(k) the Class A-1 Interest Carryover Shortfall, the Class A-2 Interest
Carryover Shortfall, the Class A-3 Interest Carryover Shortfall, the Class A-4
Interest Carryover Shortfall and the Certificateholders' Interest Carryover
Shortfall, in each case after giving effect to payments on such Distribution
Date, and any change in such amounts from the preceding statement;
(l) the aggregate Purchase Amounts for Receivables, if any, that were or
are to be purchased during or with respect to such Collection Period;
(m) the aggregate Principal Balance and number of all Receivables with
respect to which the related Financed Vehicle was repossessed;
(n) the aggregate Principal Balance and number of Receivables with
respect to which the Servicer granted a deferment;
(o) for each such date during the Funding Period, the remaining amount in
the Pre-Funding Account and the Capitalized Interest Account;
(p) the Pre-Funded Amount remaining following the end of the Funding
Period that was not used to fund the purchase of Subsequent Receivables and is
being passed through as payments on the Notes; and
(q) the Yield Supplement Overcollateralization Amount for the next
Distribution Date.
Each amount set forth on the Distribution Date statement under clauses
(a), (b) or (k) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Certificate or Note, as applicable.
Section 5.09. Pre-Funding Account.
(a) On the Closing Date, the Issuer shall cause the Indenture Trustee to
deposit in the Pre-Funding Account the Pre-Funded Amount from the net proceeds
of the sale of the Notes. On the Subsequent Transfer Date, upon satisfaction
of the conditions set forth in Section 2.01(b) with respect to such transfer,
the Servicer shall instruct the Indenture Trustee in writing to withdraw from
the Pre-Funding Account an amount equal to (i) the Principal Balance of the
Subsequent Receivables transferred to the Issuer on such Subsequent Transfer
Date less the Reserve Account Subsequent Deposit Amount for such Subsequent
Transfer Date, to distribute such amount to or upon the order of the Depositor
and (ii) the Reserve Account Subsequent Deposit Amount for such Subsequent
Transfer Date and, on behalf of the Issuer, to deposit such amount in the
Reserve Account.
(b) If the Pre-Funded Amount has not been reduced to zero on the last day
of the Funding Period after giving effect to any reductions in the Pre-Funded
Amount on such date pursuant to paragraph (a) above, the Servicer shall
instruct the Indenture Trustee in writing to withdraw from the Pre-Funding
Account on the Mandatory Redemption Date (i) if the Pre-Funded Amount is equal
to or less than $100,000, the Pre-Funded Amount and deposit such amount in the
Note Distribution Account to be applied to reduce the Outstanding Amount of
the Class A-1 Notes and (ii) if the Pre-Funded Amount is greater than
$100,000, amounts equal to the product of the Pre-Funded Percentage for each
Class of Notes and the Pre-Funded Amount and deposit such amounts in the Note
Distribution Account to be applied in reduction of the Outstanding Amount of
each Class of Notes. The Pre-Funding Account will be an asset of the Issuer.
Section 5.10. Capitalized Interest Account.
(a) On the Closing Date, the Issuer shall cause the Indenture Trustee to
deposit in the Capitalized Interest Account the Capitalized Interest Initial
Deposit from the net proceeds of the sale of the Notes.
(b) No later than 12:00 noon, New York City time, on the Business Day
prior to each Distribution Date during the Funding Period, the Indenture
Trustee shall withdraw, based on the information contained in the Servicer's
Certificate delivered pursuant to Section 4.09, from the Capitalized Interest
Account an amount equal to the Capitalized Interest Distribution Amount and
deposit such amount into the Collection Account.
(c) On each Distribution Date, after the withdrawal, if any, pursuant to
clause (b), any amounts remaining on deposit in the Capitalized Interest
Account in excess of the Capitalized Interest Account Required Amount shall be
paid to BMW Receivables.
(d) At the end of the Funding Period, any amounts remaining in the
Capitalized Interest Account shall be paid to BMW Receivables. The Capitalized
Interest Account will be an asset of the Issuer.
Section 5.11. Certificate Interest Reserve Account.
(a) On or prior to the Closing Date, the Issuer shall cause to have
deposited the Certificate Interest Reserve Account Required Amount into the
Certificate Interest Reserve Account from the net proceeds of the sale of the
Securities.
(b) In the event that the amount of the Total Distribution Amount with
respect to any Determination Date is insufficient to pay the amounts payable
on the related Distribution Date pursuant to clause 5.06(b)(iv) (after
application of any amounts to be applied from the Reserve Account) (such
insufficiency, the "Certificateholder Interest Shortfall"), the Indenture
Trustee shall withdraw the lesser of the Certificateholder Interest Shortfall
and the amount on deposit in the Certificate Interest Reserve Account from the
Certificate Interest Reserve Account and deposit such amount into the
Collection Account no later than 12:00 noon, New York City time, on the
Business Day prior to the related Distribution Date.
