Exhibit 10.1
SALE AND SERVICING AGREEMENT
among
GS AUTO LOAN TRUST 2003-1,
Issuer,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ASSET BACKED SECURITIES CORP.,
Depositor,
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY,
Seller,
THE HUNTINGTON NATIONAL BANK,
Servicer
and
JPMORGAN CHASE BANK,
Indenture Trustee
Dated as of April 1, 2003
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................1
Section 1.01 Definitions.....................................................1
Section 1.02 Other Definitional Provisions..................................25
ARTICLE II CONVEYANCE OF RECEIVABLES.................................................26
Section 2.01 Conveyance of Receivables......................................26
ARTICLE III THE RECEIVABLES..........................................................28
Section 3.01 Representations and Warranties of HNB..........................28
Section 3.02 Representations and Warranties of the Depositor................29
Section 3.03 Repurchase Upon Breach.........................................29
Section 3.04 Custody of Receivable Files....................................30
Section 3.05 Duties of Servicer as Custodian................................30
Section 3.06 Instructions; Authority to Act.................................33
Section 3.07 [Intentionally Omitted]........................................33
Section 3.08 Effective Period and Termination...............................33
ARTICLE IV SERVICING OF RECEIVABLES..................................................34
Section 4.01 Duties of Servicer.............................................34
Section 4.02 Collection of Receivable Payments; Modifications of
Receivables; Monthly Advances..................................35
Section 4.03 Realization upon Receivables...................................36
Section 4.04 Satisfaction of Receivable.....................................37
Section 4.05 Maintenance of Security Interests in Financed Vehicles.........37
Section 4.06 Additional Servicing Covenants.................................37
Section 4.07 [Intentionally Omitted]........................................38
Section 4.08 Purchase of Receivables Upon Breach............................38
Section 4.09 Servicing Fee; Costs and Expenses..............................39
Section 4.10 Servicer's Certificate and Servicer Reports....................40
Section 4.11 Annual Statement as to Compliance..............................40
Section 4.12 Annual Report of Accountants...................................42
Section 4.13 Access to Certain Documentation and Information Regarding
Receivables....................................................42
Section 4.14 Access to Information Regarding Trust and Basic Documents......42
Section 4.15 Maintenance of Errors and Omission Policy......................42
ARTICLE V DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS...................................43
Section 5.01 Establishment of Accounts......................................43
Section 5.02 Collections; Deposits into Collection Account..................45
Section 5.03 Application of Collections.....................................46
Section 5.04 Repurchase Amounts.............................................46
Section 5.05 Permitted Withdrawals from Collection Account..................46
Section 5.06 Distributions..................................................47
Section 5.07 Statements to Securityholders..................................50
Section 5.08 Subcertifications of Indenture Trustee in Connection with
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certifications..................................52
ARTICLE VI THE DEPOSITOR.............................................................52
Section 6.01 Representations of Depositor...................................52
Section 6.02 Corporate Existence............................................54
Section 6.03 Liability of Depositor; Indemnities............................54
Section 6.04 Merger or Consolidation of, or Assumption of the Obligations
of, Depositor..................................................55
Section 6.05 Limitation on Liability of Depositor and Others................55
Section 6.06 Depositor May Own Securities...................................55
Section 6.07 Depositor to Provide Copies of Relevant Securities Filings.....56
Section 6.08 Amendment of Depositor's Organizational Documents..............56
Section 6.09 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certifications..................................56
ARTICLE VII THE SERVICER.............................................................56
Section 7.01 Representations of Servicer....................................56
Section 7.02 Indemnities of Servicer........................................64
Section 7.03 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer...................................................65
Section 7.04 Limitation on Liability of Servicer and Others.................66
Section 7.05 Servicer Not to Resign.........................................66
ARTICLE VIII DEFAULT.................................................................67
Section 8.01 Servicer Termination Events and Additional Servicer Termination
Events.........................................................67
Section 8.02 Consequences of a Servicer Termination Event or an Additional
Servicer Termination Event.....................................70
Section 8.03 Appointment of Successor Servicer..............................70
Section 8.04 Notification to Securityholders................................72
Section 8.05 Waiver of Past Defaults........................................72
