EXHIBIT 10.1
EXECUTION COPY
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ISUZU AUTO OWNER TRUST 2001-1,
as Issuer,
POOLED AUTO SECURITIES SHELF LLC,
as Depositor,
ISUZU MOTORS ACCEPTANCE CORPORATION,
as Seller and Master Servicer,
and
THE CIT GROUP/SALES FINANCING, INC.,
as Subservicer
_____________________________________
SALE AND SERVICING AGREEMENT
Dated as of April 1, 2001
_____________________________________
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. General Definitions.......................................................................... 1
Section 1.02. Other Definitional Provisions................................................................ 17
Section 1.03. Interpretive Provisions...................................................................... 17
ARTICLE TWO
CONVEYANCE OF COLLATERAL
Section 2.01. Conveyance of Collateral..................................................................... 18
Section 2.02. Representations and Warranties of the Seller as to the Receivables........................... 19
Section 2.03. Representations and Warranties of the Depositor as to the Receivables........................ 23
Section 2.04. Repurchase of Receivables Upon Breach........................................................ 23
Section 2.05. Custody of Receivable Files.................................................................. 24
Section 2.06. Duties of Subservicer as Custodian........................................................... 25
Section 2.07. Instructions; Authority to Act............................................................... 26
Section 2.08. Indemnification by Custodian................................................................. 26
Section 2.09. Effective Period and Termination............................................................. 26
ARTICLE THREE
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01. Duties of Master Servicer.................................................................... 28
Section 3.02. Subservicer.................................................................................. 29
Section 3.03. Collection of Receivable Payments; Modification of Receivables............................... 31
Section 3.04. Realization Upon Receivables................................................................. 32
Section 3.05. Maintenance of Physical Damage Insurance Policies............................................ 32
Section 3.06. Maintenance of Security Interests in Financed Vehicles....................................... 32
Section 3.07. Covenants of Master Servicer and the Subservicer............................................. 33
Section 3.08. Purchase of Receivables Upon Breach.......................................................... 33
Section 3.09. Servicing Fee; Payment of Certain Expenses by Master Servicer................................ 34
Section 3.10. Master Servicer's Certificate................................................................ 34
Section 3.11. Annual Statement as to Compliance; Notice of Default......................................... 34
Section 3.12. Annual Accountants' Report................................................................... 35
Section 3.13. Access to Certain Documentation and Information Regarding Receivables........................ 35
Section 3.14. Amendments to Receivables Schedule........................................................... 35
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Section 3.15. Reports to Securityholders and Rating Agencies............................................... 36
Section 3.16. Reports to the Commission.................................................................... 36
ARTICLE FOUR
DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS
Section 4.01. Establishment of Accounts.................................................................... 37
Section 4.02. Collections.................................................................................. 38
Section 4.03. Application of Collections................................................................... 39
Section 4.04. Additional Deposits.......................................................................... 39
Section 4.05. Distributions................................................................................ 40
Section 4.06. Reserve Fund................................................................................. 43
Section 4.07. Net Deposits................................................................................. 44
Section 4.08. Statements to Securityholders................................................................ 44
Section 4.09. Insurance Policy Matters..................................................................... 46
ARTICLE FIVE
THE DEPOSITOR
Section 5.01. Representations and Warranties of Depositor.................................................. 47
Section 5.02. Liability of Depositor; Indemnities.......................................................... 48
Section 5.03. Merger, Consolidation or Assumption of the Obligations of Depositor; Certain Limitations..... 49
Section 5.04. Limitation on Liability of Depositor and Others.............................................. 51
ARTICLE SIX
THE SELLER, THE MASTER SERVICER AND THE SUBSERVICER
Section 6.01. Representations of the Seller, the Master Servicer and the Subservicer....................... 52
Section 6.02. Liability of Seller, Master Servicer and Subservicer; Indemnities............................ 53
Section 6.03. Merger, Consolidation or Assumption of the Obligations of the Seller, the Master Servicer
and the Subservicer....................................................................... 55
Section 6.04. Limitation on Liability of the Master Servicer, the Subservicer and Others................... 56
Section 6.05. IMAC Not to Resign as Master Servicer; CITSF Not to Resign as Subservicer.................... 56
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ARTICLE SEVEN
MASTER SERVICER AND SUBSERVICER TERMINATION EVENTS
Section 7.01. Master Servicer Termination Events........................................................... 57
Section 7.02. Subservicer Termination Events............................................................... 59
Section 7.03. Appointment of Successor Master Servicer or Successor Subservicer............................ 60
Section 7.04. Notification to Insurer, Noteholders, Certificateholders and Rating Agencies................. 61
Section 7.05. Waiver of Past Termination Events............................................................ 61
ARTICLE EIGHT
TERMINATION
Section 8.01. Optional Purchase of All Receivables......................................................... 62
ARTICLE NINE
MISCELLANEOUS
Section 9.01. Amendment.................................................................................... 63
Section 9.02. Protection of Title to Issuer................................................................ 64
Section 9.03. Notices...................................................................................... 66
Section 9.04. Assignment................................................................................... 66
Section 9.05. Limitations on Rights of Others.............................................................. 67
Section 9.06. Severability................................................................................. 67
Section 9.07. Further Assurances........................................................................... 67
Section 9.08. No Waiver; Cumulative Remedies............................................................... 67
Section 9.09. Separate Counterparts........................................................................ 67
Section 9.10. Headings..................................................................................... 67
Section 9.11. Governing Law................................................................................ 67
Section 9.12. Nonpetition Covenants........................................................................ 68
Section 9.13. Limitation of Liability of Owner Trustee and Indenture Trustee............................... 68
Section 9.14. Insurer Defense Costs........................................................................ 68
SCHEDULES
Schedule A Receivables Schedule......................................................................... SA-1
Schedule B Location of Receivable Files................................................................. SB-1
Schedule C Servicing Activities......................................................................... SC-1
Schedule D Credit and Collection Policy................................................................. SD-1
Schedule E Yield Supplement Overcollaterization Amount.................................................. SE-1
Schedule F Subservicer Fee.............................................................................. SF-1
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EXHIBITS
Exhibit A - Form of Distribution Statement............................................................ A-1
Exhibit B - Form of Master Servicer's Certificate..................................................... B-1
Exhibit C - Form of Certificate of Title/Lien Exception Report........................................ C-1
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SALE AND SERVICING AGREEMENT
This Sale and Servicing Agreement, dated as of April 1, 2001, is among
Pooled Auto Securities Shelf LLC, a Delaware limited liability company ("PASS"),
as depositor (the "Depositor"), Isuzu Motors Acceptance Corporation, a
California corporation ("IMAC"), as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), The CIT
Group/Sales Financing, Inc., a Delaware corporation ("CITSF"), as subservicer
(the "Subservicer"), and Isuzu Auto Owner Trust 2001-1, a Delaware business
trust, as issuer (the "Issuer").
WHEREAS the Issuer desires to purchase from the Depositor a portfolio of
receivables arising in connection with motor vehicle retail installment sale
contracts (the "Receivables") purchased by IMAC in the ordinary course of its
business, which Receivables have been sold by IMAC to the Depositor as of the
date hereof;
WHEREAS, the Depositor is willing to sell the Receivables to the Issuer
pursuant to the terms hereof;
WHEREAS, IMAC is willing to service the Receivables pursuant to the terms
hereof; and
WHEREAS, CITSF is willing to subservice the Receivables pursuant to the
terms hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. General Definitions. Whenever used in this Agreement, the
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following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Account Collateral" means, with respect to each Account and the
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Certificate Distribution Account, such Account or the Certificate Distribution
Account, together with all cash, securities, financial assets and investments
and other property from time to time deposited or credited to such Account or
the Certificate Distribution Account and all proceeds thereof, including, with
respect to the Reserve Fund, the Reserve Fund Initial Deposit.
"Accounts" means the Collection Account, the Note Distribution Account and
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the Reserve Fund.
"Affiliate" means, with respect to any specified Person, any other Person
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controlling or controlled by or under common control with such specified Person.
For the purpose of this definition, "control", when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" means this Sale and Servicing Agreement, as amended or
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supplemented from time to time.
"Amount Financed" in respect of a Receivable means the aggregate amount
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advanced under such Receivable toward the purchase price of the related Financed
Vehicle and any related costs, including accessories, insurance premiums,
service and warranty contracts and other items customarily financed as part of
Retail Installment Contracts.
"APR" of a Receivable means the annual percentage rate of finance charges
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stated in such Receivable.
"Available Collections" means, with respect to any Distribution Date, the
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sum of Available Interest and Available Principal.
"Available Funds" means, with respect to any Distribution Date, the sum of
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(i) Available Collections, (ii) the Reserve Fund Draw Amount, (iii) the Policy
Claim Amount, if any, for such Distribution Date (to the extent deposited by the
Insurer into the Collection Account) and (iv) the amount, if any, deposited by
the Insurer in the Collection Account pursuant to Section 4.09 (d) of this
Agreement or Section 5.02(d) or (e) of the Indenture.
"Available Interest" means, with respect to any Distribution Date, (i) the
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total of the following amounts allocable to interest received by the Master
Servicer or the Subservicer on or in respect of the Receivables during the
related Collection Period: (a) collections on or in respect of the Receivables,
including extension fees, (b) Net Liquidation Proceeds, (c) Insurance Proceeds
and (d) Repurchase Payments, plus (ii) any earnings on investments of funds in
the Accounts (other than the Reserve Fund) and the Certificate Distribution
Account, in each case net of losses and investment expenses.
"Available Principal" means, with respect to any Distribution Date, the
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total of the following amounts allocable to principal received by the Master
Servicer or the Subservicer on or in respect of the Receivables during the
related Collection Period: (i) collections on or in respect of the Receivables,
(ii) Net Liquidation Proceeds, (iii) Insurance Proceeds and (iv) Repurchase
Payments.
"Basic Documents" means this Agreement, the Administration Agreement, the
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Indenture, the Insurance Agreement, the Note Depository Agreement, the
Receivables Purchase Agreement, the Trust Agreement, the Certificate Depository
Agreement, the Indemnity Agreement, the Insurer Indemnification Agreement and
any other documents or certificates delivered in connection therewith, as the
same may be amended, supplemented or otherwise modified and in effect.
"Business Day" means any day other than a Saturday, a Sunday or a day on
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which banking institutions or trust companies in New York, New York, Wilmington,
Delaware, Charlotte, North Carolina, Chicago, Illinois and Los Angeles,
California are authorized by law, regulation or executive order to be closed.
"Certificate" has the meaning set forth in the Trust Agreement.
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"Certificate of Title/Lien Exception Report" means an officer's certificate
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signed by a Servicing Officer of the Master Servicer and based on a physical
inventory performed by the Subservicer, delivered by the Master Servicer to the
Insurer and Seller pursuant to Section 2.05, and substantially in the form of
Exhibit C.
"Certificate Balance" has the meaning set forth in the Trust Agreement.
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"Certificate Depository Agreement" has the meaning set forth in the Trust
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Agreement.
"Certificate Distributable Amount" means, with respect to any Distribution
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Date, the sum of the Certificate Interest Distributable Amount and the
Certificate Principal Distributable Amount.
"Certificate Distribution Account" has the meaning set forth in the Trust
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Agreement.
"Certificate Final Distribution Date" means the January 22, 2007
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Distribution Date.
"Certificate Interest Carryover Shortfall" means, with respect to any
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Distribution Date, the sum of (i) all accrued but unpaid Certificate Monthly
Interest Distributable Amount for previous Distribution Dates plus (ii) to the
extent permitted by law, interest on such accrued but unpaid Certificate Monthly
Interest Distributable Amount at the Certificate Rate.
"Certificate Interest Distributable Amount" means, with respect to any
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Distribution Date, the sum of the Certificate Monthly Interest Distributable
Amount and the Certificate Interest Carryover Shortfall for such Distribution
Date.
"Certificate Monthly Interest Distributable Amount" means, with respect to
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any Distribution Date, interest accrued for the related Interest Period at the
Certificate Rate on the Certificate Balance as of the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Initial Certificate Balance).
"Certificate Pool Factor" means, with respect to any Distribution Date, a
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seven-digit decimal figure equal to the Certificate Balance as of such
Distribution Date divided by the Initial Certificate Balance.
"Certificate Principal Distributable Amount" means, with respect to (i) any
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Distribution Date prior to which the Note Balance has been reduced to zero, zero
and (ii) any Distribution Date on or after which the Note Balance has been
reduced to zero, the lesser of (a) the Certificate Balance as of the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Closing Date) and (b) the excess of the Certificate Balance as of the
immediately preceding Distribution Date over the Pool Balance as of the last day
of the related Collection Period less the Yield Supplement Overcollaterization
Amount for such Distribution Date; provided, however, that the Certificate
Principal Distributable Amount payable to the Certificateholders on the
Certificate Final Distribution Date will equal the greater of the amount
described above and the amount that is necessary, after giving effect to all
payments of principal to the Certificateholders on such Distribution Date, to
reduce the Certificate Balance to zero.
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"Certificate Rate" means 5.470% per annum (computed on the basis of a 360-day
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year consisting of twelve 30-day months).
"Certificateholders" has the meaning set forth in the Trust Agreement.
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"CITSF" means The CIT Group/Sales Financing, Inc., a Delaware corporation, and
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its successors.
"Class" means all Notes whose forms are identical except for variation in
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denomination, principal amount or owner.
"Class A-1 Final Distribution Date" means the May 20, 2002 Distribution Date.
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"Class A-1 Noteholder" means a Person in whose name a Class A-1 Note is
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registered in the Note Register.
"Class A-2 Final Distribution Date" means the May 20, 2003 Distribution Date.
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"Class A-2 Noteholder" means a Person in whose name a Class A-2 Note is
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registered in the Note Register.
"Class A-3 Final Distribution Date" means the November 22, 2004 Distribution
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Date.
"Class A-3 Noteholder" means a Person in whose name a Class A-3 Note is
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registered in the Note Register.
"Class A-4 Final Distribution Date" means the January 22, 2007 Distribution
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Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is
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registered in the Note Register.
"Closing Date" means May 3, 2001.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Collateral" has the meaning set forth in Section 2.01(a).
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"Collection Account" means the account designated as such, and established and
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maintained pursuant to Section 4.01.
"Collection Period" means, with respect to any Distribution Date, the
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immediately preceding calendar month (or, in the case of the first Distribution
Date, the period of time since the Cutoff Date through the last day of the month
immediately preceding the calendar month in which the first Distribution Date
occurs).
"Commercial Vehicle" means any Financed Vehicle that is a new or used class 3
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to class 7 commercial truck comprised of the cab/chassis and the body.
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"Commercial Vehicle Receivable" means any Receivable secured by a Commercial
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Vehicle.
"Commission" means the Securities and Exchange Commission, and its successors.
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"Control" has the meaning set forth in Section 8-106 of the UCC.
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"Corporate Trust Office" has the meaning set forth in the Indenture.
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"Credit and Collection Policy" means the credit, collection and customer
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service policies of the Master Servicer relating to the Receivables attached as
Schedule D, as delivered by the Master Servicer to the Subservicer, as the same
may be amended or modified from time to time; provided, however, that so long as
no Insurer Default shall have occurred and be continuing, no material changes
will be made without the Insurer's consent, such consent not to be unreasonably
withheld.
"Cutoff Date" means the close of business on March 31, 2001.
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"Cutoff Date Pool Balance" means $492,091,480.94, the aggregate Principal
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Balance of the Receivables as of the Cutoff Date.
"Dealer" means the dealer of motor vehicles who sold a Financed Vehicle and
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who originated and assigned the Receivable relating to such Financed Vehicle to
IMAC under an existing agreement between such dealer and IMAC.
"Dealer Recourse" means, with respect to a Receivable, all recourse rights
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against the Dealer which originated the Receivable, and any successor to such
Dealer.
"Defaulted Receivable" means a Receivable (other than a Repurchased
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Receivable) with respect to which the earliest of the following has occurred:
(i) more than $50 of any Monthly Payment remains unpaid for 120 or more days,
(ii) the Master Servicer or the Subservicer has determined in accordance with
the Credit and Collection Policy that eventual payment in full is unlikely or
(iii) the Master Servicer or the Subservicer has repossessed and sold the
related Financed Vehicle or repossessed and held the related Financed Vehicle in
its repossession inventory for 90 days.
"Deposit Date" means, with respect to any Distribution Date and the related
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Collection Period, the Business Day immediately preceding such Distribution
Date.
"Depositor" means PASS, in its capacity as Depositor under the Trust
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Agreement, and its successors in such capacity.
"Determination Date" means, with respect to any Distribution Date, the fourth
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Business Day immediately preceding such Distribution Date.
"Distribution Date" means, with respect to any Collection Period, the
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twentieth day of the next succeeding month or, if such day is not a Business
Day, the next succeeding Business Day, commencing June 20, 2001.
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"Dollars" means the lawful currency of the United States.
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"Eligible Account" means either (i) a segregated deposit account over which
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the Indenture Trustee or the Owner Trustee, as the case may be, has sole
signature authority, maintained with an Eligible Institution meeting the
requirements of clause (i) of the definition of Eligible Institution or (ii) a
segregated trust account maintained with the trust department of an Eligible
Institution meeting the requirements of clause (ii) of the definition of
Eligible Institution, in each case bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Securityholders, the
Noteholders or the Certificateholders and for the Insurer, as the case may be.
"Eligible Institution" means a depository institution or trust company,
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qualified to take deposits which is subject to supervision and examination by
federal or state banking authorities, the deposits of which are insured by the
FDIC, (i) the commercial paper or other short-term unsecured debt obligations of
which have the Required Rating or (ii) having corporate trust powers and
organized under the laws of the United States, any state thereof, the District
of Columbia or the Commonwealth of Puerto Rico which has a long-term deposit
rating from Moody's of at least Baa3 or Standard and Poor's of at least BBB- (or
such lower rating as the Insurer and each Rating Agency shall approve in
writing).
"Entitlement Holder" has the meaning set forth in Section 8-102 of the UCC.
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"Entitlement Order" has the meaning set forth in Section 8-102 of the UCC.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"FDIC" means the Federal Deposit Insurance Corporation, and its successors.
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"FHLMC" means the Federal Home Loan Mortgage Corporation, and its successors.
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"Final Distribution Date" means the Class A-1 Final Distribution Date, the
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Class A-2 Final Distribution Date, the Class A-3 Final Distribution Date, the
Class A-4 Final Distribution Date or the Certificate Final Distribution Date, as
the context may require.
"Final Order" means a final, non-appealable order of a court exercising
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jurisdiction in an Insolvency Proceeding with respect to the Depositor, the
Seller, the Master Servicer or the Subservicer to the effect that all or any
portion of any payment made to the Noteholders or the Certificateholders must be
returned prior to the Termination Date (as defined in the Insurance Policy) as a
voidable preference under the United States Bankruptcy Code (11 U.S.C.), as
amended from time to time.
"Financed Vehicle" means, with respect to any Retail Installment Contract, the
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related new or used Isuzu motor vehicle, together with all accessions thereto,
securing the related Obligor's indebtedness under such Retail Installment
Contract.
"Financial Asset" has the meaning set forth in Section 8-102(a)(9) of the UCC.
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"Fiscal Agent" has the meaning set forth under the Insurance Policy.
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"FNMA" means the Federal National Mortgage Association, and its successors.
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"IMAC" means Isuzu Motors Acceptance Corporation, and its successors.
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"Indemnity Agreement" means the indemnity agreement, dated April 25, 2001,
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among IMAC, the Depositor and the Representative, as amended or supplemented
from time to time.
"Indenture" means the indenture, dated as of April 1, 2001, between the Issuer
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and the Indenture Trustee, as amended or supplemented from time to time.
"Indenture Trustee" means U.S. Bank, and its successors in interest and any
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successor trustee under the Indenture.
"Initial Certificate Balance" means $9,842,000.00.
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"Initial Note Balance" means $431,055,000.00.
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"Insolvency Event" means, with respect to any Person, (i) the making by such
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Person of a general assignment for the benefit of creditors, (ii) the filing by
such Person of a voluntary petition in bankruptcy, (iii) such Person being
adjudged bankrupt or insolvent, or having had entered against such Person an
order for relief in any bankruptcy or insolvency proceeding, (iv) the filing by
such Person of a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, (v) the filing by such Person of an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against such Person in any proceeding specified in clause (vii) below,
(vi) seeking, consenting to or acquiescing in the appointment of a trustee,
receiver or liquidator of such Person or of all or any substantial part of the
assets of such Person or (vii) the failure to obtain dismissal within 60 days of
the commencement of any proceeding against such Person seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, or the entry of any order
appointing a trustee, liquidator or receiver of such Person of all or any
substantial portion of the assets of such Person.
"Insurance Agreement" means the insurance and reimbursement agreement, dated
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as of the Closing Date, among the Insurer, IMAC, in its individual capacity and
as Seller and Master Servicer, the Subservicer, the Depositor and the Issuer, as
amended or supplemented from time to time.
"Insurance Payment Amount" has, with respect to a Distribution Date, the
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meaning set forth for such Distribution Date in Section 4.05(a)(xi).
"Insurance Policy" means the irrevocable financial guaranty insurance policy
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issued by the Insurer, dated the Closing Date, in respect of the Securities.
"Insurance Premium" has the meaning set forth in the Premium Side Letter
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Agreement.
"Insurance Proceeds" means any amounts payable or any payment made under any
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insurance policy, with respect to a Receivable, covering physical damage, credit
life, credit
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disability, theft, mechanical breakdown or any similar event relating to the
related Financed Vehicle or Obligor.
"Insurer" means MBIA Insurance Corporation, a New York stock insurance
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company, and its successors.
"Insurer Default" has the meaning set forth in the Indenture.
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"Insurer Defense Costs" means all reasonable costs and expenses of the Insurer
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(including reasonable costs and expenses of the Owner Trustee or the Indenture
Trustee paid by the Insurer) incurred in connection with any action, proceeding
or investigation that could reasonably be expected to adversely affect the
Issuer or the Trust Estate or the rights or obligations of the Insurer under any
of the Basic Documents or under the Insurance Policy, including any judgment or
settlement entered into in connection with any such action, proceeding or
investigation; provided, however, that Insurer Defense Costs shall not include
costs or expenses incurred as a result of the willful misfeasance, bad faith or
negligence of the Insurer.
"Insurer Indemnification Agreement" means the indemnification agreement, dated
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April 25, 2001, among the Insurer, the Seller, PASS and the Representative, as
amended or supplemented from time to time.