(c) In the event that the amount on deposit in the Certificate Interest
Reserve Account (after giving effect to all deposits thereto and withdrawals
therefrom on such Business Day prior to a Distribution Date) is greater than
the Certificate Interest Reserve Account Required Amount on any Distribution
Date, the Indenture Trustee shall release and distribute all such amounts on
such Distribution Date to BMW Receivables. Upon any such distribution to BMW
Receivables, the Certificateholders shall have no further rights in, or claims
to, such amounts.
(d) On the Business Day following the Distribution Date on which the
Notes are retired, the Indenture Trustee shall withdraw all amounts on deposit
in the Certificate Interest Reserve Account and deposit such amounts into the
Reserve Account. The Certificate Interest Reserve Account will be an asset of
the Issuer.
Section 5.12. Advances by the Servicer.
(a) By the close of business on the day required by Section 5.02 hereof,
the Servicer shall deposit into the Collection Account, out of its own funds,
the related Advance.
(b) On each Distribution Date, the Servicer shall reimburse itself for
the Outstanding Amount Advanced to the extent of actual collections of late
scheduled payments.
(c) If the Servicer determines that any advance made pursuant to Section
5.12 has become a Nonrecoverable Advance and at the time of such determination
there exists an Outstanding Amount Advanced, then the Servicer shall reimburse
itself out of funds in the Collection Account for the amount of such
Nonrecoverable Advance, but only to the extent of such Outstanding Amount
Advanced.
ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations of Depositor. The Depositor makes the
following representations to the Issuer, the Servicer, the Indenture Trustee
and the Sellers and on which the Issuer relies in accepting the Receivables
and delivering the Securities. Such representations speak as of the execution
and delivery of this Agreement and as of the Closing Date in the case of the
Initial Receivables and as of the Subsequent Transfer Date in the case of the
Subsequent Receivables, and shall survive the sale, transfer and assignment of
the Receivables by the Depositor to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor is duly organized and
validly existing as a corporation in good standing under the laws of the State
of Delaware, with the corporate power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is presently conducted.
(b) Due Qualification. The Depositor is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so would
materially and adversely affect the Depositor's ability to transfer the
Receivables to the Trust pursuant to this Agreement or the validity or
enforceability of the Receivables.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and the other Basic Documents
to which it is a party and to carry out their respective terms; the Depositor
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer, and the Depositor shall have duly
authorized such sale and assignment to the Issuer by all necessary corporate
action; and the execution, delivery and performance of this Agreement and the
other Basic Documents to which the Depositor is a party have been, and in the
case of the Subsequent Transfer Agreement, will be, duly authorized by the
Depositor by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic Documents to
which the Depositor is a party, when duly executed and delivered by the other
parties hereto and thereto, shall constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
to general principles of equity (whether applied in a proceeding at law or in
equity).
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents and the fulfillment of the terms
of this Agreement and the other Basic Documents shall not conflict with,
result in any breach of any of the terms or provisions of or constitute (with
or without notice or lapse of time, or both) a default under, the certificate
of incorporation or bylaws of the Depositor, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Depositor is a party
or by which it is bound; 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 Depositor of any court or federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over 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 tribunal or
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement or any other Basic
Document; (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by
this Agreement or any other Basic Document; (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability of, this
Agreement or any other Basic Document; or (iv) seeking to adversely affect the
federal income tax attributes of the Trust, the Notes or the Certificates.
(g) No Consents. The Depositor is not required to obtain the consent of
any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
Section 6.02. Corporate Existence. During the term of this Agreement, the
Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Depositor and its
Affiliates will be conducted on an arm's-length basis.
Section 6.03. Liability of Depositor; Indemnities. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement (which shall not
include distributions on account of the Notes or the Certificates).
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor. Any Person with which the Depositor shall merge or
consolidate or which the Depositor shall permit to become the successor to the
Depositor's business shall execute an agreement of assumption of every
obligation of the Depositor under this Agreement and the other Basic
Documents. Whether or not such assumption agreement is executed, such
successor Person shall be the successor to the Depositor under this Agreement
without the execution or filing of any document or any further act on the part
of any of the parties to this Agreement. The Depositor shall provide prompt
notice of any merger, consolidation or succession pursuant to this Section
6.04 to the Owner Trustee, the Indenture Trustee, the Servicer, the
Securityholders and the Rating Agencies. Notwithstanding the foregoing, the
Depositor shall not merge or consolidate with any other Person or permit any
other Person to become a successor to the Depositor's business unless (w)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.02 or 6.01 shall have been breached (for
purposes hereof, such representations and warranties shall speak as of the
date of the consummation of such transaction), (x) the Depositor shall have
delivered to the Owner Trustee, the Indenture Trustee and the Servicer an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section 6.04 and that all conditions precedent provided for in this
Agreement relating to such transaction have been complied with, (y) the Rating
Agency Condition shall have been satisfied and (z) the Depositor shall have
delivered to the Owner Trustee, the Indenture Trustee and the Servicer 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 executed and filed that are necessary to preserve and protect the
interest of the Trust in the Receivables and reciting the details of such
filings or (B) no such action is necessary to preserve and protect such
interest.