ARTICLE IX TERMINATION...............................................................72
Section 9.01 Optional Purchase of All Receivables...........................72
ARTICLE X MISCELLANEOUS..............................................................73
Section 10.01 Amendment......................................................73
Section 10.02 Protection of Title to Trust...................................74
Section 10.03 Notices........................................................76
Section 10.04 Assignment by the Depositor or the Servicer....................77
Section 10.05 Limitations on Rights of Others................................77
Section 10.06 Severability...................................................77
Section 10.07 Counterparts...................................................77
Section 10.08 Headings.......................................................77
Section 10.09 Governing Law..................................................77
Section 10.10 Assignment by Issuer...........................................77
Section 10.11 Nonpetition Covenants..........................................78
Section 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee.78
SCHEDULES
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Cumulative Loss Ratio
SCHEDULE D Receivables For Which The Obligor Has Received Relief
Under The Soldiers' And Sailors' Civil Relief Act Of 1940
EXHIBITS
EXHIBIT A Form of Distribution Date Statement to Noteholders
EXHIBIT B Form of Servicer's Certificate
EXHIBIT C Form of Servicer's Officer's Certificate
EXHIBIT D Form of Depositor' Annual ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
EXHIBIT E Perfection Representations, Warranties and Covenants
EXHIBIT F Form of Certification to be Provided to the Depositor by
the Indenture Trustee
This SALE AND SERVICING AGREEMENT, dated as of April 1, 2003, among GS
AUTO LOAN TRUST 2003-1, a Delaware statutory trust (the "Issuer"), ▇▇▇▇▇▇▇
SACHS ASSET BACKED SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), THE HUNTINGTON NATIONAL BANK, as servicer ("HNB," and in such
capacity, the "Servicer"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New York limited
partnership, as seller (the "Seller"), and JPMORGAN CHASE BANK, a New York
banking corporation, as indenture trustee (the "Indenture Trustee").
WHEREAS, the Issuer desires to purchase from the Depositor a portfolio
of Receivables arising in connection with retail automobile and light truck
loan and installment sale contracts purchased by the Seller in the ordinary
course of its business and sold by the Seller to the Depositor pursuant to the
Assignment, Assumption and Recognition Agreement (as defined herein);
WHEREAS, the Depositor is willing to sell such Receivables to the
Issuer; and
WHEREAS, HNB is willing to service such Receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"1934 Act Documents" shall have the meaning set forth in Section 5.08.
"Affiliate" means, when used with reference to a specified Person, any
Person that (a) directly or indirectly controls or is controlled by or is
under common control with the specified Person, (b) is an officer of, partner
in or trustee of, or serves in a similar capacity with respect to, the
specified Person or of which the specified Person is an officer, partner or
trustee, or with respect to which the specified Person serves in a similar
capacity or (c) directly or indirectly is the beneficial owner of 10% or more
of any class of equity securities of the specified Person or of which the
specified Person is directly or indirectly the owner of 10% or more of any
class of equity securities.
"Additional Servicer Termination Event" shall have the meaning set
forth in Section 8.01(b).
"Accountholder" means JPMorgan Chase Bank, in its capacity as the
securities intermediary in the Securities Account Control Agreement dated as
of April 24, 2003.
"Agreement" means this Sale and Servicing Agreement, as the same may
be amended, supplemented or modified from time to time.
"Amount Financed" means with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed
Vehicle and any related costs, including but not limited to, service
warranties.
"Annualized Net Loss Ratio" means, with respect to any Determination
Date, the average for the six (6) preceding Collection Periods (or if prior to
six (6) months from the Closing Date, the number of whole Collection Periods
since the Closing Date), of the product of 12 times a fraction (expressed as a
percentage), the numerator of which is equal to the Net Liquidation Losses
during the Collection Period plus the Cram Down Losses that occurred during
the Collection Period, and the denominator of which is equal to the aggregate
Principal Balance of the Receivables as of the first day of the Collection
Period.
"Applicable Law" means all provisions of statutes, rules and
regulations, interpretations and orders of any Governmental Authority
applicable to a Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions in which the Person in question is a
party including applicable federal, state and local laws and regulations
thereunder, including, without limitation, usury, truth in lending, consumer
credit protection, unfair and deceptive trade practice, equal credit
opportunity or disclosure laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act,
the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's Regulations B and
Z, the Soldiers' and Sailors' Civil Relief Act, the Depository Institutions
Deregulation and Monetary Control Act of 1980 and, except to the extent
preempted by federal law, state adaptations of the National Consumer Act and
of the Uniform Consumer Credit Code and all other consumer credit laws and
equal credit opportunity and disclosure laws.