"Interest Period" has the meaning set forth in the Indenture.
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"Interest Rate" has the meaning set forth in the Indenture.
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"Issuer" means Isuzu Auto Owner Trust 2001-1, a Delaware business trust, and
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its successors.
"Letter of Credit Bank" means any Person who has provided a Servicer Letter of
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Credit pursuant to Section 4.02(b).
"Lien" means any security interest, lien, charge, pledge, equity or
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encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach to a Receivable or any property, as the context may require, by
operation of law.
"Light Vehicle" or "Sport Utility Vehicle" means a Financed Vehicle that is a
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new or used automobile, light truck, minivan, sport utility or other passenger
vehicle which is not a Commercial Vehicle.
"Light Vehicle Receivable" means any Receivable that is secured by a Light
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Vehicle.
"Liquidation Expenses" means, with respect to a Defaulted Receivable, the
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reasonable out of pocket expenses incurred by the Master Servicer or the
Subservicer, in accordance with the Credit and Collection Policy, to or for its
account for repossessing, refurbishing and disposing of the related Financed
Vehicle.
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"Liquidation Proceeds" means, with respect to a Defaulted Receivable, all
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amounts received by the Master Servicer or the Subservicer with respect to such
Receivable from whatever sources (including proceeds of any insurance policy),
net of amounts that are required by law or such Receivable to be refunded to the
related Obligor.
"Master Servicer" means IMAC, in its capacity as master servicer of the
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Receivables pursuant to this Agreement, and each successor thereto (in the same
capacity) pursuant to Section 7.03.
"Master Servicer's Certificate" means an officer's certificate signed by a
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Servicing Officer of the Master Servicer delivered pursuant to Section 3.10,
substantially in the form of Exhibit B.
"Master Servicer Termination Event" has the meaning set forth in Section 7.01.
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"Master Servicer Termination Notice" has the meaning set forth in Section
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7.01.
"Monthly Payment" means, with respect to any Receivable, the amount of each
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fixed monthly payment payable to the obligee under such Receivable in accordance
with the terms thereof, net of any portion of such monthly payment that
represents late payment charges, extension fees or similar items.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
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"Motor Vehicle Receivables" has the meaning set forth in Section
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5.03(b)(ii)(A).
"Net Liquidation Proceeds" means, with respect to a Defaulted Receivable,
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Liquidation Proceeds less Liquidation Expenses.
"Net Losses" means, with respect to any Collection Period, the excess, if any,
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of (i) the aggregate Principal Balance of all Receivables that became Defaulted
Receivables during such Collection Period over (ii) the aggregate Net
Liquidation Proceeds received by the Master Servicer or the Subservicer during
such Collection Period.
"Note Balance" has the meaning set forth in the Indenture.
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"Note Distributable Amount" means, with respect to any Distribution Date, the
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sum of the Note Interest Distributable Amount and the Note Principal
Distributable Amount.
"Note Distribution Account" means the account designated as such, and
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established and maintained pursuant to Section 4.01.
"Note Interest Carryover Shortfall" means, with respect to any Distribution
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Date and any Class of Notes, the sum of (i) all accrued but unpaid Note Monthly
Interest Distributable Amount for previous Distribution Dates for such Class
plus (ii) to the extent permitted by law, interest on such accrued but unpaid
Note Monthly Interest Distributable Amount at the Interest Rate applicable to
such Class.
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"Note Interest Distributable Amount" means, with respect to any Distribution
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Date, the sum of the Note Monthly Interest Distributable Amount for such
Distribution Date and the Note Interest Carryover Shortfall for all Classes of
Notes for one or more prior Distribution Dates.
"Note Monthly Interest Distributable Amount" means, with respect to any
------------------------------------------
Distribution Date, interest accrued for the related Interest Period at the
related Interest Rate for each Class of Notes on the Note Balance of each such
Class as of the immediately preceding Distribution Date (or, in the case of the
first Distribution Date or if no interest has yet been paid, on the original
principal amount of each such Class of Notes). For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes shall be computed on the
basis of a 360-day year consisting of twelve 30-day months; and interest with
respect to the Class A-1 Notes shall be computed on the basis of the actual
number of days in each applicable Interest Period, divided by 360.
"Note Pool Factor" means, with respect to each Class of Notes as of any
----------------
Distribution Date, a seven-digit decimal figure equal to the Note Balance of
such Class of Notes as of such Distribution Date (after giving effect to any
reductions thereof to be made on such Distribution Date) divided by the original
principal amount of such Class of Notes.
"Note Principal Distributable Amount" means, with respect to any Distribution
-----------------------------------
Date, the lesser of (i) the Note Balance as of the immediately preceding
Distribution Date (or the Initial Note Balance in the case of the first
Distribution Date) and (ii) the excess of the Securities Balance as of the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, as of the Closing Date) over the Pool Balance as of the last
day of the related Collection Period less the Yield Supplement
Overcollaterization Amount for such Distribution Date; provided, however, that
the Note Principal Distributable Amount payable to the related Noteholders on
the Final Distribution Date for any Class of Notes will equal the greater of the
amount described immediately above and the outstanding principal balance of that
Class of Notes as of the immediately preceding Distribution Date.
"Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes
-----
and the Class A-4 Notes.
"Obligor" means, with respect to any Receivable, the purchaser or co-
-------
purchasers of the related Financed Vehicle purchased in part or in whole by the
execution and delivery of a Retail Installment Contract or any other Person who
owes or may be liable for payments under such Retail Installment Contract.
"Officer's Certificate" means a certificate signed by the president, any Vice
---------------------
President, the treasurer or the secretary of the Depositor, the Master Servicer
or the Subservicer, as the case may be, and delivered to the Indenture Trustee,
the Insurer or the Owner Trustee.
"Opinion of Counsel" means a written opinion of counsel (who, in the case of
------------------
counsel to the Depositor, the Master Servicer or the Subservicer may be an
employee of or outside counsel to the Depositor, the Master Servicer or the
Subservicer), which counsel shall be acceptable to the related Trustee, the
Insurer or the Rating Agency, as the case may be.
10
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
-------------
corporation, acting not in its individual capacity but solely as owner trustee
under the Trust Agreement, and its successors in interest and any successor
owner trustee under the Trust Agreement.
"PASS" means Pooled Auto Securities Shelf LLC, and its successors and assigns.
----
"Permitted Investments" means, at any time, any one or more of the following
---------------------
obligations and securities:
(i) obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency
thereof, provided such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by FHLMC,
FNMA, any state of the United States, the District of Columbia or the
Commonwealth of Puerto Rico then rated the highest available credit rating
of each Rating Agency for such obligations;
(iii) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or any
state thereof, the District of Columbia or the Commonwealth of Puerto Rico,
so long as at the time of such investment either the long-term unsecured
debt of such corporation has the highest available credit rating from each
Rating Agency for such obligations or the commercial paper or other short-
term debt of such corporation has the highest available credit rating of
each Rating Agency for such obligations;
(iv) certificates of deposit issued by any depository institution
or trust company (including the Indenture Trustee) incorporated under the
laws of the United States or any state thereof, the District of Columbia or
the Commonwealth of Puerto Rico and subject to supervision and examination
by banking authorities of one or more of such jurisdictions, provided that
the short-term unsecured debt obligations of such depository institution or
trust company has the highest available credit rating of each Rating Agency
for such obligations; provided, however, that such investment shall not
have an 'r' highlighter affixed to its rating and its terms shall have a
predetermined fixed dollar amount of principal due at maturity that cannot
vary or change;
(v) repurchase obligations held by the Indenture Trustee that are
acceptable to such Trustee with respect to any security described in
clauses (i) or (ii) hereof or any other security issued or guaranteed by
any other agency or instrumentality of the United States, in either case
entered into with a federal agency or a depository institution or trust
company (acting as principal) described in clause (iv) above;
(vi) any mutual fund, money market fund, common trust fund or other
pooled investment vehicle which has the highest applicable credit rating by
each Rating Agency (including, but not limited to funds of which the
Indenture Trustee is the manager or financial advisor); and
(vii) such other investments acceptable to each Rating Agency and to
the Insurer, if an Insurer Default shall not have occurred and be
continuing, in writing as will
11
not result in the qualification, downgrading or withdrawal of the rating
then assigned to any Securities by such Rating Agency;
provided, that each of the foregoing investments shall mature no later than the
Deposit Date immediately following the date of purchase (other than in the case
of the investment of monies in instruments of which the entity at which the
related Account or the Certificate Distribution Account, as the case may be, is
located is the obligor, which may mature on the related Distribution Date), and
shall be required to be held to such maturity.
Notwithstanding anything to the contrary contained in this definition, (a)
no Permitted Investment may be purchased at a premium, and (b) no obligation or
security is a "Permitted Investment" unless (i) the Indenture Trustee has
Control over such obligation or security and (ii) at the time such obligation or
security was delivered to the Indenture Trustee or the Indenture Trustee became
the related Entitlement Holder, the Indenture Trustee did not have notice of any
adverse claim with respect thereto within the meaning of Section 8-105 of the
UCC.
For purposes of this definition, any reference to the highest available
credit rating of an obligation shall mean the highest available credit rating
for such obligation, or such lower credit rating (as approved in writing by each
Rating Agency) as will not result in the qualification, downgrading or
withdrawal of the rating then assigned to any Securities by such Rating Agency.
"Person" means any legal person, including any individual, corporation,
------
partnership, joint venture, association, joint stock company, limited liability
company, limited liability partnership, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Policy Amount" has the meaning set forth in the Insurance Policy.
-------------
"Policy Claim Amount" means, with respect to any Distribution Date, the
-------------------
amount, if any, by which the Required Payment Amount exceeds the sum of
Available Collections plus the Reserve Fund Draw Amount for that Distribution
Date.
"Pool Balance" means, as of any day, the aggregate Principal Balance of the
------------
Receivables (exclusive of all Repurchased Receivables for which the Master
Servicer or the Seller has paid the Repurchase Payment, Defaulted Receivables
and Receivables sold or otherwise liquidated by the Indenture Trustee pursuant
to Section 5.04(a) of the Indenture) as of the close of business on such date;
provided, however, that references to the Pool Balance as of the first day of a
Collection Period shall mean the Pool Balance as of the opening of business on
such first day.
"Premium Side Letter Agreement" has the meaning set forth in the Insurance
-----------------------------
Agreement.
"Prepayment" means any prepayment, whether in part or in full, in respect
----------
of such Receivable.
"Principal Balance" means, with respect to any Receivable as of any date,
-----------------
the Amount Financed minus the sum of the following amounts: (i) that portion of
all Monthly Payments actually received on or prior to such date allocable to
principal, computed in accordance with the simple interest method, (ii) any
Repurchase Payment with respect to such Receivable allocable to principal and
(iii) any Prepayments or other payments applied to reduce the unpaid principal
12
balance of such Receivable; provided, however, that the Principal Balance of a
Defaulted Receivable or a Repurchased Receivable shall be zero as of the last
day of the Collection Period during which it became a Defaulted Receivable or a
Repurchased Receivable, as the case may be.
"Rating Agency" means Moody's and Standard & Poor's.
-------------
"Rating Agency Condition" has the meaning set forth in the Indenture.
-----------------------
"Receivable" means any Retail Installment Contract executed by an Obligor in
----------
respect of a Financed Vehicle, and all proceeds thereof and payments thereunder,
which Receivables shall be identified in the Receivables Schedule.
"Receivable Files" means the documents specified in Section 2.05.
----------------
"Receivables Purchase Agreement" means the receivables purchase agreement,
------------------------------
dated as of April 1, 2001, between the Seller and PASS, as purchaser, as amended
or supplemented from time to time.
"Receivables Schedule" means the schedule of Receivables attached as Schedule
--------------------
A to this Agreement, as it may be amended from time to time.
"Registrar of Titles" means the agency, department or office having the
-------------------
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.
"Representative" means First Union Securities, Inc., as representative of the
--------------
underwriters named in the Underwriting Agreement.
"Repurchase Payment" means, with respect to any Distribution Date and to a
------------------
Repurchased Receivable purchased by the Master Servicer or the Seller as of the
end of the related Collection Period, the sum of (i) the unpaid principal
balance owed by the related Obligor in respect of such Receivable and (ii)
interest on such unpaid principal balance at a rate equal to the APR of the
related Receivable to the last day of such Collection Period.
"Repurchased Receivable" means a Receivable which the Seller or the Master
----------------------
Servicer is respectively required to purchase pursuant to Sections 2.04 or 3.08
or which the Master Servicer has elected to purchase pursuant to Section 8.01.
"Required Payment Amount" has, with respect to each Distribution Date, the
-----------------------
meaning set forth in Section 4.05(a)(x).
"Required Rating" means, with respect to any entity, the short-term credit
---------------
rating of the related entity is at least equal to Prime-1 by Moody's and A-1+ by
Standard & Poor's.
"Required Reserve Fund Balance" means, with respect to any Distribution Date,
-----------------------------
the greater of an amount equal to (i) 2.50% of the Pool Balance as of the last
day of the related Collection Period and (ii) 1.25% of the Cutoff Date Pool
Balance; provided, however, that if a
13
Required Reserve Fund Increase Event shall have occurred as of the current
Distribution Date or either of the two immediately preceding Distribution Dates,
the Required Reserve Fund Balance shall equal the Required Reserve Fund Increase
Amount and the Required Reserve Fund Balance for any Distribution Date on which
a Trigger Event under the Insurance Agreement, has occurred and has not been
waived shall equal the Securities Balance; and provided further, that the
Required Reserve Fund Balance shall not exceed the Securities Balance as of the
related Distribution Date.
"Required Reserve Fund Increase Amount" has the meaning set forth in the
-------------------------------------
Insurance Agreement.
"Required Reserve Fund Increase Event" has the meaning set forth in the
------------------------------------
Insurance Agreement.
"Reserve Fund" means the account designated as such, and established and
------------
maintained pursuant to Section 4.01.
"Reserve Fund Amount" means, with respect to any Distribution Date, the amount
-------------------
on deposit in and available for withdrawal from the Reserve Fund on such
Distribution Date (after giving effect to all deposits to and withdrawals from
the Reserve Fund on the preceding Distribution Date, or, in the case of the
initial Distribution Date, the Closing Date), including all interest and other
investment earnings (net of losses and investment expenses) earned on such
amount during the preceding Collection Period.
"Reserve Fund Deficiency" has the meaning set forth in Section 4.05(b)(iv).
-----------------------
"Reserve Fund Draw Amount" means, with respect to any Distribution Date, the
------------------------
lesser of (i) the amount, if any, by which the sum of the Required Payment
Amount plus the Insurance Payment Amount for such Distribution Date exceeds
Available Collections for such Distribution Date and (ii) the Reserve Fund
Amount for such Distribution Date (before giving effect to any deposits to or
withdrawals from the Reserve Fund on such Distribution Date).
"Reserve Fund Initial Deposit" means the initial deposit of cash in the amount
----------------------------
of $12,302,287.02 on the Closing Date.
"Reserve Fund Collateral" means, the Reserve Fund Initial Deposit and all
-----------------------
proceeds thereof and all other amounts deposited in or credited to the Reserve
Fund from time to time under this Agreement, all Permitted Investments made with
amounts on deposit therein, all earnings and distributions thereon and proceeds
thereof.
"Responsible Officer" means, in the case of (i) the Indenture Trustee, any
-------------------
officer within the Corporate Trust Office of the Indenture Trustee, including
any Principal, Managing Director, President, Vice President, assistant 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 and (ii) the
Owner Trustee, the President, any Vice President, assistant Vice President,
assistant secretary, assistant treasurer, trust officer or
14
financial services officer of the Owner Trustee or any other officer of the
Owner Trustee customarily performing functions similar to those performed by any
of the above designated officers and, with respect to a particular corporate
trust matter, any other officer of the Owner Trustee to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Retail Installment Contract" means a motor vehicle retail installment sale
---------------------------
contract.
"Residual Interest" has the meaning set forth in the Trust Agreement.
-----------------
"Securities" means the Notes and the Certificates.
----------
"Securities Balance" means the sum of the Note Balance and the Certificate
------------------
Balance; provided, however, that except as otherwise provided by the context,
references to the Securities Balance as of a particular Distribution Date shall
take into account all distributions of principal made on such Distribution Date.
"Security" means a Note or a Certificate.
--------
"Security Entitlement" has the meaning set forth in Section 8-102(a)(17) of
--------------------
the UCC.
"Securityholders" means the Noteholders and the Certificateholders.
---------------
"Seller" means IMAC, in its capacity as seller of the Receivables under the
------
Receivables Purchase Agreement, and its successors in such capacity.
"Servicer Letter of Credit" means, if the Master Servicer desires to remit
-------------------------
collections on or in respect of the Receivables to the Collection Account on a
monthly basis upon satisfaction of the conditions described in Section
4.02(b)(ii), (i) an irrevocable letter of credit, issued by a Letter of Credit
Bank and naming the Indenture Trustee as a beneficiary or (ii) a surety bond,
insurance policy or deposit of cash or securities satisfactory to the Indenture
Trustee, each Rating Agency and, so long as no Insurer Default has occurred and
is continuing, the Insurer.
"Servicing Agreement" means the servicing agreement, dated as of May 1, 1999,
-------------------
among IMAC Funding Corp. I, IMAC, First Union Capital Markets Corp. and CITSF,
as amended or supplemented from time to time.
"Servicing Fee" means, with respect to any Distribution Date, an amount equal
-------------
to 1/12 of the Servicing Fee Rate multiplied by the Pool Balance as of the first
day of the related Collection Period (or as of the Cutoff Date in the case of
the first Distribution Date).
"Servicing Fee Rate" means 1.00% per annum.
------------------
"Servicing Officer" means any officer of the Master Servicer or the
-----------------
Subservicer involved in, or responsible for, the administration and servicing of
the Receivables whose name appears on a list of servicing officers attached to
an Officer's Certificate furnished on the Closing Date to the Insurer, the Owner
Trustee and the Indenture Trustee by the Master Servicer and the
14
Subservicer, as such list may be amended from time to time by the Master
Servicer or the Subservicer in writing.
"Standard & Poor's" means Standard & Poor's Ratings Services, a Division of
-----------------
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Subservicer" means CITSF, in its capacity as subservicer of the Receivables
-----------
pursuant to this Agreement, and each successor thereto (in the same capacity)
pursuant to Section 7.03.
"Subservicer Fee" means, with respect to any Distribution Date, the amount
---------------
determined pursuant to Schedule F hereto in respect of the related Collection
Period and payable by the Master Servicer to the Subservicer pursuant to Section
3.09.
"Subservicer Termination Event" has the meaning set forth in Section 7.02.
-----------------------------
"Subservicer Termination Notice" has the meaning set forth in Section 7.02.
------------------------------
"Successor Master Servicer" means any entity appointed as a successor to the
-------------------------
Master Servicer pursuant to Section 7.03.
"Successor Subservicer" means any entity appointed as a successor to the
---------------------
Subservicer pursuant to Section 7.03.
"Title Document" means, with respect to any Financed Vehicle, the certificate
--------------
of title for, or other evidence of ownership of, such Financed Vehicle issued by
the Registrar of Titles in the jurisdiction in which such Financed Vehicle is
registered.
"Trigger Event" has the meaning set forth in the Insurance Agreement.
-------------
"Trust Agreement" means the trust agreement, dated as of March 21, 2001, as
---------------
amended and restated as of April 1, 2001, between the Depositor and the Owner
Trustee, as amended or supplemented from time to time.
"Trust Estate" has the meaning set forth in the Trust Agreement.
------------
"Trust Fees and Expenses" means all accrued and unpaid Trustees' fees, any
-----------------------
amounts due to the Trustees for reimbursement of expenses or in respect of
indemnification and other administrative fees of the Issuer.
"Trustees" means the Owner Trustee and the Indenture Trustee.
--------
"UCC" means the Uniform Commercial Code as in effect in the respective
---
jurisdiction.
"Underwriting Agreement" means the underwriting agreement, dated April 25,
----------------------
2001, between the Depositor and the Representative, as amended or supplemented
from time to time.
"United States" means the United States of America.
-------------
16
"Unreimbursed Insurance Payments" has, with respect to a Distribution Date,
-------------------------------
the meaning set forth for such Distribution Date in Section 4.05(a)(viii).
"U.S. Bank" means U.S. Bank National Association, and its successors.
---------
"Vice President" of any Person means any vice president of such Person,
--------------
whether or not designated by a number or words before or after the title "Vice
President", who is a duly elected officer of such Person.
"Yield Supplement Overcollaterization Amount" means, with respect to any
-------------------------------------------
Distribution Date, the dollar amount set forth next to such Distribution Date on
Schedule E.
Section 1.02. Other Definitional Provisions.
-----------------------------
(a) Capitalized terms used herein that are not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
Section 1.03. Interpretive Provisions.
-----------------------
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01", an
article such as "Article One" and the like shall refer to the applicable Section
or Article of this Agreement, as the case may be, (iv) the term "include" and
all variations thereof shall mean "include without limitation", (v) the term
"or" shall include "and/or" and (vi) the term "proceeds" has the meaning set
forth in the applicable UCC.
(b) 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.
17
ARTICLE TWO
CONVEYANCE OF COLLATERAL
Section 2.01. Conveyance of Collateral.
------------------------
(a) In consideration of the Issuer's delivery to or upon the order of the
Depositor on the Closing Date of authenticated Notes and Certificates, in
authorized denominations in aggregate principal amounts equal to the Initial
Note Balance and the Initial Certificate Balance, respectively, 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, to and under the following,
whether now owned or existing or hereafter acquired or arising (collectively,
the "Collateral"):
(i) the Receivables and all monies due, to become due and paid
thereunder or in respect thereof (including proceeds of the repurchase of
Receivables by the Seller pursuant to Section 2.04 or the purchase of
Receivables by the Master Servicer pursuant to Section 3.08 or 8.01) after
the Cutoff Date;
(ii) the security interests in the Financed Vehicles granted by the
Obligors pursuant to the Receivables;
(iii) any proceeds of any physical damage insurance policies and
extended warranties covering the Financed Vehicles and any proceeds of any
credit life or credit disability insurance policies relating to the
Receivables or the Obligors;
(iv) the Receivable Files;
(v) any proceeds of Dealer Recourse;
(vi) the Receivables Purchase Agreement, including the right to
require the Seller to repurchase Receivables from the Depositor, but not
the obligations of the Depositor thereunder;
(vii) the right to realize upon any property (including the right to
receive future Liquidation Proceeds) that shall have secured a Receivable
and have been repossessed by or on behalf of the Issuer;
(viii) all funds on deposit from time to time in the Accounts
(including the Reserve Fund Initial Deposit) and the Certificate
Distribution Account and in all investment income and proceeds thereof;
(ix) any Servicer Letter of Credit; and
(x) the proceeds of any and all of the foregoing.