Section 6.05. Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor shall be under no obligation to
appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement and that in its opinion may involve it
in any expense or liability.
Section 6.06. Depositor May Own Securities. The Depositor and any
Affiliate thereof 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 thereof, except as expressly provided herein or
in any Basic Document.
Section 6.07. Depositor to Provide Copies of Relevant Securities Filings.
The Depositor shall provide or cause to be provided to the Servicer a copy of
any document filed by the Depositor subsequent to the date hereof with the
Securities and Exchange Commission pursuant to the Securities Act of 1933 or
the Securities Exchange Act of 1934 that relate specifically to the Trust, the
Notes or the Certificates.
Section 6.08. Amendment of Depositor's Organizational Documents. The
Depositor shall not amend its organizational documents except in accordance
with the provisions thereof.
ARTICLE VII
THE SERVICER
Section 7.01. Representations of Servicer. The Servicer makes the
following representations upon which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations speak as of the execution and
delivery of this Agreement and as of the Closing Date in the case of the
Initial Receivables and as of the Subsequent Transfer Date in the case of the
Subsequent Receivables, and shall survive the sale of the Receivables to the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. The Servicer is a corporation duly
organized and validly existing under the laws of the State of Delaware. The
Servicer 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 the business, properties, assets, or condition
(financial or other) of the Servicer and 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.
(b) Licenses and Approvals. The Servicer has obtained all necessary
licenses and approvals, in all jurisdictions where the failure to do so would
materially and adversely affect the Servicer's ability to acquire, own and
service the Receivables.
(c) Power and Authority. The Servicer has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their respective terms; and the execution,
delivery and performance of this Agreement and the other Basic Documents to
which it is a party have been duly authorized by the Servicer by all necessary
action.
(d) Binding Obligation. This Agreement and the other Basic Documents to
which it is a party constitute legal, valid and binding obligations of the
Servicer, enforceable against the Servicer in accordance with their respective
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity whether
applied in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents to which it is a party 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 indenture, agreement, mortgage, deed of
trust or other instrument to which the Servicer is a party or by which it is
bound; 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 of any court or federal or state regulatory body, 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 Servicer's knowledge, 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
might materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Basic Documents; or (iv) seeking to adversely affect the federal
income tax or other federal, state or local tax attributes of the Securities.
Section 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer and the representations made by the Servicer under
this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Securityholders and the
Depositor and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and against any and
all costs, expenses, losses, damages, claims and liabilities arising out of or
resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle, excluding any losses incurred in
connection with the sale of any repossessed Financed Vehicles in a
commercially reasonable manner and in compliance with the terms of this
Agreement.
(b) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Depositor, and their respective
officers, directors, agents and employees, and the Securityholders, from and
against any taxes that may at any time be asserted against any of such parties
with respect to the transactions contemplated in this Agreement, including any
sales, gross receipts, tangible or intangible personal property, privilege or
license taxes (but not including any federal or other income taxes, including
franchise taxes ), and any reasonable costs and expenses in defending against
the same.
(c) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Depositor, the Securityholders
and any of the officers, directors, employees or agents of the Issuer, the
Owner Trustee, the Depositor and the Indenture Trustee from and against any
and all costs, expenses, losses, claims, damages and liabilities to the extent
that such cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the gross negligence, willful
misfeasance or bad faith of the Servicer in the performance of its duties
under this Agreement or by reason of reckless disregard of its obligations and
duties under this Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of BMW FS (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.02, or the resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.03.
Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts of the Servicer prior thereto, and shall include reasonable fees and
expenses of counsel and reasonable 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 made thereafter collects any of such
amounts from others, such Person shall promptly repay such amounts to the
Servicer, without interest.
Section 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (i) into which the Servicer may be merged
or consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party, (iii) that acquires by conveyance, transfer or
lease substantially all of the assets of the Servicer or (iv) succeeding to
the business of the Servicer, which Person shall execute 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 paper or any further act on the part of any of the
parties to this Agreement. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 7.03 to the Owner
Trustee, the Indenture Trustee and each Rating Agency. Notwithstanding the
foregoing, the Servicer shall not merge or consolidate with any other Person
or permit any other Person to become a successor to the Servicer's business
unless (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 7.01 shall have been
breached (for purposes hereof, such representations and warranties shall speak
as of the date of the consummation of such transaction) and no event that,
after notice or lapse of time or both, would become a Servicer Termination
Event shall have occurred, (ii) the Servicer shall have delivered to the Owner
Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 7.03 and that all conditions
precedent provided for in this Agreement relating to such transaction have
been complied with and (iii) the Servicer shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel stating that either
(A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary to preserve and
protect the interest of the Trust and the Indenture Trustee, respectively, in
the assets of the Trust and reciting the details of such filings or (B) no
such action shall be necessary to preserve and protect such interest. The
Servicer shall be permitted to transfer and assign its duties and obligations
under this Agreement to an affiliate that has succeeded to substantially all
of the assets and liabilities of the Servicer in connection with a
reorganization of the Servicer; provided that the resulting entity represents
and warrants that it is not less credit-worthy than the Servicer immediately
prior to such reorganization.
