BAY VIEW SECURITIZATION CORPORATION
Depositor
CALIFORNIA THRIFT & LOAN
Servicer
and
BANKERS TRUST COMPANY
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 29, 1997
$253,224,989
Bay View 1997 RA-1 Auto Trust
$ 200,979,000 6.29% Class A-1 Automobile Receivable Backed Certificates
$ 52,245,989 6.59% Class A-2 Automobile Receivable Backed Certificates
Class I Interest Only Automobile Receivable Backed Certificates
and
Class IC Automobile Receivable Backed Certificate
TABLE OF CONTENTS
Page
ARTICLE I Creation of Trust . . . . . . . . . . . . . . . . . .1
ARTICLE II Definitions . . . . . . . . . . . . . . . . . . . . .1
SECTION 2.01. Definitions. . . . . . . . . . . . . .1
SECTION 2.02. Usage of Terms . . . . . . . . . . . 16
SECTION 2.03. Cutoff Date and Record Date. . . . . 16
SECTION 2.04. Section References . . . . . . . . . 16
ARTICLE III Conveyance of Receivables . . . . . . . . . . . . .17
ARTICLE IV Acceptance by Trustee . . . . . . . . . . . . . . . 18
ARTICLE V Information Delivered to the Rating Agency. . . . . 18
ARTICLE VI Agent for Service . . . . . . . . . . . . . . . . . 19
ARTICLE VII The Receivables . . . . . . . . . . . . . . . . . .19
SECTION 7.01. Representations and Warranties of
Depositor . . . . . . . . . . . . . .19
SECTION 7.02. Repurchase Upon Breach . . . . . . . 20
SECTION 7.03. Custody of Receivable Files. . . . . 21
SECTION 7.04. Duties of Servicer as Custodian. . . 21
SECTION 7.05. Instructions; Authority to Act . . . 22
SECTION 7.06. Custodian's Indemnification. . . . . 22
SECTION 7.07. Effective Period and Termination . . 22
SECTION 7.08. Liability of the Tax Class IC
Certificateholder and the
Certificateholders . . . . . . . . . 22
ARTICLE VIII Administration and Servicing of Receivables . . .23
SECTION 8.01. Duties of Servicer . . . . . . . . . 23
SECTION 8.02. Collection of Receivable Payments. . 24
SECTION 8.03. Realization Upon Receivables . . . . 24
SECTION 8.04. Physical Damage Insurance. . . . . . 25
SECTION 8.05. Maintenance of Security Interests
in Financed Vehicles . . . . . . . . 25
SECTION 8.06. Covenants of Servicer. . . . . . . . 25
SECTION 8.07. Purchase of Receivables Upon Breach. 25
SECTION 8.08. Servicing Fee. . . . . . . . . . . . 25
SECTION 8.09. Servicer's Certificate . . . . . . . 26
SECTION 8.10. Annual Statement as to Compliance;
Notice of Default . . . . . . . . . .26
SECTION 8.11. Annual Independent Certified Public
Accountant's Report . . . . . . . . .27
SECTION 8.12. Access to Certain Documentation and
Information Regarding Receivables . .27
SECTION 8.13. Servicer Expenses. . . . . . . . . . 28
SECTION 8.14. Reports to Certificateholders. . . . 28
ARTICLE IX Distributions; Statements to Certificateholders . . 28
SECTION 9.01. Certificate Account. . . . . . . . . 28
SECTION 9.02. Collections. . . . . . . . . . . . . 28
SECTION 9.03. Purchase Amounts . . . . . . . . . . 30
SECTION 9.04. Distributions to Parties . . . . . . 30
SECTION 9.05. Advances . . . . . . . . . . . . . . 32
SECTION 9.06. Net Deposits . . . . . . . . . . . . 32
SECTION 9.07. Statements to Certificateholders . . 33
SECTION 9.08. Intentionally Blank. . . . . . . . . 33
SECTION 9.09. Payahead Account . . . . . . . . . . 33
SECTION 9.10. Calculation of Notional Principal
Amount. . . . . . . . . . . . . . . .34
ARTICLE X Credit Enhancement. . . . . . . . . . . . . . . . . 34
SECTION 10.01. Subordination . . . . . . . . . . . 34
SECTION 10.02. Spread Account. . . . . . . . . . . 34
SECTION 10.03. Surety Bond . . . . . . . . . . . . 35
ARTICLE XI The Certificates. . . . . . . . . . . . . . . . . . 36
SECTION 11.01. The Certificates. . . . . . . . . . 36
SECTION 11.02. Authentication of Certificates. . . 36
SECTION 11.03. Registration of Transfer and
Exchange of Certificates . . . . . .36
SECTION 11.04. Mutilated, Destroyed, Lost, or Stolen
Certificates . . . . . . . . . . . .37
SECTION 11.05. Persons Deemed Owners . . . . . . . 37
SECTION 11.06. Access to Agreement and List of
Certificateholders' Names and
Addresses . . . . . . . . . . . . . 37
SECTION 11.07. Maintenance of Office or Agency . . 38
SECTION 11.08. Book-Entry Certificates . . . . . . 38
SECTION 11.09. Notices to Clearing Agency. . . . . 38
SECTION 11.10. Definitive Certificates . . . . . . 39
SECTION 11.11. The Tax Partnership Agreement . . . 39
ARTICLE XII The Depositor . . . . . . . . . . . . . . . . . . 39
SECTION 12.01. Representations and Undertakings
of Depositor . . . . . . . . . . . .39
SECTION 12.02. Merger or Consolidation of, or
Assumption of the Obligations
of Depositor. . . . . . . . . . . . 41
SECTION 12.03. Limitation on Liability of Depositor
and Others . . . . . . . . . . . . .42
SECTION 12.04. Depositor May Own Certificates. . . 42
ARTICLE XIII The Servicer. . . . . . . . . . . . . . . . . . .42
SECTION 13.01. Representations of Servicer . . . . 42
SECTION 13.02. Indemnities of Servicer . . . . . . 43
SECTION 13.03. Merger or Consolidation of, or
Assumption of the Obligations of
Servicer. . . . . . . . . . . . . . 44
SECTION 13.04. Limitation on Liability of Servicer
and Others . . . . . . . . . . . . .45
SECTION 13.05. Servicer Not to Resign. . . . . . . 45
SECTION 13.06. Delegation of Duties. . . . . . . . 45
ARTICLE XIV Default. . . . . . . . . . . . . . . . . . . . . . 46
SECTION 14.01. Events of Default . . . . . . . . . 46
SECTION 14.02. Appointment of Successor. . . . . . 47
SECTION 14.03. Notification to Certificateholders. 48
SECTION 14.04. Waiver of Past Defaults . . . . . . 48
ARTICLE XV The Trustee . . . . . . . . . . . . . . . . . . . . 49
SECTION 15.01. Duties of Trustee . . . . . . . . . 49
SECTION 15.02. Trustee's Certificate . . . . . . . 50
SECTION 15.03. Trustee's Assignment of Purchased
Receivables . . . . . . . . . . . . 51
SECTION 15.04. Certain Matters Affecting the
Trustee . . . . . . . . . . . . . . 51
SECTION 15.05. Trustee Not Liable for Certificates or
Receivables . . . . . . . . . . . . 52
SECTION 15.06. Trustee May Own Certificates. . . . 53
SECTION 15.07. Trustee's Fees and Expenses . . . . 53
SECTION 15.08. Eligibility Requirements for
Trustee . . . . . . . . . . . . . . 53
SECTION 15.09. Resignation or Removal of Trustee . 54
SECTION 15.10. Successor Trustee . . . . . . . . . 54
SECTION 15.11. Merger or Consolidation of Trustee. 55
SECTION 15.12. Appointment of Co-Trustee or Separate
Trustee . . . . . . . . . . . . . . 55
SECTION 15.13. Representations and Warranties of
Trustee . . . . . . . . . . . . . . 56
ARTICLE XVI Termination. . . . . . . . . . . . . . . . . . . . 57
SECTION 16.01. Termination of the Trust. . . . . . 57
SECTION 16.02. Optional Purchase of All
Receivables . . . . . . . . . . . . 58
SECTION 16.03. Termination upon an Insolvency Event
with respect to the Tax Class IC
Certificateholder . . . . . . . . . 58
ARTICLE XVII Miscellaneous Provisions. . . . . . . . . . . . . 59
SECTION 17.01. Amendment . . . . . . . . . . . . . 59
SECTION 17.02. Protection of Title to Trust. . . . 60
SECTION 17.03. Limitation on Rights of
Certificateholders . . . . . . . . .62
SECTION 17.04. Governing Law . . . . . . . . . . . 62
SECTION 17.05. Notices . . . . . . . . . . . . . . 62
SECTION 17.06. Severability of Provisions. . . . . 63
SECTION 17.08. Certificates Nonassessable and Fully
Paid . . . . . . . . . . . . . . . .63
SECTION 17.09. Nonpetition Covenants . . . . . . . 63
SECTION 17.10. Counterparts. . . . . . . . . . . . 64
SECTION 17.11. Third Party Beneficiary . . . . . . 64
EXHIBIT 1 - Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 2 - Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 3 - Servicer's Certificate
EXHIBIT A-1 - Form of Class A-1 Automobile Receivable Backed Certificate
EXHIBIT A-2 - Form of Class A-2 Automobile Receivable Backed Certificate
EXHIBIT B - Form of Class I Automobile Receivable Backed Certificate
EXHIBIT C - Form of Class IC Automobile Receivable Backed Certificate
EXHIBIT D - Form of Depository Trust Co. Letter of Representations
SCHEDULE A - Schedule of Receivables
SCHEDULE B - Location of Receivables
SCHEDULE C - Planned Notional Principal Amount Schedule
ANNEX A - Tax Partnership Agreement
This POOLING AND SERVICING AGREEMENT, dated as of January 29, 1997, is made
with respect to the formation of the Bay View 1997-RA-1 Auto Trust, among BAY
VIEW SECURITIZATION CORPORATION, a Delaware corporation, as depositor (the
"Depositor"), CALIFORNIA THRIFT & LOAN, a California corporation, as servicer
(the "Servicer"), and BANKERS TRUST COMPANY, a New York banking corporation, as
trustee (the "Trustee").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
CREATION OF TRUST
Upon the execution of this Agreement by the parties hereto, there is hereby
created the Bay View 1997-RA-1 Auto Trust.
The parties hereto intend that this Agreement be construed so as to create
a partnership, for tax purposes, formed to facilitate the direct investment by
Certificateholders in the assets of the Trust.
ARTICLE II
DEFINITIONS
SECTION 2.01. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Advance" means, with respect to a Receivable and with respect to a
Collection Period, the amount that the Servicer advances pursuant to Section
9.05.
"Affiliate" means any wholly-owned subsidiary of BVCC, a Delaware
corporation, excluding CTL.
"Agreement" means this Pooling and Servicing Agreement executed by the
Depositor, the Servicer and the Trustee, and all amendments and supplements
thereto.
"Amount Financed", with respect to a Receivable, means the amount advanced
under the Receivable toward the purchase price of the Financed Vehicle and any
related costs.
"Approved Rating" means a rating of P-1 by Moody's or A-l+ by Standard &
Poor's.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, the City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Available Spread Amount" means, on any Distribution Date, the amount on
deposit in the Spread Account, including any amounts retained in respect of
Outstanding Advances and any income or gain from any investment of funds in the
Spread Account, net of any losses from such investment before giving effect to
deposits into or withdrawals from the Spread Account pursuant to Article IX.
"Available Funds" means the amount defined as such in Section 9.02.
"Bank" means Bay View Federal Bank, a Federal Savings Bank.
"Book-Entry Certificates" means certificates evidencing a beneficial
interest in the Certificates, ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section 11.08;
provided, however, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer permitted and Definitive Certificates
are to be issued to the Certificate Owners, such Certificates shall no longer be
"Book-Entry Certificates".
"Business Day" means, unless otherwise specified, any day other than a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or San Francisco, California shall be authorized or obligated by law, executive
order, or governmental decree to be closed. The Servicer shall provide prior
notice to a Responsible Officer of the Trustee of any such day on which banking
institutions in San Francisco shall be so authorized or obligated to close.
"BVCC" means Bay View Capital Corporation, a Delaware corporation holding
100% of the Depositor's outstanding Common Stock.
"Certificate" means a Class A Certificate, a Class I Certificate or a Class
IC Certificate.
"Certificateholder" or "Holder" means the Person in whose name the
respective Certificate shall be registered in the Certificate Register, except
that, solely for the purposes of giving any consent, waiver, request, or demand
pursuant to the Agreement, the interest evidenced by any Certificate registered
in the name of the Depositor, the Servicer or CTL, or any Person controlling,
controlled by, or under common control with the Depositor or the Servicer, shall
not be taken into account in determining whether the requisite percentage of
Certificates (except the Class IC Certificate) necessary to effect any such
consent, waiver, request, or demand shall have been obtained. The Depositor or
the Servicer shall notify a Responsible Officer of the Trustee of a change in
any Person controlling, controlled by or under common control with the Depositor
or the Servicer, as the case may be. The term "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly and indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Certificate Account" means the account designated as such, established and
maintained pursuant to Section 9.01.
"Certificate Balance" means, at any time, the Initial Certificate Balance
minus all distributions of Monthly Principal made up to such time.
"Certificate Factor" means a seven digit decimal number computed by the
Servicer and stated in the Servicer's Certificate which is computed by dividing
the Certificate Balance (after giving effect to any prior distribution of
Monthly Principal) by the Initial Certificate Balance.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Certificate Register" and "Certificate Registrar" mean, respectively, the
register maintained and the registrar appointed pursuant to Section 11.03.
"Class A Certificate" means a certificate executed on behalf of the Trust
and authenticated by the Trustee substantially in the form attached hereto as
Exhibit A-1 or Exhibit A-2.
"Class A Certificateholder" means the Person in whose name the respective
Class A Certificate shall be registered in the Certificate Register, except
that, solely for the purposes of giving any consent, waiver, request, or demand
pursuant to this Agreement, the interest evidenced by any Class A Certificate
registered in the name of the Depositor, the Servicer or CTL, or any Person
controlling, controlled by, or under common control with the Depositor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class A Monthly Interest" means, for any Distribution Date, the sum of
Class A-1 Monthly Interest and Class A-2 Monthly Interest.
"Class A-1 Certificate" means a certificate executed on behalf of the Trust
and authenticated by the Trustee substantially in the form attached hereto as
Exhibit A-1.
"Class A-1 Certificate Balance" means, at any time, the Initial Class A-1
Certificate Balance minus all distributions of Monthly Principal to Class A-1
Certificateholders made up to such time.
"Class A-1 Certificate Factor" means a seven digit decimal number computed
by the Servicer and stated in the Servicer's Certificate which is computed by
dividing the Class A-1 Certificate Balance (after giving effect to any prior
distribution of Monthly Principal) by the Initial Class A-1 Certificate Balance.
"Class A-1 Certificateholder" means the Person in whose name the respective
Class A-1 Certificate shall be registered in the Certificate Register, except
that, solely for the purposes of giving any consent, waiver, request, or demand
pursuant to this Agreement, the interest evidenced by any Class A-1 Certificate
registered in the name of the Depositor, the Servicer or CTL, or any
Person controlling, controlled by, or under common control with the Depositor or
the Servicer (as defined in Section 12.01(b)(ii)(C)), shall not be taken into
account in determining whether the requisite percentage necessary to effect any
such consent, waiver, request, or demand shall have been obtained.
"Class A-1 Final Scheduled Distribution Date" means the Distribution Date
occurring in December 2001.
"Class A-1 Monthly Interest" means, (i) for the first Distribution Date,
the product of the following: the Initial Multiplier multiplied by one-twelfth
of the Class A-1 Pass-Through Rate multiplied by the Class A-1 Certificate
Balance at the Closing Date and (ii) for any subsequent Distribution Date,
one-twelfth of the product of the Class A-1 Pass-Through Rate and the
Class A-1 Certificate Balance as of the immediately preceding Distribution
Date (after giving effect to any distribution of Monthly Principal made on such
immediately preceding Distribution Date).
"Class A-1 Monthly Principal" means that portion of Monthly Principal to be
distributed to Class A-1 Certificateholders on each Distribution Date in
accordance with Section 9.04.
"Class A-1 Pass-Through Rate" means 6.29% per annum, payable monthly at
one-twelfth of the annual rate.
"Class A-2 Certificate" means a certificate executed on behalf of the Trust
and authenticated by the Trustee substantially in the form attached hereto as
Exhibit A-2.
"Class A-2 Certificate Balance" means, at any time, the Initial Class A-2
Certificate Balance minus all distributions of Monthly Principal to Class A-2
Certificateholders made up to such time.
"Class A-2 Certificate Factor" means a seven digit decimal number computed
by the Servicer and stated in the Servicer's Certificate which is computed by
dividing the Class A-2 Certificate Balance (after giving effect to any prior
distribution of Monthly Principal) by the Initial Class A-2 Certificate Balance.
"Class A-2 Certificateholder" means the Person in whose name the respective
Class A-2 Certificate shall be registered in the Certificate Register, except
that, solely for the purposes of giving any consent, waiver, request, or demand
pursuant to this Agreement, the interest evidenced by any Class A-2 Certificate
registered in the name of the Depositor, the Servicer or CTL, or any Person
controlling, controlled by, or under common control with the Depositor or the
Servicer (as defined in Section 12.01(b)(ii)(C)), shall not be taken into
account in determining whether the requisite percentage necessary to effect
any such consent, waiver, request, or demand shall have been obtained.
"Class A-2 Final Scheduled Distribution Date" means the Distribution Date
occurring in December 2004.
"Class A-2 Monthly Interest" means, (i) for the first Distribution Date,
the product of the following: the Initial Multiplier multiplied by one twelfth
of the Class A-2 Pass-Through Rate multiplied by the Class A-2 Certificate
Balance at the Closing Date and (ii) for any subsequent Distribution Date,
one-twelfth of the product of the Class A-2 Pass-Through Rate and the Class A-2
Certificate Balance as of the immediately preceding Distribution Date (after
giving effect to any distribution of Monthly Principal made on such
immediately preceding Distribution Date).