(b) The parties hereto intend that the conveyance hereunder be a sale. In
the event that the conveyance hereunder is not for any reason considered a sale,
the Depositor hereby
18
grants to the Issuer a first priority security interest in all of its right,
title and interest in, to and under the Receivables, and all other property
conveyed hereunder and all proceeds of any of the foregoing. The parties hereto
intend that this Agreement constitute a security agreement under applicable law.
Such grant is made to secure the payment of all amounts payable hereunder.
Section 2.02. Representations and Warranties of the Seller as to the
------------------------------------------------------
Receivables. The Seller makes the following representations and warranties as
-----------
to the Receivables on which the Issuer shall be deemed to have relied in
accepting the Receivables. The representations and warranties speak as of the
execution and delivery of this Agreement, except to the extent otherwise
provided, but shall survive the sale, transfer, assignment and conveyance of the
Receivables to the Issuer pursuant to this Agreement and the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. Each Receivable (i) shall
------------------------------
have been originated in the United States by a Dealer for the retail sale
of the related Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties
thereto, shall have been purchased by IMAC from such Dealer under an
existing agreement with IMAC, shall have been validly assigned by such
Dealer to IMAC in accordance with the terms of such agreement and shall
have been subsequently sold by IMAC to the Depositor pursuant to the
Receivables Purchase Agreement, (ii) shall have created or shall create a
valid, subsisting and enforceable first priority security interest in favor
of IMAC in the related Financed Vehicle, which security interest has been
assigned by IMAC to the Depositor and shall be assignable, and shall be so
assigned, by the Depositor to the Issuer, (iii) shall contain customary and
enforceable provisions such that the rights and remedies of the holder
thereof shall be adequate for realization against the collateral of the
benefits of the security, (iv) shall, except as otherwise provided in this
Agreement, provide for level Monthly Payments (provided that the payment in
the first or last month in the life of the Receivable may be minimally
different from the level payment) that fully amortize the Amount Financed
over its original term and shall provide for a finance charge or shall
yield interest at its APR, (v) shall provide for, in the event that such
Receivable is prepaid, a prepayment that fully pays the Principal Balance
and includes accrued but unpaid interest at least through the date of
prepayment in an amount calculated by using an interest rate at least equal
to its APR, (vi) shall have an Obligor that is not a federal, state or
local governmental entity, (vii) is a Retail Installment Contract, (viii)
was originated on or after July 1, 1998, (ix) provides for the allocation
of payments thereon on the simple interest method and (x) constitutes
"chattel paper" as defined in the UCC.
(b) Receivables Schedule. The information set forth in (i) the
--------------------
Receivables Schedule and (ii) the data file regarding the Receivables as of
the Cutoff Date delivered by the Seller to the Insurer prior to the Closing
Date shall be true and correct in all material respects as of the close of
business on the Cutoff Date, and no selection procedures believed to be
adverse to the Securityholders or the Insurer were utilized in selecting
the Receivables from those motor vehicle receivables of IMAC which met the
selection criteria set forth in this Agreement.
19
(c) Compliance with Law. Each Receivable and each sale of the
-------------------
related Financed Vehicle shall have complied at the time it was originated
or made, and shall comply as of the Closing Date, in all material respects
with all requirements of applicable federal, state and local laws, and
regulations thereunder, including usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Soldiers' and Sailors' Civil Relief Act
of 1940,the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, Federal Reserve Board Regulations B
and Z, state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code and other consumer credit, equal credit opportunity
and disclosure laws.
(d) Binding Obligation. Each Receivable shall constitute the
------------------
genuine, legal, valid and binding payment obligation in writing of the
related Obligor, enforceable by the holder thereof in accordance with its
terms, except as enforceability may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, liquidation or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.
(e) No Bankrupt Obligors. As of the Cutoff Date, no Obligor is the
--------------------
subject of a bankruptcy proceeding.
(f) Security Interest in Financed Vehicles. As of the Cutoff Date,
--------------------------------------
no Financed Vehicle has been repossessed and not reinstated, and
immediately prior to the sale, assignment and transfer thereof, each
Receivable shall be secured by a valid, binding and enforceable perfected
first priority security interest in the related Financed Vehicle in favor
of the Seller as secured party or all necessary and appropriate action with
respect to such Receivable shall have been taken to perfect a first
priority security interest in such Financed Vehicle in favor of the Seller
as secured party, which security interest has been validly assigned by the
Seller to the Depositor and by the Depositor to the Issuer.
(g) Receivables in Force. No Receivable shall have been satisfied,
--------------------
subordinated or rescinded, nor shall any Financed Vehicle have been
released in whole or in part from the Lien granted by the related
Receivable.
(h) No Waivers. No provision of a Receivable shall have been waived
----------
in such a manner that such Receivable fails to meet all of the other
representations and warranties made by the Seller herein with respect
thereto.
(i) No Amendments. No Receivable shall have been amended or modified
-------------
in such a manner that the total number of Monthly Payments has been
increased or decreased or that the related Amount Financed has been
increased or decreased or that such Receivable fails to meet all of the
other representations and warranties made by the Seller herein with respect
thereto.
20
(j) No Defenses. No Receivable is subject to any right of rescission,
-----------
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of any Receivable, or the exercise of any right
thereunder, will not render such Receivable unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and the Seller has not received written notice of the
assertion with respect to any Receivable of any such right of rescission,
setoff, counterclaim or defense.
(k) No Liens. No Liens or claims shall have been filed, including Liens
--------
for work, labor, materials or for unpaid local, state or federal taxes relating
to any Financed Vehicle, that shall be prior to, or equal or coordinate with,
the security interest in such Financed Vehicle granted by the related
Receivable.
(l) No Defaults. Except for payment defaults that, as of the Cutoff Date,
-----------
have been continuing for a period of not more than 30 days, no default, breach
or violation under the terms of any Receivable shall have occurred as of the
Cutoff Date and no continuing condition that with notice or the lapse of time or
both would constitute a default, breach or violation under the terms of any
Receivable shall have arisen; and the Seller shall not have waived any of the
foregoing except as otherwise permitted hereunder.
(m) Insurance. With respect to the Receivables with an original
---------
principal balance of $2,500 or greater, each Obligor has been required to obtain
physical damage insurance covering the related Financed Vehicle and the Obligor
is required under the terms of the related Receivable to maintain such
insurance.
(n) Title. No Receivable has been sold, transferred, assigned or pledged
-----
by the Seller to any Person other than the Depositor, and no provision of a
Receivable shall have been waived, except as provided in clause (h) above;
immediately prior to the transfer and assignment of the Receivables contemplated
in the Receivables Purchase Agreement, the Seller had good and marketable title
to each Receivable free and clear of all Liens and rights of others, except for
Liens that shall be released on or before the Closing Date; immediately upon the
transfer and assignment thereof, the Depositor shall have good and marketable
title to each Receivable, free and clear of all Liens and rights of others; and
the transfer and assignment herein contemplated has been perfected under the
UCC.
(o) Lawful Assignment. No Receivable has been originated in, or is
-----------------
subject to the laws of, any jurisdiction under which the sale, transfer,
assignment and conveyance of such Receivable under the Receivables Purchase
Agreement or this Agreement or the pledge of such Receivable under the Indenture
is unlawful, void or voidable or under which such Receivable would be rendered
void or voidable as a result of any such sale, transfer, assignment, conveyance
or pledge. The Seller has not entered into any agreement with any account debtor
that prohibits, restricts or conditions the assignment of the Receivables.
21
(p) All Filings Made. All filings (including UCC filings) necessary in any
----------------
in any jurisdiction to give the Depositor, the Issuer and the Indenture Trustee
a first priority security interest in the Receivables shall have been made.
(q) One Original. There shall be only one original executed copy of each
------------
Receivable.
(r) Maturity of Receivables. The original term of each Receivable is, as
-----------------------
of the Cutoff Date, 72 months or less and the weighted average remaining term to
maturity of the Receivables, based on Cutoff Date Pool Balance, is 60 months or
less.
(s) Finance Charge. Each Receivable provides for the payment of a finance
--------------
charge calculated on the basis of an APR ranging from 0.00% to 20%.
(t) Principal Balance. On the date of origination, if such Receivable is
-----------------
(i) a Light Vehicle Receivable, it had a Principal Balance of $41,000 or less or
(ii) a Commercial Vehicle Receivable, it had a Principal Balance of $66,000 or
less.
(u) Commercial Vehicles. The Principal Balance of Commercial Vehicle
-------------------
Receivables is not greater than 4.47% of the Cutoff Date Pool Balance and the
principal balance of Commercial Vehicle Receivables with the same Obligor is not
greater than 3.0% of the Principal Balance as of the Cutoff Date of Commercial
Vehicle Receivables.
(v) Original Amount Financed. Receivables with Amounts Financed in excess
------------------------
of $40,000 do not comprise more than 0.66% of the Cutoff Date Pool Balance.
(w) Obligors. The Obligor under each Receivable had a current billing
--------
address in the United States as of the Cutoff Date and the aggregate Principal
Balance as of the Cutoff Date of Light Vehicle Receivables with credit bureau
scores of less than 620 is not greater than 2.95% of the Principal Balance as of
the Cutoff Date of Light Vehicle Receivables.
(x) Location of Receivable Files. Each Receivable File shall be kept at
----------------------------
the location listed in Schedule B hereto.
(y) Financed Vehicles. Each Financed Vehicle shall be a new or used Isuzu
-----------------
motor vehicle and the aggregate Principal Balance of Receivables relating to
Financed Vehicles that are new is not less than 99.8% of the Cutoff Date Pool
Balance.
(z) Custodial Agreements. Immediately prior to the transfer of the
--------------------
Receivables by the Seller to the Depositor, the Seller, an Affiliate of the
Seller or an agent on behalf of the Seller had possession of the Receivable
Files and there were no, and there will not be, any custodial agreements in
effect, other than the custodial arrangement with the Subservicer set forth in
this Agreement, affecting the right or ability of the Seller to make, or cause
to be made, any delivery required under this Agreement.
22
(aa) Bulk Transfer Laws. The transfer of the Receivables and the
------------------
Receivable Files by the Seller to the Depositor pursuant to this Agreement
is not subject to the bulk transfer laws or any similar statutory provision
in effect in any applicable jurisdiction.
(bb) Title Document. Within 180 days of the Closing Date, the
--------------
Subservicer shall have received the Title Document for each Financed
Vehicle listing the Seller as the secured party and as the holder of a
first priority security interest in such Financed Vehicle.
Section 2.03. Representations and Warranties of the Depositor as to the
---------------------------------------------------------
Receivables. The Depositor makes the following representations and warranties
-----------
as to the Receivables on which the Issuer shall be deemed to have relied in
accepting the Receivables. The representations and warranties speak as of the
execution and delivery of this Agreement, except to the extent otherwise
provided, but shall survive the sale, transfer, assignment and conveyance of the
Receivables to the Issuer pursuant to this Agreement and the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture.
(a) Title. No Receivable has been sold, transferred, assigned or
-----
pledged by the Depositor to any Person other than the Issuer, and
immediately prior to the transfer and assignment herein contemplated, the
Depositor had good and marketable title to each Receivable free and clear
of all Liens and rights of others; immediately upon the transfer and
assignment thereof, the Issuer shall have good and marketable title to each
Receivable, free and clear of all Liens and rights of others; and the
transfer and assignment herein contemplated to the Issuer has been
perfected under the UCC.
(b) Lawful Assignment. The Depositor has not entered into any
-----------------
agreement with any account debtor that prohibits, restricts or conditions
the assignment of the Receivables.
(c) All Filings Made. All filings (including UCC filings)
----------------
necessary in any jurisdiction to give the Issuer a first priority security
interest in the Receivables, and to give the Indenture Trustee a first
priority security interest therein, shall have been made.
Section 2.04. Repurchase of Receivables Upon Breach. Upon discovery by the
-------------------------------------
Depositor, the Insurer, the Master Servicer, the Subservicer or the Issuer or
upon the actual knowledge of the Indenture Trustee of a breach of any of the
representations and warranties set forth in Section 2.02 that materially and
adversely affects the interests of the Issuer, the Insurer, the Trustees or the
Securityholders in any Receivable or if the Subservicer does not receive the
Title Document for the related Financed Vehicle within 180 days of the Closing
Date, the party discovering such breach or non-receipt of the Title Document
shall give prompt written notice to the others and the Insurer. As of the last
day of the first Collection Period following the Collection Period in which it
discovers or receives notice of such breach (or, at the Seller's election, the
last day of the Collection Period in which it discovers or receives notice of
such breach), the Seller shall, unless such breach shall have been cured in all
material respects, repurchase such Receivable from the Issuer. This repurchase
obligation shall apply to all representations and warranties contained in
Section 2.02, except as otherwise noted, whether or not the Depositor or the
Seller has knowledge of the breach at the time of the breach or at the
23
time the representations and warranties were made. Upon breach of Section
2.02(bb), the Seller shall repurchase such Receivable in the Collection Period
in which it discovers or receives notice of such breach. The Seller shall be
deemed to have received notice of breach of Section 2.02(bb) and shall
repurchase the Receivables listed on the Certificate of Title/Lien Exception
Report upon receipt of the Certificate of Title/Lien Exception Report in
November 2001. In consideration of the repurchase of any such Receivable, on the
related Deposit Date, the Seller shall remit the Repurchase Payment in respect
of such Receivable to the Collection Account in the manner specified in Section
4.04. In the event that, as of the date of execution and delivery of this
Agreement, any Liens or claims shall have been filed, including Liens for work,
labor or materials relating to a Financed Vehicle, that shall be prior to, or
equal or coordinate with, the Lien granted by the related Receivable, which
Liens or claims shall not have been satisfied or otherwise released in full as
of the Closing Date, the Seller shall repurchase such Receivable on the terms
and in the manner specified above. Upon any such repurchase, the Issuer shall,
without further action, be deemed to transfer, assign, set-over and otherwise
convey to the Seller, all right, title and interest of the Issuer in, to and
under such Repurchased Receivable, all monies due or to become due with respect
thereto and all proceeds thereof. The Issuer and the Trustees shall execute such
documents and instruments of transfer and assignment and take such other actions
as shall be reasonably requested by the Seller to effect the conveyance of such
Receivable pursuant to this Section. The sole remedy of the Issuer, the
Trustees, the Insurer and the Securityholders with respect to a breach of the
Seller's representations and warranties pursuant to Section 2.02 or with respect
to the existence of any such Liens or claims shall be to require the Seller to
repurchase the related Receivable pursuant to this Section. Neither the Owner
Trustee nor the Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section or the eligibility of any Receivables
for purposes of this Agreement.
Section 2.05. Custody of Receivable Files. To assure uniform quality in
---------------------------
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Subservicer, and the Subservicer accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby
constructively delivered to the Indenture Trustee, as pledgee of the Issuer, as
of the Closing Date with respect to each Receivable:
(i) the fully executed original of the Receivable;
(ii) where permitted by law, the original certificate of title (or
evidence that such certificate of title has been applied for), when
received by the Seller or the Subservicer, and otherwise, such documents,
if any, that the Subservicer keeps on file in accordance with the Credit
and Collection Policy, indicating that the Financed Vehicle is owned by the
Obligor and evidencing the security interest in the related Financed
Vehicle; and
(iii) any and all other documents that the Seller or the
Subservicer keeps on file (whether as an original or in electronic or
photographic form) in accordance with the Credit and Collection Policy
procedures relating to the individual Receivable, Obligor or Financed
Vehicle.
24
On the Closing Date, the Master Servicer shall deliver an Officer's
Certificate to the Issuer, the Insurer and the Indenture Trustee confirming that
the Subservicer has received, on behalf of the Issuer and the Indenture Trustee,
all the documents and instruments necessary for the Subservicer to act as the
agent of the Issuer, the Insurer and the Indenture Trustee for the purposes set
forth in this Section, including the documents referred to herein, and the
Issuer, the Owner Trustee and the Indenture Trustee are hereby authorized to
rely on such Officer's Certificate.
In addition, on the August 2001 Distribution Date and the November 2001
Distribution Date, the Master Servicer shall deliver to the Insurer and the
Seller a Certificate of Title/Lien Exception Report in the form attached as
Exhibit C hereto.
Section 2.06. Duties of Subservicer as Custodian.
----------------------------------
(a) Safekeeping. The Subservicer, in its capacity as custodian, shall
-----------
hold the Receivable Files for the benefit of the Issuer and the Indenture
Trustee and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Master Servicer
and the Issuer to comply with this Agreement and the Indenture Trustee to comply
with the Indenture. In performing its duties as custodian, the Subservicer shall
act with reasonable care, using that degree of skill and attention required by
the Credit and Collection Policy but in no event less than that it exercises
with respect to the receivable files of comparable motor vehicle receivables
that the Subservicer services for itself or others. The Subservicer shall
conduct, or cause to be conducted, periodic examinations of the files of all
receivables owned or serviced by it which shall include the Receivable Files
held by it under this Agreement, and of the related accounts, records and
computer systems, in such a manner as shall enable the Issuer, the Master
Servicer or the Indenture Trustee to verify the accuracy of the Subservicer's
record keeping. If as a result of the periodic examination referred to in the
preceding sentence, the Subservicer discovers any failure on its part to hold
the Receivable Files, the Subservicer shall promptly report such failure to the
Master Servicer, the Issuer, the Insurer and the Indenture Trustee and it will
also report any material failure to maintain its accounts, records and computer
systems as herein provided and promptly take appropriate action to remedy any
such failure. Nothing herein shall be deemed to require an initial review or any
periodic review of the Receivable Files by the Issuer or the Indenture Trustee.
(b) Maintenance of and Access to Records. The Subservicer shall maintain
------------------------------------
each Receivable File solely in its capacity as Subservicer at its office
specified in Schedule B hereto or at such other office as shall be specified to
the Issuer, the Master Servicer, the Insurer and the Indenture Trustee by 30
days' prior written notice. The Subservicer may temporarily move individual
Receivable Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures. The Subservicer shall make available to the Issuer,
the Insurer and the Indenture Trustee or its duly authorized representatives,
attorneys or auditors the Receivable Files and the related accounts, records and
computer systems maintained by the Subservicer at such times during normal
business hours as the Issuer, the Insurer and the Indenture Trustee shall
reasonably request.
25
(c) Release of Documents. As soon as practical after receiving written
--------------------
instructions from the Indenture Trustee or the Insurer, the Subservicer shall,
at the expense of the Master Servicer, release any document in the Receivable
Files to the Indenture Trustee or its agent or designee, as the case may be, at
such place or places as the Indenture Trustee may reasonably designate. The
Subservicer shall not be responsible for any loss occasioned by the failure of
the Indenture Trustee or the Insurer to return any document or any delay in so
doing.
Section 2.07. Instructions; Authority to Act. The Subservicer shall be
------------------------------
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer of the
Indenture Trustee. A certified copy of a bylaw or of a resolution of the board
of directors of the Indenture Trustee shall constitute conclusive evidence of
the authority of any such Responsible Officer to act and shall be considered in
full force and effect until receipt by the Subservicer of written notice to the
contrary given by the Indenture Trustee.
Section 2.08. Indemnification by Custodian. The Subservicer, as custodian
----------------------------
of the Receivable Files, shall indemnify and hold harmless the Issuer, the
Master Servicer, the Insurer and the Trustees from any and all liabilities,
obligations, losses, compensatory damages, payments, costs or expenses of any
kind whatsoever that may be imposed on, incurred or asserted against the Issuer,
the Insurer and the Trustees as the result of any improper act or omission in
any way relating to the maintenance and custody of the Receivable Files by the
Subservicer, as custodian; provided, however, that the Subservicer shall not be
liable for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Owner Trustee or the Indenture
Trustee.
Section 2.09. Effective Period and Termination. The Subservicer's
--------------------------------
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
the Subservicer shall resign as Subservicer under Section 6.05, or if all of the
rights and obligations of the Subservicer shall have been terminated under
Section 7.02, the appointment of the Subservicer as custodian hereunder may be
terminated (i) by the Issuer, with the consent of the Indenture Trustee and, so
long as no Insurer Default shall have occurred and be continuing, the Insurer,
(ii) by the Holders of Notes evidencing not less than 25% of the Note Balance
or, if the Notes have been paid in full, by the Holders of Certificates
evidencing not less than 25% of the Certificate Balance and, so long as no
Insurer Default shall have occurred and be continuing, with the consent of the
Insurer, (iii) by the Owner Trustee, with the consent of the Holders of Notes
evidencing not less than 25% of the Note Balance and, so long as no Insurer
Default shall have occurred and be continuing, with the consent of the Insurer
or (iv) so long as no Insurer Default shall have occurred and be continuing, by
the Insurer, in each case by notice then given in writing to the Depositor, the
Master Servicer, the Subservicer and the Insurer (with a copy to the Indenture
Trustee and the Owner Trustee if given by the Noteholders or the
Certificateholders). As soon as practicable after any termination of such
appointment, the Subservicer shall deliver, or cause to be delivered, at the
expense of the Master Servicer (unless the Subservicer is terminated for cause
in which case the Subservicer shall be responsible for the expense), the
Receivable Files and the related accounts and records maintained by the
Subservicer to the Indenture Trustee, the Indenture Trustee's agent or the
Indenture Trustee's designee, as the case may be, at such place as the Indenture
Trustee may
26
reasonably designate or, if the Notes have been paid in full, at such place as
the Owner Trustee may reasonably designate.