Section 7.04. 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, the Depositor, the
Indenture Trustee, the Owner Trustee, the Noteholders or the
Certificateholders, except as provided in this Agreement, for any action taken
or for refraining from the taking of any action pursuant to this Agreement;
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
a breach of this Agreement or willful misfeasance, bad faith or negligence in
the performance of duties. The Servicer and any director, officer, employee or
agent of the Servicer may conclusively rely in good faith on the written
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this
Agreement.
(b) The parties expressly acknowledge and consent to the Indenture
Trustee simultaneously acting in the capacity of successor Servicer and
Indenture Trustee. The Indenture Trustee may, in such capacities, discharge
its separate functions fully, without hindrance or regard to conflict of
interest principles, duty of loyalty principles or other breach of fiduciary
duties to the extent that any such conflict or breach arises from the
performance by the Indenture Trustee of express duties set forth in this
Agreement in any of such capacities.
Section 7.05. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided however, that the Servicer shall remain obligated
and be liable to the Owner Trustee, the Indenture Trustee and the
Securityholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation
and liability by virtue of the appointment of such 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 fees and expenses of any
subservicer shall be as agreed between the Servicer and such subservicer from
time to time, and none of the Owner Trustee, the Indenture Trustee, the Issuer
or the Securityholders shall have any responsibility therefor.
Section 7.06. Servicer Not to Resign.
(a) Subject to the provisions of Section 7.03, the Servicer shall not
resign from the obligations and duties imposed on it by this Agreement as
Servicer except upon a determination that the performance of its duties under
this Agreement shall no longer be permissible under applicable law.
(b) Notice of any determination that the performance by the Servicer of
its duties hereunder is no longer permitted under applicable law shall be
communicated to the Owner Trustee and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered by the Servicer to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No resignation of the
Servicer shall become effective until a successor Servicer acceptable to the
Controlling Party shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 8.03. If no Servicer has been
appointed within 30 days of resignation or removal, the Controlling Party may
petition any court of competent jurisdiction for such appointment.
ARTICLE VIII
DEFAULT
Section 8.01. Servicer Termination Events. For purposes of this
Agreement, the occurrence and continuance of any of the following shall
constitute a "Servicer Termination Event":
(a) any failure by the Servicer to deposit into the Collection Account
any proceeds or payment required to be so delivered under the terms of this
Agreement that continues unremedied for a period of five Business Days after
written notice is received by the Servicer or after discovery of such failure
by a Responsible Officer of the Servicer;
(b) failure by the Servicer to deliver to the Owner Trustee, the
Indenture Trustee and the Seller the Servicer's Certificate by the applicable
Determination Date, or to observe any covenant or agreement set forth in
Section 4.06 or in Section 7.01, which failure (i) materially and adversely
affects the rights of the Securityholders and (ii) continues unremedied for a
period of five Business Days after knowledge thereof by the Servicer or after
the date on which written notice of such failure requiring the same to be
remedied shall have been given to the Servicer by any of the Owner Trustee,
the Indenture Trustee or Noteholders evidencing not less than 50% of the
Outstanding Amounts of the Notes;
(c) failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement,
which failure (i) materially and adversely affects the rights of the
Securityholders and (ii) continues unremedied for a period of 60 days after
discovery of such failure by a Responsible Officer of the Servicer or after
the date on which written notice of such failure requiring the same to be
remedied shall have been given to the Servicer by any of the Owner Trustee,
the Indenture Trustee or Noteholders evidencing not less than 50% of the
Outstanding Amounts of the Notes; or
(d) the occurrence of an Insolvency Event with respect to the Servicer.
Section 8.02. Consequences of a Servicer Termination Event. If a Servicer
Termination Event shall occur, the Indenture Trustee may, and at the direction
of Noteholders evidencing 50% of the Outstanding Amount of the Notes, shall
terminate all of the rights and obligations of the Servicer under this
Agreement by notice in writing to the Servicer. On or after the receipt by the
Servicer of such written notice, all authority, power, obligations and
responsibilities of the Servicer under this Agreement automatically shall pass
to, be vested in and become obligations and responsibilities of the successor
Servicer appointed by the Controlling Party; provided, however, that such
successor Servicer shall have no liability with respect to any obligation that
was required to be performed by the terminated Servicer prior to the date that
such successor Servicer becomes the Servicer or any claim of a third party
based on any alleged action or inaction of the terminated Servicer. The
successor Servicer is authorized and empowered by this Agreement to execute
and deliver, on behalf of the terminated Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, whether to complete the transfer and endorsement
of the Receivables and related documents to show the Indenture Trustee (or the
Owner Trustee if the Notes have been paid in full) as lienholder or secured
party on the related certificates of title of the Financed Vehicles or
otherwise. The terminated Servicer agrees to cooperate with the successor
Servicer in effecting the termination of the responsibilities and rights of
the terminated Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all money and property held by
the Servicer with respect to the Receivables and other records relating to the
Receivables, including any portion of the Receivables File held by the
Servicer and a computer tape in readable form as of the most recent Business
Day containing all information necessary to enable the successor Servicer to
service the Receivables. The terminated Servicer shall also provide the
successor Servicer access to Servicer personnel and computer records in order
to facilitate the orderly and efficient transfer of servicing duties.