"Class A-2 Monthly Principal" means that portion of Monthly Principal to be
distributed to Class A-2 Certificateholders on each Distribution Date in
accordance with Section 9.04.
"Class A-2 Pass-Through Rate" means 6.59% per annum, payable monthly at
one-twelfth of the annual rate.
"Class I Certificate" means a certificate executed on behalf of the Trust
and authenticated by the Trustee substantially in the form attached hereto as
Exhibit B.
"Class I Certificateholder" means the Person in whose name the respective
Class I Certificate shall be registered in the Certificate Register, except that
solely for the purposes of giving any consent, waiver, request, or demand
pursuant to the Agreement, the interest evidenced by any Class I Certificate
registered in the name of the Depositor, the Servicer or CTL, or any Person
controlling, controlled by, or under common control with the Depositor or the
Servicer (as defined in Section 12.01(b)(ii)(C)), shall not be taken into
account in determining whether the requisite percentage necessary to effect any
such consent, waiver, request, or demand shall have been obtained.
"Class I Final Scheduled Distribution Date" means December 2004.
"Class I Monthly Interest" means (i) for the first Distribution Date, the
product of the following: the Initial Multiplier multiplied by one-twelfth of
the Class I Pass-Through Rate multiplied by the Notional Principal Amount of the
Class I Certificates at the Closing Date, and (ii) for any subsequent
Distribution Date, one-twelfth of the product of the Class I Pass-Through Rate
and the Notional Principal Amount as of the immediately preceding Distribution
Date (after giving effect to any reduction of the Notional Principal Amount on
such preceding Distribution Date); provided, however, that after the Class I
Final Scheduled Distribution Date, the Class I Monthly Interest shall be zero.
"Class I Pass-Through Rate" means 3.15% per annum, payable monthly at
one-twelfth of the annual rate.
"Class IC Certificate" means a certificate executed on behalf of the Trust
and authenticated by the Trustee substantially in the form attached hereto as
Exhibit C.
"Class IC Certificateholder" means the Depositor or any Person in whose
name the Class IC Certificate shall be registered in the Certificate Register.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means January 29, 1997.
"Collected Interest" on a Receivable, as of the last day of a Collection
Period, means the portion of all payments received by the Servicer allocable to
interest relating to such Collection Period.
"Collected Principal" on a Receivable, as of the last day of a Collection
Period, means the portion of all payments received by the Servicer allocable to
principal relating to such Collection Period.
"Collection Period" means (i) initially, the period from the day after the
Cutoff Date to the end of the calendar month of January 1997 and
(ii) thereafter, each calendar month, until the Trust shall terminate
pursuant to Article 16.
"Companion Component" means, for each respective Distribution Date, the
difference between the Certificate Balance and the PAC Component.
"Corporate Trust Office" means the office of the Trustee at which its
corporate trust business shall, at any particular time, be administered, which
office at the date of the execution of this Agreement is located at Four ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; Attention: Corporate Trust and Agency Group;
Telecopy (▇▇▇) ▇▇▇-▇▇▇▇ or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor and the
Servicer.
"CTL" means California Thrift & Loan, a California corporation, and its
successors and assigns, other than in its capacity as Servicer.
"Cutoff Date" means December 31, 1996.
"Dealer" means the seller of a Financed Vehicle, who originated and
assigned the related Receivable to CTL under an existing agreement with CTL or
who arranged for a loan from CTL to the purchaser of a Financed Vehicle under an
existing agreement with CTL.
"Defaulted Receivable" means, for any Collection Period, a Receivable as to
which any of the following has occurred: (i) any payment was delinquent 150
days or more as of the last day of such Collection Period, (ii) the Financed
Vehicle that secures the Receivable has been repossessed, or (iii) the Servicer
has determined that the Receivable is uncollectible in accordance with the
Servicer's customary practices on or before the last day of such Collection
Period; provided, however, that "Defaulted Receivable" shall not include any
Receivable that has been repurchased pursuant to Section 7.02 or purchased
pursuant to Section 8.07 and provided further, that any Advances made pursuant
to Section 9.05 shall not be considered in the determination of the delinquency
status with respect to such Receivable.
"Definitive Certificate" means a Certificate defined as such in Section
11.08.
"Depositor" means Bay View Securitization Corporation, a Delaware
corporation, in its capacity as the depositor of the Receivables under this
Agreement, and each successor to Bay View Securitization Corporation (in the
same capacity) pursuant to Section 12.03.
"Depository Agreement" means the agreement among the Depositor, the Trustee
and the initial Clearing Agency in the form attached hereto as Exhibit D.
"Determination Date" means, for each Collection Period, the 10th calendar
day of the following month, (or in the event such day is not a Business Day, on
the next succeeding Business Day).
"Dissolution Distribution Date" means the Distribution Date following the
liquidation of the trust corpus pursuant to Section 16.02 or Section 16.03.
"Distribution Date" means, for each Collection Period, the 15th calendar
day of each month (or, in the event such day is not a Business Day, the next
succeeding Business Day). The first Distribution Date shall be February 18,
1997.
"Eligible Bank" means any depository institution with trust powers
(including the Trustee), organized under the laws of the United States or any
State having a net worth in excess of $50,000,000, the deposits of which are
insured to the full extent permitted by law by the Federal Deposit Insurance
Corporation, which is subject to supervision and examination by Federal or State
authorities and which (A) (i) has a long-term unsecured debt rating of at least
Baa3 from Moody's and BBB- from Standard & Poor's and (ii) a short-term
unsecured debt rating of at least P-2 from Moody's and A-2 from Standard &
Poor's or (B) is approved by each Rating Agency and the Surety Bond Issuer.
"Eligible Investment" means any of the following:
(i) direct obligations of, and obligations the full and timely payment of
principal and interest on which is fully guaranteed by, the United States of
America, the Federal National Mortgage Association, or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposits of, bankers'
acceptances issued by, or federal funds sold by any depository institution or
trust company (including the Trustee or any agent of the Trustee, acting in
their respective commercial capacities) incorporated under the laws of the
United States of America, any State thereof or the District of Columbia or any
foreign depository institution with a branch or agency licensed under the laws
of the United States of America or any State, in each case subject to
supervision and examination by Federal and/or State banking authorities and
having an Approved Rating at the time of such investment or contractual
commitment providing for such investment or (B) any other demand or time
deposit or certificate of deposit which is fully insured by the Federal Deposit
Insurance Corporation;
(iii) repurchase obligations with respect to (A) any security described in
clause (i) above or (B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii) (A) above;
(iv) short-term securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America or
any State, the short-term unsecured obligations of which have an Approved
Rating, or higher, at the time of such investment;
(v) commercial paper having an Approved Rating at the time of such
investment;
(vi) a guaranteed investment contract issued by any insurance company or
other corporation acceptable to the Rating Agency, provided that the Trustee
shall have received written notice from the Rating Agency to the effect that the
investment of funds in such a contract will not result in the reduction or
withdrawal of any rating on the Certificates;
(vii) interests in any money market fund having a rating of Aaa by Moody's
or AAAm by Standard & Poor's; and
(viii) any other investment approved in advance in writing by the Rating
Agencies and the Surety Bond Issuer.
"Event of Default" means an event specified in Section 14.01.
"Excess Yield Requirement" has the meaning specified in Section 1.01 of the
Insurance Agreement.
"Financed Vehicle" means a new or used automobile, light truck, motorcycle,
recreational vehicle or van, together with all accessions thereto, securing an
Obligor's indebtedness under the respective Receivable.
"Holder" -- see "Certificateholder."
"Indemnification Agreement" means the Indemnification Agreement, dated as
of the Closing Date among the Surety Bond Issuer, the Depositor, BVCC and
PaineWebber Incorporated.
"Initial Certificate Balance" means $253,224,989.
"Initial Class A-1 Certificate Balance" means $200,979,000.
"Initial Class A-2 Certificate Balance" means $52,245,989.
"Initial Multiplier" means the number of days remaining in the month of the
Closing Date assuming a 30-day month from and including the Closing Date divided
by 30.
"Insolvency Event" with respect to a party means (i) the entry of a decree
or order by a court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a trustee-in-bankruptcy or similar
official for such party in any insolvency, readjustment of debt, marshalling
of assets and liabilities, or similar proceedings, or for the winding up or
liquidation of their respective affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(ii) the consent by such party to the appointment of a trustee-in-bankruptcy or
similar official in any insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings of or relating to such party or
of or relating to substantially all of its property; or (iii) such party shall
admit in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations.
"Insurance Agreement" means the Insurance and Reimbursement Agreement,
dated as of the Closing Date, among the Depositor, CTL individually and as
Servicer, and the Surety Bond Issuer pursuant to which the Surety Bond Issuer
issued the Surety Bond.
"Interest Advance Amount" with respect to a Simple Interest Receivable as
to which an Advance is required to be made on the last day of a Collection
Period, shall mean an amount equal to 30 days of interest upon the Principal
Balance of such Receivable as of such date; and, with respect to a Precomputed
Receivable as to which an Advance is required to be made on the last day of a
Collection Period, shall mean an amount equal to that portion of the earliest
delinquent Scheduled Payment allocable to interest (using the actuarial or
constant yield method).
"Interest Shortfall" means, as to any Simple Interest Receivable as of the
last day of any Collection Period, the amount, if any, by which (a) interest due
on such Receivable exceeds (b)the Collected Interest on such Receivable.
"Interest Shortfall" with respect to a Precomputed Receivable as of the last day
of any Collection Period means the amount, if any, by which the portion of the
Scheduled Payment due during such Collection Period allocable to interest (using
the actuarial or constant yield method) exceeds the Collected Interest on such
Receivable (computed using the same method and after giving effect to the
withdrawal of any previously received Scheduled Payments in respect of such
Receivable from the Payahead Account in accordance with Sections 8.02(b) and
9.09 hereof).
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics' liens, and any liens
which attach to the respective Receivable or related Financed Vehicle by
operation of law.
"Liquidation Proceeds" means the monies collected from whatever source,
including insurance proceeds, on Defaulted Receivables, net of the sum of any
reasonable amounts expended by the Servicer for the account of the Obligor plus
any amounts required by law to be remitted to the Obligor. "Liquidation
Proceeds" with respect to a Distribution Date means such monies collected during
the preceding Collection Period.
"Monthly Interest" means the sum of Class A Monthly Interest and Class I
Monthly Interest.
"Monthly Principal" means, for any Distribution Date, an amount equal to
(i) the Pool Balance at the close of business on the last day of the second
preceding Collection Period (or, in the case of the first Distribution Date, the
Original Pool Balance), less (ii) the Pool Balance at the close of business on
the last day of the preceding Collection Period; provided, however, that:
(i) Monthly Principal will be increased by the amount, if any, which is
necessary to reduce the Class A-1 Certificate Balance to zero on the Class A-1
Final Scheduled Distribution Date and (ii) Monthly Principal will be increased
by the amount, if any, which is necessary to reduce the Class A-2 Certificate
Balance to zero on the Class A-2 Final Scheduled Distribution Date. Monthly
Principal will not exceed the Certificate Balance.
"Monthly Servicing Fee" means, (i) for the first Distribution Date, the
product of the following: (one-twelfth of the Servicing Rate) multiplied by
(the number of days remaining in the month of the Closing Date from and
including the Closing Date, assuming a 30-day month, divided by 30) multiplied
by the Initial Certificate Balance and (ii) for any subsequent Distribution
Date, one-twelfth of the product of (a) the Certificate Balance on the
preceding Distribution Date (after giving effect to any distribution of Monthly
Principal made on that such Distribution Date) and (b) the Servicing Rate.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Principal Surety Bond Amount" means the Certificate Balance as of the
first Distribution Date minus all amounts previously drawn on the Surety Bond or
from the Spread Account with respect to Monthly Principal.
"Note Rate" means, with respect to a Receivable, the contract rate of
interest on such Receivable, exclusive of prepaid finance charges.
"Notional Principal Amount" or "PAC Component" means, for the purpose of
calculating the Class I Monthly Interest at any time, the Original Notional
Principal Amount minus all allocations of Monthly Principal to the PAC Component
made up to such time pursuant to Section 9.10 of this Agreement.
"Obligor" on a Receivable means the purchaser or the co-purchasers of the
Financed Vehicle who owes payments under the Receivable. The phrase payment
made on behalf of an Obligor" shall mean all payments made with respect to a
Receivable except payments made by CTL, the Depositor or the Servicer.
"Officers' Certificate" means a certificate signed by any two of the
chairman of the board, the president, any vice chairman of the board, any vice
president, the treasurer, or the controller of CTL, the Depositor or the
Servicer, as the case may be; provided that no individual shall sign in a dual
capacity.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
to the Depositor and/or Servicer, which counsel shall be acceptable to the
Trustee.
"Optional Purchase Price" means the amount specified as such in Section
16.02.
"Original Notional Principal Amount" shall be $175,746,647.
"Original Pool Balance" means $253,224,989.
"Outstanding Advances" as of any date, with respect to a Receivable, means
the total amount of Advances made on such Receivable for which the Servicer has
not been reimbursed.
"PAC Component" has the meaning set forth in Section 9.10.
"Payahead" on a Precomputed Receivable means the amount, as of the close of
business on the last day of a Collection Period, computed in accordance with
Section 8.02(b) with respect to such Receivable.
"Payahead Account" means the account designated as such, established and
maintained pursuant to Section 9.09.
"Payahead Balance" on a Precomputed Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Precomputed Receivable, as
reduced by applications of previous Payaheads with respect to such Precomputed
Receivable, pursuant to Sections 8.02(b) and 9.09.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Planned Notional Principal Amount" means, for each respective Distribution
Date, the corresponding amount specified in the Planned Notional Principal
Amount Schedule.
"Planned Notional Principal Amount Schedule" means, the amortization
Schedule of Planned Notional Principal Amount for each respective Distribution
Date, attached hereto as Schedule C.
"Pool Balance" as of any date means the aggregate Principal Balance of the
Receivables as of such date; provided, however, that for purposes of determining
Monthly Principal, the Principal Balance of a Defaulted Receivable or a
Purchased Receivable (if actually purchased by the Servicer or repurchased by
CTL) shall be deemed to be zero on and after the close of business on the last
day of the Collection Period in which the Receivable becomes a Defaulted
Receivable or a Purchased Receivable is actually purchased or repurchased.
"Precomputed Receivable" means any Receivable under which the portion of a
payment allocable to earned interest (which may be referred to in the related
contract as an add-on finance charge) and the portion allocable to the Amount
Financed is determined according to the sum of periodic balances, the sum of
monthly balances, the rule of 78's or any equivalent method.
"Premium Side Letter Agreement" means the letter, dated as of the Closing
Date, as defined in the Insurance Agreement.
"Prepayment Charges," as used in the Agreement, shall be interpreted to
include, without limitation, in the case of a Precomputed Receivable that is
prepaid in full, the difference between the Principal Balance of such Receivable
(plus accrued interest to the date of prepayment) and the Principal Balance of
such Receivable computed in accordance with the method provided for in the
contract governing such Receivable, such as the rule of 78's.
"Principal Balance" of a Simple Interest Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
that portion of all payments received on or before the close of business on such
last day allocable to principal of such Receivable. "Principal Balance" with
respect to a Precomputed Receivable, as of the close of business on the Cutoff
Date, means the gross principal balance of such Receivable on the records of the
Servicer, net of unearned or accrued interest reflected therein, and as of the
close of business on the last day of a Collection Period, means the Principal
Balance as of the Cutoff Date minus that portion of all Scheduled Payments
received with respect to such Receivable in respect of such Collection Period
and all prior Collection Periods allocable to principal of such Receivable using
the actuarial or constant yield method.
"Principal Distribution Sequence" means that Monthly Principal shall be
distributed among the Class A Certificateholders in the following sequence: (i)
to the Class A-1 Certificateholders until the Class A-1 Certificate Balance has
been reduced to zero and (ii) to the Class A-2 Certificateholders until the
Class A-2 Certificate Balance has been reduced to zero.
"Purchase Agreement" means the Purchase Agreement, dated as of the Closing
Date, by and between the Depositor and CTL, as amended, supplemented or modified
from time to time.
"Purchase Amount" of any Receivable, as of the close of business on the
last day of any Collection Period, means the amount equal to the sum of the
Principal Balance of such Receivable plus any unpaid interest accrued and due
during or prior to such Collection Period on such Receivable.
"Purchased Receivable" means a Receivable purchased not later than the
Determination Date of the month immediately following the respective Collection
Period by the Servicer pursuant to Section 8.07 or repurchased not later than
the Determination Date of the month immediately following the respective
Collection Period by CTL pursuant to Section 7.02.
"Rating Agency" means each of Moody's and Standard & Poor's and their
successors and assigns.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that, within 7 days
of receipt of such notice, the Rating Agencies shall have notified the
Depositor, the Servicer and the Trustee in writing that such action will not
result in a reduction or withdrawal of the then current ratings of the
Certificates.
"Receivable" means any simple interest or pre-computed (add-on) interest
installment sales contract or installment loan and security agreement which
shall appear on Schedule A to the Agreement.
"Receivable Files" means the documents specified in Section 7.03.
"Receivables" or "Receivables Pool" means those Receivables conveyed to the
Trust by the Depositor listed as of the Cutoff Date in Schedule A.
"Record Date" means, for any Distribution Date, the last day of the
preceding Collection Period.
"Recoveries" means Liquidation Proceeds received by the Servicer during the
preceding calendar month on Defaulted Receivables.
"Recoveries of Advances" means, for any Collection Period, all payments
received by the Servicer by or on behalf of Obligors (other than Obligors with
respect to Defaulted Receivables and excluding reimbursements of Outstanding
Advances on Defaulted Receivables pursuant to Sections 9.04(a) (i) and 9.05)
during such Collection Period representing recoveries of Interest Shortfalls for
which Advances were made for prior Collection Periods.