27
ARTICLE THREE
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01. Duties of Master Servicer. The Master Servicer, acting alone
-------------------------
and/or through one or more subservicers to the extent permitted hereunder, for
the benefit of the Issuer, shall manage, service, administer and make
collections on the Receivables with reasonable care, using that degree of skill
and attention required by the Credit and Collection Policy but in no event less
than the Master Servicer exercises with respect to all comparable motor vehicle
receivables that it services for itself or others. The Master Servicer's duties
shall include collection and posting of all payments, responding to inquiries of
Obligors or by federal, state or local government authorities with respect to
the Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting tax information to Obligors in accordance with its customary
practices, policing the collateral, accounting for collections and furnishing
monthly and annual statements to the Trustees and the Insurer with respect to
distributions, generating federal income tax information and performing the
other duties specified herein. The Master Servicer shall follow the Credit and
Collection Policy and shall have full power and authority, acting alone, except
with respect to the duties that have been delegated to the Subservicer
hereunder, to do any and all things in connection with such managing, servicing,
administration and collection that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Master Servicer shall be
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Trustees, the Insurer, the Securityholders or any of them, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge and all other comparable instruments, with respect to the
Receivables and the Financed Vehicles. The Master Servicer is hereby authorized
to commence, in its own name or in the name of the Issuer, a legal proceeding to
enforce a Defaulted Receivable pursuant to Section 3.04 or to commence or
participate in a legal proceeding (including a bankruptcy proceeding) relating
to or involving a Receivable, including a Defaulted Receivable. If the Master
Servicer commences or participates in such a legal proceeding in its own name,
the Issuer shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection on behalf of the party retaining an interest in such
Receivable, such Receivable and the other property conveyed to the Issuer
pursuant to Section 2.01 with respect to such Receivable to the Master Servicer
for purposes of commencing or participating in any such proceeding as a party or
claimant, and the Master Servicer is authorized and empowered by the Issuer to
execute and deliver in the Master Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. If in any enforcement suit or legal
proceeding it shall be held that the Master Servicer may not enforce a
Receivable on the grounds that it shall not be a real party in interest or a
holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Master Servicer's expense and written direction, take steps to enforce such
Receivable, including bring suit in its name or the name of the Owner Trustee,
the Indenture Trustee, the Noteholders or the Certificateholders. The Owner
Trustee shall furnish the Master Servicer with any powers of attorney and other
documents and take any other steps which the Master Servicer may deem necessary
or appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder.
28
Section 3.02. Subservicer.
-----------
The Master Servicer may appoint one or more subservicers (including, as
described herein, the Subservicer) approved by, so long as no Insurer Default
shall have occurred and be continuing, the Insurer for the servicing of certain
or all of the Receivables (including holding the related Receivable Files as
custodian). Notwithstanding any appointment of a subservicer, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer or a subservicer or reference to actions taken through such
Persons or otherwise, the Master Servicer shall remain obligated and liable to
the Indenture Trustee, the Owner Trustee, the Insurer and the Securityholders
for the servicing of the Receivables in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing arrangements or by virtue of indemnification from the Subservicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Receivables. The Master
Servicer shall be entitled to enter into an agreement with the Subservicer for
indemnification of the Master Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification. All references in this
Section to a subservicer include CITSF as Subservicer. The Master Servicer may
perform the following activities on behalf of the Subservicer:
(i) cash reconciliation, financial accounting and production of
reports using information from the Subservicer;
(ii) investor reporting;
(iii) maintenance of licenses;
(iv) directions to Trustees regarding transfers;
(v) coordination of auditors; and
(vi) maintaining data warehouse.
All other actions taken or to be taken by the Subservicer in servicing the
Receivables may be performed by the Master Servicer only with, so long as no
Insurer Default shall have occurred and be continuing, the prior written consent
of the Insurer.
(b) The Master Servicer, with the approval of the Insurer, hereby appoints
CITSF and CITSF hereby agrees to act as initial Subservicer of the Receivables.
The Subservicer shall be required to perform only those duties in this Agreement
that specifically are required to be performed by the Subservicer. The
Subservicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors or by federal, state or local government
authorities with respect to the Receivables, investigating delinquencies,
sending payment coupons to Obligors, reporting tax information to Obligors in
accordance with its customary practices, policing the Collateral, accounting for
collections and furnishing monthly and annual statements to the Trustees and the
Insurer with respect to distributions, and to the extent otherwise not set forth
herein, shall engage in the activities set forth in Schedule C. The Subservicer
shall follow the Credit and Collection Policy and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing,
29
administration and collection that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Subservicer shall be authorized
and empowered to execute and deliver, on behalf of itself, the Issuer, the
Insurer, the Trustees, the Securityholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Receivables
and the Financed Vehicles.
The Subservicer (including any successor thereto) is hereby authorized,
except for specific actions set forth in the Credit and Collection Policy where
the written consent of the Master Servicer is required, to take any and all
reasonable steps in its name and on its behalf necessary or desirable and not
inconsistent with the sale of the Receivables to the Issuer as it shall
determine including endorsing its name on checks and other instruments
representing collections on or in respect of the Receivables, executing and
delivering 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, after the delinquency of any Receivable and to
the extent permitted under and in compliance with applicable law and
regulations, to commence proceedings with respect to enforcing payment thereof
(including a bankruptcy proceeding). The Subservicer shall act with prudent
care, and shall utilize the standard of care required by the Credit and
Collection Policy but in no event less than that exercised by the Subservicer
with respect to its own business, in managing, servicing, administering and
collecting all amounts due under any and all Receivables. The Master Servicer
and the Issuer shall furnish the Subservicer (and any permitted successor
thereto) with any powers of attorney and other documents necessary or
appropriate to enable the Subservicer to carry out its servicing and
administrative duties hereunder, and shall cooperate with the Subservicer to the
fullest extent in order to ensure the collectability of the Receivables. In no
event shall the Subservicer be entitled to make the Indenture Trustee or the
Issuer a party to any litigation without such party's express prior written
consent, or to make the Seller a party to any litigation without the consent of
the Master Servicer; provided, however the Subservicer may initiate such
litigation to (i) recover possession or foreclose on collateral securing a
Receivable and (ii) collect any money due to the Issuer from any Obligor,
including to recover deficiencies. The Subservicer shall keep the Master
Servicer informed of all litigation, including any claims or counterclaims
asserted by any Obligor or any other party. The Master Servicer may take over
the conduct of any litigation or defense of any claims or counterclaims through
counsel satisfactory to the Master Servicer, at any time, except to the extent
that same may be asserted against the Subservicer. If the Subservicer commences
or participates in such a legal proceeding in its own name, the Issuer shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection on behalf of the party retaining an interest in such Receivable to
the Subservicer for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Subservicer is authorized and
empowered by the Issuer to execute and deliver in the Subservicer's name any
notices, demands, claims, complaints, responses, affidavits or other documents
or instruments in connection with any such proceeding. If in any such
enforcement suit or legal proceeding it shall be held that the Subservicer may
not enforce a Receivable on the grounds that it shall not be a real party in
interest or a holder entitled to enforce such Receivable, the Owner Trustee
shall, at the Master Servicer's expense and written direction, take steps to
enforce such Receivable, including bring suit in its name. The Subservicer may
retain an Affiliate or an unrelated third party to perform any or all of its
obligations under this Agreement. The following activities may be performed by
an Affiliate or unrelated third party of the Subservicer without the Insurer's
consent:
30
(i) title and document perfection follow-up;
(ii) investigation and administration of bankrupt accounts,
excluding collections activities on such accounts;
(iii) repossession of vehicles;
(iv) remarketing of vehicles;
(v) hiring of counsel regarding lien filings;
(vi) skip tracing;
(vii) maintenance of lockbox accounts; and
(viii) insurance tracking.
All other subservicing activities may be performed by an unrelated third
party or an Affiliate only with, so long as no Insurer Default shall have
occurred and be continuing, the prior written consent of the Insurer. Any
delegation of duties to any Affiliate or third parties shall not relieve the
Subservicer of any of its obligations hereunder.
Section 3.03. Collection of Receivable Payments; Modification of
--------------------------------------------------
Receivables. The Subservicer 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
required in the Credit and Collection Policy and as it follows with respect to
all comparable motor vehicle receivables that it services for itself or others.
Except as otherwise provided in section 3.07, the Subservicer shall be
authorized to grant extensions or adjustments on a Receivable without the prior
consent of the Issuer; provided, however, that no extensions are allowed in the
first 12 months of a Receivable, no extensions are allowed in consecutive months
and only one extension may be granted in any one 12-month period. Subject to
Section 3.07, the Subservicer may not waive, modify or otherwise vary any
provision of a Receivable, except as may be otherwise provided under the Credit
and Collection Policy or this Agreement. Notwithstanding the foregoing, the
Subservicer may in its discretion waive any late payment charge or any other
fees that may be collected in the ordinary course of servicing any Receivable.
If, as a result of the extending of payments in accordance with the Credit and
Collection Policy, (i) any Receivable will be outstanding later than the last
day of the Collection Period in which the Certificate Final Distribution Date
occurs or (ii) a Financed Vehicle is released from the security interest, the
Master Servicer shall be obligated to repurchase such Receivable pursuant to
Section 3.08. In addition, in the event that any such extension of a Receivable
modifies the terms of such Receivable in such a manner as to constitute a
cancellation of such Receivable and the creation of a new motor vehicle
receivable that results in a deemed exchange thereof within the meaning of
Section 1001 of the Code, the Master Servicer shall purchase such Receivable
pursuant to Section 3.08, and the Receivable created shall not be included in
the Trust Estate. Notwithstanding the foregoing, extensions or modifications of
the payment schedule of a Receivable can be made only in accordance with the
Credit and Collection Policy, provided that the amount of any extension fee
charged in connection with the
31
extension of a Receivable is deposited into the Collection Account as part of
Available Interest by the Master Servicer or the Subservicer in accordance with
Section 4.02(a).
Section 3.04. Realization Upon Receivables.
----------------------------
(a) On behalf of the Issuer, the Subservicer shall use commercially
reasonable efforts, consistent with the Credit and Collection Policy, to
repossess or otherwise comparably convert the ownership of any Financed Vehicle
that it has reasonably determined should be repossessed or otherwise converted
following a default under the Receivable secured by the Financed Vehicle (and
the Master Servicer shall specify such Receivables to the Trustees and the
Insurer no later than the Determination Date following the end of the Collection
Period in which the Subservicer shall have made such determination). The
Subservicer shall follow such practices and procedures as it shall deem
necessary or advisable and as shall be consistent with the Credit and Collection
Policy, which practices and procedures may include reasonable efforts to realize
upon any Dealer Recourse, selling the related Financed Vehicle at public or
private sale and other actions by the Subservicer in order to realize upon such
a Receivable. The Subservicer shall be entitled to recover its reasonable
Liquidation Expenses with respect to each Defaulted Receivable. All Net
Liquidation Proceeds realized in connection with any such action with respect to
a Receivable shall be deposited by the Master Servicer or the Subservicer in the
Collection Account in the manner specified in Section 4.02(a). The foregoing is
subject to the proviso that, in any case in which the Financed Vehicle shall
have suffered damage, the Master Servicer or the Subservicer shall not expend
funds in connection with any repair or towards the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession shall increase the Liquidation Proceeds of the related Receivable
by an amount greater than the amount of such expenses.
(b) In the event repossession or foreclosure proceedings are instituted,
whether by the Subservicer or otherwise, and the Subservicer obtains possession
of any Financed Vehicle, the Subservicer shall manage and protect such Financed
Vehicle, including the maintenance of insurance unless there is otherwise
insurance relating to the Financed Vehicle, against loss and damage from the
date of the commencement of such proceedings until the termination thereof and
the conveyance of title, or until other disposition of the Issuer's interest in
the Financed Vehicle at the expense of the Issuer. The Subservicer shall,
however, only maintain such insurance while a Financed Vehicle is in the
Subservicer's possession or in possession of a third party at the Subservicer's
request for the purpose of being sold by that third party.
Section 3.05. Maintenance of Physical Damage Insurance Policies. The
-------------------------------------------------
Master Servicer and the Subservicer shall, in accordance with the Credit and
Collection Policy, require that so long as the related Receivable has a
Principal Balance of more than $2,500, the related Obligor shall maintain
physical damage insurance covering such Financed Vehicle.
Section 3.06. Maintenance of Security Interests in Financed Vehicles.
------------------------------------------------------
The Master Servicer shall, in accordance with the Credit and Collection Policy
and at its own expense, take such steps as are necessary to maintain perfection
of the security interest created by each Receivable in the related Financed
Vehicle. The Master Servicer is hereby authorized to take such steps as are
necessary to reperfect such security interest on behalf of the Issuer and the
Indenture Trustee in the event the Master Servicer receives notice of, or
otherwise has actual
32
knowledge of, the fact that such security interest is not perfected as a result
of the relocation of a Financed Vehicle or for any other reason. In the event
that the assignment of a Receivable to the Issuer is insufficient, without a
notation on the related Financed Vehicle's certificate of title, to grant to the
Issuer a first priority perfected security interest in the related Financed
Vehicle, the Master Servicer hereby agrees to serve as the agent of the Issuer
for the purpose of perfecting the security interest of the Issuer in such
Financed Vehicle and agrees that the Master Servicer's listing as the secured
party on the certificate of title is solely in its capacity as agent of the
Issuer.
Section 3.07. Covenants of Master Servicer and the Subservicer. Each of
------------------------------------------------
the Master Servicer and the Subservicer makes the following covenants on which
the Issuer shall rely in accepting the Receivables in trust pursuant to Section
2.01:
(i) Liens in Force. Except upon the payment in full of a
-------------
Receivable or as otherwise contemplated by this Agreement or applicable
law, it shall not release in whole or in part any Financed Vehicle from the
security interest securing the related Receivable.
(ii) No Impairment. It shall do nothing to impair the rights of
-------------
the Issuer, the Trustees, the Securityholders or the Insurer in the
Receivables (pursuant to an amendment or modification of any Receivable or
otherwise), except as provided herein.
(iii) No Amendments. It shall not amend or otherwise modify any
-------------
Receivable such that the last Monthly Payment is extended beyond the last
day of the month in which the Certificate Final Distribution Date occurs,
or either the Amount Financed or the APR is altered.
Section 3.08. Purchase of Receivables Upon Breach. Upon discovery by the
-----------------------------------
Depositor, the Insurer, the Master Servicer, the Subservicer or the Issuer or
upon the actual knowledge of the Indenture Trustee of a breach of any of the
covenants of the Master Servicer or the Subservicer set forth in Section 3.07
that materially and adversely affects the interests of the Issuer, the Insurer,
the Trustees or the Securityholders in any Receivable, or if an improper
extension, rescheduling or modification of a Receivable is made by the Master
Servicer or the Subservicer as described in Section 3.03, the party discovering
such breach shall give prompt written notice to the others, the Indenture
Trustee and the Insurer. As of the last day of the first Collection Period
following the Collection Period in which it discovers or receives notice of such
breach (or, at the Master Servicer's election, the last day of the Collection
Period in which it discovers or receives notice of such breach) the Master
Servicer shall, unless such breach or impropriety shall have been cured in all
material respects, purchase from the Issuer such Receivable. In consideration of
the purchase of any such Receivable, on the related Deposit Date the Master
Servicer shall remit the Repurchase Payment to the Collection Account in the
manner specified in Section 4.04. The sole remedy of the Issuer, the Trustees or
the Securityholders against the Master Servicer or the Subservicer with respect
to a breach pursuant to Section 3.03 or 3.07 shall be to require the Master
Servicer to purchase the related Receivables pursuant to this Section, except as
otherwise provided in Section 6.02. Neither the Owner Trustee nor the Indenture
Trustee shall have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable pursuant
to this Section.
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Section 3.09. Servicing Fee; Payment of Certain Expenses by Master
----------------------------------------------------
Servicer. As compensation for the performance of its obligations hereunder, the
--------
Master Servicer shall be entitled to receive on each Distribution Date the
Servicing Fee. The Servicing Fee in respect of a Collection Period shall be
calculated based on a 360-day year comprised of twelve 30-day months. In
addition, the Master Servicer shall also be entitled to receive as additional
servicing compensation all late fees, prepayment charges and other
administrative fees and expenses or similar charges (other than extension fees)
allowed by applicable law with respect to the Receivables, collected (from
whatever source) on the Receivables; provided, however, such fees shall not form
a part of the Servicing Fee and the Master Servicer shall be entitled to such
fees as and when collected. On each Distribution Date the Master Servicer shall
pay the Subservicer the Subservicer Fee, together with any unpaid Subservicer
Fee with respect to one or more prior Collection Periods. The Master Servicer
shall pay all expenses incurred by it in connection with the activities under
this Agreement (including fees and disbursements of the independent accountants,
taxes imposed on the Master Servicer, expenses incurred in connection with
distributions and reports to Securityholders and all other fees and expenses not
expressly stated under this Agreement to be for the account of the
Securityholders), except expenses incurred in realizing upon Receivables under
Section 3.04.
Section 3.10. Master Servicer's Certificate. On or before each
-----------------------------
Determination Date, the Master Servicer shall deliver to the Depositor, the
Trustees, the Insurer and each Rating Agency a Master Servicer's Certificate
containing all information necessary to make the distributions required by
Sections 4.05 and 4.06 in respect of the related Collection Period on the
related Distribution Date and all information necessary for the Trustees to send
statements to Securityholders pursuant to Section 4.08. The Master Servicer
shall also specify to the Trustees and the Insurer, no later than the
Determination Date following the last day of a Collection Period as of which the
Seller shall be required to repurchase or the Master Servicer shall be required
to purchase a Receivable, the identity of any such Receivable and the identity
of any Receivable which the Master Servicer shall have determined to be a
Defaulted Receivable during such Collection Period. Receivables purchased or to
be purchased by the Master Servicer or the Seller and Receivables as to which
the Master Servicer has determined during such Collection Period to be Defaulted
Receivables and with respect to which payment of the Repurchase Payment has been
provided from whatever source as of last day of such Collection Period shall be
identified by the Seller's account number with respect to such Receivable (as
specified in the Receivables Schedule).
Section 3.11. Annual Statement as to Compliance; Notice of Default.
----------------------------------------------------
(a) The Master Servicer shall deliver to the Depositor, the Trustees, the
Insurer and each Rating Agency, on or before 90 days after the end of each
fiscal year, commencing with the fiscal year ended December 31, 2001, an
Officer's Certificate of the Master Servicer, stating that (i) a review of the
activities of the Master Servicer during the preceding 12-month period ended
December 31 (or, if applicable, such shorter period in the case of the first
such Officer's Certificate) and of its performance under this Agreement has been
made under such officer's supervision, and (ii) to such officer's knowledge,
based on such review, the Master 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.
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(b) The Master Servicer and the Subservicer shall deliver to the
Depositor, the Trustees, the Insurer and each Rating Agency, promptly after
having obtained knowledge thereof, but in no event later than five Business Days
thereafter, an Officer's Certificate specifying the nature and status of any
event which with the giving of notice or lapse of time, or both, would become a
Master Servicer Termination Event or Subservicer Termination Event.
Section 3.12. Annual Accountants' Report. The Master Servicer shall cause
--------------------------
a firm of independent accountants (who may also render other services to the
Master Servicer or to the Depositor) to deliver to the Depositor, the Trustees
and the Insurer on or before April 30 of each year, beginning with the April 30
that is at least four months after the Closing Date, a report with respect to
the preceding 12-month period ended December 31 (or, if applicable, such shorter
period in the case of the first such report) to the effect that such accountants
have examined certain records and documents relating to the servicing of the
Receivables under this Agreement including an examination of the Subservicer's
operational procedures (using procedures specified in such report, which
procedures shall be substantially in compliance with generally accepted auditing
standards) and that nothing has come to their attention indicating that such
servicing has not been conducted in compliance with the Credit and Collection
Policy or the customary servicing procedures of the Master Servicer, including
the procedures set forth in this Agreement, except for (i) such exceptions as
such firm shall believe to be immaterial and (ii) such other exceptions as shall
be set forth in such report. Such report shall also indicate that the firm is
independent with respect to the Depositor and the Master Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
Section 3.13. Access to Certain Documentation and Information Regarding
---------------------------------------------------------
Receivables. Subject to Section 2.06(b), each of the Master Servicer and the
-----------
Subservicer shall provide to the Depositor, the Trustees and the Insurer
reasonable access to the documentation regarding the Receivables. Each such
entity shall provide such access to any Securityholder only in such cases where
such Securityholder is required by applicable statutes or regulations to review
such documentation. In each case, such access shall be afforded without charge
but only upon reasonable request and during normal business hours which does not
unreasonably interfere with the normal operations or customer or employee
relations of the Master Servicer or the Subservicer, at the respective offices
of the Master Servicer and the Subservicer. Nothing in this Section shall
derogate from the obligation of the Master Servicer and the Subservicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Master Servicer and the Subservicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section. Each Securityholder, by its acceptance of
the related Security or a beneficial interest therein, and the Insurer shall be
deemed to have agreed to keep any information obtained by it pursuant to this
Section confidential, except as may be required by applicable law.
Section 3.14. Amendments to Receivables Schedule. If the Master Servicer,
----------------------------------
during a Collection Period, assigns to a Receivable an account number that
differs from the original account number identifying such Receivable on the
Receivables Schedule, the Master Servicer shall deliver to the Depositor and the
Trustees on or before the Distribution Date relating to such Collection Period
an amendment to the Receivables Schedule reporting the newly assigned account
number, together with the old account number of each such Receivable. The first
such delivery of amendments to the Receivables Schedule shall include monthly
amendments
35
reporting account numbers appearing on the Receivables Schedule with the new
account numbers assigned to such Receivables during any prior Collection Period.
Section 3.15. Reports to Securityholders and Rating Agencies.
----------------------------------------------
(a) At the expense of the Issuer, the Indenture Trustee shall provide to
any Note Owner and the Owner Trustee shall provide to any Certificateholder who
so requests in writing a copy of (i) any Master Servicer's Certificate, (ii) any
annual statement as to compliance described in Section 3.11(a), (iii) any annual
accountants' report described in Section 3.12, (iv) any statement to
Securityholder pursuant to Section 4.08 or (v) any Basic Document (without
Schedules or Exhibits). The Indenture Trustee or the Owner Trustee, as
applicable, may require such Securityholder or Note Owner to pay a reasonable
sum to cover the cost of the Trustee's complying with such request.
(b) The Master Servicer shall forward to each Rating Agency a copy of each
(i) Master Servicer's Certificate, (ii) annual statement as to compliance
described in Section 3.11(a), (iii) Officer's Certificate of the Master Servicer
described in Section 3.11(b), (iv) annual accountants' report pursuant to
Section 3.12, (v) statement to Securityholders pursuant to Section 4.08 and (vi)
other report it may receive pursuant to this Agreement, the Trust Agreement or
the Indenture.
Section 3.16. Reports to the Commission. The Depositor shall, on behalf
-------------------------
of the Issuer, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder. The Master Servicer shall, at its
expense, cooperate in any reasonable request made by the Depositor in connection
with such filings.