Section 8.03. Appointment of Successor Servicer.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 8.02 or upon the resignation of the Servicer pursuant to
Section 7.06, the Indenture Trustee shall be the successor in all respects to
the Servicer in its capacity as Servicer under this Agreement and shall be
subject to all the rights, responsibilities, restrictions, duties, liabilities
and termination provisions relating to the Servicer under this Agreement,
except as otherwise stated herein. The Depositor, the Owner Trustee, the
Indenture Trustee and such successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. If a successor Servicer is acting as Servicer hereunder, it shall
be subject to termination under Section 8.02 upon the occurrence of any
Servicer Termination Event after its appointment as successor Servicer.
(b) On and after the time the Servicer receives a notice of termination
pursuant to Section 8.02 or upon the resignation of the Servicer pursuant to
Section 7.06, or if the Indenture Trustee is legally unable or unwilling to
act as Servicer, the Controlling Party may exercise at any time its right to
appoint a successor to the Servicer, and shall have no liability to the Owner
Trustee, the Indenture Trustee, the Servicer, the Depositor, any Noteholders,
any Certificateholders or any other Person if it does so. Notwithstanding the
above, if the Indenture Trustee shall be legally unable or unwilling to act as
Servicer, the Indenture Trustee, the Owner Trustee or Noteholders evidencing
50% of the Outstanding Amount of the Notes may petition a court of competent
jurisdiction to appoint any Eligible Servicer as the successor to the
Servicer. Pending appointment pursuant to the preceding sentence, the
Indenture Trustee shall act as successor Servicer unless it is legally unable
to do so, in which event the outgoing Servicer shall continue to act as
Servicer until a successor has been appointed and accepted such appointment.
(c) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement.
Section 8.04. Notification to Securityholders. Upon any termination of,
or appointment of a successor to, the Servicer pursuant to this Article VIII,
the Owner Trustee shall give prompt written notice thereof to the
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.
Section 8.05. Waiver of Past Defaults. Noteholders evidencing not less
than a majority of the Outstanding Amount of the Notes or the
Certificateholders evidencing not less than a majority of the outstanding
Certificate Balance (in the case of any default that does not adversely affect
the Indenture Trustee or the Noteholders) may, on behalf of all
Securityholders, waive in writing any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a
default in making any required deposits to or payments from any of the Trust
Accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Termination Event
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.
ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase of All Receivables.
(a) On each Determination Date as of which the Pool Balance is equal to
or less than 10% of the sum of the Initial Pool Balance and the amount on
deposit in the Pre-Funding Account on the Closing Date, the Servicer shall
have the option to purchase the Receivables. To exercise such option, the
Servicer shall deposit to the Collection Account pursuant to Section 5.04 an
amount equal to the aggregate Purchase Amount for the Receivables (including
Liquidated Receivables) and shall succeed to all interests in and to the
Receivables. The exercise of such option shall effect a retirement, in whole
but not in part, of all outstanding Notes.
(b) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations to
make payments to Certificateholders of, the Indenture Trustee pursuant to this
Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment.
(a) This Agreement may be amended by the Depositor, the Servicer, the
Indenture Trustee and the Issuer, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of
any Noteholder or Certificateholder; provided further, that such action shall
not be deemed to adversely affect in any material respect the interests of any
Noteholder or Certificateholder and no Opinion of Counsel to that effect shall
be required if the person requesting the amendment obtains a letter from the
Rating Agencies stating that the amendment would not result in the downgrading
or withdrawal of the ratings then assigned to the Notes and the Certificates.
(b) This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Issuer, with the prior written consent of the
Indenture Trustee, Noteholders holding not less than a majority of the
Outstanding Amount of the Notes and the Holders (as defined in the Trust
Agreement) of outstanding Certificates evidencing not less than a majority of
the outstanding Certificate Balance, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Securityholders;
provided, however, that no such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Securityholders or (ii) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificate Balance, the
Securityholders of which are required to consent to any such amendment,
without the consent of the Noteholders holding all Outstanding Notes and
Certificateholders holding all outstanding Certificates.
Promptly after the execution of any amendment or consent, the
Administrator shall furnish written notification of the substance of such
amendment or consent to each Securityholder, the Indenture Trustee and each
Rating Agency.