"Required Spread Amount" means on each Distribution Date, 1.25% of the
Original Pool Balance; provided that on any Distribution Date (or after the
first Distribution Date on which) the Excess Yield Requirement is not met, the
Required Spread Amount shall be equal to 3.75% of the Certificate Balance (after
giving effect to any payment of Monthly Principal on such Distribution Date);
and provided further that upon and during the continuance of an Event of Default
or a Trigger Event, the Required Spread Amount shall be equal to the Surety Bond
Amount as of such Distribution Date after giving effect to any draws on the
Surety Bonds, draws on the Spread Account and other distributions pursuant to
Section 9.04 on such Distribution Date.
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the Corporate Trust Office (or any successor group of the
Trustee) including any managing director, vice president, assistant vice
president, assistant treasurer, assistant secretary or any other officer of the
Trustee customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Scheduled Payment" on a Receivable means that portion of the payment
required to be made by the Obligor during the respective Collection Period
sufficient to amortize the Principal Balance and to provide interest at the Note
Rate.
"Servicer" means California Thrift & Loan, a California corporation, in its
capacity as the servicer of the Receivables and each successor to California
Thrift & Loan (in the same capacity) pursuant to Section 13.03 or 14.02.
"Servicer's Certificate" means a certificate completed and executed by an
officer of the Servicer pursuant to Section 8.09.
"Servicing Rate" means 1.00% per annum, payable monthly at one-twelfth of
the annual rate, subject to adjustment with respect to a successor Servicer
pursuant to Section 14.02.
"Simple Interest Receivables" means any Receivable which provides for equal
monthly payments, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest on
such obligation multiplied by the period of time (expressed as a fraction of a
year, based on the actual number of days in the calendar month and 365 days in
the calendar year) elapsed since the preceding payment under which the
obligation was made. Payments on Simple Interest Receivables are applied,
first, to collection fees, if any, then to applicable late charges, then to pay
interest accrued to the date of such payment, then to principal due on such
date, and then to further reduce the outstanding principal balance.
"Spread Account" means, the account designated as such, established and
maintained pursuant to Section 10.02.
"Spread Account Facility" means any liquidity facility or similar
arrangement established pursuant to Section 10.02.
"Spread Account Surplus" means, on any Distribution Date, the excess, if
any, of the Available Spread Amount on such Distribution Date, after giving
effect to deposits into and withdrawals from the Spread Account pursuant to
Article 9 on such Distribution Date, over the sum of the Required Spread Amount
and Outstanding Advances on such Distribution Date (after giving effect to any
payments of Monthly Principal and Monthly Interest and all amounts owing to the
Surety Bond Issuer on such Distribution Date).
"Standard & Poor's" means Standard & Poor's Ratings Services, a division of
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"State" means (i) any state of the United States of America or (ii) the
District of Columbia.
"Surety Bond" means the irrevocable Principal/Interest Surety Bond dated
January 29, 1997 issued by the Surety Bond Issuer to the Trustee for the benefit
of the Class A Certificateholders and Class I Certificateholders and having a
maximum amount available to be drawn in respect of Class A Monthly Interest,
Class I Monthly Interest and Monthly Principal equal to the Surety Bond Amount.
"Surety Bond Amount" means with respect to any Distribution Date:
(x) the sum of (A) the lesser of (i) the Certificate Balance (after giving
effect to any distribution of Available Funds and any funds withdrawn from the
Spread Account to pay Monthly Principal on such Distribution Date) and (ii) the
Net Principal Surety Bond Amount, plus (B) Class A Monthly Interest, plus (C)
Class I Monthly Interest, plus (D) the Monthly Servicing Fee; less
(y) all amounts on deposit in the Spread Account (including any
Outstanding Advances on deposit therein) on such Distribution Date.
"Surety Bond Fee" means for any Distribution Date, an amount equal to the
sum of the Premium and First Loss Protection Fee as defined in the Premium Side
Letter Agreement.
"Surety Bond Issuer" means Capital Markets Assurance Corporation, a New
York domiciled monoline stock insurance company.
"Tax Class IC Certificateholder" mean the Depositor, as the initial Class
IC Certificateholder.
"Transaction Documents" mean (i) this Agreement, (ii) the Purchase
Agreement, (iii) the Underwriting Agreement, (iv) the Insurance Agreement and
(v)the Indemnification Agreement.
"Trigger Event" means the occurrence and continuance of any of the
following events:
(i) the Depositor, CTL or the Servicer, as the case may be, shall fail to
pay when due any amount payable by it hereunder, or under the Insurance
Agreement, which failure shall continue for two (2) Business Days after receipt
of notice thereof by the Depositor or Servicer,
as the case may be;
(ii) an Event of Default occurs under this Agreement;
(iii) any representation or warranty made by CTL, the Depositor or the
Servicer, in any of the Transaction Documents proves to have been false or
misleading in any material respect as of the date made;
(iv) the Surety Bond Issuer reasonably determines that the performance of
the Servicer, in any material respect, as determined by the Surety Bond Issuer,
under this Agreement is not in compliance with the level of performance of the
Servicer as set forth herein;
(v) the Depositor, CTL or the Servicer shall have breached any covenant or
agreement contained in this Agreement or the Insurance Agreement;
(vi) the occurrence of an Insolvency Event with respect to CTL, the
Servicer, the Depositor, BVCC or the Trust;
(vii) the 3-Month Rolling Average Net Default Rate, as defined in the
Insurance Agreement, shall be equal to or exceed 3%; provided, however, if the
Certificate Factor is less than .25, the 3-Month Rolling Average Net Default
Rate shall be equal to or exceed 4%;
(viii) the 3-Month Rolling Average 30+ Delinquency Rate, as defined in the
Insurance Agreement, shall be equal to or exceed 2%; provided, however, if the
Certificate Factor is less than .25, the 3-Month Rolling Average 30+ Delinquency
Rate shall be equal to or exceed 3%;
(ix) the security interests, as defined in the UCC, of the Trustee in the
Trust estate shall cease to be effective or shall cease to be a first priority
perfected security interest; or
(x) subject to Section 7.03 of the Insurance Agreement, any of the
Transaction Documents or any other agreement ancillary or incidental thereto
shall cease to be in full force and effect.
"Trust" means the trust created by the Agreement, the estate of which shall
generally comprise the Receivables (other than Purchased Receivables) and all
monies paid on the Receivables, and all monies due thereon, after the Cutoff
Date with respect to the Receivables held by the Servicer (excluding, however,
the interest components of the Scheduled Payments during the initial Collection
Period less the product of (x) 2 divided by 30 and (y) the scheduled monthly
interest on the Receivables for the first Distribution Date), which amount will
be deemed to be $13,350,000 for the month of January 1997, subject to adjustment
pursuant to the provisions of Section 2.01(c) of the Purchase Agreement);
security interests in the Financed Vehicles; funds deposited in the Certificate
Account and Payahead Account; all documents contained in the Receivable Files;
any property that shall have secured a Receivable and that shall have been
acquired by or on behalf of the Trust; any Liquidation Proceeds and any rights
of the Depositor in proceeds from claims or refunds of premiums on any physical
damage, lender's collateral protection, credit life, disability, and
hospitalization insurance policies covering Financed Vehicles or Obligors; the
interest of the Depositor in recourse to Dealers relating to certain of the
Receivables; the proceeds of the foregoing; amounts on deposit from time to time
in the Spread Account; and the rights of the Depositor under the Purchase
Agreement, including without limitation Section 3.03 thereof.
"Trustee" means Bankers Trust Company, a banking corporation organized
under the laws of the State of New York and its successors or any corporation
resulting from or surviving any merger or consolidation to which it or its
successors may be a party or any successor trustee at the time serving as
successor trustee hereunder.
"Trustee's Certificate" means a certificate completed and executed by the
Trustee by a Responsible Officer pursuant to Section 15.02, substantially in the
form of, in the case of an assignment to CTL, Exhibit 1, and in the case of an
assignment to the Servicer, Exhibit 2.
"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
January 24, 1997, among CTL, the Depositor, BVCC and PaineWebber Incorporated.
SECTION 2.02. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 2.03. Cutoff Date and Record Date. All references to the Record
Date prior to the first Record Date in the life of the Trust shall be to the
Cutoff Date.
SECTION 2.04. Section References. All section references in this
Agreement shall be to Sections in this Agreement unless otherwise specified.
ARTICLE III
CONVEYANCE OF RECEIVABLES
In consideration of the Trustee's delivery to or upon the order of the
Depositor of Class A Certificates with a Certificate Balance equal to the
Original Pool Balance, Class I Certificates representing in the aggregate the
Original Notional Principal Amount and the Class IC Certificate the Depositor
does hereby sell, transfer, assign, and otherwise convey to the Trustee, in
trust for the benefit of the Certificateholders and the Surety Bond Issuer,
without recourse (subject to the obligations herein):
(i) all right, title, and interest of the Depositor in and to the
Receivables listed in Schedule A hereto;
(ii) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables;
(iii) any Liquidation Proceeds and any proceeds from claims or refunds of
premiums on any physical damage, lender's collateral protection, credit life,
disability and hospitalization insurance policies covering Financed Vehicles or
Obligors;
(iv) funds deposited in the Certificate Account;
(v) the interest of the Depositor in any proceeds from recourse to Dealers
relating to the Receivables;
(vi) all documents contained in the Receivable Files;
(vii) all monies paid on the Receivables, and all monies due thereon, after
the Cutoff Date with respect to the Receivables held by the Servicer (excluding,
however, the interest components of the Scheduled Payments during the initial
Collection Period less the product of (x) 2 divided by 30 and (y) the scheduled
monthly interest on the Receivables for the first Distribution Date), which
amount will be deemed to be $13,350,000 for the month of January 1997, subject
to adjustment pursuant to the provisions of Section 9.04(a); and
(viii) all rights of the Depositor under the Purchase Agreement, including
without limitation the rights of the Depositor pursuant to Section 3.03 thereof
to require CTL to repurchase any Receivables as to which there has been a breach
of the representations and warranties contained therein;
(ix) the benefits of the Surety Bond; and
(x) all proceeds of the foregoing.
The Depositor does hereby further assign, convey, pledge and grant a
security interest in (i) the funds on deposit from time to time in the Spread
Account; (ii) all Eligible Investments purchased with funds deposited in the
Spread Account; (iii) any and all other right, title and interest, including any
beneficial interest the Depositor may have in the Certificate Account, the
Spread Account and the funds deposited therein, and (iv) any proceeds of any of
the foregoing, to the Trustee and for the benefit of the Certificateholders to
secure amounts payable to Certificateholders as provided under this Agreement.
The Depositor does not convey to the Trustee any interest in any contracts
with Dealers related to any "dealer reserve" or any rights to the recapture of
any dealer reserve.
ARTICLE IV
ACCEPTANCE BY TRUSTEE
The Trustee does hereby accept all consideration conveyed by the Depositor
pursuant to Article III, and declares that the Trustee shall hold such
consideration upon the trusts herein set forth for the benefit of all present
and future Certificateholders and the Surety Bond Issuer, subject to the terms
and provisions of this Agreement.
ARTICLE V
INFORMATION DELIVERED TO THE RATING AGENCY
(a) The Servicer hereby expresses its intention to deliver promptly to the
Rating Agency (i) a copy of each Servicer's Certificate that it delivers to the
Trustee and the Surety Bond Issuer pursuant to Section 8.09, (ii) a copy of each
annual Officers' Certificate as to compliance and any notice of Default that it
delivers to the Trustee pursuant to Section 8.10, (iii) a copy of each annual
certified public accountant's report that it delivers to the Trustee pursuant
to Section 8.11, (iv) a statement for each Collection Period including
delinquency and loss information for the Receivables, the amount of any draws on
the Surety Bond, (v) written notice of any merger, consolidation, or other
succession of the Servicer, pursuant to Section 13.03, or the Depositor,
pursuant to Section 12.03, (vi) a copy of each amendment to this Agreement and
(vii) any Opinion of Counsel delivered to the Trustee pursuant to
Section 17.02(i).
(b) The Trustee hereby expresses its intention to deliver promptly to the
Rating Agency (i) a copy of each statement or notification to Certificateholders
delivered pursuant to Section 14.03 or 15.10, (ii) a copy of each amendment to
this Agreement and (iii) a copy of the notice of termination of the Trust
provided to Certificateholders pursuant to Section 16.01.
(c) For purposes of delivery pursuant to paragraphs (a) and (b) of this
Article VIII, the addresses for the Rating Agencies are:
Structured Finance/Asset Backed Surveillance Group
Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇'▇ Investors Service, Inc.
Attention: ABS Monitoring Department
4th Floor
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(d) The provisions of this Article V are included herein for convenience
of reference only and shall not be construed to be contractual undertakings or
obligations. The failure of the Servicer or the Trustee to comply with any or
all of the provisions of this Article V shall not constitute an Event of Default
or a default of any kind under this Agreement or make any remedy available to
any Person.
ARTICLE VI
AGENT FOR SERVICE
The agent for service for the Depositor shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇, Secretary
of the Depositor. Any and all service on the agent for service of the Depositor
shall be sent to Bay View Securitization Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
The agent for service for the Servicer shall be ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
of the Servicer. Any and all service on the agent for service of the Servicer
shall be sent to California Thrift & Loan, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
ARTICLE VII
THE RECEIVABLES
SECTION 7.01. Representations and Warranties of Depositor. Pursuant to
Article III, the Depositor has assigned to the Trust the benefit of, and its
rights respecting, the representations and warranties made to the Depositor in
the Purchase Agreement as to the Receivables on which the Trustee relies in
accepting the Receivables in trust and executing and authenticating the
Certificates. Such representations and warranties speak as of the execution and
delivery of the Purchase Agreement but shall survive the sale, transfer, and
assignment of the Receivables to the Trustee.
(a) The Depositor hereby represents and warrants to the Trustee that it
has entered into the Purchase Agreement with CTL, that CTL has made the
representations and warranties set forth therein, that such representations and
warranties run to and are for the benefit of the Depositor, and that pursuant to
Article III of this Agreement the Depositor has transferred and assigned to the
Trustee all rights of the Depositor to cause CTL under the Purchase Agreement
to repurchase Receivables in the event of a breach of such representations and
warranties.
(b) It is the intention of the Depositor that the transfer and assignment
herein contemplated, taken as a whole, constitute a sale of the Receivables from
the Depositor to the Trust and that the beneficial interest in and title to the
Receivables not be part of the receivership estate in the event of the
appointment of a receiver for the Depositor. No Receivable has been sold,
transferred, assigned, or pledged by the Depositor to any Person other than the
Trustee. 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, immediately upon the transfer thereof, the Trustee (for the
benefit of the Certificateholders and the Surety Bond Issuer)shall have good and
marketable title to each Receivable, free and clear of all liens and rights of
others, except for the rights of the Certificateholders and the Surety Bond
Issuer; and the transfer has been perfected under the UCC. On or prior to the
Closing Date, all filings (including, without limitation, UCC filings) necessary
in any jurisdiction to give the Trustee a first perfected ownership interest in
the Receivables shall have been made.
(c) The Depositor further represents and warrants that it shall not incur
any indebtedness or issue and sell any securities directly or indirectly, unless
recourse with respect to such indebtedness or securities is limited solely to
the specific assets securing such indebtedness or securities, and in all events
without recourse to the Receivables or Financed Vehicles.
SECTION 7.02. Repurchase Upon Breach. The Depositor, CTL, the Servicer,
or the Trustee, as the case may be, shall inform the Surety Bond Issuer and the
other parties (the Depositor, CTL, the Servicer or the Trustee, as the case may
be) promptly, in writing, upon the discovery of any breach of the
representations and warranties contained in the Purchase Agreement or upon the
discovery that any Receivable has been materially and adversely affected because
a court has determined that a Receivable secured by a Financed Vehicle
registered in a state other than California is not perfected by a first priority
perfected security interest in the Financed Vehicle in favor of the Trustee.
This obligation shall not constitute an obligation on the part of the Trustee to
actively seek to discover any such breaches. Unless the breach or failure to so
perfect shall have been cured by the second Record Date following the discovery,
CTL, pursuant to its obligations under the Purchase Agreement, shall repurchase
any Receivable materially and adversely affected by the breach or failure to so
perfect as of such Record Date (or, at CTL's option, the first Record Date
following the discovery). In consideration of the purchase of the Receivable,
CTL shall remit the Purchase Amount, in the manner specified in Section 9.03.
The sole remedy of the Trustee, the Trust, or the Certificateholders with
respect to a breach of the representations and warranties referred to in
Section 7.01 shall be to require CTL to repurchase Receivables pursuant to the
Purchase Agreement and this Section 7.02.
SECTION 7.03. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trustee, upon
the execution and delivery of the Agreement, hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, for the benefit of
the Trust and the Certificateholders, to act as the agent of the Trust as
custodian of the following documents or instruments which are hereby
constructively delivered to the Trustee with respect to each Receivable:
(i) The original of the Receivable.
(ii) The original credit application fully executed by the Obligor.
(iii) The original certificate of title or such documents that the
Depositor or Servicer shall keep on file, in accordance with its customary
procedures, evidencing the security interest of CTL in the Financed Vehicle.
(iv) Any and all other documents that the Servicer or the Depositor shall
keep on file, in accordance with its customary procedures, relating to a
Receivable, an Obligor, or a Financed Vehicle.
SECTION 7.04. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files on behalf of the Trust for the use and benefit of all
present and future Certificateholders, and maintain such accurate and complete
accounts, records, and computer systems pertaining to each Receivable File as
shall enable the Trustee and Servicer to comply with this Agreement. In
performing its duties as custodian the Servicer shall act with reasonable car,
using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable motor vehicle
receivables that the Servicer services for itself. The Servicer shall conduct,
or cause to be conducted, periodic audits of 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 Trustee to verify the accuracy of
the Servicer's record keeping. The Servicer shall promptly report to the
Trustee any failure on its part to hold the Receivable Files and maintain its
accounts, records, and computer systems as herein provided and shall promptly
take appropriate action to remedy any such failure; provided, however,
notwithstanding anything to the contrary in Section 7.03 or this Section 7.04,
the Servicer shall not be required to possess the original of Receivables
representing less than 2% of the Original Pool Balance until 30 days following
the Closing Date.