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ARTICLE FOUR
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO SECURITYHOLDERS
Section 4.01. Establishment of Accounts.
-------------------------
(a) The Master Servicer shall establish and maintain an Eligible Account
with and in the name of the Indenture Trustee for the benefit of (i) the
Securityholders and the Insurer (the "Collection Account"), (ii) the Noteholders
(the "Note Distribution Account") and (iii) the Securityholders and the Insurer
(the "Reserve Fund"), in each case bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the related
Securityholders and, in the case of the Collection Account and the Reserve Fund,
the Insurer. Except as otherwise provided in this Agreement, in the event that
the Indenture Trustee is no longer an Eligible Institution, the Master Servicer
shall, with the assistance of the Indenture Trustee as necessary, cause the
Accounts to be moved to an Eligible Institution.
(b) To the extent permitted by applicable laws, rules and regulations, all
amounts held in the Collection Account, the Note Distribution Account and the
Reserve Fund shall be either invested by the Indenture Trustee in Permitted
Investments selected in writing by the Master Servicer or maintained in cash.
Earnings on investment of funds in the Accounts (other than the Reserve Fund)
and the Certificate Distribution Account (net of losses and investment expenses)
shall be part of Available Interest and any losses and investment expenses shall
be charged against the funds on deposit in the related Account.
(i) Except as otherwise provided in Section 4.01(b), the Indenture
Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Accounts and in all proceeds thereof (including
all income thereon) and all such funds, investments, proceeds and income
shall be part of the Trust Estate. The Accounts shall be under the sole
dominion and control of the Indenture Trustee for the benefit of the
related Securityholders and, to the extent applicable, the Insurer.
(ii) Notwithstanding anything else contained herein, the Master
Servicer agrees that each Account and the Certificate Distribution Account
will be established only with an Eligible Institution which agrees
substantially as follows: (A) it will comply with Entitlement Orders
related to such account issued by the Indenture Trustee without further
consent by the Master Servicer; (B) until termination of this Agreement, it
will not enter into any other agreement related to such account pursuant to
which it agrees to comply with Entitlement Orders of any Person other than
the Indenture Trustee; (C) all Account Collateral delivered or credited to
it in connection with such account and all proceeds thereof will be
promptly credited to such account; (D) it will treat all Account Collateral
as Financial Assets; and (E) all Account Collateral will be physically
delivered (accompanied by any required endorsements) to, or credited to an
account in the name of, the Eligible Institution maintaining the related
Account or the Certificate Distribution Account in accordance with such
Eligible Institution's customary procedures such that such Eligible
Institution establishes a Security Entitlement in favor of the Indenture
37
Trustee with respect thereto over which the Indenture Trustee (or such
other Eligible Institution) has Control.
(iii) The Master Servicer shall have the power, revocable by the
Indenture Trustee, by the Owner Trustee with the consent of the Indenture
Trustee or by the Insurer provided that no Insurer Default shall have
occurred, to instruct the Indenture Trustee to make withdrawals and
payments from the Accounts and the Certificate Distribution Account for the
purpose of permitting the Master Servicer or the Owner Trustee to carry out
its respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
(c) Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account hereunder until all
Securities and the Insurer have been paid in full and the Issuer is terminated
pursuant to Section 9.01 of the Trust Agreement.
Section 4.02. Collections.
-----------
(a) The Master Servicer shall instruct or otherwise cause all Obligors at
all times to make all payments on or in respect of the Receivables and the
Financed Vehicles directly to a lock-box account acceptable to the Rating
Agencies and, so long as no Insurer Default shall have occurred and be
continuing, the Insurer. Within two Business Days of receipt of deposit of such
amounts into the lock-box account, the Master Servicer will deposit or cause to
be deposited such amounts to the Collection Account. All other monies, including
any extension fees and Net Liquidation Proceeds, paid to the Master Servicer or
the Subservicer on or in respect of the Receivables and the Financed Vehicles
will be deposited to the Collection Account within two Business Days after
receipt thereof.
(b) Notwithstanding the provisions of Section 4.02(a), so long as IMAC is
acting as the Master Servicer, and subject to the conditions set forth below,
the Master Servicer may be permitted to make remittances of collections on a
less frequent basis than that specified in Section 4.02(a) upon compliance with
the specific terms and conditions set forth below in this Section and for so
long as such terms and conditions are fulfilled. Accordingly, notwithstanding
the provisions of Section 4.02(a), the Master Servicer will be permitted to
remit such collections to the Collection Account in immediately available funds
no later than 12:00 P.M., Los Angeles time, on each Deposit Date but only for so
long as (i)(A) the Master Servicer shall be IMAC, (B) except as provided in
clause (ii) below, the short-term credit rating of the Master Servicer is at
least equal to the Required Rating by each Rating Agency, and so long as no
Insurer Default shall have occurred and be continuing, the written consent of
the Insurer shall have been obtained and (C) no Master Servicer Termination
Event shall have occurred and not have been waived; provided, however, that
immediately following the non-compliance with clause (B) above or in the event
that an event of the nature specified in Section 7.01(v) has occurred
(notwithstanding any period of grace contained in such clause), the Master
Servicer shall remit such collections to the Collection Account on a daily basis
within two Business Days of receipt thereof, or (ii)(A) the conditions specified
in clause (i)(A) and (C) above are satisfied and (B) the Master Servicer shall
have obtained, so long as no Insurer Default shall have occurred and be
continuing, the prior written consent of the Insurer (1) a Servicer Letter of
Credit issued by a depository institution or insurance company, as the case may
be, having a short-term credit rating
38
at least equal to the Required Rating and providing that the Indenture Trustee
may draw thereon in the event that the Master Servicer fails to deposit
collections into the Collection Account on a monthly basis or (2) a surety bond,
insurance policy or other deposit of cash or securities satisfactory to the
Indenture Trustee and each Rating Agency; provided that in connection with
clause (ii) above, the Master Servicer provides to the Indenture Trustee and the
Insurer from each Rating Agency for which the Master Servicer's then-current
short-term credit rating is not at least equal to the Required Rating for such
Rating Agency, a letter to the effect that the satisfaction of the conditions in
clause (ii) above and allowing the Master Servicer to make monthly deposits will
not result in a qualification, reduction or withdrawal of its then-current
rating of any Securities and, if applicable, an Officer's Certificate from the
Master Servicer to the effect that the Master Servicer's then-current short-term
credit rating is at least equal to the Required Rating from each other Rating
Agency, if any; and, provided further, that if the Master Servicer shall have
obtained a Servicer Letter of Credit in accordance with clause (ii) above, the
Master Servicer shall be required to remit collections to the Collection Account
on each Business Day to the extent that the aggregate amount of collections
described in Section 4.02(a) and received during such Collection Period exceeds
the Servicer Letter of Credit amount. The Indenture Trustee shall not be deemed
to have knowledge of any event or circumstance under clause (i)(C) above that
would require daily remittance by the Master Servicer to the Collection Account
unless a Responsible Officer has received notice of such event or circumstance
from the Depositor or the Master Servicer in an Officer's Certificate, from
Securityholders or the Insurer as provided in Section 7.01 or from the Letter of
Credit Bank. For purposes of this Article the phrase "payments made on behalf of
Obligors" shall mean payments made by Persons other than the Depositor, the
Master Servicer or the Letter of Credit Bank, if any.
Section 4.03. Application of Collections. On each Distribution Date, all
--------------------------
collections on or in respect of the Receivables for the related Collection
Period shall be applied by the Master Servicer as follows:
(a) With respect to each Receivable (other than a Repurchased
Receivable), payments made by or on behalf of the Obligor shall be applied
first to the Monthly Payment with respect to such Receivable in accordance
with the simple interest method. Any amount remaining after the application
described in the preceding sentence shall be applied to prepay the unpaid
principal balance of such Receivable.
(b) With respect to each Repurchased Receivable, payments made by or
on behalf of the Obligor shall be applied in the same manner. A Repurchase
Payment shall be applied to the Monthly Payment, in each case to the extent
that the payments by the Obligor shall be insufficient to fully repay the
Receivable, and then to prepay the unpaid principal balance of such
Receivable in full.
Section 4.04. Additional Deposits.
-------------------
(a) The following additional deposits shall be made to the Collection
Account: (i) the Seller shall remit the aggregate Repurchase Payments with
respect to Repurchased Receivables pursuant to Section 2.04 or the amount
required upon the optional purchase of all Receivables by the Master Servicer
pursuant to Section 8.01 and (ii) the Master Servicer shall remit (A) any
extension fee charged in connection with the extension of a Receivable pursuant
to Section 3.03,
39
(B) the aggregate Repurchase Payments with respect to Repurchased Receivables
pursuant to Section 3.08 and (C) the amount required upon the optional purchase
of all Receivables by the Master Servicer pursuant to Section 8.01.
(b) All deposits required to be made in respect of a Collection Period
pursuant to this Section by the Master Servicer or the Subservicer, as the case
may be, may be made in the form of a single deposit and shall be made in
immediately available funds, no later than 2:00 p.m., Los Angeles time, on the
related Deposit Date.
Section 4.05. Distributions.
-------------
(a) On each Determination Date, the Master Servicer shall calculate the
following amounts:
(i) the Available Collections for the following Distribution
Date;
(ii) the Servicing Fee for the related Collection Period and any
unpaid Servicing Fee with respect to one or more prior Collection Periods;
(iii) the Note Interest Distributable Amount for each class of
Notes for the following Distribution Date;
(iv) the Certificate Interest Distributable Amount for the
following Distribution Date;
(v) the Note Principal Distributable Amount for the following
Distribution Date;
(vi) the Certificate Principal Distributable Amount for the
following Distribution Date;
(vii) the Insurance Premium for the following Distribution Date
plus any overdue Insurance Premiums for previous Distribution Dates;
(viii) the aggregate amount of any unreimbursed payments under the
Insurance Policy, including any amount deposited by the Insurer pursuant to
Section 5.02(d) or (e) of the Indenture, to the extent payable to the
Insurer under the Insurance Agreement plus accrued interest on any
unreimbursed payments under the Insurance Policy, including any amount
deposited by the Insurer pursuant to Section 5.02(d) or (e) of the
Indenture, at the rate provided in the Insurance Agreement plus any other
amounts due the Insurer under the Insurance Agreement and any other Basic
Document plus any unreimbursed Insurer Defense Costs (collectively, the
"Unreimbursed Insurance Payments");
(ix) the Subservicer Fee for the related Collection Period and any
unpaid Subservicer Fee with respect to one or more prior Collection
Periods;
(x) the sum of the amounts described in clauses (ii) through (vi)
above (the "Required Payment Amount"); and
40
(xi) the sum of the amounts described in clauses (vii) and (viii)
above (the "Insurance Payment Amount").
(b) On each Determination Date, the Master Servicer shall calculate the
following amounts:
(i) the lesser of (A) the amount, if any, by which the sum of the
Required Payment Amount for the related Distribution Date plus the
Insurance Payment Amount for such Distribution Date exceeds the Available
Collections for such Distribution Date and (B) the Reserve Fund Amount for
such Distribution Date (before giving effect to any deposits to or
withdrawals from the Reserve Fund on such related Distribution Date);
(ii) the amount, if any, by which the Required Payment Amount for the
related Distribution Date exceeds the sum of the Available Collections for
such Distribution Date plus the Reserve Fund Draw Amount for such
Distribution Date;
(iii) the Reserve Fund Amount for the related Distribution Date (after
giving effect to the withdrawal of the Reserve Fund Draw Amount for such
Distribution Date); and
(iv) the amount, if any, by which the Required Reserve Fund Balance
for the related Distribution Date exceeds the Reserve Fund Amount for such
Distribution Date (after giving effect to the withdrawal of the Reserve
Fund Draw Amount for such Distribution Date) (such excess, the "Reserve
Fund Deficiency").
On each Distribution Date, the Master Servicer shall instruct the Indenture
Trustee to transfer the Reserve Fund Draw Amount, if any, for such Distribution
Date from the Reserve Fund to the Collection Account; provided, however, that,
if the Notes have been declared immediately due and payable following an Event
of Default (as defined in the Indenture), the Master Servicer shall instruct the
Indenture Trustee to transfer directly to the Insurer the portion, if any, of
such Reserve Fund Draw Amount payable in respect of the Insurance Payment
Amount.
(c) If the Master Servicer determines on any Determination Date that the
Available Collections for the following Distribution Date and the Reserve Fund
Draw Amount for such Distribution Date will be insufficient to pay in full the
Required Payment Amount for such Distribution Date, the Master Servicer shall
deliver to the Indenture Trustee, with a copy to the Insurer, the Owner Trustee
and the Fiscal Agent, no later than 2:00 p.m., New York City time, on such
Determination Date, a written notice specifying the Policy Claim Amount for such
Distribution Date. The Indenture Trustee shall, no later than 12:00 p.m., New
York City time, on the second Business Day prior to such Distribution Date, make
a claim under the Insurance Policy for such Policy Claim Amount by delivering to
the Insurer and the Fiscal Agent, with a copy to the Depositor and the Master
Servicer, a Notice for Payment (as defined in and attached as Exhibit A to the
Insurance Policy) for such Policy Claim Amount. In making any such claim, the
Indenture Trustee shall act on behalf of the Noteholders and the
Certificateholders and shall comply with all the terms and conditions of the
Insurance Policy. The Indenture Trustee shall, upon receipt, deposit such
Policy Claim Amount in the Collection Account.
41
(d) On each Distribution Date, the Master Servicer shall instruct the
Indenture Trustee in writing (based on the information contained in the related
Master Servicer's Certificate) to make the following deposits and distributions
for receipt by the applicable party or deposit in the applicable account by 8:00
a.m., Los Angeles time, to the extent of Available Funds, in the following order
of priority:
(i) to the Master Servicer, the Servicing Fee plus any unpaid
Servicing Fee with respect to one or more prior Collection Periods;
provided, however, that to the extent the Master Servicer fails to pay the
Subservicer the related Subservicer Fee pursuant to Section 3.09 and any
Subservicer Fee with respect to one or more prior Collection Periods, an
amount equal to the lesser of the amount otherwise payable to the Master
Servicer and the amount owing to the Subservicer plus any unpaid
Subservicer Fee with respect to one or more prior Collection Periods will
instead be paid to the Subservicer and the remainder of such amount, if
any, will be paid to the Master Servicer;
(ii) to the Note Distribution Account, the Note Interest
Distributable Amount to be distributed to the Noteholders; provided,
however, if the amount available to pay the amounts described in this
clause is insufficient, interest will be paid pro rata on all Classes of
Notes;
(iii) to the Certificate Distribution Account, so long as the
maturity of the Notes has not been accelerated pursuant to Section 5.02 of
the Indenture, the Certificate Interest Distributable Amount; provided,
however, if an Event of Default has occurred and the Notes have been
accelerated, amounts in this clause will instead be paid under clause (v);
(iv) to the Note Distribution Account, the Note Principal
Distributable Amount which shall be distributed in the following order of
priority:
(A) so long as the maturity of the Notes has not been
accelerated pursuant to Section 5.02 of the Indenture, first, to the
Class A-1 Noteholders until they are paid in full, second, to the
Class A-2 Noteholders until they are paid in full, third, to the Class
A-3 Noteholders until they are paid in full and fourth, to the Class
A-4 Noteholders until they are paid in full; and
(B) if the maturity of the Notes has been accelerated after
an Event of Default pursuant to Section 5.02 of the Indenture, to the
Holders of each Class of Notes pro rata, until they are paid in full;
(v) if the maturity of the Notes has been accelerated pursuant to
Section 5.02 of the Indenture, to the Certificate Distribution Account, the
Certificate Interest Distributable Amount;
(vi) to the Certificate Distribution Account, the Certificate
Principal Distributable Amount;
42
(vii) to the Insurer, the Insurance Premium for such Distribution Date
plus any overdue Insurance Premium for previous Distribution Dates;
(viii) to the Insurer, the Unreimbursed Insurance Payments;
(ix) if the maturity of the Notes has been accelerated following an
Event of Default pursuant to Section 5.02 of the Indenture, to the Note
Distribution Account, an amount equal to the Note Balance as of such
Distribution Date (before giving effect to the application of Available
Funds on such Distribution Date) minus the Note Principal Distributable
Amount for such Distribution Date, paid pro rata on all Classes of Notes
until they have been paid in full;
(x) to the Reserve Fund, the amount, if any, necessary to reinstate
the balance in the Reserve Fund up to the Required Reserve Fund Balance;
(xi) to the Subservicer, any remaining unpaid Subservicer Fee for the
related Collection Period plus any remaining unpaid Subservicer Fee with
respect to one or more prior Collection Periods; and
(xii) to the Seller, as holder of the Residual Interest, any remaining
Available Funds.
(e) The Indenture Trustee shall provide prompt written notice to the
Insurer of any action or proceeding known to the Indenture Trustee seeking to
recover all or any portion of any payment made to the Noteholders or the
Certificateholders as a voidable preference under the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time. If the Indenture Trustee has
received a Final Order with respect to a preference payment, it shall promptly
notify the Insurer of such Final Order and shall comply with the provisions of
the Insurance Policy to obtain payment by the Insurer of such preference
payment. The Indenture Trustee shall furnish to the Insurer such information as
the Insurer shall reasonably request with respect to such preference payment.
Section 4.06. Reserve Fund.
------------
(a) On the Closing Date, the Seller will deposit, on behalf of the
Depositor, the Reserve Fund Initial Deposit into the Reserve Fund from the net
proceeds of the sale of the Securities. The Reserve Fund shall be the property
of the Issuer subject to the rights of the Indenture Trustee in the Reserve Fund
Collateral.
(b) On each Distribution Date, the Master Servicer shall instruct the
Indenture Trustee to transfer the Reserve Fund Draw Amount, if any, for such
Distribution Date from the Reserve Fund to the Collection Account; provided,
however, that, if the Notes have been declared immediately due and payable
following an Event of Default (as defined in the Indenture), the Master Servicer
shall instruct the Indenture Trustee to transfer directly to the Insurer the
portion, if any, of such Reserve Fund Draw Amount payable in respect of the
Insurance Payment Amount.
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(c) All interest and other income (net of losses and investment expenses)
on funds on deposit in the Reserve Fund shall upon the written direction of the
Master Servicer, be paid to the Seller, as holder of the Residual Interest, to
the extent that the funds therein exceed the Required Reserve Fund Balance.
Upon any distribution to the Seller of amounts in excess of the Required Reserve
Fund Balance, the Securityholders, the Trustees and the Insurer will have no
rights in, or claims to, such amounts.
(d) If the Note Balance and the Certificate Balance, and all other amounts
owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to the Noteholders, the Certificateholders or the Insurer, have been
paid in full and the Issuer has been terminated, any remaining funds on deposit
in the Reserve Fund shall be distributed to the Seller, as holder of the
Residual Interest.
Section 4.07. Net Deposits. For so long as IMAC shall be the Master
------------
Servicer and CITSF shall be the Subservicer, the Seller, the Master Servicer,
the Subservicer and the Indenture Trustee may make any remittances pursuant to
this Article net of amounts to be distributed by the applicable recipient to
such remitting party. Nonetheless, each such party shall account for all of the
above described remittances and distributions as if the amounts were deposited
and/or transferred separately.
Section 4.08. Statements to Securityholders.
-----------------------------
(a) On each Distribution Date, the Master Servicer shall provide to the
Owner Trustee (with copies to the Depositor, the Insurer, the Rating Agencies
and each Paying Agent) to forward to each Certificateholder of record, and to
the Indenture Trustee to forward to each Noteholder of record a statement, based
on the related Master Servicer's Certificate setting forth at least the
following information as to the Securities with respect to the related
Distribution Date and Collection Period, to the extent applicable:
(i) the amount of such distribution allocable to principal for each
Class of Notes and the Certificates;
(ii) the amount of such distribution allocable to current and overdue
interest (including any interest on overdue interest), as allocated to each
Class of Notes and the Certificates;
(iii) the Available Collections;
(iv) the aggregate amount of Receivables that became Defaulted
Receivables during the related Collection Period;
(v) the Pool Balance as of the close of business on the last day of
the related Collection Period;
(vi) the Note Distributable Amount, the Certificate Distributable
Amount and the Available Funds;
44
(vii) the Servicing Fee paid to the Master Servicer with respect to
the related Collection Period;
(viii) the Subservicer Fee paid to the Subservicer with respect to
the related Collection Period;
(ix) the aggregate outstanding principal balance of each Class of
Notes, the Note Pool Factor with respect to each Class of Notes, the
Certificate Balance and the Certificate Pool Factor (in each case after
giving effect to payments allocated to principal reported under clause (i)
above);
(x) the amount of Trust Fees and Expenses;
(xi) the Insurance Premiums;
(xii) the Unreimbursed Insurance Payments, if any;
(xiii) the Insurance Payment Amount, if any;
(xiv) the Reserve Fund Amount on such Distribution Date, after
giving effect to all deposits thereto and withdrawals therefrom made on
such Distribution Date or the related Deposit Date, if any, and the change
in such balance from the immediately preceding Distribution Date;
(xv) the Reserve Fund Draw Amount, if any;
(xvi) the aggregate Repurchase Amount of Receivables repurchased by
the Seller or purchased by the Master Servicer, if any, with respect to the
related Collection Period;
(xvii) the number and aggregate Principal Balance of Receivables that
were 31-60 days, 61-90 days and 91 days or more delinquent as of the last
day of the preceding Collection Period; and
(xviii) the Net Losses with respect to the related Collection Period.
Each amount set forth on the Distribution Date statement under clauses (i),
(ii) and (v) above shall be expressed as a dollar amount per $1,000 of original
principal balance of a Note or the Initial Certificate Balance of a Certificate,
as the case may be.
(b) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of the Issuer, but not later
than the latest date permitted by law, the related Trustee shall mail to each
Person who at any time during such calendar year shall have been a
Securityholder, a statement, prepared by the Master Servicer, containing certain
information for such calendar year or, in the event such Person shall have been
a Securityholder during a portion of such calendar year, for the applicable
portion of such year, for the purposes of such Securityholder's preparation of
federal income tax returns. In addition, the Master
45
Servicer shall furnish to the Trustees for distribution to such Person at such
time any other information necessary under applicable law for the preparation of
such income tax returns.
Section 4.09. Insurance Policy Matters.