It shall not be necessary for the consent of Securityholders pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the
substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee, on behalf of the Issuer, and the Indenture Trustee shall be entitled
to receive and rely upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in Section 10.02(i)(A). The Owner Trustee, on behalf of
the Issuer, and the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment that affects the Owner Trustee's or the
Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
Section 10.02. Protection of Title to Trust.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such a
manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer and the Indenture Trustee in
the Receivables and the proceeds thereof. The Servicer shall deliver or cause
to be delivered to the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above as
soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Owner Trustee and the
Indenture Trustee at least five days' prior written notice thereof and shall
have promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Depositor and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least five Business Days'
prior written notice of any relocation of its principal executive office if,
as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement, and shall promptly
file any such amendment or new financing statement. The Servicer shall at all
times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) a person
adequately trained in the use of the Servicer's data system to know at any
time the status of each 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 such Receivable and
the amounts from time to time deposited in the Collection Account in respect
of each such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, the Servicer's
master computer records (including any backup archives) that refer to a
Receivable shall be coded to reflect that such Receivable is part of the
portfolio of Receivables that is the subject of this Agreement and is held by
the Indenture Trustee for BMW Vehicle Owner Trust 1999-A. Indication of such
Receivable's inclusion in the portfolio shall be deleted from or modified on
the Servicer's computer systems when, and only when, the related Receivable
shall have been paid in full or repurchased.
(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 motor
vehicle receivables to any prospective purchaser, lender or other transferee,
the Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including any restored from
backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents upon
reasonable notice and at any time during normal business hours, which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations, to inspect, audit and make copies of and abstracts from
the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or the
Indenture Trustee, within fifteen Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each
of the Servicer's Certificates furnished prior to such request indicating
removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee: promptly after the execution and delivery of this Agreement and each
amendment hereto and in connection with the transfer of Subsequent Receivables
from the Depositor to the Trust, an Opinion of Counsel stating that, in the
opinion of such counsel, either (i) all financing statements and continuation
statements have been executed and filed that are necessary to fully preserve
and protect the interest of the Trust and the Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (ii) 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 in
the following year to preserve and protect such interest.
Section 10.03. Notices. All demands, notices, communications and
instructions upon or to the Depositor, the Servicer, the Issuer, the Owner
Trustee, the Indenture Trustee or any Rating Agency under this Agreement shall
be in writing, personally delivered, faxed and followed by first class mail,
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt (a) in the case of the Depositor, to Seven
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: SSB Vehicle
Securities Inc.; (b) in the case of the Servicer, Administrator and Custodian,
to BMW FS, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President Finance and Risk, (c) in the case of the Indenture
Trustee, to ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Capital Markets Fiduciary Services, Attention: BMW Vehicle Owner
Trust 1999-A; (d) in the case of the Issuer or the Owner Trustee, at the
Corporate Trust Administration Department (as defined in the Trust Agreement);
(e) in the case of Moody's, to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ABS Monitoring Department, and (g) in the case of Standard &
Poor's, to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Asset Backed Surveillance Department; or, as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
Section 10.04. Assignment by the Depositor or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided
in Sections 6.04 and 7.03 herein and as provided in the provisions of this
Agreement concerning the resignation of the Servicer, this Agreement may not
be assigned by the Depositor or the Servicer.
Section 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the
Seller, the Issuer, the Owner Trustee, the Certificateholders, the Indenture
Trustee and the Noteholders, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
Section 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 10.07. Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which when so executed
and delivered shall be an original, but all of which shall together constitute
but one and the same instrument.
Section 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 10.09. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 10.10. Assignment by Issuer. The Depositor hereby acknowledges
and consents to any 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 Receivables or the assignment of any or all of the
Issuer's rights and obligations hereunder to the Indenture Trustee.
Section 10.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the parties hereto shall not, prior to the date
that is one year and one day after the termination of this Agreement with
respect to the Issuer or the Depositor, acquiesce, petition or otherwise
invoke or cause the Issuer or the Depositor to invoke the process of any court
or government authority for the purpose of commencing or sustaining a case
against the Issuer or the Depositor under any federal or state bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or
the Depositor or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer or the Depositor.
Section 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee of the
Issuer 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 in accordance
with the priorities set forth herein. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank, not in its individual
capacity but solely as Indenture Trustee, and in no event shall The Chase
Manhattan Bank 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 in
accordance with the priorities set forth herein.
Section 10.13. Depositor Payment Obligation. The Depositor shall be
responsible for the payment of all fees and expenses of the Trust, the Owner
Trustee and the Indenture Trustee paid by any of them in connection with any
of their obligations under the Basic Documents to obtain or maintain or
monitor the renewal of any required license of the Trust under the
Pennsylvania Motor Vehicle Sales Finance Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
BMW VEHICLE OWNER TRUST 1999-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: ___________________________________
Name:
Title
SSB VEHICLE SECURITIES INC.