"Assignment, Assumption and Recognition Agreement" means the
Assignment, Assumption and Recognition Agreement dated as of April 1, 2003,
between ▇▇▇▇▇▇▇ Sachs Mortgage Company, as assignor, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset
Backed Securities Corp., as assignee, and The Huntington National Bank, as
seller and servicer, as the same may be amended, supplemented or otherwise
modified from time to time.
"Basic Documents" means the Trust Agreement, the Indenture, this
Agreement, the Assignment, Assumption and Recognition Agreement, the
Securities Account Control Agreement and other documents and certificates
delivered in connection therewith.
"Business Day" means any day other than (a) a Saturday or Sunday or
(b) a day on which banking institutions in the States of New York and
Delaware, the jurisdiction of the principal place of business of the Servicer
or the cities in which the Corporate Trust Offices of the Indenture Trustee
are located, are authorized or required by law or executive order to be
closed. Notwithstanding the foregoing, with respect to payments to the
Holders, Business Day shall mean any day other than (i) a Saturday or Sunday
or (ii) a day on which banking institutions in the State of New York or the
cities in which the Corporate Trust Offices of the Indenture Trustee are
located are authorized or required by law or executive order to be closed.
"Certificate" means a certificate evidencing the beneficial interest
of a Certificateholder in the Trust.
"Certificate Distribution Account" has the meaning assigned to such
term in the Trust Agreement.
"Certificateholders" has the meaning assigned to such term in the
Trust Agreement.
"Class" means any one of the classes of Notes.
"Class A Note" means any Class A-1 Note, Class A-2 Note, Class A-3
Note or Class A-4 Note.
"Class A Noteholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Class A-1 Interest
Distributable Amount for such Distribution Date, the Class A-2 Interest
Distributable Amount for such Distribution Date, the Class A-3 Interest
Distributable Amount for such Distribution Date and the Class A-4 Interest
Distributable Amount for such Distribution Date.
"Class A Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to the greater of (a) the Outstanding
Amount of the Class A-1 Notes immediately prior to such Distribution Date and
(b) an amount equal to (i) the Outstanding Amount of the Class A Notes
immediately prior to such Distribution Date minus (ii) the lesser of (A) 88.2%
of the Pool Balance for such Distribution Date and (B) an amount equal to (1)
the Pool Balance for such Distribution Date minus (2) the
Overcollateralization Target Amount for such Distribution Date; provided,
however, that, unless the Class A Notes have been paid in full, for any
Distribution Date as of which the Three-Month Annualized Net Loss Ratio is
greater than or equal to the Sequential Principal Payment Trigger Percentage
in effect on that Distribution Date, the Class A Principal Distributable
Amount shall be 100% of the Regular Principal Allocation for such Distribution
Date; provided further, that on the Final Scheduled Distribution Date of any
Class of Class A Notes, the Class A Principal Distributable Amount shall not
be less than the amount that is necessary to pay that Class of Class A Notes
in full; and provided further, that the Class A Principal Distributable Amount
on any Distribution Date shall not exceed the Outstanding Amount of the Class
A Notes on that Distribution Date.
"Class A-1 Final Scheduled Distribution Date" means the Distribution
Date in April 2004.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-1
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-1 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-1
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class A-1 Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class A-1 Rate.
"Class A-1 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-1 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-1 Interest Carryover
Shortfall for such Distribution Date.
"Class A-1 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-1 Notes at the Class A-1 Rate on the Outstanding
Amount of the Class A-1 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-1 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class
A-1 Notes shall be computed on the basis of the actual number of days in the
related Interest Accrual Period and a 360-day year.
"Class A-1 Note Balance" means, as of any date of determination, the
Initial Class A-1 Note Balance less all amounts distributed to Class A-1
Noteholders on or prior to such date and allocable to principal.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
"Class A-1 Notes" means the 1.300% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" means 1.300% per annum.
"Class A-2 Final Scheduled Distribution Date" means the Distribution
Date in January 2006.
"Class A-2 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-2
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-2 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-2
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class A-2 Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class A-2 Rate.
"Class A-2 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-2 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-2 Interest Carryover
Shortfall for such Distribution Date.
"Class A-2 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-2 Notes at the Class A-2 Rate on the Outstanding
Amount of the Class A-2 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-2 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class
A-2 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-2 Notes" means the 1.538% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2 to the Indenture.
"Class A-2 Rate" means 1.538% per annum.