------------------------
(a) The Indenture Trustee hereby agrees on behalf of the Noteholders (and
each Noteholder, by its acceptance of its Notes or a beneficial interest
therein, hereby agrees) for the benefit of the Insurer that the Indenture
Trustee shall recognize that to the extent the Insurer makes a payment under the
Insurance Policy, either directly or indirectly (by paying through the Indenture
Trustee) to the Noteholders, the Insurer will be entitled to be subrogated to
the rights of the Noteholders to the extent of such payment made under the
Insurance Policy. Any rights of subrogation acquired by the Insurer as a result
of any payment made under the Insurance Policy shall, in all respects, be
subordinate and junior in right of payment to the prior indefeasible payment in
full of all amounts due under the Notes.
(b) The Owner Trustee hereby agrees on behalf of the Certificateholders
(and each Certificateholder, by its acceptance of its Certificates or a
beneficial interest therein, hereby agrees) for the benefit of the Insurer that
the Indenture Trustee shall recognize that to the extent the Insurer makes a
payment under the Insurance Policy, either directly or indirectly (by paying
through the Indenture Trustee) to the Certificateholders, the Insurer will be
entitled to be subrogated to the rights of the Certificateholders to the extent
of such payment made under the Insurance Policy. Any rights of subrogation
acquired by the Insurer as a result of any payment made under the Insurance
Policy shall, in all respects, be subordinate and junior in right of payment to
the prior indefeasible payment in full of all amounts due under the
Certificates.
(c) The Indenture Trustee, for itself and on behalf of the Noteholders,
and the Insurer, for itself and on behalf of the Certificateholders, hereby
agree that the Insurer may at any time during the continuation of any proceeding
relating to a Final Order direct all matters relating to such Final Order,
including the direction of any appeal of any order relating to such Final Order
and the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Insurer shall
be subrogated, to the extent of any payments made under the Insurance Policy, to
the rights of the Depositor, the Seller, the Master Servicer, the Subservicer,
the Issuer, the Indenture Trustee and the Securityholders in the conduct of any
preference claim, including all rights of any party to any adversarial
proceeding or action with respect to any court order issued in connection with
any such preference claim.
(d) The Insurer will at any time, and from time to time, have the option
(but not be required, except in accordance with the terms of the Insurance
Policy) to make payments of fees or expenses of any provider of services to the
Trust, including but not limited to the Indenture Trustee or the Owner Trustee
with respect to such Distribution Date. Any such payments made by the Insurer
will be reimbursed to the Insurer pursuant to Section 4.05(d)(viii).
46
ARTICLE FIVE
THE DEPOSITOR
Section 5.01. Representations and Warranties of Depositor. The Depositor
-------------------------------------------
makes the following representations and warranties on which the Issuer is deemed
to have relied in acquiring the Receivables. The representations and warranties
speak as of the execution and delivery of this Agreement and as of the Closing
Date, and shall survive the sale of the Receivables to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor has been duly
------------------------------
organized and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and has, power, authority and legal right to acquire, own
and sell the Receivables.
(b) Due Qualification. The Depositor is duly qualified to do
-----------------
business as a foreign limited liability company in good standing and has
obtained all necessary licenses and approvals in each jurisdiction in which
the failure to so qualify or to obtain such licenses and approvals would,
in the reasonable judgment of the Depositor, materially and adversely
affect the performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, the Trust
Agreement, any of the other Basic Documents, the Receivables, the Notes or
the Certificates.
(c) Power and Authority. The Depositor has the power and authority
-------------------
to execute, deliver and perform its obligations under this Agreement and
the other Basic Documents to which it is a party. 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 has duly authorized such sale and
assignment by all necessary limited liability company action; and the
execution, delivery and performance of this Agreement and the other Basic
Documents to which the Depositor is a party has been duly authorized by the
Depositor by all necessary limited liability company action.
(d) Valid Sale; Binding Obligation. This Agreement evidences a valid
------------------------------
sale, transfer and assignment of the Receivables to the Issuer, enforceable
against creditors of and purchasers from the Depositor, and constitutes a
legal, valid and binding obligation of the Depositor enforceable in
accordance with its terms, except as enforceability may be subject to or
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability
shall be considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by the
------------
Depositor of this Agreement and the other Basic Documents to which the
Depositor is a party and the consummation of the transactions contemplated
hereby and thereby and the
47
fulfillment of the terms hereof and thereof does not conflict with, result
in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time, or both) a default under, the
certificate of formation or limited liability company agreement of the
Depositor, or conflict with or violate any of the material terms or
provisions of, or constitute (with or without notice or lapse of time, or
both) a default under, any indenture, agreement or other instrument to
which the Depositor is a party or by which it shall be bound; nor result in
the creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument (other
than this Agreement); nor violate any law or, to the Depositor's knowledge,
any order, rule or regulation applicable to the Depositor of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties, which breach, default, conflict, Lien or violation would have a
material adverse effect on the earnings, business affairs or business
prospects of the Depositor.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending, or to the Depositor's knowledge, threatened against the Depositor,
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement or any other
Basic Document, (ii) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by the Basic
Documents, (iii) seeking any determination or ruling that might materially
and adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, the Basic Documents or the
Securities or (iv) relating to the Depositor and which might adversely
affect the federal income tax attributes of the Securities.
Section 5.02. 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 obligations
shall include the following:
(a) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Trustees, the Subservicer, the Insurer and the Securityholders
and any of the officers, directors, employees and agents of the Issuer, the
Owner Trustee, the Insurer and the Indenture Trustee from and against any
loss, liability or expense incurred by reason of (i) the Depositor's
willful misfeasance, bad faith or negligence in the performance of its
duties under this Agreement or any other Basic Document to which it is a
party, or by reason of reckless disregard of its obligations and duties
under this Agreement or any other Basic Document to which it is a party and
(ii) the Depositor's violation of federal or state securities laws in
connection with the offering and sale of the Securities.
Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee or the Indenture Trustee, as the case may be, and the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Depositor shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Depositor, without
interest.
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Section 5.03. Merger, Consolidation or Assumption of the Obligations of
--------------- ---------------------------------------------------------
Depositor; Certain Limitations.
------------------------------
(a) Any Person (i) into which the Depositor shall be merged or
consolidated, (ii) resulting from any merger, conversion or consolidation to
which the Depositor shall be a party or (iii) that shall succeed by purchase and
assumption to all or substantially all of the business of the Depositor, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Depositor under this Agreement, shall be the
successor to the Depositor under this Agreement without the execution or filing
of any other document or any further act on the part of any of the parties to
this Agreement; provided, however, that (A) the Depositor shall have delivered
to the Owner Trustee, the Insurer and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such merger, conversion,
consolidation or succession and such agreement of assumption comply with this
Section, (B) the Depositor shall have delivered to the Owner Trustee, the
Insurer and the Indenture Trustee an Opinion of Counsel either (1) stating that,
in the opinion of such counsel, all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to fully preserve and protect the interest of the Issuer and the
Indenture Trustee, respectively, in the Receivables, and reciting the details of
such filings, or (2) stating that, in the opinion of such counsel, no such
action shall be necessary to fully preserve and protect such interest and (C)
the Rating Agency Condition shall have been satisfied and, unless an Insurer
Default shall have occurred and be continuing, the written consent of the
Insurer shall have been obtained. The Depositor shall provide prior written
notice of any merger, conversion, consolidation or succession pursuant to this
Section to the Insurer. Notwithstanding anything to the contrary contained
herein, the execution of the foregoing agreement of assumption and compliance
with clauses (A), (B) and (C) above shall be conditions to the consummation of
the transactions referred to in clauses (i), (ii) and (iii) above
(b) (i) Subject to paragraph (ii) below, the purpose of the Depositor
shall be to engage in any lawful activity for which a limited liability company
may be organized under the general limited liability company law of Delaware
other than the banking business, the trust company business or the practice of a
profession permitted to be incorporated by the Delaware Limited Liability
Company Act.
(ii) Notwithstanding paragraph (b)(i) above, the purpose of the
Depositor shall be limited to the conduct or promotion of the following
activities: (A) to acquire retail installment contracts, purchase money
notes or other notes between motor vehicle dealers or lenders and
purchasers of new and used automobiles, minivans, sport utility vehicles,
light-duty trucks, motorcycles or commercial vehicles (the "Motor Vehicle
Receivables"); (B) to act as settlor or grantor of one or more trusts or
special purpose entities (each, a "Securitization Trust") formed pursuant
to a trust agreement or other agreement for the purpose of issuing one or
more series or classes of certificates, bonds, notes or other evidences of
interest or indebtedness secured by or representing beneficial interests in
the Motor Vehicle Receivables; (C) to acquire, lease, own, hold, sell,
transfer, convey, dispose of, pledge, assign, borrow money against,
finance, refinance or otherwise deal with, publicly or privately held and
whether with unrelated third parties or with affiliated entities, retail
installment sale contracts, purchase money notes or other notes between
motor vehicle dealers or lenders and purchasers of Motor Vehicle
Receivables;
49
(D) to acquire securities or other property of a Securitization Trust
(including remainder interests in collateral or reserve accounts) or any
interest in any of the foregoing; (E) to issue, authorize, sell and deliver
securities or other instruments secured or collateralized by the
securities; (F) to own equity interests in other limited liability
companies or partnerships whose purposes are substantially restricted to
those described in clauses (A) through (E) above; (G) to borrow money other
than pursuant to clause (C) above, but only to the extent that such
borrowing is permitted by the terms of the transactions contemplated by
clauses (A) through (F) above; and (H) to (1) negotiate, authorize,
execute, deliver or assume or perform the obligations under any agreement,
instrument or document relating to the activities set forth in clauses (A)
through (G) above, including the Basic Documents (as defined in the limited
liability company agreement of the Depositor) and (2) engage in any lawful
act or activity and to exercise any powers permitted to limited liability
companies organized under the laws of the State of Delaware that are
incidental to and necessary, convenient or advisable for the accomplishment
of the above-mentioned purposes, including the entering into of interest
rate or basis swap, cap, floor or collar agreements, currency exchange
agreements or similar hedging transactions and referral, management,
servicing and administration agreements. So long as any outstanding debt of
the Depositor or securities are rated by any nationally recognized
statistical rating organization, the Depositor shall not issue notes or
otherwise borrow money unless (A) the Depositor has made a written request
to the related nationally recognized statistical rating organization to
issue notes or incur borrowings, which notes or borrowings are rated by the
related nationally recognized statistical rating organization the same as
or higher than the rating afforded any outstanding rated debt or
securities, or (B) such notes or borrowings (1) are fully subordinated (and
which shall provide for payment only after payment in respect of all
outstanding rated debt and/or securities) or are nonrecourse against any
assets of the Depositor other than the assets pledged to secure such notes
or borrowings, (2) do not constitute a claim against the Depositor in the
event such assets are insufficient to pay such notes or borrowings and (3)
where such notes or borrowings are secured by the rated debt or securities,
are fully subordinated (and which shall provide for payment only after
payment in respect of all outstanding rated debt and/or securities) to such
rated debt or securities.
(c) Notwithstanding any other provision of this Section and any provision
of law, the Depositor shall not do any of the following:
(i) engage in any business or activity other than as set forth in
clause (b) above;
(ii) without the unanimous written consent of the members of the
Depositor and the members of the Board of Directors of the Depositor
(including all independent directors of the Depositor), (A) consolidate or
merge the Depositor with or into any Person or sell all or substantially
all of the assets of the Depositor, (B) institute proceedings to have the
Depositor be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against Depositor, (C)
file a petition seeking, or consent to, reorganization or relief with
respect to the Depositor under any applicable federal or state law relating
to bankruptcy, (D) consent to the appointment of a
50
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Depositor or a substantial part of its property, (E) make
any assignment for the benefit of creditors of the Depositor, (F) admit in
writing the Depositor's inability to pay its debts generally as they become
due, (G) take any action in furtherance of any action set forth in clauses
(A) through (F) above or (H) to the fullest extent permitted by law,
dissolve or liquidate the Depositor; or
(iii) change the current number of independent special members
under the limited liability company agreement of the Depositor delivered to
the MBIA prior to the Closing Date.
(d) The Depositor shall not amend its organizational documents except in
accordance with the provisions thereof.
Section 5.04. Limitation on Liability of Depositor and Others.
------------------------------------------------
(a) Neither the Depositor nor any of the directors, officers, employees
or agents of the Depositor shall be under any liability to the Issuer, the
Noteholders or the Certificateholders for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Depositor
or any such Person against any liability that would otherwise be imposed by
reason of willful misfeasance or bad faith in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement, or
by reason of negligence in the performance of duties under this Agreement
(except for errors in judgment). The Depositor, and its directors, officers,
employees and agents, may rely in good faith on the advice of counsel or on any
document of any kind prima facie properly executed and submitted by any Person
in respect of any matters arising under this Agreement.
(b) The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.
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ARTICLE SIX
THE SELLER, THE MASTER SERVICER AND THE SUBSERVICER
Section 6.01. Representations of the Seller, the Master Servicer and the
----------------------------------------------------------
Subservicer. Each of the Seller, the Master Servicer and the Subservicer shall
-----------
make the following representations as to themselves on which the Issuer is
deemed to have relied in acquiring the Receivables. The representations shall
speak as of the execution and delivery of this Agreement and as of the Closing
Date, 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. It has been duly organized
------------------------------
and is validly existing as a corporation in good standing under the laws of
the applicable jurisdiction, with power, authority and legal right to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, power, authority and legal right to sell and service the
Receivables and, in the case of the Subservicer, to hold the Receivable
Files as custodian on behalf of the Issuer.
(b) Due Qualification. It is duly qualified to do business as a
-----------------
foreign corporation in good standing and has obtained all necessary
licenses and approvals in each jurisdiction in which the failure to so
qualify or to obtain such licenses and approvals would, in its reasonable
judgment, materially and adversely affect its performance of its
obligations under, or the validity or enforceability of, this Agreement,
any of the other Basic Documents to which it is a party, the Receivables,
the Notes or the Certificates.
(c) Power and Authority. It has the power and authority to
-------------------
execute, deliver and perform its obligations under this Agreement and the
other Basic Documents to which it is a party; and the execution, delivery
and performance of this Agreement and the other Basic Documents to which it
is a party has been duly authorized by it by all necessary corporate
action.
(d) Binding Obligation. This Agreement and the other Basic
------------------
Documents to which it is a party constitute its legal, valid and binding
obligation enforceable in accordance with its terms, except as
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium, liquidation or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability shall be considered in a
proceeding in equity or in law.
(e) No Violation. The execution, delivery and performance by it
------------
of this Agreement and the other Basic Documents to which it is a party, the
consummation of the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not conflict with, result
in a breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, its articles of
incorporation or bylaws, or conflict with or breach any of the material
terms or
52
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, any indenture, agreement, mortgage, deed of trust or
other instrument to which it is a party or by which it shall be bound or to
which any of its properties are subject; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than this
Agreement); nor violate any law or, any order, rule or regulation
applicable to it or its properties of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or its properties, which
breach, default, conflict, Lien or violation would have a material adverse
effect on its earnings, business affairs or business prospects.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending, or to its best knowledge, threatened, before any court, regulatory
body, administrative agency, tribunal or other governmental instrumentality
having jurisdiction over it or its properties: (i) asserting the invalidity
of this Agreement or any other Basic Document, (ii) seeking to prevent the
issuance of the Securities or the consummation of any of the transactions
contemplated by the Basic Documents, (iii) seeking any determination or
ruling that might materially and adversely affect the performance of its
obligations under, or the validity or enforceability of the Receivables or
the Basic Documents to which it is a party.
Section 6.02. Liability of Seller, Master Servicer and Subservicer;
-----------------------------------------------------
Indemnities.
-----------
(a) The Seller shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Seller hereunder and shall
have no other obligations or liabilities hereunder. Such obligations shall
include the following:
(i) The Seller shall indemnify, defend and hold harmless the
Issuer, the Insurer, the Depositor, the Trustees, the Master Servicer and
the Subservicer and any of the officers, directors, employees and agents of
the Issuer, the Insurer, the Owner Trustee and the Indenture Trustee from
and against any taxes that may at any time be asserted against any such
Person with respect to the transactions contemplated herein and in the
other Basic Documents, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but,
in the case of the Issuer, not including any taxes asserted with respect
to, and as of the date of, the sale of the Receivables to the Issuer or the
issuance and original sale of the Securities, or asserted with respect to
ownership of the Receivables, or federal or other income taxes arising out
of distributions on the Securities) and costs and expenses in defending
against the same.
(ii) The Seller shall indemnify, defend and hold harmless the
Trustees and their respective officers, directors, employees and agents
from and against all costs, expenses, losses, claims, damages and
liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein and contained in the Trust
Agreement, in the case of the Owner Trustee, and contained in the
Indenture, in the case of the Indenture Trustee, except to the extent that
such cost, expense, loss, claim, damage or liability: (A) in the case of
the Owner Trustee, shall be due to the willful misfeasance, bad faith or
gross negligence (except for errors in judgment) of the Owner
53
Trustee or shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in Section 7.03 of the Trust
Agreement, or (B) in the case of the Indenture Trustee, shall be due to the
willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Indenture Trustee.
(iii) The Seller shall pay any and all taxes levied or assessed
upon all or any part of the Trust Estate.
(b) The Master Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Master Servicer
hereunder and shall have no other obligations or liabilities hereunder. Such
obligations shall include the following:
(i) the Master Servicer shall defend, indemnify and hold
harmless each of the Seller, the Depositor, the Owner Trustee, the
Indenture Trustee and the Insurer (each, an "Indemnified Party") from and
against any and all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel and expenses
of litigation arising out of or resulting from the use, ownership or
operation by the Master Servicer, the Subservicer, any Affiliate thereof or
any subservicer of any Financed Vehicle;
(ii) the Master Servicer shall indemnify, defend and hold
harmless each Indemnified Party and the Subservicer, as the case may be,
from and against any taxes that may at any time be asserted against each
Indemnified Party and the Subservicer, as the case may be, with respect to
the transactions contemplated herein or in the other Basic Documents,
including any sales, gross receipts, general corporation, tangible or
intangible personal property, privilege or license taxes and costs and
expenses in defending against the same;
(iii) the Master Servicer shall indemnify, defend and hold
harmless each Indemnified Party 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, and was
imposed upon each Indemnified Party through the performance of the duties
of the Master Servicer or the Subservicer or the failure of the Master
Servicer or the Subservicer to perform any of its respective obligations
hereunder; and
(iv) the Master Servicer shall indemnify, defend and hold
harmless the Subservicer 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, and was imposed
upon the Subservicer through the performance of the duties of the Master
Servicer hereunder or the failure of the Master Servicer to perform any of
its obligations hereunder.
(c) Subject to Section 6.04, the Subservicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Subservicer under this Agreement. In this regard, the
Subservicer shall indemnify, defend and hold harmless the Master Servicer, the
Issuer, the Insurer, the Trustees, the Securityholders and the Depositor and any
of the officers, directors, employees and agents of the Issuer, the Insurer, the
Owner Trustee and the
54
Indenture Trustee from and against any and all costs, expenses, losses, damages,
claims and liabilities (i) arising out of or resulting from the use, ownership
or operation by the Subservicer or any Affiliate thereof of a Financed Vehicle
and (ii) to the extent that such cost, expense, loss, claim, damage or liability
arose out of, or was imposed upon any such Person through, the negligence,
willful misfeasance or bad faith of the Subservicer in the performance of its
duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
(d) Notwithstanding anything to the contrary contained in this Section,
the Master Servicer shall not be liable to any Indemnified Party or the
Subservicer for any loss, liability, expense, damage or injury resulting or
ensuing (i) from any fraud, negligence or willful misconduct by any Indemnified
Party or the Subservicer, as the case may be, and (ii) under any federal, state
or local income or franchise taxes or other taxes imposed on or measured by
income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by any Indemnified Party or the
Subservicer, as the case may be.
(e) Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee, as the case may be, or
the termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Master Servicer or the Subservicer
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 Master
Servicer or the Subservicer, as the case may be, without interest.
(f) For purposes of this Section, in the event of a termination of the
rights and obligations of CITSF (or any Successor Subservicer pursuant to
Section 7.03) as Subservicer pursuant to Section 7.02 or a resignation by CITSF
(or any Successor Subservicer pursuant to Section 7.03) as Subservicer pursuant
to Section 6.05, CITSF (or any Successor Subservicer pursuant to Section 7.03)
shall be deemed to be the Subservicer pending appointment of a Successor
Subservicer (other than the Indenture Trustee) pursuant to Section 7.03.
Indemnification under this Section by CITSF (or any Successor Subservicer) as
Subservicer, with respect to the period such Person was (or was deemed to be)
the Subservicer, shall survive the termination of such Person as Subservicer or
a resignation by such Person as Subservicer as well as the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation and the fees and expenses of the Owner Trustee and the
Indenture Trustee. If the Subservicer shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Subservicer, without interest.
Section 6.03. Merger, Consolidation or Assumption of the Obligations of
---------------------------------------------------------
the Seller, the Master Servicer and the Subservicer. Any corporation (i) into
---------------------------------------------------
which the Seller, the Master Servicer or the Subservicer may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Seller, the Master Servicer or the Subservicer shall be a party or
(iii) which may succeed to all or substantially all of the business of the
Seller, the Master Servicer or the Subservicer, which corporation in any of the
foregoing cases executes
55
an agreement of assumption to perform every obligation of the Seller, the Master
Servicer or the Subservicer hereunder, shall be the successor to the Seller, the
Master Servicer or the Subservicer under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
The Seller, the Master Servicer or the Subservicer shall, obtain the prior
written consent of the Insurer to any such transfer, assignment or succession
and provide notice of any merger, consolidation or succession pursuant to this
Section to the Trustees and each Rating Agency.
Section 6.04. Limitation on Liability of the Master Servicer, the
---------------------------------------------------
Subservicer and Others.
----------------------
(a) Neither the Master Servicer, the Subservicer nor any of their
respective directors, officers, employees or agents shall be under any liability
to the Issuer or any Securityholders for any action taken or for refraining from
the taking of any action pursuant hereto, or for errors in judgment; provided,
however, that this provision shall not protect the Master Servicer, the
Subservicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Master Servicer, the Subservicer and any of their
respective directors, officers, employees or agents may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
(b) Except as provided herein, the Master Servicer and the Subservicer
shall not be under any obligation to appear in, prosecute or defend any legal
action that shall not be incidental to its duties to administer and service the
Receivables in accordance herewith, and that in its opinion may involve it in
any expense or liability; provided, however, that the Master Servicer and the
Subservicer may undertake any reasonable action relating to the administration
and servicing of the Receivables or the Financed Vehicles that it may deem
reasonable or desirable in respect hereof and the rights and duties of the
parties hereto.