By: ___________________________________
Name:
Title
BMW FS FUNDING CORPORATION
By: ___________________________________
Name:
Title
By: ___________________________________
Name:
Title
BMW FINANCIAL SERVICES NA, INC.
By: ___________________________________
Name:
Title
By: ___________________________________
Name:
Title
THE CHASE MANHATTAN BANK
By: ___________________________________
Name:
Title
SCHEDULE A
Schedule of Receivables
-----------------------
[To be Delivered to the Indenture Trustee at Closing]
SCHEDULE B
Location of Receivable Files
----------------------------
BMW Financial Services NA, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
Representations and Warranties of the Sellers
---------------------------------------------
Under Section 3.02 of the Receivables Purchase Agreement
--------------------------------------------------------
EXHIBIT B
Form of Distribution Date Statement to Securityholders
BMW Financial Services NA, Inc.
BMW Vehicle Owner Trust 1999-A Distribution Date Statement to Securityholders
Principal Distribution Amount
-----------------------------------------------------------------------------------------------------
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Principal Distribution Amount
Principal Per $1,000 Certificate
Interest Distribution Amount
Interest Per $1,000 Certificate
Class A-1 Interest Carryover Shortfall
Class A-2 Interest Carryover Shortfall
Class A-3 Interest Carryover Shortfall
Class A-4 Interest Carryover Shortfall
Certificateholders' Interest Carryover Shortfall
Distribution Date Payment Shortfall
Reserve Account Withdrawal Shortfall
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Certificate Balance
Certificate Pool Factor
Servicing Fee
Owner Trustee Fee
Indenture Trustee Fee
Pool Balance
Realized Losses
Liquidated Receivables or Purchased Receivables
Purchase Amounts
Reserve Account Balance
Amount Deposited to Reserve Account
Certificate Interest Reserve Account Balance
Principal Balance of Receivables that were delinquent:
30 to 59 days
60 to 89 days
90 days or more
Amount Withdrawn from Reserve Account
Amount Withdrawn from the Certificate Interest Reserve Account
Pre-Funding Account Balance
Certificate Interest Reserve Account
Capitalized Interest Account Balance
Mandatory Redemption Amount
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
EXHIBIT C
Form of Servicer's Certificate
------------------------------
[TO BE ADDED]
EXHIBIT D
FORM OF DEALER AGREEMENT
EXHIBIT E
Form of Subsequent Transfer Agreement
-------------------------------------
SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT (the "Agreement") dated as of
________, by and among SSB Vehicle Securities Inc., a Delaware corporation
("SSB"), BMW Vehicle Owner Trust 1999-A, a Delaware business trust (the
"Trust"), BMW Financial Services NA, Inc., a Delaware corporation ("BMW FS"),
and The Chase Manhattan Bank, a New York banking corporation, as indenture
trustee under the Indenture (the "Indenture Trustee").
Reference is hereby made to the Sale and Servicing Agreement (the "Sale
and Servicing Agreement") dated as of September 1, 1999, among SSB, The Chase
Manhattan Bank, the Trust, BMW Funding and BMW FS, and the Receivables
Purchase Agreement (the "Purchase Agreement") dated as of September 1, 1999,
among BMW Funding Corporation, BMW FS and SSB.
WHEREAS, SSB wishes to sell the Subsequent Receivables set forth in
Schedule A hereto to the Trust, and the Trust wishes to purchase such
Subsequent Receivables and to pledge such Subsequent Receivables to the
Indenture Trustee, all in accordance with the provisions of the Sale and
Servicing Agreement and the Indenture;
NOW, THEREFORE, BMW FS, SSB, the Trust and the Indenture Trustee hereby
agree as follows:
Definitions. Capitalized terms used herein and not otherwise defined
herein shall the meanings ascribed to them in the Sale and Servicing
Agreement.
Subsequent Receivables. Schedule A attached hereto sets forth the
Subsequent Receivables being transferred hereby by SSB to the Trust having an
aggregate principal balance of $_________ as of _______ (the "Subsequent
Cutoff Date").