(b) Maintenance of and Access to Records. The Servicer shall maintain each
Receivable File at one of its offices specified in Schedule B to this Agreement,
or at such other office as shall be specified to the Trustee by prior written
notice. The Servicer shall make available to the Trustee or its duly authorized
representatives, attorneys, or auditors a list of locations of the Receivable
Files, the Receivable Files, and the related accounts, records, and computer
systems maintained by the Servicer at such times as the Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Trustee, the Servicer
shall release any document in a Receivable File to the Trustee, the Trustee's
agent, or the Trustee's designee, as the case may be, at such place or places as
the Trustee may designate, as soon as practicable.
SECTION 7.05. Instructions; Authority to Act. The Servicer shall be deemed
to have received proper instructions with respect to the Receivable Files upon
its receipt of written instructions signed by a Responsible Officer of the
Trustee.
SECTION 7.06. Custodian's Indemnification. The Servicer, in its capacity
as custodian, shall indemnify the Trust and the Trustee (which shall include,
for purposes of this Section 7.06, its directors, officers, employees and
agents) for any and all liabilities, obligations, losses, compensatory damages,
payments, costs, or expenses of any kind whatsoever that may be imposed on,
incurred, or asserted against the Trust or the Trustee as the result of any act
or omission in any way relating to the maintenance and custody by the Servicer
of the Receivable Files; provided, however, that the Servicer shall not be
liable to the Trustee for any portion of any such amount resulting from the
willful misconduct, bad faith, or negligence of the Trustee. This indemnity
shall survive the termination of this Agreement and the resignation or removal
of the Trustee.
SECTION 7.07. Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this Section 7.07. If the
Servicer shall resign in accordance with the provisions of this Agreement or if
all of the rights and obligations of the Servicer shall have been terminated
under Section 14.01, the appointment of the Servicer as custodian may be
terminated (i) by the Trustee with the consent of the Surety Bond Issuer, which
consent shall not be unreasonably withheld, (ii) by the Holders of Certificates
evidencing not less than 25% of the Certificate Balance and 25% of the Notional
Principal Amount of the Class I Certificates with the consent of the Surety Bond
Issuer, which consent shall not be unreasonably withheld, or (iii) by the Surety
Bond Issuer, without the consent of the Holders of the Certificates (and, as to
the rights of the Surety Bond Issuer under (i), (ii) or (iii), so long as the
Surety Bond Issuer is not in default of its obligations under the Surety Bond).
The Trustee, on behalf of the Trust, may terminate the Servicer's appointment as
custodian with cause at any time upon written notification to the Servicer. As
soon as practicable after any termination of such appointment, the Servicer
shall deliver the Receivable Files to the Trustee or the Trustee's agent at
such place or places as the Trustee, with the consent of the Surety Bond Issuer,
may reasonably designate.
SECTION 7.08. Liability of the Tax Class IC Certificateholder and the
Certificateholders.
(a) The Tax Class IC Certificateholder shall be liable directly to and
shall indemnify any creditor of the Trust, including any injured party, for all
losses, claims, damages, liabilities and expenses of the Trust, to the extent
not paid out of the assets of the Trust, to the extent that the Tax Class IC
Certificateholder would be liable if the Trust were a partnership under the
Uniform Limited Partnership Act in which the holder of the Class IC Certificate
was a general partner; provided, however, that the Tax Class IC
Certificateholder shall not be liable for (i) any losses incurred by a
Certificateholder or a Certificate Owner in its capacity as an investor in the
Certificates or (ii) any losses, claims, damages, liabilities and expenses
arising out of the imposition by any taxing authority of any federal, state or
local income or franchise taxes or any other taxes imposed on or measured by
gross or net income, gross or net receipts, capital, net worth and similar items
(including any interest, penalties or additions with respect thereto) upon the
Certificateholders, the Certificate Owners, or the Trustee (including any
liabilities, costs or expenses with respect thereto) with respect to the
Receivables not specifically indemnified against or represented to hereunder.
In addition, any third party creditors of the Trust (other than in connection
with the obligations described in the preceding sentence for which the Tax Class
IC Certificateholder shall not be liable) shall be deemed third party
beneficiaries of this section 7.08(a). The obligations of the Tax Class IC
Certificateholder under this Section 7.08(a) shall be evidenced by the Class
IC Certificate owned by the Tax Class IC Certificateholder.
(b) No Certificate Owner or Certificateholder, other than to the extent set
forth in Section 7.08(a) with respect to the Class IC Certificate, shall have
any personal liability for any liability or obligation of the Trust.
(c) The Class IC Certificate may only be transferred to non-affiliates of
the Depositor and only so long as the Depositor as the initial Class IC
Certificateholder retains at least 1% of the beneficial interest of Class IC
Certificate and remains subject to unlimited personal liability to any creditor
of the Trust (other than the Trustee and the Certificateholders as set forth in
Section 7.08(a)). The permitted transferee of all or any portion of the 99%
beneficial interest shall not be subject to the personal liability provisions of
this Section 7.08.
ARTICLE VIII
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 8.01. Duties of Servicer. The Servicer, for the benefit of the
Trust and the Certificateholders, shall manage, service, administer, and make
collections on the Receivables with reasonable care, using that degree of skill
and attention that the Servicer exercises with respect to all comparable motor
vehicle receivables that it services for itself. The Servicer's duties shall
include collection and posting of all payments, making Advances (in accordance
with Section 9.05), responding to inquiries of Obligors or of federal, state or
local governmental authorities with respect to the Receivables, investigating
delinquencies, sending payment coupons to Obligors, accounting for collections,
and furnishing monthly and annual statements to the Trustee with respect to
distributions. The Servicer shall follow its customary standards, policies,
and procedures in performing its duties as Servicer. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered by the
Trustee to execute and deliver, on behalf of itself, the Trust, the
Certificateholders, or the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable or a Defaulted Receivable, the Trustee
shall thereupon be deemed to have automatically assigned, solely for the purpose
of collection, such Receivable to the Servicer. The Trustee shall execute any
documents prepared by the Servicer and delivered to the Trustee for execution
that are necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
SECTION 8.02. Collection of Receivable Payments. (a) The Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of such Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
motor vehicle receivables that it services for itself. If payments are extended
in the ordinary course of the Servicer's collection procedures, and, as a
result, any Receivable would be outstanding at the Final Scheduled Distribution
Date, then the Servicer shall be obligated to purchase such Receivable pursuant
to Section 8.07 (unless such Receivable is otherwise being purchased pursuant to
Section 16.02) as of the last day of the Collection Period immediately preceding
the Final Scheduled Distribution Date. The Servicer may in its discretion waive
any late payment charge or any other fees that it is entitled to retain under
Section 8.08, or other fee (to the extent consistent with its credit and
collection policy on the Closing Date) that may be collected in the ordinary
course of servicing a Receivable.
(b) All allocations of payments with respect to a Simple Interest
Receivable to principal and interest and determinations of periodic charges and
the like shall be made using the simple interest method, based on either the
actual number of days elapsed and the actual number of days in the calendar year
or on the basis of a thirty-day month and a 360- day calendar year, as specified
in the related installment sales contract or installment loan and security
agreement. Each payment on a Simple Interest Receivable shall be applied first
to collection fees, if any; second, to late charges, if any, accrued on such
Receivable; third to the amount of interest accrued on such Receivable to the
date of receipt; fourth to principal due on such Receivable; and, last, to
reduce the remaining principal amount outstanding on such Receivable. Payments
made by or on behalf of an Obligor, including any prior Payaheads made and added
to the Payahead Balance, with respect to a Precomputed Receivable shall be
applied first to overdue Scheduled Payments (including reduction of Outstanding
Advances as provided in Section 9.04). Next, any excess shall be applied to the
Scheduled Payment and any remaining excess shall be added to the Payahead
Balance, and shall be applied to prepay the Precomputed Receivable, but only if
such Payahead Balance shall be sufficient to prepay the Receivable in full.
Otherwise, any such remaining excess payments shall constitute a Payahead and
shall increase the Payahead Balance.
SECTION 8.03. Realization Upon Receivables. (a) On behalf of the Trust the
Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer shall have determined
that eventual payment in full is unlikely. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of motor vehicle receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession will increase the
Liquidation Proceeds of the related Receivable by an amount equal to or greater
than the amount of such expenses.
(b) Unless otherwise stated in this Agreement, the Servicer shall either
purchase or liquidate each Financed Vehicle that has not previously been
liquidated and that secures, or previously secured, a Defaulted Receivable
either (i) by the end of the Collection Period preceding the Class A-2 Final
Scheduled Distribution Date or (ii) if earlier, by the end of the Collection
Period during which such Receivable became a Defaulted Receivable. Any purchase
of a Financed Vehicle by the Servicer shall be made at a price equal to the fair
market value of the Financed Vehicle as determined by the Servicer in accordance
with the Servicer's normal servicing standards.
SECTION 8.04. Physical Damage Insurance. The Servicer, in accordance with
its customary servicing procedures and underwriting standards, shall require
that each Obligor shall have obtained and shall maintain physical damage
insurance covering the Financed Vehicle, and the Servicer shall have obtained
and shall maintain lender's collateral protection insurance coverage, each as of
the execution of the Receivable. The Servicer shall be named as a loss payee as
Servicer for the Trust on all lender's collateral protection insurance coverage
obtained on the Receivables.
SECTION 8.05. Maintenance of Security Interests in Financed Vehicles. The
Servicer shall, in accordance with its customary servicing procedures, take such
steps as are necessary to ensure that perfection of the security interest
created by each Receivable in the related Financed Vehicle has been obtained,
and to maintain such security interest. The Trustee hereby authorizes the
Servicer to take such steps as are necessary to re-perfect such security
interest on behalf of the Trust in the event of the relocation of a Financed
Vehicle or for any other reason.
SECTION 8.06. Covenants of Servicer. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the Certificateholders in the Receivables, nor shall the Servicer change the
amount of the Scheduled Payment under a Receivable or change the Amount Financed
under a Receivable or reduce the Note Rate of a Receivable (except if so ordered
by a bankruptcy court in a proceeding concerning the Obligor).
SECTION 8.07. Purchase of Receivables Upon Breach. The Servicer or the
Trustee shall inform the other party and the Surety Bond Issuer promptly, in
writing, upon the discovery of any breach by the Servicer of its obligations
under Section 8.06. This obligation shall not constitute an obligation on the
part of the Trustee to discover any such breaches. Unless the breach shall have
been cured by the last day of the Collection Period following the Collection
Period during which such breach was discovered, the Servicer shall purchase any
Receivable materially and adversely affected by such breach as of such day (or,
at the Servicer's election, as of the last day of the Collection Period during
which such breach was discovered). In consideration of the purchase of such
Receivable, the Servicer shall remit the Purchase Amount with respect to such
Receivable in the manner specified in Section 9.03. The sole remedy of the
Trustee, the Trust, or the Certificateholders with respect to a breach pursuant
to Section 8.06 shall be to require the Servicer to purchase Receivables
pursuant to this Section 8.07, except as provided in Section 13.02.
SECTION 8.08. Servicing Fee. The servicing fee for a Collection Period
shall equal the Monthly Servicing Fee (except that in the case of a successor
Servicer, the servicing fee shall equal such amount as is arranged in accordance
with Section 14.02). The Servicer shall be entitled to retain from payments of
interest on the Receivables collected during a Collection Period an amount equal
to the Monthly Servicing Fee due the Servicer in respect of such Collection
Period and need not deposit such amount in the Certificate Account. The Servicer
shall also be entitled to retain, and need not deposit in the Certificate
Account, all late fees, prepayment charges, other administrative fees or similar
charges allowed by applicable law with respect to Receivables, if any, collected
(from whatever source) on the Receivables. The Monthly Servicing Fee will be
paid only out of the funds of the Trust and not from the Trustee's own funds.
So long as California Thrift & Loan or an Affiliate is the Servicer, if the
Servicer fails to pay the Trustee's fees and expenses pursuant to Section 15.07,
the Trustee shall be entitled to receive such amount from the Monthly Servicing
Fee prior to payment thereof to the Servicer and the Servicer shall not retain
from collections that portion of the Monthly Servicing Fee equal to any fees of
the Trustee that are due and payable and any unpaid amount that the Servicer has
received notice is due the Trustee as reimbursement for expenses.
SECTION 8.09. Servicer's Certificate. On or before the Determination Date
following each Collection Period, the Servicer shall deliver to the Trustee and
the Surety Bond Issuer a Servicer's Certificate in substantially the form of
Exhibit 3 attached hereto containing all information necessary to make the
distributions pursuant to Section 9.04 for the Collection Period preceding the
date of such Servicer's Certificate, including (A) the amount of aggregate
collections on the Receivables, (B) the aggregate Purchase Amount of the
Receivables repurchased by CTL and purchased by the Servicer, (C) with respect
to Precomputed Receivables the net deposit from the Certificate Account to the
Payahead Account or the net withdrawal from the Payahead Account to the
Certificate Account required for the Collection Period in accordance with
Section 9.09, and in the case of a net withdrawal, the Monthly Interest and
Monthly Principal reported on such Servicer's Certificate shall reflect the
portions of such withdrawal allocable to interest and principal, respectively,
in accordance with this Agreement, (D) current and cumulative information
respecting (i) delinquent Receivables that are 30, 60 and 90 days past due, and
(ii) charge-offs, the number of repossessions of Financed Vehicles during the
preceding Collection Period, number of unliquidated repossessed Financed
Vehicles, gross and net losses on the Receivables, and recoveries on charged off
Receivables; and (E) each other item listed in Section 9.04 hereof reasonably
requested by the Rating Agency or the Surety Bond Issuer in order to monitor the
performance of the Receivables. Receivables purchased by CTL as of the last day
of such Collection Period shall be identified by the CTL account number with
respect to such Receivable (as specified in Schedule A to this Agreement).
SECTION 8.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Trustee and the Surety Bond Issuer, on or
before April 30 of each year, beginning on the first April 30 that is at least
six months after the Closing Date, an Officers' Certificate, dated as of
December 31 of the preceding year, stating that (i) a review of the activities
of the Servicer during the preceding 12-month period (or in the case of the
initial Officer's Certificate, the period from the Closing Date to and including
the date of such Officer's Certificate) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year, or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. A copy of such
certificate and the Report referred to in Section 8.11 may be obtained by any
Certificateholder at its own expense by a request in writing to the Trustee
addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to a Responsible Officer of the Trustee and
the Surety Bond Issuer, promptly after having obtained knowledge thereof, but in
no event later than 5 Business Days thereafter, written notice in an Officers'
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under Section 14.01. The Depositor or the
Servicer shall deliver to a Responsible Officer of the Trustee and the Surety
Bond Issuer, promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, written notice in an Officers'
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under clause (ii) of Section 14.01.
SECTION 8.11. Annual Independent Certified Public Accountant's Report. The
Servicer shall cause a firm of independent certified public accountants, who may
also render other services to the Servicer, to deliver to the Trustee and the
Surety Bond Issuer on or before March 31 of each year concerning the 12-month
period ended December 31 of the preceding year (or shorter period since the
date of this Agreement), beginning on the first December 31 following the first
March 31 after the Closing Date, a report addressed to the Board of Directors of
the Servicer and to the Trustee, to the effect that such firm has reviewed the
servicing of the Receivables by the Servicer and that such review (1) included
tests relating to new or used automobile, motorcycle, recreational vehicle, van
and light truck loans serviced for others in accordance with the requirements of
the Uniform Single Audit Program for Mortgage Bankers, to the extent the
procedures in such program are applicable to the servicing obligations set forth
in the Agreement, and (2) except as described in the report, disclosed no
exceptions or errors in the records relating to automobile, van or light truck
loans serviced for others that, in the firm's opinion, paragraph four of such
program requires such firm to report. In the event such firm requires the
Trustee to agree to the procedures performed by such firm, the Servicer shall
direct the Trustee in writing to so agree; it being understood and agreed that
the Trustee will deliver such letter of agreement in conclusive reliance upon
the direction of the Servicer, and the Trustee makes no independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
The report will also indicate that the firm is independent of the Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 8.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Certificateholders access to the
Receivables Files in such cases where the Certificateholder shall be required by
applicable statutes or regulations to review such documentation. Access shall
be afforded without charge, but only upon reasonable request and during the
normal business hours at the respective offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 8.12.
SECTION 8.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of its agents, independent accountants, taxes
imposed on the Servicer, and expenses incurred in connection with distributions
and reports to Certificateholders.
SECTION 8.14. Reports to Certificateholders. The Trustee shall provide to
any Certificateholder who so requests in writing (addressed to the Corporate
Trust Office) a copy of any certificate described in Section 8.09, or the
annual statement described in Section 8.10, or the annual report described in
Section 8.11. The Trustee may require the Certificateholder to pay a reasonable
sum to cover the cost of the Trustee's complying with such request.
ARTICLE IX
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
SECTION 9.01. Certificate Account. The Servicer, on behalf of the Trust,
shall establish the Certificate Account with an Eligible Bank as a segregated
trust account in the name of the Trust for the benefit of Certificateholders
with the Corporate Trust Office of the Trustee. The Servicer shall direct the
Trustee to invest the amounts in the Certificate Account in Eligible Investments
that mature not later than the Business Day prior to the next succeeding
Distribution Date and to hold such Eligible Investments to maturity. The
Trustee (or its custodian) shall (i) maintain possession of any negotiable
instruments or securities evidencing Eligible Investments until the time of sale
or maturity and each certificated security or negotiable instrument evidencing
an Eligible Investment shall be endorsed in blank or to the Trustee or
registered in the name of the Trustee and (ii) cause any Eligible Investment
represented by an uncertificated security to be registered in the name of the
Trustee.