"Class A-3 Final Scheduled Distribution Date" means the Distribution
Date in April 2007.
"Class A-3 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-3
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-3 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-3
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class A-3 Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class A-3 Rate.
"Class A-3 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-3 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-3 Interest Carryover
Shortfall for such Distribution Date.
"Class A-3 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-3 Notes at the Class A-3 Rate on the Outstanding
Amount of the Class A-3 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-3 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class
A-3 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Class A-3 Notes" means the 2.076% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A-3 to the Indenture.
"Class A-3 Rate" means 2.076% per annum.
"Class A-4 Final Scheduled Distribution Date" means the Distribution
Date in June 2010.
"Class A-4 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-4
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-4 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-4
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class A-4 Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class A-4 Rate.
"Class A-4 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-4 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-4 Interest Carryover
Shortfall for such Distribution Date.
"Class A-4 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-4 Notes at the Class A-4 Rate on the Outstanding
Amount of the Class A-4 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-4 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class
A-4 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Class A-4 Notes" means the 2.716% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" means 2.716% per annum.
"Class B Final Scheduled Distribution Date" means the Distribution
Date in June 2010.
"Class B Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class B Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class B Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class B
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class B Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class B Rate.
"Class B Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued during the applicable Interest Accrual
Period on the Class B Notes at the Class B Rate on the Outstanding Amount of
the Class B Notes on the immediately preceding Distribution Date (or, in the
case of the first Distribution Date, the Closing Date), after giving effect to
all distributions of principal to the Class B Noteholders on or prior to such
preceding Distribution Date. For all purposes of this Agreement and the other
Basic Documents, interest with respect to the Class B Notes shall be computed
on the basis of a 360-day year consisting of twelve 30-day months.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
"Class B Noteholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Class B Monthly Interest
Distributable Amount for such Distribution Date and the Class B Interest
Carryover Shortfall for such Distribution Date.
"Class B Notes" means the 2.621% Asset Backed Notes, Class B,
substantially in the form of Exhibit B to the Indenture.
"Class B Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (a) the sum of (i) the Outstanding
Amount of the Class A Notes (after taking into account distribution of the
Class A Principal Distributable Amount on such Distribution Date) and (ii) the
Outstanding Amount of the Class B Notes immediately prior to such Distribution
Date minus (b) the lesser of (i) 92.5% of the Pool Balance for such
Distribution Date and (ii) an amount equal to (A) the Pool Balance for such
Distribution Date minus (B) the Overcollateralization Target Amount for such
Distribution Date; provided, however, that, for any Distribution Date as of
which the Three-Month Annualized Net Loss Ratio is greater than or equal to
the Sequential Principal Payment Trigger Percentage in effect on that
Distribution Date, the Class B Principal Distributable Amount shall be an
amount equal to (x) 100% of the Regular Principal Allocation for such
Distribution Date minus (y) the Class A Principal Distributable Amount for
such Distribution Date; provided further that, on the Class B Final Scheduled
Distribution Date, the Class B Principal Distributable Amount shall not be
less than the amount that is necessary to pay the Class B Notes in full; and
provided further that the Class B Principal Distributable Amount on any
Distribution Date shall not exceed the Outstanding Amount of the Class B Notes
on that Distribution Date.
"Class B Rate" means 2.621% per annum.
"Class C Final Scheduled Distribution Date" means the Distribution
Date in June 2010.
"Class C Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class C Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class C Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class C
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class C Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class C Rate.
"Class C Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued during the applicable Interest Accrual
Period on the Class C Notes at the Class C Rate on the Outstanding Amount of
the Class C Notes on the immediately preceding Distribution Date (or, in the
case of the first Distribution Date, the Closing Date), after giving effect to
all distributions of principal to the Class C Noteholders on or prior to such
preceding Distribution Date. For all purposes of this Agreement and the other
Basic Documents, interest with respect to the Class C Notes shall be computed
on the basis of a 360-day year consisting of twelve 30-day months.
"Class C Noteholder" means the Person in whose name a Class C Note is
registered in the Note Register.
"Class C Noteholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Class C Monthly Interest
Distributable Amount for such Distribution Date and the Class C Interest
Carryover Shortfall for such Distribution Date.
"Class C Notes" means the 3.748% Asset Backed Notes, Class C,
substantially in the form of Exhibit C to the Indenture.