Section 6.05. IMAC Not to Resign as Master Servicer; CITSF Not to Resign
----------------------------------------------------------
as Subservicer. Subject to the provisions of Section 6.03, neither IMAC nor
--------------
CITSF shall resign from the obligations and duties imposed on it pursuant hereto
as Master Servicer and Subservicer, respectively, under this Agreement except
upon determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which it
could take to make the performance of its duties hereunder permissible under
applicable law. Notice of any such determination permitting the resignation of
either IMAC or CITSF shall be communicated to the Trustees and the Insurer 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 to the Depositor, the Insurer and the Trustees. No such resignation
shall become effective until a Successor Master Servicer or a Successor
Subservicer, as the case may be, shall have assumed the responsibilities and
obligations of the Master Servicer or the Subservicer, as the case may be, in
accordance with Section 7.03.
56
ARTICLE SEVEN
MASTER SERVICER AND SUBSERVICER TERMINATION EVENTS
Section 7.01. Master Servicer Termination Events. If any one of the
----------------------------------
following events (each, a "Master Servicer Termination Event") shall occur and
not have been waived on any day:
(i) any failure by the Master Servicer to deliver to the related
Trustee for deposit in any of the Accounts or the Certificate Distribution
Account any required payment or to direct the Indenture Trustee to make any
required distributions therefrom, which failure continues unremedied for a
period of two Business Days after discovery of such failure by an officer
of the Master Servicer or after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (i) to
the Master Servicer by the Insurer or the related Trustee or (ii) to the
Master Servicer and to the Trustees by the Holders of Notes evidencing not
less than 51% of the Note Balance or, if the Notes have been paid in full,
by the Holders of Certificates, evidencing not less than 51% of the
Certificate Balance;
(ii) any failure by the Master Servicer duly to observe or to
perform any other covenant or agreement of the Master Servicer set forth in
this Agreement or any other Basic Document, which failure shall materially
and adversely affect the rights of Certificateholders or Noteholders or the
Insurer and continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given (i) to the Master Servicer by the Insurer, the
Depositor or the related Trustee or (ii) to the Master Servicer and to the
related Trustee by the Holders of Notes, evidencing not less than 51% of
the Note Balance or, if the Notes have been paid in full, by the Holders of
Certificates, evidencing not less than 51% of the Certificate Balance;
(iii) any representation or warranty of the Master Servicer made
in, or in any certificate delivered under, the Sale and Servicing
Agreement, other than any representation or warranty relating to a
Repurchased Receivable, shall prove to have been incorrect in any material
respect as of the time when made and that breach shall continue unremedied
for 30 days after written notice of that breach, requiring the same to be
remedied, shall have been given to (i) the Master Servicer by the
Depositor, the Owner Trustee, the Indenture Trustee or the Insurer or (ii)
the Master Servicer, the Owner Trustee and the Indenture Trustee by the
Holders of Notes evidencing not less than 51% of the Note Balance or, if
the Notes have been paid in full, by the Holders of Certificates evidencing
not less than 51% of the Certificate Balance;
(iv) any failure by the Master Servicer to deliver to the
Depositor, the Indenture Trustee, the Owner Trustee, the Insurer and each
Rating Agency the Master Servicer Certificate relating to the payment of
amounts due to Securityholders beyond the earlier of three Business Days
following the date the certificate was due and the Business Day preceding
the related Distribution Date;
57
(v) the occurrence of an Insolvency Event with respect to the
Master Servicer; or
(vi) so long as IMAC is the Master Servicer, Isuzu Motors Limited
no longer directly or indirectly owns 80% or more of the outstanding shares
of stock of IMAC;
then, and in each and every case, if a Master Servicer Termination Event or a
Trigger Event under the Insurance Agreement shall have occurred and not have
been waived and no Insurer Default shall have occurred and be continuing, the
Indenture Trustee or, if the Notes have been paid in full, the Owner Trustee, in
each case if directed in writing to do so by the Insurer, may terminate all of
the rights and obligations (other than the obligations set forth in Section
6.02) of the Master Servicer under this Agreement. If a Master Servicer
Termination Event shall have occurred and not have been waived and an Insurer
Default shall have occurred and be continuing, either the Indenture Trustee or
the Holders of Notes evidencing not less than 51% of the Note Balance (or, if
the Notes have been paid in full and the Indenture has been discharged in
accordance with its terms, the Holders of Certificates evidencing not less than
51% of the Certificate Balance) by notice then given in writing to the
Depositor, the Master Servicer and the Insurer (and to the Indenture Trustee and
the Owner Trustee if given by the Noteholders) (a "Master Servicer Termination
Notice") may terminate all the rights and obligations (other than the
obligations set forth in Section 6.02) of the Master Servicer under this
Agreement. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this Agreement,
whether with respect to the Notes, the Certificates or the Receivables or
otherwise, shall, without further action, pass to and be vested in the Indenture
Trustee or such Successor Master Servicer as may be appointed under Section
7.03; and, without limitation, the Indenture Trustee and the Owner Trustee are
hereby authorized and empowered to execute and deliver, for the benefit of the
predecessor Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. In addition, the Master Servicer shall
transfer its electronic records relating to the Receivables to the Successor
Master Servicer in such electronic form as the Successor Master Servicer may
reasonably request. The predecessor Master Servicer shall cooperate with the
Successor Master Servicer, the Insurer and the Trustees in effecting the
termination of the responsibilities and rights of the predecessor Master
Servicer under this Agreement, including the transfer to the Successor Master
Servicer for administration by it of all cash amounts that shall at the time be
held by the predecessor Master Servicer for deposit, or have been deposited by
the predecessor Master Servicer, in the Accounts or the Certificate Distribution
Account or thereafter received with respect to the Receivables and that shall at
that time be held by the predecessor Master Servicer. All reasonable costs and
expenses (including servicer conversion costs and attorneys' fees) incurred in
connection with transfer of the servicing to the Successor Master Servicer and
amending this Agreement to reflect such succession as Master Servicer pursuant
to this Section shall be paid by the predecessor Master Servicer upon
presentation of reasonable documentation of such costs and expenses. Any costs
or expenses incurred in connection with a Master Servicer Termination Event
shall constitute an expense of administration under Title 11 of the United
States Bankruptcy Code or any other applicable Federal or State bankruptcy laws.
Upon receipt of notice of the occurrence of a Master Servicer Termination Event,
the Indenture Trustee shall give notice thereof to the Insurer and each Rating
Agency.
58
Section 7.02. Subservicer Termination Events. If any one of the following
------------------------------
events (each, a "Subservicer Termination Event") shall occur and not have been
waived on any day:
(i) any failure by the Subservicer to make any payment, transfer
or deposit or to give instructions or notice to the Master Servicer, the
Indenture Trustee or the Insurer as required by this Agreement, or to
deliver any required reports hereunder on or before the date occurring two
Business Days after the date such payment, transfer, deposit, instruction,
notice or report is required to be made or given, as the case may be, under
the terms of this Agreement;
(ii) any failure by the Subservicer duly to observe or perform in
any material respect any other covenants or agreements of the Subservicer
set forth in this Agreement which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Subservicer and the
Master Servicer by the Indenture Trustee, the Owner Trustee or the Insurer
provided that such 30-day cure period shall be extended for an additional
30 days, with, so long as no Insurer Default shall have occurred and be
continuing, the prior written consent of the Insurer, for a total of 60
days, if (i) such default cannot be cured within the initial 30 days, (ii)
the Subservicer promptly commences the cure of such default within the
initial 30 days and thereafter diligently and continuously prosecutes the
cure of such default and (iii) such default is of such nature that it is
capable of being cured within 60 days;
(iii) any representation or warranty of the Subservicer made in,
or in any certificate delivered under, the Sale and Servicing Agreement
shall prove to have been incorrect in any material respect as of the time
when made and that breach shall continue unremedied for 30 days after
written notice of that breach, requiring the same to be remedied, shall
have been given to (i) the Subservicer and the Master Servicer by the
Depositor, the Owner Trustee, the Indenture Trustee or the Insurer or (ii)
the Subservicer, the Master Servicer, the Owner Trustee and the Indenture
Trustee by the Holders of Notes evidencing not less than 51% of the Note
Balance or, if the Notes have been paid in full, by the Holders of
Certificates evidencing not less than 51% of the Certificate Balance;
(iv) the Subservicer fails in any material respect to service the
Receivables in accordance with the Credit and Collection Policy;
(v) the occurrence of an Insolvency Event with respect to the
Subservicer; or
(vi) so long as CITSF is the Subservicer, The CIT Group, Inc. or
Tyco International Ltd. no longer directly or indirectly owns 100% of the
outstanding shares of stock of CITSF;
then, and in each and every case, if a Subservicer Termination Event or a
Subservicer Trigger Event under the Insurance Agreement shall have occurred and
not have been waived and no Insurer Default shall have occurred and be
continuing, the Indenture Trustee or, if the Notes have been paid in full, the
Owner Trustee, in each case if directed in writing to do so by the Insurer,
59
may terminate all of the rights and obligations of the Subservicer as
Subservicer under this Agreement. If a Subservicer Termination Event shall have
occurred and not have been waived and an Insurer Default shall have occurred and
be continuing, either the Indenture Trustee or Holders of Notes evidencing not
less than 51% of the Note Balance (or, if the Notes have been paid in full and
the Indenture Trustee has been discharged in accordance with its terms, the
Holders of Certificates evidencing not less than 51% of the Certificate Balance)
by notice given in writing to the Depositor, the Master Servicer, the
Subservicer and the Insurer (and to the Indenture Trustee and the Owner Trustee
if given by the Noteholders) (a "Subservicer Termination Notice"), may terminate
all of the rights and obligations (other than the obligations set forth in
Section 6.02) of the Subservicer under this Agreement. The Subservicer shall pay
all reasonable set-up and conversion costs associated with the transfer of
servicing rights to the Successor Subservicer.
Section 7.03. Appointment of Successor Master Servicer or Successor
-----------------------------------------------------
Subservicer.
-----------
(a) Upon the Master Servicer's or the Subservicer's receipt of notice of
termination pursuant to Section 7.01 or Section 7.02 or the Master Servicer's or
the Subservicer's resignation pursuant to Section 6.05, the predecessor Master
Servicer or the Subservicer, as the case may be, shall continue to perform its
functions as Master Servicer or Subservicer under this Agreement, in the case of
termination, only until the date specified in such termination notice or, if no
such date is specified in a notice of termination, until receipt of such notice
and, in the case of resignation, until the later of (i) the date 45 days from
the delivery to the Trustees of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement and
(ii) the date upon which the predecessor Master Servicer or Subservicer shall
become unable to act as Master Servicer or Subservicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Master Servicer's or the Subservicer's termination hereunder, the Indenture
Trustee shall appoint a Successor Master Servicer or a Successor Subservicer, as
the case may be, acceptable, so long as no Insurer Default shall have occurred
and be continuing, to the Insurer, and the Successor Master Servicer or
Successor Subservicer shall accept its appointment (including the Successor
Master Servicer's appointment as Administrator under the Administration
Agreement as set forth in Section 7.03(b)), by a written assumption in form
acceptable to the Trustees and the Insurer. In the event that a Successor Master
Servicer or a Successor Subservicer has not been appointed at the time when the
predecessor Master Servicer or the predecessor Subservicer has ceased to act as
Master Servicer or Subservicer, respectively, in accordance with this Section,
the Indenture Trustee without further action shall automatically be appointed
the Successor Master Servicer or the Successor Subservicer, as the case may be,
and the Indenture Trustee shall be entitled to receive the Servicing Fee or the
Subservicer Fee, as the case may be. Notwithstanding the foregoing, the
Indenture Trustee shall, if it shall be legally unable or unwilling so to act,
appoint or petition a court of competent jurisdiction to appoint any established
institution, with, so long as no Insurer Default shall have occurred and be
continuing, the approval of the Insurer, having a net worth of not less than
$50,000,000 and whose regular business shall include the servicing of motor
vehicle receivables, as the successor to the Master Servicer or the Subservicer,
as the case may be under this Agreement. In addition upon such appointment the
Indenture Trustee may make such arrangements for the compensation of each
Successor Master Servicer and Successor Subservicer out of collections in
accordance with Section 4.05(d) on or in respect of the Receivables as it and
such successor shall agree, which, in no event, shall be greater than that
60
payable to, in the case of the Successor Master Servicer, IMAC as Master
Servicer or in the case of the Successor Subservicer, CITSF as Subservicer,
without the prior written consent of the Insurer so long as no Insurer Default
shall have occurred and be continuing.
(b) Upon appointment, the Successor Master Servicer or the Successor
Subservicer (including the Indenture Trustee acting as Successor Master Servicer
or as Successor Subservicer) shall (i) be the successor in all respects to the
predecessor Master Servicer or the predecessor Subservicer, as the case may be,
and shall be subject to all the responsibilities, duties and liabilities arising
thereafter relating thereto placed on the predecessor Master Servicer or
Subservicer, and the Successor Master Servicer shall be entitled to the
Servicing Fee and the Successor Subservicer shall be entitled to the Subservicer
Fee and all the rights granted to the predecessor Master Servicer or the
predecessor Subservicer, as the case may be, by the terms and provisions of this
Agreement. The Successor Master Servicer shall become the Administrator pursuant
to Section 1.09 of the Administration Agreement.
Section 7.04. Notification to Insurer, Noteholders, Certificateholders and
------------------------------------------------------------
Rating Agencies. Upon any notice of a Master Servicer Termination Event or a
---------------
Subservicer Termination Event or upon any termination of, or any appointment of
a successor to, the Master Servicer or the Subservicer pursuant to this Article,
the Indenture Trustee shall give prompt written notice thereof to the Insurer
and the Noteholders and the Owner Trustee shall give prompt written notice
thereof to the Certificateholders and to the Rating Agencies.
Section 7.05. Waiver of Past Termination Events. The Holders of Notes
---------------------------------
evidencing not less than 51% of the Note Balance or, if the Notes have been paid
in full, the Holders of Certificates evidencing not less than 51% of the
Certificate Balance may, on behalf of all Noteholders and Certificateholders, as
applicable, waive any Master Servicer Termination Event or Subservicer
Termination Event and its consequences, except an event resulting from the
failure to make any required deposits to or payments from the Collection
Account, the Note Distribution Account, the Certificate Distribution Account or
the Reserve Fund in accordance with this Agreement; provided, however, that no
Master Servicer Termination Event or Subservicer Termination Event shall be
waived without the prior written consent of the Insurer, if such waiver would
reasonably be expected to have a material adverse effect upon the rights of the
Insurer. Notwithstanding the foregoing, so long as no Insurer Default shall have
occurred and be continuing, the Insurer may, on behalf of all Securityholders,
waive a Master Servicer Termination Event or a Subservicer Termination Event.
Upon any such waiver of a Master Servicer Termination Event or Subservicer
Termination Event, such event shall cease to exist, and shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other event or impair any right arising therefrom, except
to the extent expressly so waived.
61
ARTICLE EIGHT
TERMINATION
Section 8.01. Optional Purchase of All Receivables.
------------------------------------
(a) On the Distribution Date following the last day of any Collection
Period as of which the Pool Balance is 10% or less of the Cutoff Date Pool
Balance, the Master Servicer shall have the option to purchase the Trust Estate,
other than the Accounts and the Certificate Distribution Account. To exercise
such option, on the related Deposit Date the Master Servicer shall deposit
pursuant to Section 4.04(a) in the Collection Account an amount equal to the
aggregate Repurchase Payments for the Receivables (including Defaulted
Receivables), plus the appraised value of any such other property held by the
Issuer other than the Accounts and the Certificate Distribution Account, such
value to be determined by an appraiser mutually agreed upon by the Master
Servicer, the Issuer and the Trustees, and shall succeed to all interests in and
to the Issuer. Notwithstanding the foregoing, the Master Servicer shall not be
permitted to exercise such option unless the amount to be deposited in the
Collection Account pursuant to this Section is at least equal to the sum of the
Note Balance plus all accrued but unpaid interest (including any overdue
interest) on the Notes plus the Certificate Balance plus all accrued but unpaid
interest (including any overdue interest) on the Certificates plus all amounts
due to the Insurer under the Insurance Agreement and the other Basic Documents.
Upon such payment, the Master Servicer shall succeed to and own all interests in
and to the Issuer. The aggregate Repurchase Payment for such Distribution Date,
plus, to the extent necessary, all amounts in the Reserve Fund, shall be used to
make payments in full to the Noteholders, the Certificateholders and the Insurer
in the manner set forth in Article Four. The Master Servicer shall notify the
Owner Trustee, the Indenture Trustee, the Subservicer, the Insurer and the
Depositor of its exercise of the option hereunder no later than 20 days prior to
the related Distribution Date.
(b) If, at the time the Master Servicer exercises its purchase option
hereunder, the Master Servicer's long-term unsecured debt has a rating lower
than investment grade by the Rating Agencies, the Master Servicer shall deliver
to the Depositor, the Insurer, the Owner Trustee and the Indenture Trustee on
such Distribution Date (i) a letter from an Independent investment bank or an
Independent public accountant to the effect that the price paid by the Master
Servicer for the Receivables at the time of transfer pursuant to such purchase
option represented a fair market price for such Receivables or (ii) a letter
from the Rating Agencies to the effect that no such letter is required.
(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 shall succeed to the rights of the Noteholders hereunder and
the Indenture Trustee shall continue to carry out its obligations hereunder with
respect to the Certificateholders, including making distributions from the
Collection Account in accordance with Section 4.05(d), making withdrawals from
the Reserve Fund in accordance with Sections 4.05(b) and 4.06 and submitting
claims for payment under the Insurance Policy in accordance with the terms
thereof.
62
ARTICLE NINE
MISCELLANEOUS
Section 9.01. Amendment.
---------
(a) This Agreement may be amended by the Depositor, the Master Servicer,
the Subservicer and the Issuer, with the consent of the Indenture Trustee and,
so long as no Insurer Default shall have occurred and be continuing, the
Insurer, but without the consent of any Securityholders, (i) to cure any
ambiguity, to correct or supplement any provision in this Agreement which may be
inconsistent with any other provision of this Agreement, to add, change or
eliminate any other provision of this Agreement with respect to matters or
questions arising under this Agreement that shall not be inconsistent with the
provisions of this Agreement or (ii) to change the formula for determining the
Required Reserve Fund Balance, the manner in which the Reserve Fund is funded or
to amend or modify any provisions of this Agreement relating to the remittance
schedule with respect to collections deposited into the Collection Account
pursuant to Section 4.03; provided, however, that (i) any such action shall not,
as evidenced by an Opinion of Counsel delivered to the Insurer, adversely affect
in any material respect the interests of any Securityholder and the Opinion of
Counsel shall include an opinion to the effect that such amendment will not
cause the Issuer to be characterized for federal income tax purposes as an
association taxable as a corporation or otherwise have a material adverse impact
on the federal income taxation of any Outstanding Notes or Outstanding
Certificates or any Noteholder, Certificateholder or the Insurer, (ii) in
connection with any amendment pursuant to clause (ii) above, the Master Servicer
shall deliver to the Trustees a letter from each Rating Agency to the effect
that such amendment will not cause its then-current rating on any Securities to
be qualified, reduced or withdrawn and (iii) no such amendment will be permitted
without the consent of the Insurer if such amendment would reasonably be
expected to materially adversely affect the interests of the Insurer.
(b) This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Subservicer and the Issuer, with the consent of the
Indenture Trustee and, so long as no Insurer Default shall have occurred and be
continuing, the Insurer, the consent of the Holders of Notes evidencing not less
than a majority of the Note Balance or, if the Notes have been paid in full,
with the consent of the Owner Trustee, the consent of the Holders (as defined in
the Trust Agreement) evidencing not less than a majority of the 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) except as otherwise provided in Section 9.01(a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on or in respect of the Receivables or distributions
that shall be required to be made for the benefit of the Securityholders, (ii)
reduce the aforesaid percentages of the Note Balance or the Certificate Balance,
the consent of the Holders of which is required for any such amendment, without
the consent of all of the Securityholders and (iii) be permitted without the
consent of the Insurer if such amendment would reasonably be expected to
materially adversely affect the interests of the Insurer.
63
(c) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the
Insurer 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. The manner of obtaining such consents and of
evidencing the authorization of Certificateholders of the execution thereof
shall be subject to such reasonable requirements as the Owner Trustee may
require.
(d) Prior to the execution of any amendment to this Agreement, the Trustees
and the Insurer 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 9.02(i)(i). The
Trustees may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
Section 9.02. Protection of Title to Issuer.
-----------------------------
(a) The Depositor or the Master Servicer shall execute and file such
financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Issuer and of the
Indenture Trustee in the Receivables and in the proceeds thereof. The Depositor
shall deliver (or cause to be delivered) to the Trustees and the Insurer file-
stamped copies of, or filing receipts for, any document filed as provided above,
as soon as available following such filing.
(b) Neither the Depositor nor the Master 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
Section 9.02(a) seriously misleading within the meaning of Section 9-402(7) of
the UCC, unless it shall have given the Trustees and the Insurer at least 30
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements or such new financing statements as may be necessary to continue the
perfection of the interest of the Issuer and the Indenture Trustee for the
benefit of the Noteholders and the Insurer in the Receivables and the proceeds
thereof
(c) Each of the Seller, the Depositor, the Master Servicer and the
Subservicer shall give the Trustees at least 60 days' prior written notice of
any change in its jurisdiction of incorporation or organization or any
relocation of its principal executive office if, as a result of such relocation
or change, 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 Master Servicer and the Subservicer shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States.
(d) The Master Servicer and the Subservicer shall maintain accounts and
records as to each Receivable accurately and in sufficient detail to permit (i)
the reader thereof to know at any
64
time the status of such Receivable, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Receivable and the amounts from time
to time deposited in the Accounts and held by the Servicer in respect of such
Receivable.