SECTION 9.02. Collections. The Servicer shall remit to the Certificate
Account all payments by or on behalf of the Obligors on the Receivables and all
Liquidation Proceeds, both as collected during the Collection Period net of
Monthly Servicing Fees and administrative fees allowed to be retained by the
Servicer pursuant to Section 8.08 and net of charge backs (attributable to
errors in posting, returned checks, or rights of offset for amounts that should
not have been paid or that must be refunded as the result of a successful claim
or defense under bankruptcy or similar laws) not later than the second Business
Day following the Business Day on which such amounts are received by the
Servicer. Notwithstanding the foregoing, for so long as (a) CTL or an Affiliate
remains the Servicer, (b) no Event of Default shall have occurred and be
continuing and (c)(1) CTL (or an Affiliate succeeding CTL as Servicer) maintains
a short-term rating of at least A-1 by Standard & Poor's and P-l by Moody's (and
for five Business Days following a reduction in either such rating) or (2) prior
to ceasing daily remittances, the Rating Agency Condition shall have been
satisfied (and any conditions or limitations imposed by the Rating Agencies in
connection therewith are complied with) and the prior written consent of the
Surety Bond Issuer (not to be unreasonably withheld) shall have been obtained,
CTL, as Servicer, or an Affiliate with the consent of the Surety Bond Issuer,
may remit all such payments and Liquidation Proceeds with respect to any
Collection Period to the Certificate Account on a less frequent basis, but in no
event later than the Determination Date immediately preceding each Distribution
Date. The Servicer shall remit any Advances with respect to a Collection Period
to the Certificate Account on or before the Determination Date.
On each Determination Date, the Servicer shall determine (a) the amount of
payments on all Receivables and all Liquidation Proceeds received during such
Collection Period, the amount of Advances for such Collection Period, the
portion of the outstanding Principal Balance of each Defaulted Receivable which
represents forced placed insurance that was cancelled prior to the Cutoff Date,
and the Purchase Amount for all Receivables purchased or repurchased with
respect to such Collection Period which have been deposited in the Certificate
Account (net of amounts required to be paid pursuant to Section 9.04(d),
excluding investment income on all such amounts, and not including amounts
required to be paid pursuant to Sections 7.02, 8.07, and 9.05 but not so paid)
after giving effect to the net transfer from the Certificate Account to the
Payahead Account or from the Payahead Account to the Certificate Account as
provided in Section 9.09, (the "Available Funds"), and (b) the amount of funds
necessary to make the distributions required pursuant to Sections 9.04(a)(i)
through (viii), inclusive, on the next Distribution Date. The Servicer shall by
a Servicer's Certificate notify the Trustee of such amounts by telecopy to the
Corporate Trust Office at the number specified in the Agreement (or such other
number as the Trustee may from time to time provide), followed promptly by
mailing such notice to the Trustee at the Corporate Trust Office and to the
Surety Bond Issuer. On each Distribution Date, the Trustee, or the Servicer on
its behalf, shall effect the net transfer between the Certificate Account and
the Payahead Account as required by Section 9.09 for such Distribution Date.
On any Distribution Date on which there are not sufficient Available Funds
to make the distributions required pursuant to Sections 9.04(a)(i) through (iv)
the Trustee, or the Servicer on its behalf, shall withdraw from the Spread
Account, to the extent of the Available Spread Amount, an amount equal to such
deficiency and promptly deposit such amount in the Certificate Account. If such
deficiency exceeds the Available Spread Amount, the Servicer shall
simultaneously and in the same manner also notify the Trustee and the Surety
Bond Issuer of the amount of such excess deficiency. The Trustee shall promptly
(and in any event not later than 1:00 p.m. New York City time on the Business
Day preceding the Distribution Date) deliver a Notice for Payment as defined in
the Surety Bond (appropriately completed) to the Surety Bond Issuer with respect
to the Surety Bond. The Surety Bond Issuer is required pursuant to Section
10.03 and the terms of the Surety Bond to pay the amount of such excess
deficiency of Class I Monthly Interest, Class A Monthly Interest and Monthly
Principal, up to the Surety Bond Amount.
The Trustee shall deposit in the Certificate Account the $13,350,000
received pursuant to Article III of the Agreement, any funds received by the
Trustee in respect of funds drawn under the Surety Bond from the Surety Bond
Issuer and all amounts received by the Depositor from CTL under Section 5.04 of
the Purchase Agreement with respect to forced placed insurance cancelled prior
to the Cutoff Date and deposited in the Trust in accordance therewith.
If the Available Funds for a Distribution Date are insufficient to pay
current and past due Surety Bond Fees, or any amounts owing to the Surety Bond
Issuer pursuant to the Insurance Agreement including, without limitation,
reimbursements, indemnities, fees and expenses, plus accrued interest thereon,
to the Surety Bond Issuer, the Servicer shall notify the Trustee of such
deficiency, and the Available Spread Amount, if any, then on deposit in the
Spread Account (after giving effect to any withdrawal to satisfy a deficiency in
Monthly Interest or Monthly Principal) shall be available to cover such
deficiency.
SECTION 9.03. Purchase Amounts. Not later than the Determination Date, the
CTL or the Servicer, as the case may be, shall remit to the Certificate Account
the aggregate Purchase Amount for such Collection Period pursuant to Sections
7.02 and 8.07.
SECTION 9.04. Distributions to Parties.
(a) On each Distribution Date, the Trustee shall apply or cause to be
applied the Available Funds in the Certificate Account for the prior Collection
Period, (plus any amounts withdrawn from the Spread Account or drawn on the
Surety Bond pursuant to Section 9.02), to make the following distributions in
the listed order of priority:
(i) The aggregate amount of Outstanding Advances on all Receivables that
became Defaulted Receivables during the prior Collection Period;
(ii) To the extent not previously distributed to the Servicer, the Monthly
Servicing Fee, including any overdue Monthly Servicing Fee, to the Servicer;
(iii) Pro rata (y) Class A Monthly Interest, including any overdue Class
A Monthly Interest, to the Class A Certificateholders and (z) Class I Monthly
Interest, including any overdue Class I Monthly Interest, to the Class I
Certificateholders;
(iv) Monthly Principal, together with any overdue Monthly Principal, to the
Class A Certificateholders entitled to receive Monthly Principal in accordance
with the Principal Distribution Sequence;
(v) The Surety Bond Fee, including any overdue Surety Bond Fee, plus
accrued interest thereon at the rate provided in the Insurance Agreement, to the
Surety Bond Issuer;
(vi) The amount of Recoveries of Advances, to the Servicer (to the extent
not applied pursuant to (i) above on or prior to such Distribution Date);
(vii) The aggregate amount of all unreimbursed draws made on the Surety
Bond in respect of Class A Monthly Interest, Class I Monthly Interest and
Monthly Principal and any other amounts payable to the Surety Bond Issuer under
the Insurance Agreement, plus accrued interest thereon at the rate provided in
the Insurance Agreement, to the Surety Bond Issuer;
(viii) The balance for deposit in the Spread Account. The rights of the
Class IC Certificateholder to receive distributions from the Spread Account are
described in Sections 10.02(e) and (f).
Notwithstanding the foregoing, pursuant to Section 2.01(a)(vi) of the
Purchase Agreement, CTL will convey on the Closing Date to the Purchaser, who as
Depositor under this Agreement will contribute to the Trust, $13,350,000
representing estimated Monthly Principal for the month of January 1997 and
scheduled monthly interest on the Receivables from the Closing Date to the end
of the initial Collection Period (assuming a 30 day month) (such period, the
"Stub Period"). To the extent the actual amount of Monthly Principal for the
month of January 1997 and scheduled monthly interest on the Receivables for such
period, as determined by the Servicer as of the first Determination Date, is
greater than $13,350,000, the Depositor agrees to pay the difference into the
Certificate Account on the Determination Date. To the extent the actual amount
of Monthly Principal for the month of January 1997 and scheduled monthly
interest on the Receivables for the Stub Period, as determined by the Servicer
as of the first Determination Date, is less than $13,350,000, the Trust shall
pay the difference from the Certificate Account to the Depositor on the
Determination Date. Servicer shall advise the Trustee, the Depositor and CTL,
in writing, of any and all amounts due or owed by any party, as the case may be.
(b) (i) If on any Distribution Date there are not sufficient Available
Funds (together with amounts withdrawn from the Spread Account and/or the Surety
Bond) to pay the distribution required by Section 9.04(a)(iii), the Available
Funds distributable under Section 9.04(a)(iii) shall be distributed
proportionately on the basis of the ratio of the required distribution due each
of the Class A Certificateholders and Class I Certificateholders, respectively,
to the sum of the distributions required by Section 9.04(a)(iii) to the Class A
Certificateholders and the Class I Certificateholders.
(ii) Notwithstanding the foregoing, the Class I Certificateholders will not
be entitled to any distributions after the Notional Principal Amount of the
Class I Certificates has been reduced to zero.
(iii) Notwithstanding the foregoing, if either (A) the Servicer exercises
its option to purchase the remaining corpus of the Trust on any Distribution
Date pursuant to Section 16.02, or (B) the Receivables are liquidated in any
Collection Period after the occurrence of an Insolvency Event with respect to
the Tax Class IC Certificateholder which causes a termination of the Trust
pursuant to Section 16.03, the following shall apply: (a) the Available Funds
and amounts withdrawn from the Spread Account or drawn on the Surety Bond in
respect only of Monthly Interest and Monthly Principal with respect to the
immediately preceding Distribution Date as determined in accordance with Section
9.02 and 9.04 shall be distributed to Certificateholders on such Distribution
Date; (b) the Surety Bond will not be available to pay any shortfall of Monthly
Interest or Monthly Principal after a disposition of the Receivables pursuant to
Section 16.02 or after liquidation of the trust assets pursuant to Section
16.03; and (c) the Optional Purchase Price (in the case of clause (A) of this
paragraph) and the proceeds of any liquidation of Receivables (in the case of
clause (B) of this paragraph) and any remaining assets of the Trust (including
the remaining Available Spread Amount) shall be distributed to
Certificateholders on such Distribution Date based on their Adjusted Capital
Accounts (as defined in Section 6(c)(iv) of Annex A attached hereto) in
accordance with Section 6(b)(iii) and Section 9 of Annex A attached hereto.
(iv) In making such distributions the Trustee shall be entitled to rely upon
(without investigation, confirmation or recalculation) all information and
calculations contained in the Servicer's Certificate delivered to the Trustee
pursuant to Section 8.09 hereof.
(v) All monthly distributions shall be made by wire transfer of immediately
available funds to each Certificateholder of record on the preceding Record
Date. Notwithstanding the foregoing, the final payment on each Certificate shall
be made only against presentation and surrender of the Certificate at the office
or agency then maintained by the Trustee in accordance with Section 11.07.
(c) On each Distribution Date, the Trustee shall remit to the Servicer all
investment income earned through the last day of the preceding Collection Period
on amounts held from time to time in the Certificate Account.
(d) On each Distribution Date, if the Servicer has reported to the Trustee
in the Servicer's Certificate for any Collection Period that an Obligor or an
Obligor's representative or successor successfully shall have asserted a claim
or defense under bankruptcy law or similar laws for the protection of creditors
generally (including the avoidance of a preferential transfer under bankruptcy
law) that results in a liability of the Trust to such Obligor for monies
previously collected and remitted to the Trustee and not otherwise netted
against collections pursuant to Section 9.02, the Trustee shall make all
payments in respect of such claims or defenses out of the amounts on deposit in
the Certificate Account with respect to such Collection Period before making the
distributions required by paragraph (a) of this Section 9.04.
(e) If the Servicer has failed to provide the Trustee with the notice
required pursuant to Section 9.02, the Trustee may calculate Monthly Interest
and Monthly Principal and apply funds, if any, in the Certificate Account as of
the last day of the Collection Period, to make a distribution of Monthly
Interest and Monthly Principal to the Certificateholders.
SECTION 9.05. Advances. (a) As of the last day of the initial Collection
Period, the Servicer shall advance funds equal to the excess, if any, of Monthly
Interest due in respect of the initial Collection Period, over the Collected
Interest for such Collection Period; and (b) as of the last day of each
Collection Period, the Servicer shall advance funds in the amount of the
Interest Advance Amount (or such other amount as the Servicer shall reasonably
determine to cover an Interest Shortfall) with respect to each Receivable that
is delinquent for more than 30 days, in each such case, to the extent that the
Servicer, in its sole discretion, determines that the Advance will be
recoverable from payments by or on behalf of the Obligor, the Purchase Amount,
or Liquidation Proceeds. With respect to each Receivable, the Advance paid
pursuant to this Section 9.05 shall increase Outstanding Advances. Outstanding
Advances shall be reduced by subsequent payments by or on behalf of the Obligor,
collections of Liquidation Proceeds, or payments of the Purchase Amount. The
Servicer shall remit any Advances with respect to a Collection Period to the
Certificate Account by the related Determination Date.
If the Servicer shall determine that an Outstanding Advance with respect to
any Receivable shall not be recoverable, the Servicer shall be reimbursed from
any collections made on other Receivables in the Trust, and Outstanding Advances
with respect to such Receivable shall be reduced accordingly.
SECTION 9.06. Net Deposits. For so long as CTL or an Affiliate, is the
Servicer, CTL (or an Affiliate succeeding CTL as Servicer with the consent of
the Surety Bond Issuer) (in whatever capacity) may make the remittances with
respect to any Distribution Date pursuant to Section 9.02 above, net of amounts
to be distributed to itself or its delegee under Section 13.06 (also in whatever
capacity) pursuant to Section 9.04, if it determines pursuant to Section 9.02
that there is no deficiency in Available Funds for such Distribution Date.
Nonetheless, the Servicer shall account for all of the above described amounts
as if such amounts were deposited and distributed.
SECTION 9.07. Statements to Certificateholders. On each Distribution Date,
the Trustee shall mail to the Rating Agency and the Certificateholders the
Servicer's Certificate furnished to the Trustee by the Servicer pursuant to
Section 8.09.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of the Agreement, the Trustee shall
mail, to each Person who at any time during such calendar year shall have been
a Certificateholder, a statement containing the annual sum of the respective
amounts determined in items 5 through 11 of the Servicer's Certificate for such
calendar year, as applicable to such Person, or, in the event such Person shall
have been a Certificateholder during a portion of such calendar year, for the
applicable portion of such year, unless substantially comparable information has
been provided to such Certificateholder, for the purposes of such
Certificateholder's preparation of federal income tax returns pursuant to
Section 5(b) of Annex A hereto. To the extent required by applicable law, the
Servicer shall prepare or cause to be prepared and the Tax Class IC
Certificateholder or the Trustee shall sign the tax returns of the Trust and
shall file such returns and such of the above information with the Internal
Revenue Service.
SECTION 9.08. Intentionally Blank.
SECTION 9.09. Payahead Account. The Servicer shall establish the Payahead
Account in the name of the Trustee on behalf of the Obligors and the
Certificateholders as their interests may appear. The Payahead Account shall be
a segregated trust account established with an Eligible Bank (which may be the
Trustee). Amounts in the Payahead Account shall be invested in Eligible
Investments that mature not later than the Business Day prior to the next
succeeding Distribution Date. Investment income or interest earned on the
Payahead Account shall be remitted to the Servicer at least monthly, or as
frequently as the Servicer may reasonably request. On or prior to each
Distribution Date, the Servicer shall transfer or the Trustee (as instructed in
the Servicer's Certificate) shall transfer (a) from the Certificate Account to
the Payahead Account, in immediately available funds, all Payaheads received by
the Servicer and previously deposited to the Certificate Account during the
Collection Period as described in Section 9.02; and (b) from the Payahead
Account to the Certificate Account, in immediately available funds, the
aggregate amount of previously deposited Payaheads to be applied to Scheduled
Payments on Precomputed Receivables for the related Collection Period or
prepayments for the related Collection Period, pursuant to Section 8.02(b),
each in the amounts set forth in the Servicer's Certificate delivered on the
related Determination Date. A single, net transfer between the Payahead Account
and the Certificate Account may be made. Any amount deposited in the Payahead
Account shall not constitute Available Funds under Section 9.02. Any amount
deposited to the Certificate Account from the Payahead Account pursuant to
Section 9.09(b) shall be included in Available Funds under Section 9.02.
SECTION 9.10. Calculation of Notional Principal Amount.
(a) Solely for the purpose of calculating the Class I Monthly Interest, the
Certificate Balance will be divided into, and equal the sum of, two principal
components: (i) the "PAC Component" and (ii) the "Companion Component." The PAC
Component shall initially equal the Original Notional Principal Amount.
(b) On each Distribution Date, solely for the purposes of calculating the
Notional Principal Amount, the Monthly Principal will be allocated (i) first, to
the PAC Component up to the amount necessary to reduce the PAC Component to its
Planned Notional Principal Amount for such Distribution Date, (ii) second, to
the Companion Component until the balance thereof is reduced to zero, and (iii)
third, to the PAC Component without regard to the Planned Notional Principal
Amount for such Distribution Date.
ARTICLE X
CREDIT ENHANCEMENT
SECTION 10.01. Subordination. The rights of the Class IC Certificateholder
shall be subordinated to the rights of the Class A Certificateholders and Class
I Certificateholders to the extent described in Section 9.04.
SECTION 10.02. Spread Account.
(a) On or prior to the Closing Date, the Trustee shall establish and
maintain a segregated trust account in the corporate trust department of an
Eligible Bank referred to herein as the "Spread Account." The Spread Account
shall be maintained in the name of the Trustee. The Spread Account and any
amounts on deposit therein shall be part of the Trust and shall be for the
benefit of the Certificateholders and the Surety Bond Issuer, as their
respective interests may appear herein; provided, however, that the interest of
the Surety Bond Issuer and the Class IC Certificateholder shall be subordinated
to the interests of the other Certificateholders as provided herein.
(b) Funds on deposit in the Spread Account shall be invested in Eligible
Investments in the same manner and subject to the same requirements and
limitations as the investment of funds in the Certificate Account pursuant to
Section 9.01, including the limitation that Eligible Investments mature not
later than the Business Day prior to the next succeeding Distribution Date;
provided, however, no such limitation on the maturity of Eligible Investments
shall apply if the Trust obtains the benefit of a liquidity facility or similar
arrangement from a commercial bank with an Approved Rating or other provider
approved in advance in writing by the Surety Bond Issuer, with respect to funds
in the Spread Account (a "Spread Account Facility") and Standard & Poor's and
Moody's confirm in writing that the rating of the Certificates will not be
lowered or withdrawnas a result of eliminating or modifying the limitation on
the maturity of Permitted Investments in respect of the Spread Account. For
purposes of determining the availability of funds or the balance in the Spread
Account for any reason under this Agreement, investment earnings on such funds
shall be deemed to be available or on deposit only to the extent that the
aggregate of such amounts, plus the funds on deposit in the Spread Account, do
not exceed the Required Spread Amount.