"Class C Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (a) the sum of (i) the Outstanding
Amount of the Class A Notes (after taking into account distribution of the
Class A Principal Distributable Amount on such Distribution Date), (ii) the
Outstanding Amount of the Class B Notes (after taking into account
distribution of the Class B Principal Distributable Amount on such
Distribution Date) and (iii) the Outstanding Amount of the Class C Notes
immediately prior to such Distribution Date minus (b) the lesser of (i) 94.5%
of the Pool Balance for such Distribution Date and (ii) an amount equal to (A)
the Pool Balance for such Distribution Date minus (B) the
Overcollateralization Target Amount for such Distribution Date; provided,
however, that, for any Distribution Date as of which the Three-Month
Annualized Net Loss Ratio is greater than or equal to the Sequential Principal
Payment Trigger Percentage in effect on that Distribution Date, the Class C
Principal Distributable Amount shall be an amount equal to (x) 100% of the
Regular Principal Allocation for such Distribution Date minus (y) an amount
equal to the sum of (1) the Class A Principal Distributable Amount for such
Distribution Date plus (2) the Class B Principal Distribution Amount for such
Distribution Date; provided further that, on the Class C Final Scheduled
Distribution Date, the Class C Principal Distributable Amount shall not be
less than the amount that is necessary to pay the Class C Notes in full; and
provided further that the Class C Principal Distributable Amount on any
Distribution Date shall not exceed the Outstanding Amount of the Class C Notes
on that Distribution Date.
"Class C Rate" means 3.748% per annum.
"Class D Final Scheduled Distribution Date" means the Distribution
Date in June 2010.
"Class D Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class D Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class D Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class D
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class D Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class D Rate.
"Class D Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued during the applicable Interest Accrual
Period on the Class D Notes at the Class D Rate on the Outstanding Amount of
the Class D Notes on the immediately preceding Distribution Date (or, in the
case of the first Distribution Date, the Closing Date), after giving effect to
all distributions of principal to the Class D Noteholders on or prior to such
preceding Distribution Date. For all purposes of this Agreement and the other
Basic Documents, interest with respect to the Class D Notes shall be computed
on the basis of a 360-day year consisting of twelve 30-day months.
"Class D Noteholder" means the Person in whose name a Class D Note is
registered in the Note Register.
"Class D Noteholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Class D Monthly Interest
Distributable Amount for such Distribution Date and the Class D Interest
Carryover Shortfall for such Distribution Date.
"Class D Notes" means the 5.500% Asset Backed Notes, Class D,
substantially in the form of Exhibit D to the Indenture.
"Class D Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (a) 100% of the Regular Principal
Allocation for such Distribution Date minus (b) an amount equal to the sum of
(i) the Class A Principal Distributable Amount for such Distribution Date,
(ii) the Class B Principal Distributable Amount for such Distribution Date and
(iii) the Class C Principal Distributable Amount for such Distribution Date;
provided, however, that, on the Class D Final Scheduled Distribution Date, the
Class D Principal Distributable Amount shall not be less than the amount that
is necessary to pay the Class D Notes in full; and provided further that the
Class D Principal Distributable Amount on any Distribution Date shall not
exceed the Outstanding Amount of the Class D Notes on that Distribution Date.
"Class D Rate" means 5.500% per annum.
"Closing Date" means April 24, 2003.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a).
"Collection Period" means, with respect to each Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"Collector" shall have the meaning set forth in Section 4.03(b).
"Contract" means a retail automobile and light truck loan and
installment sale contract.
"Contract Rate" means, with respect to each Receivable, the annual
rate of interest applicable to such Receivable stated in the applicable loan
or installment sale contract.
"Controlling Class" means (i) if the Class A Notes have not been paid
in full, the Class A Notes, (ii) if the Class A Notes have been paid in full
and Class B Notes remain Outstanding, the Class B Notes, (iii) if the Class A
Notes and the Class B Notes have been paid in full and Class C Notes remain
Outstanding, the Class C Notes, and (iv) if the Class A Notes, the Class B
Notes and the Class C Notes have been paid in full and Class D Notes remain
Outstanding, the Class D Notes.
"Controlling Party" means (i) if the Notes have not been paid in full,
the Indenture Trustee acting at the direction of at least a majority in
Outstanding Amount of the Noteholders of the Controlling Class and (ii) if the
Notes have been paid in full, the Owner Trustee for the benefit of the
Certificateholders.
"Conveyed Assets" shall have the meaning set forth in Section 2.01(a).
"Corporate Trust Administration Department" shall have the meaning set
forth in the Trust Agreement.