(e) The Master Servicer and the Subservicer shall maintain its computer
systems so that, from and after the time of sale under this Agreement of the
Receivables, the Master Servicer's and the Subservicer's master computer records
(including any backup archives) that refer to a Receivable shall indicate
clearly the interest of the Issuer and the Indenture Trustee in such Receivable
and that such Receivable is owned by the Issuer and has been pledged to the
Indenture Trustee. Indication of the Issuer's and the Indenture Trustee's
interest in a Receivable shall be deleted from or modified on the Master
Servicer's and the Subservicer'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 Master 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 Depositor and the Master 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 Master Servicer and the Subservicer shall permit the Insurer and
the Indenture Trustee and their respective agents at any time during normal
business hours to inspect, audit and make copies of and abstracts from the
Master Servicer's or Subservicer's records regarding any Receivable.
(h) If the Seller has repurchased one or more Receivables from the Issuer
pursuant to Section 2.04 or the Master Servicer has purchased one or more
Receivables from the Issuer pursuant to Section 3.07, the Master Servicer shall,
upon request, furnish to the Owner Trustee, the Insurer or to the Indenture
Trustee, within five Business Days, a list of all Receivables (by contract
number and name of Obligor) then held as part of the Issuer, together with a
reconciliation of such list to the Receivables Schedule and to each of the
Master Servicer's Certificates furnished before such request indicating removal
of Receivables from the Issuer.
(i) The Master Servicer shall deliver to the Trustees and the Insurer:
(i) promptly after the execution and delivery of this Agreement and of
each amendment hereto, an Opinion of Counsel stating that, in the opinion
of such counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Depositor or the Issuer 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 (B) no such action shall be necessary to preserve and protect
such interest; and
(ii) within 90 days after the beginning of each fiscal year of the
Issuer beginning with the first fiscal year beginning more than three
months after the Cutoff
65
Date, an Opinion of Counsel, dated as of a date during such 90-day period,
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the interest of the Depositor
or the Issuer 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 (B) no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i) or (ii) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Depositor shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
Section 9.03. Notices. All demands, notices and communications under this
-------
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt in the case of (i) the Depositor, to PASS, in care of First Union
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel, (ii) the Master Servicer or the Seller, to Isuzu Motors
Acceptance Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Treasury Department, (iii) the Subservicer, to
The CIT Sales/Financing, Inc., ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Senior Vice President, with a copy to ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Senior Vice President, (iv) the
Issuer or the Owner Trustee, at the Corporate Trust Office (as such term is
defined in the Trust Agreement), (v) the Indenture Trustee, at the Corporate
Trust Office (as such term is herein defined), Attention: Corporate Trust
Administration Department, (vi) the Insurer, to MBIA Insurance Corporation, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Insured Portfolio Management,
Structured Finance, (vii) Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (viii)
Standard & Poor's, to Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Asset Backed Surveillance Department or (ix) as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
Section 9.04. Assignment.
----------
(a) Notwithstanding anything to the contrary contained herein, except as
provided in the remainder of this Section or as provided in Sections 5.03, 6.03
and 6.05, this Agreement may not be assigned by the Seller, the Depositor, the
Master Servicer or the Subservicer without the prior written consent of the
Insurer and Holders of Notes evidencing not less than a majority of the Note
Balance and Holders of Certificates evidencing not less than a majority of the
Certificate Balance.
(b) The Depositor hereby acknowledges and consents to the mortgage, pledge,
assignment and grant of a security interest by the Issuer to the Indenture
Trustee pursuant to the
66
Indenture for the benefit of the Noteholders and the Insurer of all right, title
and interest of the Issuer in, to and under the Receivables and/or the
assignment of any or all of the Issuer's rights and obligations hereunder to the
Indenture Trustee.
Section 9.05. Limitations on Rights of Others. The provisions of this
-------------------------------
Agreement are solely for the benefit of the Depositor, the Master Servicer, the
Subservicer, the Issuer, the Owner Trustee, the Certificateholders, the
Indenture Trustee, the Noteholders and the Insurer, 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. The Owner Trustee is a third-party beneficiary of Sections
2.08 and 6.02 of this Agreement and is entitled to the rights and benefits
thereof and may enforce the provisions as if it were a party hereto.
Section 9.06. Severability. If any one or more of the covenants,
------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of this
Agreement.
Section 9.07. Further Assurances. The Depositor, the Seller, the Master
------------------
Servicer, the Subservicer and the Issuer agree to do and perform, from time to
time, any and all acts and to execute any and all further instruments required
or reasonably requested by the Owner Trustee or the Indenture Trustee more fully
to effect the purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the Receivables for
filing under the provisions of the UCC of any applicable jurisdiction.
Section 9.08. No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Depositor, the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
provided in this Agreement are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 9.09. Separate Counterparts. This Agreement may be executed by the
---------------------
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 9.10. 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 9.11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND
67
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 9.12. Nonpetition Covenants. Notwithstanding any prior termination
---------------------
of this Agreement, the Owner Trustee, the Indenture Trustee, the Issuer, the
Master Servicer and the Subservicer shall not, prior to the date which 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 9.13. Limitation of Liability of Owner Trustee and Indenture
------------------------------------------------------
Trustee.
-------
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by the Owner Trustee not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall the Owner Trustee in its individual capacity or, except as expressly
provided in the Trust Agreement, as beneficial owner 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. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles Six, Seven and Eight of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by the Indenture Trustee, not in its individual
capacity but solely as Indenture Trustee and in no event shall the Indenture
Trustee 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.
Section 9.14. Insurer Defense Costs. Each of the Issuer, the
---------------------
Depositor, the Seller, the Master Servicer and the Subservicer acknowledges
Section 4.06 of the Trust Agreement and agrees that the Issuer shall reimburse
the Insurer for all Insurer Defense Costs pursuant to Section 4.05(d) of this
Agreement and Section 2.07(a) of the Indenture.
68
IN WITNESS WHEREOF, the parties hereto have caused this Sale and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
ISUZU AUTO OWNER TRUST 2001-1
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as
Owner Trustee on behalf of the Issuer
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Financial Services Officer
POOLED AUTO SECURITIES SHELF LLC,
as Depositor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
ISUZU MOTORS ACCEPTANCE
CORPORATION,
as Master Servicer and Seller
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
THE CIT GROUP/SALES FINANCING, INC.,
as Subservicer
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
69
Acknowledged and accepted as of the day
and year first above written:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Vice President
70
SCHEDULE A
RECEIVABLES SCHEDULE
Delivered to the Insurer, the Owner Trustee and Indenture Trustee on the Closing
Date.
SA-1
SCHEDULE B
LOCATION OF RECEIVABLE FILES
The CIT Group/Sales Financing, Inc.
Service Center
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
SB-1
SCHEDULE C
SERVICING ACTIVITIES
In accordance with this Agreement and the Credit and Collection Policy and
except as otherwise instructed by the Master Servicer in writing, the
Subservicer shall, on behalf of the Issuer, perform all necessary servicing
functions for the servicing, administration and collection of Receivables,
including the duties and responsibilities set forth below:
1. General Duties. The Subservicer shall perform the following general
--------------
services:
(a) Late Payment and Servicing. If payment of the amount due is
--------------------------
not received from an Obligor within 10 days following the date such payment
is due under a Receivable, the Subservicer shall contact such Obligor to
effect collection and to resolve delinquencies by lawful means, including,
but not limited to, the following:
(i) attempting to contact the Obligor by telephone to
encourage payment;
(ii) mailing of past due notices as necessary;
(iii) preparation and mailing of collection letters;
(iv) mailing reminder notices to the Obligor as deemed
necessary;
(v) using skip tracing techniques to locate a missing
Obligor;
(vi) calling directly on the Obligor;
(vii) identifying and taking action on reasonable
alternatives to avoid or minimize losses; and
(viii) initiating all steps leading to termination or
foreclosure actions deemed necessary, including sending legally
required notices of default.
(b) Extensions. Subject to Section 3.03 of the Agreement, the
----------
Subservicer may grant an extension (Monthly Payment deferrals) to an
Obligor having temporary cash flow problems. The Subservicer will exercise
care in offering extensions so as not to defer obvious losses.
(c) Payoffs. The Subservicer shall process payoffs by quoting
-------
amounts due, accepting payoff amounts, stamping Receivable documents "Paid"
and returning them to the Obligors, and arranging for the certificates of
title to be released for return to the Obligors or designated persons
authorized to pay off the Receivables.
(d) Insurance Claims. Filing and processing of insurance claims.
----------------
SC-1
(e) Bankruptcy. Filing claims in bankruptcy proceedings.
----------
(f) Credit Reporting. (i) Report accounts to credit bureaus and
----------------
(ii) respond to credit rating inquiries.
2. Insurer Instruction. Notwithstanding anything in the Agreement to the
-------------------
contrary, if the Insurer shall direct the Subservicer with respect to the manner
or procedure of the performance of any of the duties of the Subservicer under
the Agreement, the Subservicer shall promptly notify the Issuer and the Master
Servicer before complying with such direction.
3. Obligor Privacy. The Subservicer shall use its best efforts to
---------------
maintain the privacy of Obligors and applicants.
4. Reports. The Subservicer shall provide reports as set forth in the
-------
Servicing Agreement.
SC-2
SCHEDULE D
CREDIT AND COLLECTION POLICY
(See Attached)
SD-1
SCHEDULE E
YIELD SUPPLEMENT COLLATERALIZATION AMOUNT
The Yield Supplement Overcollateralization Amount on any Distribution Date
will be the amount specified below:
Closing Date $51,194,480.94 January 2004 $8,361,637.80
June 2001 $49,310,265.09 February 2004 $7,637,714.76
July 2001 $47,459,215.21 March 2004 $6,952,693.41
August 2001 $45,641,315.75 April 2004 $6,306,776.06
September 2001 $43,856,816.78 May 2004 $5,699,529.90
October 2001 $42,105,935.00 June 2004 $5,130,207.50
November 2001 $40,388,930.13 July 2004 $4,597,984.25
December 2001 $38,706,036.31 August 2004 $4,102,639.21
January 2002 $37,057,517.06 September 2004 $3,644,214.32
February 2002 $35,443,607.93 October 2004 $3,222,534.68
March 2002 $33,864,576.89 November 2004 $2,835,758.01
April 2002 $32,320,657.85 December 2004 $2,480,501.21
May 2002 $30,812,113.63 January 2005 $2,153,165.79
June 2002 $29,339,188.15 February 2005 $1,851,980.17
July 2002 $27,902,082.28 March 2005 $1,576,594.38
August 2002 $26,501,030.89 April 2005 $1,326,602.81
September 2002 $25,136,165.93 May 2005 $1,101,514.97
October 2002 $23,807,669.46 June 2005 $ 900,645.45
November 2002 $22,515,701.19 July 2005 $ 723,484.34
December 2002 $21,260,497.47 August 2005 $ 569,824.77
January 2003 $20,042,323.84 September 2005 $ 439,291.21
February 2003 $18,861,357.12 October 2005 $ 330,919.16
March 2003 $17,717,692.88 November 2005 $ 242,461.25
April 2003 $16,611,361.05 December 2005 $ 170,542.09
May 2003 $15,542,469.74 January 2006 $ 112,542.82
June 2003 $14,511,138.44 February 2006 $ 66,876.36
July 2003 $13,517,538.69 March 2006 $ 33,115.20
August 2003 $12,561,982.61 April 2006 $ 10,923.83
September 2003 $11,644,721.17 May 2006 $ 204.02
October 2003 $10,765,943.71 June 2006 $ 15.21
November 2003 $ 9,925,832.89 July 2006 $ 8.06
December 2003 $ 9,124,364.49 August 2006 $ 2.84
SE-1
SCHEDULE F
SUBSERVICER FEE
1. Monthly Payments. During the initial and any extended term of this
----------------
Agreement, the Subservicer shall invoice the Master Servicer for the following
sums within ten Business Days following the end of each calendar month, and the
Master Servicer shall pay the Subservicer the following sums within 20 Business
Days following the end of each calendar month:
(a) In connection with Light Vehicle Receivables:
(i) Monthly Servicing Fee: $9.50 per Receivable serviced during
the preceding calendar month.
(b) In connection with Commercial Vehicle Receivables:
(i) Monthly Servicing Fee: $15 per Receivable serviced during
the preceding calendar month; and
(ii) Delinquent Account Fees: $6 per Receivable 15 through 29
days delinquent as of the last day of the preceding month. $12 per
Receivable 30 through 59 days delinquent as of the last day of the
preceding month.
2. Minimum Monthly Payments. Notwithstanding anything to the contrary in
------------------------
Section 1 of this Schedule F, the Master Servicer shall pay the Subservicer the
minimum monthly payments (the "Minimum Monthly Payments") of $17,000 in the
event that (and in lieu of) the total amounts payable by the Master Servicer to
the Subservicer pursuant to Section 1 of this Schedule F and in connection with
any servicing of any kind performed by CITSF for IMAC in the aggregate in a
particular calendar month fails to generate such minimum amounts.
3. Reimbursement of Expenses. The Subservicer shall be responsible for
-------------------------
all costs and expenses incurred in connection with the performance of its
Servicing Duties hereunder, except that the Master Servicer shall reimburse the
Subservicer in accordance with the terms of the Sale and Servicing Agreement and
for the following out-of-pocket expenses actually and reasonably incurred by the
Subservicer:
(a) customary and necessary repossession expenses incurred in
accordance with the Credit and Collection Policy and attributable to the
transportation, repair, care, custody, control and resale of repossessed
Light Vehicles and Commercial Vehicles, including, but not limited to,
unpaid personal property taxes and lot rent;
(b) all initial, renewal and examination fees incurred in
connection with any sales finance, motor vehicle sales finance or business
licenses required by any state, county, municipality or other governmental
unit and which the Subservicer is obligated to maintain solely as a result
of the performance of its Servicing Duties hereunder; and
SF-1
(c) expenses of counsel incurred in connection with the enforcement
of Receivables after default (including during any bankruptcy proceedings)
together with court costs incurred in connection therewith: notwithstanding
the foregoing, the Subservicer shall not incur and the Master Servicer
shall not be obligated to reimburse more than $1,200 for such expenses and
costs in connection with any Receivable without the express prior written
consent of the Master Servicer; and
4. The fees set forth herein shall be subject to an annual adjustment
beginning on the anniversary date of this Agreement. Each such fee shall be
increased by an amount equal to the annual consumer price index.
SF-2
EXHIBIT A
FORM OF DISTRIBUTION STATEMENT TO SECURITYHOLDERS
Isuzu Auto Owner Trust 2001-1
Note Principal Distributable Amount $___________________
Class A-1 Notes: $ per $1,000 original principal amount
Class A-2 Notes: $ per $1,000 original principal amount
Class A-3 Notes: $ per $1,000 original principal amount
Class A-4 Notes: $ per $1,000 original principal amount
Note Interest Distributable Amount $___________________
Class A-1 Notes: $ per $1,000 original principal amount
Class A-2 Notes: $ per $1,000 original principal amount
Class A-3 Notes: $ per $1,000 original principal amount
Class A-4 Notes: $ per $1,000 original principal amount
Certificate Principal Distributable Amount (per $1,000 original principal amount) $___________________
Certificate Interest Distributable Amount (per $1,000 original principal amount) $___________________
Available Collections $___________________
Available Interest $___________________
Available Principal $___________________
Available Funds $___________________
Note Distributable Amount $___________________
Certificate Distributable Amount $___________________
Pool Balance as of the close of business on the last day of the Collection
Period $___________________
(per $1,000 original principal amount)
Note Pool Factor $___________________
Class A-1 Notes: $___________________
Class A-2 Notes: $___________________
Class A-3 Notes: $___________________
Class A-4 Notes: $___________________
Certificate Pool Factor $___________________
Note Balance $___________________
Class A-1 Notes: $___________________
Class A-2 Notes: $___________________
Class A-3 Notes: $___________________
Class A-4 Notes: $___________________
Certificate Balance $___________________
Reserve Fund Amount $___________________
change from immediately preceding Distribution Date $___________________
Reserve Fund Draw Amount $___________________
Servicing Fee $___________________
A-1
Subservicer Fee $___________________
Insurance Premium (s) Due $___________________
Current Amount Due $___________________
Overdue Premiums $___________________
Unreimbursed Insurance Payments $___________________
Current Amount Due $___________________
Accrued Interest $___________________
Insurance Payment Amount $___________________
(sum of Insurance Premiums Due and Unreimbursed Insurance Payments)
Required Payment Amount $___________________
Aggregate Amount of Defaulted Receivables $___________________
Aggregate Repurchase Amount of Repurchased Receivables $___________________
Trust Fees and Expenses $___________________
Repurchase Payments $___________________
Net Losses on the Receivables $___________________
Aggregate Principal Balance of Receivables $___________________
31 to 60 days past due (No. of Receivables ____) $________________
61 to 90 days past due (No. of Receivables ____) $________________
91 or more days past due (No. of Receivables ____) $________________
A-2
EXHIBIT B
FORM OF MASTER SERVICER'S CERTIFICATE
Isuzu Motors Acceptance Corporation
________________________________________________________________________________
Isuzu Auto Owner Trust 2001-1
________________________________________________________________________________
Collection Period ___________________
Determination Date ___________________
Distribution Date ___________________
1. Pool Balance as of the close of business on the last day of the Collection Period $__________________
(per $1,000 original principal amount)
2. Note Balance
a. Class A-1 Notes $
b. Class A-2 Notes $
c. Class A-3 Notes $
d. Class A-4 Notes $
3. Certificate Balance $
4. Pool Factors
a. Class A-1 Notes
b. Class A-2 Notes
c. Class A-3 Notes
d. Class A-4 Notes
e. Certificates
5. Available Funds $___________________
6. Available Collections $___________________
a. Available Interest $___________________
b. Available Principal $___________________
7. Total Servicing Fee $___________________
a. Servicing Fee $___________________
b. Amount Unpaid from prior months $___________________
8. Total Subservicer Fee
a. Subservicer Fee $___________________
b. Amount Unpaid from prior months $___________________
9. Note Principal Distributable Amount (per $1,000 original principal amount) $___________________
a. Class A-1 Notes (per $1,000 original principal amount) $___________________
b. Class A-2 Notes (per $1,000 original principal amount) $___________________
c. Class A-3 Notes per $1,000 original principal amount) $___________________
d. Class A-4 Notes (per $1,000 original principal amount) $___________________
10. Note Interest Distributable Amount (per $1,000 original principal amount) $___________________
a. Class A-1 Notes (per $1,000 original principal amount) $___________________
b. Class A-2 Notes (per $1,000 original principal amount) $___________________
c. Class A-3 Notes (per $1,000 original principal amount) $___________________
d. Class A-4 Notes (per $1,000 original principal amount) $___________________
B-1
11. Note Distributable Amount (per $1,000 original principal amount) $___________________
12. Certificate Principal Distributable Amount (per $1,000 original principal amount) $___________________
13. Certificate Interest Distributable Amount (per $1,000 original principal amount) $___________________
14. Certificate Distributable Amount (per $1,000 original principal amount) $___________________
15. Insurance Premium(s) Due
a. Current Amount Due $___________________
b. Overdue Premiums $___________________
16. Unreimbursed Insurance Payments
a. Current Amount Due $___________________
b. Accrued Interest $___________________
17. Insurance Payment Amount (sum of Line 15 + Line 16) $___________________
18. Required Payment Amount $___________________
19. Reserve Fund Amount $___________________
Change from immediately preceding Distribution Date $___________________
20. Reserve Fund Draw Amount $___________________
21. The lesser of: (a or b)
a. The amount, if any, by which the sum of the Required Payment Amount for the
Distribution Date plus the Insurance Payment Amount for the Distribution Date
exceeds Available Collections for such Distribution Date $___________________
b. The Reserve Fund Amount for such Distribution Date (before giving effect to any
deposits to or withdrawals from the Reserve Fun on the related Distribution Date) $___________________
22. The amount by which the Required Payment Amount exceeds the sum of Available Collections
plus the Reserve Fund Draw Amount: $___________________
23. Reserve Fund Amount $___________________
24. The amount by which the Required Reserve Fund Balance exceeds the Reserve
Fund Amount $___________________
25. Aggregate Amount of Defaulted Receivables $___________________
Account No. ___ $___________________
26. Aggregate Repurchase Amount of Repurchased Receivables $___________________
Account No. ___ $___________________
27. Trust Fees and Expenses $___________________
28. Repurchase Payments $___________________
29. Net Losses on the Receivables $___________________
30. Aggregate Principal Balance of Receivables $___________________
a. 31 to 60 days past due (No. of Receivables ____) $___________________
b. 61 to 90 days past due (No. of Receivables ____) $___________________
c. 91 or more days past due (No. of Receivables ____) $___________________
Instructions to the Indenture Trustee
-------------------------------------
From the Collections Account:
B-2
1. To the Master Servicer $___________________
2. To the Subservicer $___________________
3. To the Note Distribution Account $___________________
4. To the Certificate Distribution Account $___________________
5. To the Insurer $___________________
5. To the Reserve Fund $___________________
6. To the Subservicer $___________________
7. To the Seller $___________________
From the Note Distribution Account:
1. To the Class-1 Noteholders $___________________
2. To the Class-2 Noteholders $___________________
3. To the Class-3 Noteholders $___________________
4. To the Class-4 Noteholders $___________________
From the Certificate Distribution Account:
1. To the Certificateholders $___________________
From the Reserve Fund:
1. To the Collections Account $___________________
2. To the Seller $___________________
3. To the Insurer $___________________
B-3
EXHIBIT C
CERTIFICATE OF TITLE/LIEN EXCEPTION REPORT
Status of Title Documents
The Master Servicer certifies that, as of the date hereof, the Subservicer
has produced a file listing the status of the Title Documents relating to each
Receivable pursuant to Section 2.05 of the Sale and Servicing Agreement, dated
as of April 1, 2001, among Isuzu Auto Owner Trust 2001-1, as Issuer, Pooled Auto
Securities Shelf LLC, as Depositor, Isuzu Motors Acceptance Corporation, as
Seller and Master Servicer, and The CIT Group/Sales Financing, Inc., as
Subservicer (the "Sale and Servicing Agreement"), and has identified in the
exception listing below the following Title Document exceptions (including
missing Title Documents or Title Documents that have been received but do not
list the Seller as the secured party and holder of a first priority security
interest in the related Financed Vehicle).
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, ______________________ has caused this certificate to
be executed by its duly authorized officer as of this ____ day of
_______________________, 2001.
ISUZU MOTORS ACCEPTANCE CORPORATION
By: ______________________________________
Name:
Title
[Certification at August 2001 Distribution Date]
[Final Certification at November 2001 Distribution Date]
Exception Listing
Original
Obligor Amount Principal Accrued Repurchase
Loan # Name Financed Balance* Interest* Payment*
*For final certification only
C-1