(c) If on any Distribution Date the amount of Available Funds is
insufficient to make the distributions required by Section 9.04(a) (iii) and
(iv) the Trustee shall withdraw or cause to be withdrawn from the Spread Account
and deposited in the Certificate Account the lesser of (i) the entire Available
Spread Amount and (ii) the amount necessary to make up such deficiency to pay
any deficiency in Class I Monthly Interest, Class A Monthly Interest and Monthly
Principal (prior to making any draw on the Surety Bond), all as provided in
Sections 9.02 and 9.04 and the Surety Bond.
(d) On each Distribution Date, all distributions made pursuant to Section
9.04(a) (viii) shall be deposited into the Spread Account.
(e) If the amount on deposit in the Spread Account, after giving effect to
the distributions set forth in Section 9.04 (including, without limitation,
payment of amounts due and owing to the Surety Bond Issuer) is greater than the
sum of the Required Spread Amount and the amount of Outstanding Advances on such
Distribution Date, the amount of such excess shall be distributed first to pay
any Outstanding Advances, and then to the Class IC Certificateholder. Amounts
properly distributed to the Class IC Certificateholder pursuant to this Section,
either directly without deposit in the Spread Account or from excess amounts in
the Spread Account shall be deemed released from the Trust and from any security
interest of the Trustee or the Surety Bond Issuer.
(f) Upon the termination of this Agreement, amounts remaining in the Spread
Account, after payment of any amounts due and owing to the Class A Certificates
and Class I Certificates and to the Surety Bond Issuer, shall be distributed to
the Class IC Certificateholder and such amounts shall not be subject to any
claims or rights of the other Certificateholders to the extent that such action
is not inconsistent with Section 6(b)(ii) and Section 9 of Annex A hereto.
SECTION 10.03. Surety Bond. The Surety Bond Issuer is required under the
terms of the Surety Bond to pay Class I Monthly Interest, Class A Monthly
Interest and Monthly Principal up to the Surety Bond Amount in the event of any
deficiency of Available Funds to pay such amounts (after payment of the Monthly
Servicing Fee) not covered by amounts withdrawn from the Spread Account, as
determined pursuant to Section 9.02 to the Trustee for credit to the Certificate
Account on the later of (a) 11:00 a.m., New York City time, on the Business Day
immediately preceding a Distribution Date and (b) 11:00 a.m., New York City
time, on the Business Day immediately succeeding presentation to the Surety Bond
Issuer of the Trustee's demand therefor. Any demand for payment pursuant to
Section 9.02 to the Surety Bond Issuer received by the Surety Bond Issuer on a
Business Day after 1:00 p.m., New York City time, or on any day that is not a
Business Day, will be deemed to be received by the Surety Bond Issuer at 9:00
a.m., New York City time, on the next Business Day. Notwithstanding the
forgoing, on a Dissolution Distribution Date, the obligations of the Surety Bond
Issuer under the Surety Bond shall be limited in accordance with Section
9.04(b)(iii).
ARTICLE XI
THE CERTIFICATES
SECTION 11.01. The Certificates. The Class A Certificates and Class I
Certificates shall be issued in denominations of $1,000 ($1,000 Notional
Principal Amount in the case of the Class I Certificates) and integral multiples
thereof; provided, however, that one Class A-1 Certificate and one Class A-2
Certificate may be issued in a denomination that represents any residual amount
of such class. The Class IC Certificate shall be issued in the form of one or
more Certificates and shall initially be issued to the Depositor. The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of a Responsible Officer of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be valid and binding obligations of the Trust, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates.
SECTION 11.02. Authentication of Certificates. The Trustee shall cause the
Certificates to be executed on behalf of the Trust, authenticated, and delivered
to or upon the written order of the Depositor, signed by its chairman of the
board, its president, or any vice president, without further corporate action by
the Depositor, in authorized denominations, pursuant to this Agreement. No
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication, substantially as set forth in the forms of
Certificate attached as Exhibits to this Agreement, executed by a Responsible
Officer of the Trustee by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
SECTION 11.03. Registration of Transfer and Exchange of Certificates. The
Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 11.07, a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Trustee shall provide
for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall be the initial Certificate
Registrar.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Trustee shall execute, authenticate, and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Trustee, provided, however, that registration of
transfer of the Class IC Certificate may not be effected unless the Trustee
receives an Opinion of Counsel, satisfactory to it, to the effect that (i) such
transfer may be made in reliance upon an exemption from the registration
requirements of the Securities Act of 1933, as amended, and (ii) such transfer
will not adversely affect the tax treatment of the Trust or the certificates.
At the option of a Holder, Certificates may be exchanged for other Certificates
of authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the Corporate Trust Office.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
Holder or his attorney duly authorized in writing. Each Certificate surrendered
for registration of transfer and exchange shall be cancelled and subsequently
destroyed by the Trustee.
No service charge shall be made for any registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
SECTION 11.04. Mutilated, Destroyed, Lost, or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar or the Trustee such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Certificate shall have been acquired by a bona fide purchaser, the
Trustee on behalf of the Trust shall execute and the Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost,
or stolen Certificate, a new Certificate of like tenor and denomination. In
connection with the issuance of any new Certificate under this Section 11.04,
the Trustee and the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
11.04 shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen, or destroyed Certificate
shall be found at any time.
SECTION 11.05. Persons Deemed Owners. Prior to registration of transfer,
the Trustee or the Certificate Registrar may treat the Person in whose name any
Certificate shall be registered as the owner of such Certificate for the purpose
of receiving distributions pursuant to Section 9.04 and for all other purposes
whatsoever, and neither the Trustee nor the Certificate Registrar shall be bound
by any notice to the contrary.
SECTION 11.06. Access to Agreement and List of Certificateholders' Names
and Addresses. The Trustee shall furnish or cause to be furnished to the
Servicer, within 15 days after receipt by the Trustee of a request therefor from
the Servicer in writing, a list of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more
Certificateholders, or one or more Holders of Certificates aggregating not less
than 25% of the Certificate Balance or not less than 25% of the Notional
Principal Amount of the Class I Certificates, apply in writing to the Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and such application shall be accompanied by a copy of the
communication that such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current list of
Certificateholders. The Trustee shall also allow any Certificateholder, upon
request, to examine a copy of this Agreement at its Corporate Trust Office
during regular business hours. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed to hold neither the Servicer nor the
Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 11.07. Maintenance of Office or Agency. The Trustee shall maintain
in the Borough of Manhattan, The City of New York, an office or offices or
agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and this Agreement may be served. The Trustee
initially designates the Corporate Trust Office as specified in this Agreement
as its office for such purposes. The Trustee shall give prompt written notice
to the Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 11.08. Book-Entry Certificates. The Class A Certificates and Class
I Certificates, upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Depositor. The Class A Certificates and Class I Certificates
shall initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of the Clearing Agency, and no Certificate Owner will receive
a definitive Certificate representing such Certificate Owner's interest in the
Certificates, except as provided in Section 11.10. Unless and until definitive,
fully registered Certificates ("Definitive Certificates") have been issued to
Certificate Owners pursuant to Section 11.10:
(i) the provisions of this Section 11.08 shall be in full force and effect;
(ii) the Depositor, the Servicer and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes (including the
making of distributions on the Certificates) as the authorized representatives
of the Certificate Owners (requests and directions from, and votes of, such
representatives shall not be considered inconsistent if they are made with
respect to different Certificate Owners);
(iii) to the extent that the provisions of this Section 11.08 conflict
with any other provisions of this Agreement, the provisions of this Section
11.08 shall control; and
(iv) the rights of Certificate Owners shall be exercised only through the
Clearing Agency and the Clearing Agency Participants and shall be limited to
those established by law and agreements between such Certificate Owners and the
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement, unless and until Definitive Certificates are issued
pursuant to Section 11.10, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Certificates to such Clearing
Agency Participants.
SECTION 11.09. Notices to Clearing Agency. Whenever notice or other
communication to the Class A Certificateholders or Class I Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 11.10, the Trustee
shall give all such notices and communications specified herein to be given to
such Certificateholders to the Clearing Agency.
SECTION 11.10. Definitive Certificates. The Class IC Certificate will be
issued initially in fully registered, certificated form. If (i)(A) the
Depositor advises the Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities under the Depository
Agreement, and (B) the Trustee or the Depositor is unable to locate a qualified
successor, (ii) the Depositor, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency
or (iii) after the occurrence of an Event of Default, Certificate Owners
representing beneficial interests aggregating not less than 50% of the
Certificate Balance advise the Trustee through the Clearing Agency in writing
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of the Certificate Owners, the Trustee shall notify
the Clearing Agency of the occurrence of any such event and of the availability
of Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Certificates by the Clearing Agency, accompanied
by registration instructions from the Clearing Agency for registration, the
Trustee shall issue the Definitive Certificates. Neither the Depositor nor the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed on or to be performed by the Clearing Agency shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
SECTION 11.11. The Tax Partnership Agreement. Each of the Class A
Certificateholders and Class I Certificateholders and the Class IC
Certificateholder agrees to be bound by the terms of the Tax Partnership
Agreement attached hereto as Annex A.
ARTICLE XII
THE DEPOSITOR
SECTION 12.01. Representations and Undertakings of Depositor. (a) The
Depositor makes the following representations on which the Trustee relies in
accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
this Agreement and shall survive the sale of the Receivables to the Trust.
(i) Organization and Good Standing. The Depositor shall have been duly
organized and shall be validly existing as a corporation 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 shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire and own the
Receivables.
(ii) Due Qualification. The Depositor shall be duly qualified to do
business as a foreign corporation in good standing, and shall have obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications, except where the failure to so qualify would not materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of this Agreement or the Certificates.
(iii) Power and Authority. The Depositor shall have the power and
authority to execute and deliver this Agreement and to carry out its terms, the
Depositor shall have full power and authority to sell and assign the property to
be sold and assigned to and deposited with the Trustee as part of the Trust and
shall have duly authorized such sale and assignment to the Trustee by all
necessary corporate action; and the execution, delivery, and performance of the
Agreement shall have been duly authorized by the Depositor by all necessary
corporate action.
(iv) Valid Sale; Binding Obligations. This Agreement shall evidence a valid
sale, transfer, and assignment of the Receivables, enforceable against creditors
of and purchasers from the Depositor; and shall evidence a legal, valid, and
binding obligation of the Depositor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability shall be considered in a proceeding in equity or at law.
(v) No Violation. The consummation of the transactions contemplated by the
Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Depositor, or 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 best of 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.
(vi) No Proceedings. There are no proceedings or investigations pending,
or, to the Depositor's best knowledge, threatened, before any court, regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (A) asserting the invalidity
of this Agreement or the Certificates, (B) seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions contemplated
by this Agreement, (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Depositor of its obligations under,
or the validity or enforceability of, this Agreement or the Certificates, or (D)
which might adversely affect the federal income tax attributes of the
Certificates.
(vii) No Subsidiaries. The Depositor neither currently has nor will
have any subsidiaries.
(b) The Depositor further covenants that, prior to termination of the
Trust:
(i) It will not engage at any time in any business or business activity
other than such activities expressly set forth in its Certificate of
Incorporation delivered to the Surety Bond Issuer on or prior to the Closing
Date, and will not amend its Certificate of Incorporation without the prior
written consent of the Surety Bond Issuer.
(ii) It will not:
(A) Fail to do all things necessary to maintain its corporate existence
separate and apart from BVCC and any other Person, including, without
limitation, holding regular meetings of its stockholders and board of directors
and maintaining appropriate corporate books and records (including a current
minute book);
(B) Suffer any limitation on the authority of its own directors and
officers to conduct its business and affairs in accordance with their
independent business judgment or authorize or suffer any Person other than its
own officers and directors to customarily delegated to others under powers of
attorney) for which a corporation's own Officers and directors would customarily
be responsible;
(C) Fail to (I) maintain or cause to be maintained by an agent of the
Depositor under the Depositor's control physical possession of all its books and
records, (II) maintain capitalization adequate for the conduct of its business,
(III) account for and manage all its liabilities separately from those of any
other Person, including payment by it of all payroll, administrative expenses
and taxes, if any, from its own assets, (IV) segregate and identify separately
all of its assets from those of any other Person, (V) to the extent any such
payments are made, pay its employees, officers and agents for services performed
for the Depositor, (VI) maintain a separate telephone number from those of BVCC
or any other affiliate thereof, or (VII) file with the Securities and Exchange
Commission any periodic reports concerning the Trust and the Certificates that
are required by the Securities Exchange Act of 1934, as amended.
(D) Except as may be provided in this Agreement, or a similar agreement
relating to other securitizations in which the Depositor has similar rights
and/or obligations, commingle its funds with those of BVCC or any affiliate
thereof or use its funds for other than the Depositor's uses.
SECTION 12.02. Merger or Consolidation of, or Assumption of the Obligations
of Depositor. Any Person (a) into which the Depositor may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Depositor shall be a party, or (c) which may succeed to all or substantially all
of the properties and assets of the Depositor's business, 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 hereunder without the execution or filing of any document or any
further act by any of the parties to this Agreement; provided, however, that (i)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.01 shall have been breached and no Event of
Default, and no event that, after notice or lapse of time, or both, would become
an Event of Default shall have happened and be continuing, (ii) the Depositor
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger, or succession and such
agreement of assumption comply with this Section 12.02 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with and (iii) the Depositor shall have delivered an Opinion
of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Trustee in the Receivables, and reciting the details of such
filings, or (B) stating that, in the opinion of such Counsel, no such action
shall be necessary to preserve and protect such interest. Notwithstanding the
forgoing, the Depositor shall not engage in any merger or consolidation with any
Person, or a disposition of all or substantially all of its assets without the
prior written consent of the Surety Bond Issuer, not to be unreasonably
withheld.
SECTION 12.03. Limitation on Liability of Depositor and Others. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor shall not be under any obligation to appear
in, prosecute, or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 12.04. Depositor May Own Certificates. The Depositor and any
Person controlling, controlled by, or under common control with the Depositor
may in its individual or any other capacity become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Depositor
or an affiliate thereof, except as otherwise provided in the definition of
"Certificateholder", "Class A Certificateholder" and "Class I
Certificateholder." Certificates so owned by or pledged to the Depositor or such
controlling or commonly controlled Person shall have an equal and proportionate
benefit under the provisions of this Agreement, without preference, priority, or
distinction as among all of the Certificates.
ARTICLE XIII
THE SERVICER
SECTION 13.01. Representations of Servicer. The Servicer makes the
following representations on which the Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates. The
representations speak as of the execution and delivery of this Agreement and
shall survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Servicer shall have been duly
organized and shall be validly existing as a corporation under the laws of the
State of California, with power and authority to own its properties and to
conduct its business as such properties shall be currently owned and such
business is presently conducted, and had at all relevant times, and shall have,
power, authority, and legal right to acquire, own, sell, and service the
Receivables and to hold the Receivable Files as custodian on behalf of the
Trustee.
(ii) Due Qualification. The Servicer shall be duly qualified to do business
as a foreign corporation in good standing, and shall have obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications,
except where the failure to so qualify would not materially and adversely affect
the performance by the Depositor of its obligations under, or the validity or
enforceability of this Agreement or the Certificates.
(iii) Power and Authority. The Servicer shall have the power and
authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery, and performance of this Agreement shall have been duly
authorized by the Servicer by all necessary corporate action.
(iv) Binding Obligations. This Agreement shall constitute a legal, valid,
and binding obligation of the Servicer enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability shall be considered in a proceeding in equity or at law.
(v) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or by-laws of the Servicer, or any indenture, agreement, or other
instrument to which the Servicer 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 best of the
Servicer's knowledge, any order, rule, or regulation applicable to the Servicer
of any court or of any federal or State regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over the Servicer or
its properties.
(vi) No Proceedings. There are no proceedings or investigations pending,
or, to the Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over the Servicer or its properties: (A) asserting the invalidity of this
Agreement or the Certificates, (B) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by this
Agreement, (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Servicer of its obligations under, or
the validity or enforceability of, this Agreement or the Certificates, or (D)
which might adversely affect the federal income tax attributes of the
Certificates.
SECTION 13.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(i) The Servicer shall indemnify, defend and hold harmless the Trustee, its
officers, directors, employees and agents, the Trust and the Certificateholders
from and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership, or operation
by the Servicer or any affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend and hold harmless the Trustee, its
officers, directors, employees and agents and the Trust from and against any
taxes that may at any time be asserted against the Trustee, its officers,
directors, employees or agents or the Trust with respect to the transactions
contemplated herein, including, without limitation, any sales, gross receipts,
general corporation, tangible or intangible personal property, privilege, or
license taxes, including any taxes asserted with respect to, and as of the date
of, the sale of the Receivables to the Trust or the issuance and original sale
of the Certificates, or asserted with respect to ownership of the Receivables,
or federal or other income taxes arising out of distributions on the
Certificates and costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless the
Trustee, its officers, directors, employees and agents, the Trust and the
Certificateholders from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon the Trustee, the Trust or
the Certificateholders through any act or omission of the Servicer in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement, provided, however,
that the Servicer shall not be liable to the Trustee for any portion of any such
amount resulting from the willful misconduct, bad faith, or negligence of the
Trustee.
(iv) The Servicer shall indemnify, defend, and hold harmless the Trustee,
its officers, directors, employees and agents, and the Trust from and against
all costs, expenses, losses, claims, damages, and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties herein contained, except to the extent that such cost, expense, loss,
claim, damage or liability: (a) shall be due to the willful misfeasance, bad
faith, or negligence of the Trustee; (b) relates to any tax other than the taxes
with respect to which the Servicer shall be required to indemnify the Trustee;
(c) shall arise from the Trustee's breach of any of its representations or
warranties set forth in Section 15.13; or (d) shall arise out of or be incurred
in connection with the acceptance or performance by the Trustee of the duties of
successor Servicer hereunder.