"Corporate Trust Office" shall have the meaning set forth in the
Indenture.
"Cram Down Loss" means, with respect to a Receivable, any loss
resulting from an order issued by a court of appropriate jurisdiction in an
insolvency proceeding that reduces the amount owed on a Receivable or
otherwise modifies or restructures the scheduled payments to be made thereon.
The amount of any such Cram Down Loss will equal the excess of (i) the
Principal Balance of the Receivable immediately prior to such order over (ii)
the Principal Balance of such Receivable as so reduced, modified or
restructured. A Cram Down Loss will be deemed to have occurred at the end of
the Collection Period in which the Servicer enters the Cram Down Loss into its
computer system (and Servicer shall make such entry within two Business Days
after receipt of notice of such order).
"Cumulative Net Loss Ratio" means, for any Determination Date, a
fraction (expressed as a percentage), the numerator of which is equal to (x)
the sum of the Net Liquidation Losses for all Collection Periods from the
Cut-Off Date through and including the Collection Period immediately preceding
such Determination Date plus (y) the Cram Down Losses that occurred during
such period, and the denominator of which is equal to the aggregate Principal
Balance of the Receivables as of the Cut-Off Date.
"Cut-Off Date" means the close of business on March 31, 2003.
"Dealer" means the dealer that sold a Financed Vehicle and that
originated and/or assigned a related Receivable to HNB under an existing
Dealer Agreement.
"Dealer Agreement" means the agreement between a Dealer and HNB
relating to the origination of, or assignment of, the related Receivables to
HNB and all documents and instruments relating thereto, as the same may be
amended, supplemented or otherwise modified from time to time.
"Defaulted Receivable" means, with respect to any Collection Period, a
Receivable (a) which, at the end of such Collection Period, is deemed
uncollectible by the Servicer in accordance with the Servicing Standard, (b)
in respect of which the related Financed Vehicle has been repossessed and
liquidated, (c) in respect of which the Servicer has repossessed and held the
related Financed Vehicle in its repossession inventory for 60 (sixty) days or
more, (d) which by the end of the month becomes 120 days past due and is not
in repossession inventory or (e) which by the end of the month becomes 180
days past due.
"Deficiency Balance" means the outstanding Principal Balance of a
Defaulted Receivable remaining unpaid after the application, to reduce the
Principal Balance of such Receivable, of all Liquidation Proceeds and
Insurance Proceeds received for such Defaulted Receivable and after all
proceeds have been received from the disposition of the related Financed
Vehicle.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Indenture Trustee by physical delivery to the Indenture Trustee
endorsed to, or registered in the name of, the Indenture Trustee or
endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery
of such certificated security endorsed to, or registered in the name
of, the Indenture Trustee or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102 of the UCC) and the making
by such clearing corporation of appropriate entries on its books
reducing the appropriate securities account of the transferor and
increasing the appropriate securities account of the Indenture Trustee
by the amount of such certificated security and the identification by
the clearing corporation of the certificated securities for the sole
and exclusive account of the Indenture Trustee (all of the foregoing,
"Physical Property"), and, in any event, any such Physical Property in
registered form shall be in the name of the Indenture Trustee or its
nominee; and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of
ownership of any such Trust Account Property to the Indenture Trustee
or its nominee or custodian, consistent with changes in applicable law
or regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that is a book-entry security held through the
Federal Reserve System pursuant to federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such Trust Account Property to an
appropriate book-entry account maintained with a Federal Reserve Bank
by a securities intermediary that is also a "depository" pursuant to
applicable federal regulations; the making by such securities
intermediary of entries in its books and records crediting such Trust
Account Property to the Indenture Trustee's security account at the
securities intermediary and identifying such book-entry security held
through the Federal Reserve System pursuant to federal book-entry
regulations as belonging to the Indenture Trustee; and such additional
or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee, consistent with changes in
applicable law or regulations or the interpretation thereof;
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the Indenture Trustee or its nominee
or custodian who either (i) becomes the registered owner on behalf of
the Indenture Trustee or (ii) having previously become the registered
owner, acknowledges that it holds for the Indenture Trustee; and
(d) with respect to any item of Trust Account Property that is
a security entitlement causing the securities intermediary to indicate
on its books and records that such security entitlement has been
credited to a securities account of the Indenture Trustee.
"Depositor" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Backed Securities Corp. and its
successors in interest.