Transfer of Subsequent Receivables to the Trust. Pursuant to and upon the
representations, warranties and agreements on the part of BMW FS and SSB in
the Subsequent Purchase Agreement and the Sale and Servicing Agreement and the
Receivables Purchase Agreement and in consideration of the purchase price of
$_________, SSB does hereby sell, assign, transfer and otherwise convey unto
the Trust, without recourse (except as expressly provided in the Sale and
Servicing Agreement), all right, title and interest of SSB in and to: (1) the
Subsequent Receivables and all moneys received thereon on or after the
Subsequent Cutoff Date listed on Schedule A to this Agreement; (2) the
security interests in the Financed Vehicles and any accessions thereto granted
by Obligors pursuant to the Subsequent Receivables and any other interest of
the Depositor in such Financed Vehicles; (3) any Liquidation Proceeds and any
other proceeds with respect to the Subsequent Receivables from claims on any
physical damage, credit life or disability insurance policies covering the
Financed Vehicles or the related Obligors, including any vendor's single
interest or other collateral protection insurance policy; (4) any property
that shall have secured a Subsequent Receivable and shall have been acquired
by or on behalf of the SSB, the Servicer or the Trust; (5) all documents and
other items contained in the Receivable Files; (6) all of SSB's rights (but
not its obligations) under the Subsequent Purchase Agreement; (7) all right,
title and interest in all funds on deposit from time to time in the Trust
Accounts, the Certificate Interest Reserve Account and the Certificate
Distribution Account and in all investments therein and proceeds thereof
(including all Investment Earnings thereon); (8) any proceeds from any
Subsequent Receivable repurchased by a Dealer pursuant to a Dealer Agreement;
and (9) the proceeds of any and all of the foregoing. The foregoing sale does
not constitute and is not intended to result in any assumption by the Trust of
any obligation of either SSB or BMW FS to the Obligors, insurers or any other
person in connection with the Subsequent Receivables, Receivable Files, any
insurance policies or any agreement or instrument relating to any of them.
Withdrawal from the Pre-Funding Account. Pursuant to Section ____ of the
Sale and Servicing Agreement, the Indenture Trustee is hereby directed to (i)
withdraw $________ from the Pre-Funding Account representing the Principal
Balance of the Subsequent Receivables transferred to the Issuer on such
Subsequent Transfer Date less the Reserve Account Subsequent Deposit Amount
for such Subsequent Transfer Date and distribute such amount to or upon the
order of the Depositor and (ii) withdraw $_________ from the Pre-Funding
Account representing the Reserve Account Subsequent Deposit Amount for such
Subsequent Transfer Date and, on behalf of the Depositor, to deposit such
amount in the Reserve Account.
Representations of BMW FS.
(a) BMW FS hereby consents to the assignment by SSB to the Trust of SSB's
rights with respect to the representations and warranties made by BMW FS in
the Purchase Agreement and the Subsequent Purchase Agreement with regard to
the Subsequent Receivables and BMW FS. Such representations and warranties
speak as of the execution and delivery of this Agreement, but shall survive
the delivery of the Subsequent Receivables to the Indenture Trustee or the
Custodian. Pursuant to this Agreement, SSB has sold, assigned, transferred and
conveyed to the Trust its rights under the Purchase Agreement, including its
rights with respect to the representations and warranties of BMW FS, upon
which the Trust relies in accepting the Subsequent Receivables.
(b) BMW FS hereby agrees that the Issuer on behalf of the Trust shall
have the right to enforce any and all rights under the Purchase Agreement and
the Subsequent Purchase Agreement assigned herein to such party, including the
right to cause BMW FS to repurchase any Subsequent Receivable with respect to
which it is in breach of any of its representations and warranties, directly
against BMW FS as though the Issuer or the Trust was a party to the Purchase
Agreement and the Subsequent Purchase Agreement, and the Issuer shall not be
obligated to exercise any such rights indirectly through SSB.
Representations of SSB. SSB represents and warrants to the Trust that the
representations and warranties of SSB in the Sale and Servicing Agreement with
respect to the Subsequent Receivables and SSB are true and correct as of the
date of this Agreement and hereby certifies that:
(c) the minimum APR for the Subsequent Receivables is 8.00%;
(d) after the inclusion of the Subsequent Receivables, the weighted
average number of months since the initial installment due date for the
Receivables is at least 9 months;
(e) after the inclusion of the Subsequent Receivable, at least 50% of the
aggregate principal balance of the Receivables is secured by Financed Vehicles
which were new at the date of origination;
(f) no Subsequent Receivable will be an Owners Choice Receivable; and
(g) All other conditions precedent set forth in Section 2.01(b) of the
Sale and Servicing Agreement relating to the conveyance of Subsequent
Receivables to the Trust have been satisfied.
Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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.
Headings. The headings of the various Sections herein are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.
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, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Limitation of Liabilities. It is expressly understood and agreed by the
parties hereto that (a) this Subsequent Transfer Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee of BMW Vehicle Owner Trust 1999-A, in the exercise of
the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the
purpose for binding only the Issuer, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties
hereto and by any Person claiming by, through or under the parties hereto and
(d) under no circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Issuer or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Issuer under this Subsequent Trust Agreement or any
other related documents.
Ratification of Agreement. As supplemented by this Agreement, the Sale
and Servicing Agreement is in all respects ratified and confirmed and the Sale
and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Subsequent
Transfer Agreement to be duly executed by their respective officers as of the
day and year first above written.
BMW VEHICLE OWNER TRUST 1999-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:_______________________________
Name:
Title:
SSB VEHICLE SECURITIES INC.
By:_______________________________
Name:
Title:
BMW FINANCIAL SERVICES NA, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:______________________________
Name:
Title:
SCHEDULE A TO
SUBSEQUENT TRANSFER AGREEMENT NO. ___
Schedule of Subsequent Receivables
----------------------------------