Indemnification under this Section 13.02 shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer shall have made
any indemnity payments pursuant to this Section and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest. This indemnification shall
survive the termination of this Agreement or the Trust and the resignation or
removal of the Trustee or the Servicer.
SECTION 13.03. Merger or Consolidation of, or Assumption of the Obligations
of Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Servicer shall be a party, (c) which may succeed to all or substantially all of
the properties and assets of the Servicer's indirect automobile financing and
receivables servicing business or (d) that is an Affiliate, which Person in any
of the foregoing cases executes an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no Event of Default, and no event which, after notice or lapse
of time, or both, would become an Event of Default shall have happened and be
continuing, (ii) the Servicer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
13.03 and that all conditions precedent provided for in this Agreement relating
to such transaction have been complied with and (iii) the Servicer shall have
delivered an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Trustee and the Surety Bond Issuer in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such Counsel, no such action shall be necessary to preserve and
protect such interest. Notwithstanding the forgoing, the Servicer shall not
engage in any merger or consolidation in which it is not the surviving
corporation without the prior written consent of the Surety Bond Issuer, not to
be unreasonably withheld.
SECTION 13.04. Limitation on Liability of Servicer and Others. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the Certificateholders,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; provided, however,
that this provision shall not protect the Servicer or any such person against
any liability that would otherwise be imposed by reason of willful misconduct,
bad faith, or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute, or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement (collection actions with respect to Defaulted Receivables are
understood to be incidental to the Servicer's duties to service the
Receivables), and that in its opinion may involve it in any expense or
liability.
SECTION 13.05. Servicer Not to Resign. The Servicer shall not resign from
its obligations and duties under this Agreement except upon determination that
the performance of its duties shall no longer be permissible under applicable
law or otherwise with the consent of the Trustee and the Surety Bond Issuer. Any
determination described above permitting the resignation of the Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until the Trustee or a successor
servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with
Section 14.02.
SECTION 13.06. Delegation of Duties. Except as provided in Section 13.03
hereof, it is understood and agreed by the parties hereto that the Servicer or
the Depositor may at any time delegate any duties including duties as custodian
to any Person willing to accept such delegation and to perform such duties
(including any affiliate of the Servicer) in accordance with the customary
procedures of the Servicer. In connection with such delegation, the Servicer or
the Depositor may assign rights to the delegee or direct the payment to the
delegee of benefits or amounts otherwise inuring to the benefit of, or payable
to, the Depositor or the Servicer hereunder. Any such delegation shall not
relieve the Servicer or the Depositor of their respective liability and
responsibility with respect to such duties, and shall not constitute a
resignation within Section 13.05 hereof. The Servicer shall give written notice
to the Rating Agency, the Surety Bond Issuer and the Trustee of any such
delegation.
ARTICLE XIV
DEFAULT
SECTION 14.01. Events of Default. If any one of the following events
("Events of Default") shall occur and be continuing:
(i) Any failure by the Servicer or CTL to deliver to the Trustee for
distribution to Certificateholders any proceeds or payment required to be so
delivered under the terms of the Certificates and this Agreement or the Purchase
Agreement or any failure by the Servicer to deliver any Servicer's Certificate
pursuant to Section 8.09 that, in either case, shall continue unremedied for a
period of two Business Days (A) after written notice from either the Trustee,
the Surety Bond Issuer (so long as the Surety Bond Issuer is not in default of
its obligations under the Surety Bond) or the Holders of Certificates evidencing
not less than 25% of the Certificate Balance and 25% of the Notional Principal
Amount of the Class I Certificates is received by the Servicer or CTL as
specified in this Agreement or (B) after discovery by an officer of the
Servicer; or
(ii) Failure on the part of the Servicer, the Depositor or CTL duly to
observe or to perform in any material respect any other covenants or agreements
of the Servicer, the Depositor or CTL, as the case may be, set forth in the
Certificates or in this Agreement or the Purchase Agreement, which failure shall
(a) materially and adversely affect the rights of Certificateholders or the
Surety Bond Issuer and (b) continue unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given (1) to the Servicer, CTL or the Depositor, as the case may
be, by the Trustee, or (2) to the Servicer or the Depositor, as the case may be,
and to the Trustee, by the Surety Bond Issuer (so long as the Surety Bond Issuer
is not in default of its obligations under the Surety Bond) or by the Holders of
Certificates evidencing not less than 25% of the Certificate Balance and 25% of
the Notional Principal Amount of the Class I Certificates; or
(iii) The occurrence of an Insolvency Event with respect to the Servicer;
then, and in each and every case, so long as an Event of Default shall not have
been remedied, either the Trustee, or the Holders of Certificates evidencing not
less than 25% of the Certificate Balance and 25% of the Notional Principal
Amount of the Class I Certificates, by notice then given in writing to the
Servicer (and to the Trustee if given by the Certificateholders) may, with the
consent of the Surety Bond Issuer (so long as the Surety Bond Issuer is not in
default of its obligations under the Surety Bond) terminate all of the rights
and obligations of the Servicer under this Agreement. In addition, if a Trigger
Event (excluding Trigger Events (vii) and (viii) as defined herein) shall have
occurred, the Surety Bond Issuer may (A) require that the Trustee deliver a
notice of termination to the Servicer and appoint a successor Servicer
designated by the Surety Bond Issuer in such notice pursuant to Section 14.02;
(B) require that the Trustee amend certificates of title relating to the
Financed Vehicles and take other actions to identify the Trust as the new
secured party on such certificates of title; (C) as provided in the Insurance
Agreement, require that the Servicer or successor Servicer or the Trustee
instruct Obligors in respect of the Receivables to remit payment on the
Receivable directly to the Trustee or a separate account established exclusively
for the Trust; and (D) as provided in the Insurance Agreement, compel transfer
by the Servicer of all Receivables files and, if applicable, certain rights in
respect of servicing systems assets to the Surety Bond Issuer or to the
successor Servicer designated by the Surety Bond Issuer. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Trustee (except that the Trustee may but shall not be required to make
Advances and shall not be subject to the indemnification obligations of the
Servicer under Section 13.02(i), (ii) or (iv))
or such successor Servicer as may be appointed under Section 14.02 pursuant to
and under this Section 14.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise. The predecessor Servicer shall cooperate with the successor
Servicer and the Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement, including the
transfer to the successor Servicer of electronic records related to the
Receivables in such form as the successor Servicer may reasonably request and
the transfer to the successor Servicer for administration by it of all cash
amounts that shall at the time be held by the predecessor Servicer for deposit,
or shall thereafter
be received with respect to a Receivable. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Receivable Files to the successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section 14.01 shall be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses.
SECTION 14.02. Appointment of Successor. (a) Upon the Servicer's receipt
of notice of termination pursuant to Section 14.01 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (y) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's resignation or
termination hereunder, the Trustee shall appoint a successor Servicer, which
successor Servicer shall be reasonably acceptable to the Surety Bond Issuer (so
long as the Surety Bond Issuer is not in default of its obligations under the
Surety Bond), and the successor Servicer shall accept its appointment by a
written assumption in form acceptable to the Trustee. In the event that a
successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section 14.02,
the Trustee without further action shall automatically be appointed the
successor Servicer. Notwithstanding the above, the 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 financial institution,
having a net
worth of not less than $50,000,000 and whose regular business shall include the
servicing of automotive receivables, as the successor to the Servicer under this
Agreement and which financial institution is, in the case of appointment by the
Trustee, reasonably acceptable to the Surety Bond Issuer.
(b) Upon appointment, the successor Servicer shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, and shall be entitled to the Servicing Fee
and all of the rights granted to the predecessor Servicer, by the terms and
provisions of this Agreement. The predecessor Servicer shall be entitled to be
reimbursed for Outstanding Advances.
(c) In connection with such appointment, the Trustee may make such
arrangements for successor Servicer out of payments on Receivables it and such
successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of that permitted the original Servicer under this
Agreement. The Trustee and such successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
SECTION 14.03. Notification to Certificateholders. Upon any notice of an
Event of Default or upon any termination of, or appointment of a successor to,
the Servicer pursuant to this Article XIV, the Trustee shall give prompt written
notice thereof to Certificateholders at their respective addresses appearing in
the Certificate Register.
SECTION 14.04. Waiver of Past Defaults. The Holders of Certificates
evidencing not less than 51% of the Certificate Balance and 51% of the Notional
Principal Amount of the Class I Certificates, may, on behalf of all Holders of
Certificates, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in making any
required deposits to or payments from the Certificate Account in accordance with
this Agreement; provided, that the no waiver of any default or provision of this
Agreement shall become effective without the consent of the Surety Bond Issuer
(unless the Surety Bond Issuer is in default of its obligations under the Surety
Bond) and the Rating Agency Condition shall have been satisfied. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
ARTICLE XV
THE TRUSTEE
SECTION 15.01. Duties of Trustee. If an Event of Default shall have
occurred and shall not have been cured and, in the case of an Event of Default
described in clause (i) of Section 14.01, the Trustee has received notice of
such Event of Default, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and shall use the same degree of care and
skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs; provided, however, that if the Trustee shall assume
the duties of the Servicer pursuant to Section 14.02, the Trustee in performing
such duties shall use the degree of skill and attention customarily exercised by
a servicer with respect to motor vehicle receivables that it services for itself
or others.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that shall be specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own bad faith; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing
of all such Events of Default that may have occurred, the duties and obligations
of the Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance of such
duties and obligations as shall be specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, or manifest
error, the Trustee may conclusively rely on the truth of the statements and the
correctness of the opinions expressed in any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee shall
have been negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any action taken,
suffered, or omitted to be taken in good faith in accordance with this Agreement
or at the direction of the Holders of Certificates evidencing not less than 25%
of the Certificate Balance relating to the time, method, and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any failure by the
Servicer or CTL to comply with the obligations of the Servicer or CTL, as the
case may be, referred to in clauses (i) or (ii) of Section 14.01, or of any
failure by the Depositor to comply with the obligations of the Depositor
referred
to in clause (ii) of Section 14.01, unless a Responsible Officer of the Trustee
receives written notice of such failure (it being understood that knowledge of
the Servicer or the Servicer as custodian, in its capacity as agent for the
Trustee, is not attributable to the Trustee) from the Servicer, CTL or the
Depositor, as the case may be, or the Holders of Certificates evidencing not
less than 25% of the Certificate Balance;
(v) Without limiting the generality of this Section or Section 15.04, the
Trustee shall have no duty (A) to see to any recording, filing, or depositing of
this Agreement or any agreement referred to therein or any financing statement
evidencing a security interest in the Receivables or the Financed Vehicles, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain any such
insurance, (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed, or levied against, any part of the Trust, (D) to confirm
or verify the
contents of any reports or certificates of the Servicer delivered to the Trustee
pursuant to this Agreement believed by the Trustee to be genuine and to have
been signed or presented by the proper party or parties, or (E) to inspect the
Financed Vehicles at any time or ascertain or inquire as to the performance or
observance of any of the Depositor's or the Servicer's representations,
warranties or covenants or the Servicer's duties and obligations as Servicer and
as custodian of the Receivable Files under this Agreement; and
(vi) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers, and privileges of, the Servicer in accordance with the terms of
this Agreement.
SECTION 15.02. Trustee's Certificate. On or as soon as practicable after
each Distribution Date on which Receivables shall be (i) assigned to CTL
pursuant
to Section 7.02 or deemed to be assigned to the Depositor as a result of the
application of Available Funds in respect of Defaulted Receivables pursuant to
Section 9.02 or (ii) assigned to the Servicer pursuant to Section 8.07 or 16.02,
the Trustee shall, at the written request of the Servicer, execute a Trustee's
Certificate, substantially in the form of, in the case of an assignment to CTL,
Exhibit 1, or, in the case of an assignment to the Servicer, Exhibit 2, based on
the information contained in the Servicer's Certificate for the related
Collection Period, amounts deposited to the Certificate Account, and notices
received pursuant to this Agreement, identifying the Receivables repurchased or
deemed to be repurchased by CTL pursuant to Section 7.02 or 9.02 or purchased
by the Servicer pursuant to Section 8.07 or 16.02 during such Collection Period,
and shall deliver such Trustee's Certificate, accompanied by a copy of the
Servicer's Certificate for such Collection Period to CTL or the Servicer, as the
case may be. The Trustee's Certificate shall be an assignment pursuant to
Section 15.03.
SECTION 15.03. Trustee's Assignment of Purchased Receivables. With respect
to each Receivable repurchased by CTL pursuant to Section 7.02, or deemed to be
so repurchased pursuant to Section 9.02 or purchased by the Servicer pursuant to
Section 8.07 or 16.02, the Trustee shall assign, as of the last day of the
Collection Period during which such Receivable became a Defaulted Receivable or
became subject to repurchase by CTL or purchase by the Servicer, without
recourse, representation, or warranty, to CTL or the Servicer (as the case may
be) all the Trustee's right, title, and interest in and to such Receivables, and
all security and documents relating thereto, such assignment being an assignment
outright and not for security. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Receivable on the ground that
it shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Trustee shall, at the Servicer's expense, take such steps as the
Trustee deems necessary to enforce the Receivable, including bringing suit in
itsname or the name of the Certificateholders.
SECTION 15.04. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 15.01:
(i) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, Servicer's Certificate,
certificate of auditors, or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(ii) The Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it under this Agreement in good faith
and in accordance with such advice or Opinion of Counsel.
(iii) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct, or
defend any litigation under this Agreement or in relation to this Agreement, at
the request, order, or direction of any of the Certificateholders pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity reasonably satisfactory
to the Trustee against the costs, expenses, and liabilities that may be incurred
therein or thereby. Nothing contained in this Agreement, however, shall relieve
the Trustee of the obligations, upon the occurrence of an Event of Default (that
shall not have been cured), to exercise such of the rights and powers vested in
it by this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(iv) The Trustee shall not be liable for any action taken, suffered, or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement.
(v) Prior to the occurrence of an Event of Default and after the curing of
all Events of Default that may have occurred, the Trustee shall not be bound to
make any investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, or other paper or document, unless requested in writing
so to do by Holders of Certificates evidencing not less than 25% of the
Certificate Balance or not less than 25% of the Notional Principal Amount of the
Class I Certificates; provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses, or liabilities likely to be incurred
by it in the making of such investigation shall be, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Agreement, the Trustee may require reasonable indemnity
against such cost, expense, or liability as a condition to so proceeding. The
reasonable
expense of every such examination shall be paid by the Servicer or, if paid by
the Trustee, shall be reimbursed by the Servicer upon demand. Nothing in this
clause (v) shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors.
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties under this Agreement either directly or by or through agents
or attorneys or a custodian and the Trustee shall not be responsible for any
misconduct or negligence on the part or any agent, attorney or custodian
appointed with due care by it hereunder. The Trustee shall not be responsible
for any acts or omissions of the Servicer in its capacity as Servicer or
custodian.
(vii) The Trustee shall have no duty of independent inquiry, except as
may be required by Section 15.01, and the Trustee may rely upon the
representations and warranties and covenants of the Depositor and the Servicer
contained in this Agreement with respect to the Receivables and the Receivable
Files.
SECTION 15.05. Trustee Not Liable for Certificates or Receivables. The
recitals contained herein and in the Certificates (other than the certificate of
authentication on the Certificates) shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee shall make no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates),
or of any Receivable or related document. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity, and
enforceability of any security interest in any Financed Vehicle or any
Receivable, or the perfection and priority of such a security interest or the
maintenance of any such perfection and priority, or for or with respect to the
efficacy of the Trust or its ability to generate the payments to be distributed
to Certificateholders under this Agreement, including, without limitation: the
existence, condition, location, and ownership of any Financed Vehicle; the
existence and enforceability of any physical damage insurance, lender's
collateral protection insurance, or credit life or disability and
hospitalization
insurance with respect to any Receivable; the existence and contents of any
Receivable or any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable;
the compliance by the Depositor or the Servicer with any warranty or
representation made under this Agreement or in any related document and the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any noncompliance therewith or any breach
thereof; any investment of monies by the Servicer or any loss resulting
therefrom (it being understood that the Trustee shall remain responsible for any
Trust property that it may hold); the acts or omissions of the Depositor, the
Servicer,
or any Obligor; an action of the Servicer taken in the name of the Trustee; or
any action by the Trustee taken at the instruction of the Servicer; provided,
however, that the foregoing shall not relieve the Trustee of its obligation to
perform its duties under this Agreement. Except with respect to a claim based
on the failure of the Trustee to perform its duties under this Agreement or
based
on the Trustee's negligence or willful misconduct, no recourse shall be had for
any claim based on any provision of this Agreement, the Certificates, or any
Receivable or assignment thereof against the Trustee in its individual capacity,
the Trustee shall not have any personal obligation, liability, or duty
whatsoever
to any Certificateholder or any other Person with respect to any such claim, and
any such claim shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity as provided in this Agreement. The Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Servicer in respect of the
Receivables.
SECTION 15.06. Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Certificates with the
same rights as it would have if it were not Trustee.
SECTION 15.07. Trustee's Fees and Expenses. The Servicer shall pay to the
Trustee, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts created by this Agreement and in the exercise and performance of any
of the Trustee's powers and duties under this Agreement, including acting as
Servicer, and the Servicer shall pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements, and advances (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) incurred or made by the Trustee in
accordance with any provisions of this Agreement, including acting as Servicer,
except any such expense, disbursement, or advance as may be attributable to its
willful misconduct, negligence, or bad faith, and the Servicer shall indemnify
the Trustee (which, for purposes of this section, shall include its directors,
officers, employees, and agents) for and hold it harmless against any loss,
liability, or expense incurred without willful misconduct, negligence, or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the Trust, including acting as Servicer, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties under this
Agreement. Additionally, the Servicer, pursuant to Section 7.06 and Section
13.02, respectively, shall indemnify the Trustee with respect to certain
matters. This indemnification shall survive the termination of this Agreement or
the Trust and the resignation or removal of the Trustee or the Servicer.