"Depositor's Annual ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification" shall have the
meaning set forth in Section 6.09.
"Determination Date" means the fourth Business Day preceding the
Remittance Date.
"Distribution Date" means, with respect to each Collection Period, the
fifteenth day of the following month or, if such day is not a Business Day,
the immediately following Business Day, commencing in May 2003.
"Distribution Date Statement" means the monthly report to
Securityholders specified in Section 5.07, the form of which is set forth in
Exhibit A.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any State, having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or the Owner Trustee or (b) a depository institution
organized under the laws of the United States of America or any State, that
(i) has either (A) a long-term unsecured debt rating of at least "AA-" by
Standard & Poor's and "A2" by Moody's or (B) a short-term unsecured debt
rating or certificate of deposit rating of at least "A-1+" by Standard &
Poor's and "Prime-1" by Moody's and (ii) the deposits of which are insured by
the FDIC.
"Eligible Investments" means securities, negotiable instruments or
security entitlements, excluding any security with an "r" attached to the
rating thereof, that evidence:
(a) direct obligations of, and obligations fully guaranteed as
to the full and timely payment by, the United States of America or any
agency or instrumentality thereof;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the
laws of the United States of America or any State (or any domestic
branch of a foreign bank) and subject to supervision and examination
by federal or state banking or depository institution authorities;
provided, however, that at the time of the investment or contractual
commitment to invest therein, the commercial paper or other short-term
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from
each Rating Agency in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each Rating
Agency in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
Rating Agency in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee
or any of their respective Affiliates is investment manager or
advisor);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b) above; and
(g) any other investment with respect to which the Rating
Agency Condition is met and the Issuer, the Indenture Trustee or the
Servicer has received written notification from Standard & Poor's that
the acquisition of such investment will not result in a reduction,
withdrawal or downgrade of the then-current rating of any Class of
Notes.
"Eligible Servicer" means (a) HNB or (b) any other Person that at the
time of its appointment as Servicer is either (i) a person that (A) is
servicing a portfolio of retail automobile and light truck loan and
installment sale contracts, (B) is legally qualified and has the capacity to
service the Receivables, (C) has demonstrated the ability professionally and
competently to service a portfolio of motor vehicle retail installment sale
contracts or motor vehicle installment loans similar to the Receivables with
reasonable skill and care and (D) has a minimum net worth of $50,000,000 or
(ii) otherwise acceptable to each Rating Agency.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor organization.
"Final Scheduled Distribution Date" means the Class A-1 Final
Scheduled Distribution Date, the Class A-2 Final Scheduled Distribution Date,
the Class A-3 Final Scheduled Distribution Date, the Class A-4 Final Scheduled
Distribution Date, the Class B Final Scheduled Distribution Date, the Class C
Final Scheduled Distribution Date or the Class D Final Scheduled Distribution
Date, as applicable.
"Financed Vehicle" means a new or used automobile or light truck
securing a Receivable.
"First Allocation of Principal" means, with respect to any
Distribution Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes as of the day immediately preceding such Distribution
Date over (y) the Pool Balance with respect to such Distribution Date.
"Fitch" means Fitch, Inc. and its successors.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state,
federal, provincial or local, and any agency, authority, instrumentality,
regulatory body, court, administrative court or judge, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GAP Amount" means the amount of the outstanding Principal Balance of
a Receivable which HNB determines is required to be cancelled pursuant to HNB
GAP (as described in the related contract or other documents), if the Obligor
on such Receivable has purchased HNB GAP.
"HNB" means The Huntington National Bank, a national banking
association organized under the laws of the United States of America.
"HNB GAP" means HNB's debt cancellation plan pursuant to which some or
all of the outstanding Principal Balance of a Receivable is required to be
cancelled as provided under the terms of the debt cancellation plan as set
forth in the contract or related documents for the related Receivable.
"Indemnified Claim" shall have the meaning set forth in Section
7.02(b).
"Indemnified Parties" or "Indemnified Party" shall have the meaning
set forth in Section 7.02(a).
"Indenture" means the Indenture, dated as of April 1, 2003, between
the Issuer and the Indenture Trustee, as the same may be amended, supplemented
or otherwise modified from time to time.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Indenture Trustee Fee" means one twelfth of the sum of the fees
payable annually to the Indenture Trustee, as set forth in the fee letter from
the Indenture Trustee to the Depositor dated March 27, 2003.