SECTION 15.08. Eligibility Requirements for Trustee. The Trustee under
this Agreement shall at all times be a corporation having an office in the same
State as the location of the Corporate Trust Office as specified in this
Agreement; and organized and doing business under the laws of such State or the
United States of America; authorized under such laws to exercise corporate trust
powers; and having a net worth of at least $50,000,000 and subject to
supervision
or examination by federal or State authorities and (A)(i) has a long-term
unsecured debt rating of at least Baa3 from Moody's and BBB- from Standard &
Poor's and (ii) a short-term unsecured debt rating of at least P-2 from Moody's
and A-2 from Standard & Poor's or (B) is approved by the Surety Bond Issuer and
each Rating Agency. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 15.08,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 15.08, the Trustee shall resign
immediately in the manner and with the effect specified in Section 15.09.
SECTION 15.09. Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Servicer. Upon receiving such notice of resignation, the
Servicer, with the prior written consent of the Surety Bond Issuer, shall
promptly appoint a successor Trustee, by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy
to the successor Trustee. If no successor Trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the
provisions of Section 15.08 and shall fail to resign after written request
therefor by the Servicer, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation, or liquidation, then the Servicer may remove
the
Trustee. If it shall remove the Trustee under the authority of the immediately
preceding sentence, the Servicer shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered
to the Trustee so removed and one copy to the successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 15.09 shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 15.10.
SECTION 15.10. Successor Trustee. Any successor Trustee appointed
pursuant
to Section 15.09 shall execute, acknowledge, and deliver to the Servicer and to
its predecessor Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor Trustee, without any further act,
deed,
or conveyance, shall become fully vested with all the rights, powers, duties,
and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Trustee. The predecessor Trustee shall deliver to the
successor Trustee all documents and statements held by it under this Agreement;
and the Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties, and obligations.
No successor Trustee shall accept appointment as provided in this Section
15.10 unless at the time of such acceptance such successor Trustee shall be
eligible pursuant to Section 15.08.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section 15.10, the Servicer shall mail notice of the successor of such Trustee
under this Agreement to all Holders of Certificates at their addresses as shown
in the Certificate Register. If the Servicer shall fail to mail such notice
within 10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.
SECTION 15.11. Merger or Consolidation of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion, or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 15.08, without the execution
or filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
SECTION 15.12. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and
the Trustee acting jointly shall have the power and shall execute and deliver
all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person, in such capacity
and
for the benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 15.12, such
powers,
duties, obligations, rights, and trusts as the Servicer and the Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. No co-trustee or separate
trustee under this Agreement shall be required to meet the terms of eligibility
as a successor Trustee pursuant to Section 15.08 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall
be required pursuant to Section 15.10.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations conferred or imposed upon
the Trustee shall be conferred upon and exercised or performed by the Trustee
and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether as
Trustee under this Agreement or as successor to the Servicer under this
Agreement), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties, and obligations (including
the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee under this Agreement shall be personally liable by reason
of any act or omission of any other trustee under this Agreement; and
(iii) The Servicer and the Trustee acting jointly may at any time accept
the resignation of or remove any separate trustee or co-trustee.
Any notice, request, or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XV. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Each
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee, its
agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign, or be removed, all of its estates,
properties, rights, remedies, and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 15.13. Representations and Warranties of Trustee. The Trustee
shall make the following representations and warranties on which the Depositor
and Certificateholders may rely:
(i) Organization and Existence. The Trustee is a New York banking
corporation duly organized and validly existing under the laws of the State of
New York and authorized to engage in a banking and trust business under such
laws.
(ii) Power and Authority. The Trustee has full power, authority, and legal
right to execute, deliver, and perform this Agreement, and shall have taken all
necessary action to authorize the execution, delivery, and performance by it of
this Agreement.
(iii) Duly Executed. This Agreement shall have been duly executed and
delivered by the Trustee and shall constitute the legal, valid, and binding
agreement of the Trustee, enforceable in accordance with its terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
reorganization, moratorium, conservatorship, receivership or other similar laws
now or hereinafter in effect relating to the enforcement of creditors' rights in
general, as such laws would apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership or
similar occurrence affecting the Trustee, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) as well as concepts of reasonableness, good faith and fair
dealing.
ARTICLE XVI
TERMINATION
SECTION 16.01. Termination of the Trust. The respective obligations and
responsibilities of the Depositor, the Servicer and the Trustee created hereby
and the Trust created by this Agreement shall terminate upon (i) the disposition
of the Trust corpus as of the last day of any Collection Period at the direction
of Servicer, at its option, pursuant to Section 16.02, (ii) the sale,
liquidation
or disposition of the Trust corpus following a termination upon the bankruptcy
of the Tax Class IC Certificateholder as provided in Section 16.03, or (iii) the
payment to Certificateholders and the Surety Bond Issuer of all amounts required
to be paid to them pursuant to this Agreement and the Insurance Agreement (as
set forth in writing by the Surety Bond Issuer) and the disposition of all
property
held as part of the Trust; provided, however, that in no event shall the trust
created by this Agreement continue beyond the expiration of 21 years from the
date as of which this Agreement is executed. The Servicer shall promptly, and
in any event not less than five Business Days prior to the date on which notice
is given to the Certificateholders, notify the Trustee of any prospective
termination pursuant to this Section 16.01.
Notice of any termination, specifying the Distribution Date upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders mailed not later than the 10th day prior
to the specified Distribution Date stating (A) the Distribution Date upon which
final payment of the Certificates shall be made upon presentation and surrender
of the Certificates at the office of the Trustee therein designated, (B) the
amount of any such final payment, and (C) if applicable, that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee therein specified. The Trustee shall give such notice to the
Certificate Registrar (if other than the Trustee) at the time such notice is
given to Certificateholders. Upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to Section 9.04 and, in
the event of a termination pursuant to clause (i) or (ii) of the preceding
paragraph, the provisions of Section 9 of Annex A hereto shall govern the
remaining distributions to Certificateholders.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject
to this Agreement. Any funds remaining in the Trust after exhaustion of such
remedies shall, upon notice to the Trustee, be distributed by the Trustee to the
Depositor or its successor, and upon such distribution the Certificateholders'
rights to any amounts so distributed will be extinguished.
SECTION 16.02. Optional Purchase of All Receivables. On the last day of
any Collection Period following which (i) the Notional Principal Amount has been
reduced to zero, and (ii) the Certificate Balance as of the related Distribution
Date is less than or equal to 10% of the Original Pool Balance, the Servicer
shall have the option to purchase the corpus of the Trust at a price (the
"Optional Purchase Price") equal to the fair market value of the Receivables,
but not less than (i) the sum of (x) 100% of the Certificate Balance, (y)
accrued
and unpaid interest on such amount computed at a rate equal to the weighted
average Note Rate, and (z) all amounts due and owing to the Surety Bond Issuer
under the Agreement and the Insurance Agreement minus any amounts representing
payments received on the Receivables not yet applied to the interest related
thereto or to reduce the principal balance thereof. The proceeds of such sale
will be deposited into the Certificate Account for distribution to the
Certificateholders (and, to the extent applicable, the Surety Bond Issuer) on
the
next succeeding Distribution Date. In connection with such disposition, the Tax
Class IC Certificateholder is required to pay any unpaid fees and expenses of
the
Trustee that it would otherwise have been entitled to pursuant to this
Agreement.
The fair market value of the outstanding Receivables for purposes of this
Section
16.02 shall be an amount equal to the average of the bid prices for such assets
taken as a whole, provided to the Servicer by two independent, nationally
recognized dealers in automobile loans substantially similar to the
Receivables.
Such price shall be deposited to the Certificate Account in immediatelyavailable
funds by 12:00 noon, New York City time, on the Business Day prior to such next
succeeding Distribution Date and, upon notice to the Trustee of such deposit,
the
Trustee shall transfer the Receivables and the Receivable Files to the
purchaser,
whereupon the Certificates shall no longer evidence any right or interest in the
Receivables or any proceeds thereof.
SECTION 16.03. Termination upon an Insolvency Event with respect to the
Tax Class IC Certificateholder. Following the occurrence of an Insolvency Event
with respect to the Tax Class IC Certificateholder, the Tax Class IC
Certificateholder
shall on the date of such Insolvency Event give notice to the Trustee and the
Surety Bond Issuer of such Insolvency Event. An Insolvency Event with respect to
a permitted transferee of up to 99% of the beneficial interest of the Class IC
Certificates shall not cause the Trust to terminate as described herein. Within
15 days of the receipt by the Trustee of such notice of an Insolvency Event, the
Trustee shall (i) publish a notice in Authorized Newspapers that an Insolvency
Event has occurred and that the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and (ii) send
written notice to the Certificateholders describing the provisions of this
Section 16.03, noting in particular that the Surety Bond will not be available
to be drawn upon to pay a shortfall in the amount due Certificateholders upon a
liquidation of the Receivables, and requesting instructions from such
Certificateholders, which notice shall request each such Certificateholder to
advise the Trustee in writing that it elects one of the following options: (a)
the Certificateholder wishes the Trustee to instruct the Servicer not to sell,
dispose of or otherwise liquidate the Receivables and terminate the Trust, or
(b) the Certificateholder wishes the Trustee to instruct the Servicer to sell,
dispose of or otherwise liquidate the Receivables and terminate the Trust, or
(c) the Certificateholder refuses to advise the Trustee as to whether or not the
Trustee shall instruct the Servicer to sell, dispose of or otherwise liquidate
the Receivables and terminate the Trust. After 90 days from the day on which
notice pursuant to clause (i) above is first published, the Trustee shall,
unless instructed not to do so by the written direction of the holders of
Certificates
representing not less than 51% of the Certificate Balance and 51% of the
Notional Principal Amount of the Class I Certificates, or unless otherwise
prohibited by law, instruct the Servicer to proceed to sell, dispose of, or
otherwise liquidate the Receivables, in a commercially reasonable manner and on
commercially reasonable terms, which shall include the solicitation of
competitive bids, and shall proceed to consummate the sale, liquidation or
disposition of the Receivables as provided above with the highest bidder for the
Receivables. The Servicer shall be permitted to bid for the Receivables. The
Trustee may obtain a prior determination from trustee-in-bankruptcy that the
terms and manner of any proposed sale, disposition or liquidation are
commercially reasonable. The
provisions of Section 9.04 and this Section 16.03 shall not be deemed to be
mutually exclusive. Following the sale, disposition or liquidation of the
Receivables in a commercially reasonable manner, the Trustee shall wind up the
affairs of the Trust and terminate the Trust in accordance with Section 16.01.
ARTICLE XVII
MISCELLANEOUS PROVISIONS
SECTION 17.01. Amendment. This Agreement may be amended by the Depositor,
the Servicer and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement, or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be inconsistent
with the provisions of this Agreement; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel satisfactory to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
This Agreement may also be amended from time to time by the Depositor, the
Servicer, and the Trustee with the consent of the Tax Class IC
Certificateholder,
Holders of Certificates evidencing not less than 51% of the Certificate Balance
and 51% of the Notional Principal Amount of the Class I Certificates for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall,
without the consent of the Holders of all Certificates then outstanding, reduce
the aforesaid percentage required to consent to any such amendment. In no case
may any such amendment increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made on any Certificate.
Notwithstanding anything to the contrary in this Agreement, no Opinion of
Counsel or consent of Certificateholders shall be required in connection with
any
amendment of this Agreement to provide for a Spread Account Facility; provided
that prior to the effectiveness of any such amendment each Rating Agency shall
confirm in writing that the rating of the Certificates will not be lowered or
withdrawn as a result of such amendment.
Notwithstanding anything to the contrary to this Agreement, no amendment of
this Agreement shall be effective without the prior written consent of the
Surety Bond Issuer.
Notwithstanding anything to the contrary to this Agreement, Sections 7.08
and 16.03 shall not be amended without the unanimous consent of the Trustee and
all holders of outstanding Certificates of such series (or unless an opinion of
Counsel is delivered to the effect that such provision is not required under
relevant state law).
Promptly after the execution of any amendment or consent, the Trustee shall
furnish written notification of the substance of such amendment or consent to
each Certificateholder.
It shall not be necessary for the consent of Certificateholders pursuant to
this Section 17.01 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 the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee shall
be entitled to receive and rely upon an Opinion of Counsel stating (i) that the
execution of such amendment is authorized or permitted by this Agreement and
(ii) that such amendment will not materially and adversely affect the tax status
of the Trust, and the Opinion of Counsel referred to in Section 17.02(i)(1). The
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's own rights, duties, or immunities under this Agreement.
SECTION 17.02. Protection of Title to Trust.
(a) The Depositor 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 Certificateholders and the Trustee under this
Agreement in the Receivables and in the proceeds thereof. The Depositor shall
deliver (or cause to be delivered) to the Trustee file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Depositor nor the Servicer shall change its name, identity,
or corporate structure in any manner that would, could, or might make any
financing statement or continuation statement filed by the Depositor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Trustee at least 60
days' prior written notice thereof.
(c) The Depositor and the Servicer shall give the Trustee at least 60 days'
prior written notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement (in which case the Servicer shall
file or cause to be filed such amendment or continuation statement or new
financing statement). The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Certificate Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trustee,
the Servicer's master computer records (including any back-up archives) that
refer to a Receivable shall indicate clearly with reference to the particular
trust that such Receivable is owned by the Trustee. Indication of the Trustee's
ownership of a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the Receivable shall have been paid in
full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in motor
vehicle receivables to any prospective purchaser, lender, or other transferee,
the Servicer shall give to such prospective purchaser, lender, or other
transferee computer tapes, records, or print-outs (including any restored from
back-up 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 Trustee.
(g) The Servicer shall permit the Trustee and its agents at any time during
normal business hours to inspect, audit, and make copies of and abstracts from
the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee, within five
Business Days, a list of all Receivables (by contract number and name of
Obligor)
then held as part of the Trust, together with a reconciliation of such list to
the Schedule of Receivables and to each of the Servicer's Certificates furnished
before such request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee:
(1) At the time of the execution and delivery of this Agreement and of each
amendment thereto, and upon any resignation or removal of the Servicer, an
Opinion of Counsel either (a) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the 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) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest; and
(2) within 90 days after the beginning of each calendar year beginning with
the first calendar year beginning more than three months after the Cutoff Date,
an Opinion of Counsel, dated as of a date during such 90-day period, either (a)
stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the 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) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interest.
SECTION 17.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs
to claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations, and liabilities of the parties to this Agreement or any of
them.
No Certificateholder shall have any right to vote (except as provided in
Section 14.04, 17.01 or 17.07) or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties to this Agreement
except as expressly set forth herein, nor shall anything in this Agreement set
forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as members of an
association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken pursuant to any provision of this Agreement (except
for the Class IC Certificateholder to the extent provided in Section 7.08).
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action, or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders
of Certificates evidencing not less than 25% of the Certificate Balance or not
less than 25% of the Notional Principal Amount of the Class I Certificates shall
have made written request upon the Trustee to institute such action, suit, or
proceeding in its own name as Trustee under this Agreement and shall have
offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 30 days after its receipt of such notice, request, and offer of indemnity,
shall have neglected or refused to institute any such action, suit, or
proceeding and during such 30-day period no direction inconsistent with such
written request has
been given to the Trustee pursuant to Section 14.04; no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing
itself or themselves of any provisions of this Agreement to affect, disturb, or
prejudice the rights of the Holders of any other of the Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right, under this Agreement except in the manner provided in
this Agreement and for the equal, ratable, and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this
Section 17.03, each Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 17.04. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed within the State of New York, and the obligations, rights,
and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
SECTION 17.05. Notices. All demands, notices, and communications under
this Agreement shall be in writing, personally delivered, sent by facsimile to,
sent by courier to or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given unless otherwise provided herein, upon
receipt (a) in the case of the Depositor to the agent for service as specified
in this Agreement, at the following address: Bay View Securitization
Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other address as shall be designated by the Depositor in a written notice to the
Servicer or Trustee; (b) in the case of the Servicer to the agent for service as
specified in this Agreement, at the following address, California Thrift & Loan,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (c) in the case of the Trustee, at
the Corporate Trust Office, (d) in the case of the Surety Bond Issuer, at
Capital
Markets Assurance Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Fax (212)
▇▇▇-▇▇▇▇, Attention: Managing Director, Credit Enhancement. Any notice
required
or permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register unless otherwise provided herein. Unless otherwise provided herein,
any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.
SECTION 17.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
SECTION 17.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided below or in Sections 12.02 and 13.03 and as
provided in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Depositor or the Servicer
without the prior written consent of the Trustee, the Class IC
Certificateholder,
and the Holders of Certificates evidencing not less than 66% of the Certificate
Balance and 66% of the Notional Principal Amount of the Class I Certificates
provided, that, notwithstanding the foregoing, CTL may direct or irrevocably
assign payments to which it is entitled under this Agreement to the Depositor or
another wholly-owned subsidiary of BVCC, upon written notice to the Trustee.
SECTION 17.08. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust
(except to the extent provided in respect of the Class IC Certificateholder in
Section 7.08). The interests represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and, upon authentication thereof by the Trustee pursuant to Section
11.02, Certificates shall be deemed fully paid.
SECTION 17.09. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Servicer, CTL and the Trustee shall not,
prior to the date which is one year and one days after the termination of this
Agreement with respect to the Trust or the Depositor, acquiesce, petition or
otherwise invoke or cause the Trust or the Depositor to invoke the process of
any
court or government authority for the purpose of commencing or sustaining a case
against the Trust 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 Trust or the
Depositor or any substantial part of its property, or ordering the winding up
or liquidation of the affairs of the Trust or the Depositor.
SECTION 17.10. Counterparts. For the purpose of facilitating the execution
of this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.
SECTION 17.11. Third Party Beneficiary. This Agreement shall inure to the
benefit of the Surety Bond Issuer and its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Pooling and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
BAY VIEW SECURITIZATION CORPORATION,
as Depositor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CALIFORNIA THRIFT & LOAN,
as Servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board
BANKERS TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President