"Initial Class A-1 Note Balance" means $118,614,000.
"Initial Class A-2 Note Balance" means $138,336,000.
"Initial Class A-3 Note Balance" means $124,956,000.
"Initial Class A-4 Note Balance" means $114,082,000.
"Initial Class B Note Balance" means $17,148,000.
"Initial Class C Note Balance" means $9,233,000.
"Initial Class D Note Balance" means $11,666,000.
"Initial Pool Balance" means an amount equal to the aggregate
Principal Balance, as of the Cut-Off Date, of the Receivables listed on
Schedule A hereto, which shall be $527,442,461.
"Insurance Proceeds" means, proceeds of any insurance policy or
service warranty related to a Receivable or the related Collateral, to the
extent such proceeds are to be used to reduce the Principal Balance of such
Receivable and are not to be applied to the restoration of the related
Financed Vehicle or released to the Obligor in accordance with Applicable Law
or the procedures that the Servicer would follow in servicing retail motor
vehicle loan and installment sale contracts or repossessed collateral held for
its own account.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or all or substantially all of its property
in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for all or substantially all of its property, or the making by
such Person of any general assignment for the benefit of creditors, or such
Person admits in writing its inability to pay its debts as such debts become
due, or the taking of action by such Person in furtherance of any of the
foregoing.
"Interest Accrual Period" means, with respect to the Class A-1 Notes,
the period from and including the most recent Distribution Date on which
interest has been paid (or, in the case of the first Distribution Date, the
Closing Date) to and including the day before the Distribution Date and, with
respect to the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the
Class B Notes, the Class C Notes and the Class D Notes, the period from and
including the 15th day of the preceding calendar month (or, in the case of the
first Distribution Date, the Closing Date) to and including the 14th day of
the calendar month in which such Distribution Date occurs.
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in a Trust Account (other than the Collection Account) to be applied
on such Distribution Date pursuant to Section 5.01(e).
"Issuer" means GS Auto Loan Trust 2003-1.
"Late Fees" means any late fees, prepayment charges, extension fees,
pass-a-payment fees or other administrative fees or similar charges allowed by
applicable law with respect to the Receivables.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law.
"Liquidation Proceeds" means cash (other than Insurance Proceeds) in
excess of the costs of liquidation received in connection with the liquidation
of a Defaulted Receivable, whether through the sale or assignment of such
Receivable, trustee's sale or otherwise, including the sale or other
disposition of the related Financed Vehicle.
"List of Receivables" means the list of Receivables set forth in
Schedule A.
"Minimum Required Rating" means, with respect to HNB, a short-term
senior unsecured debt rating equal to or greater than "Prime-1" by Moody's and
"A-1" by Standard & Poor's.
"Monthly Advance" means the interest portion of each Monthly Payment
that is delinquent with respect to each Receivable at the close of business on
the last day of the Collection Period required to be advanced by the Servicer
pursuant to Section 4.02(c) on the Remittance Date for the related month.
"Monthly Payment" means the scheduled monthly payment of principal and
interest on a Receivable that is payable by an Obligor under the related
Contract.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"Net Investment Losses" means, with respect to a Trust Account and any
Collection Period, the amount, if any, by which the aggregate of all losses
and expenses incurred during such period in connection with the investment of
funds in Eligible Investments in accordance with Section 5.01(e) exceeds the
aggregate of all interest and other income realized during such period on such
funds.
"Net Liquidation Losses" means, with respect to any Collection Period,
the amount, if any, by which (a) the aggregate Principal Balance of all
Receivables that became Defaulted Receivables during that Collection Period
exceeds (b) the Liquidation Proceeds, Insurance Proceeds and any Deficiency
Balance recoveries received during that Collection Period.
"Note Balance" means, as of any date of determination, an amount equal
to the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial Class
A-2 Note Balance, (iii) the Initial Class A-3 Note Balance, (iv) the Initial
Class A-4 Note Balance, (v) the Initial Class B Note Balance, (vi) the Initial
Class C Note Balance and (vii) the Initial Class D Note Balance, less all
amounts distributed to Noteholders on or prior to such date and allocable to
principal.
"Note Interest Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.01(b).
"Note Pool Factor" means, with respect to each Class of Notes as of
the close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the Outstanding Amount of such Class of Notes (after
giving effect to any reductions thereof to be made on the immediately
following Distribution Date) divided by the original Outstanding Amount of
such Class of Notes. The Note Pool Factor will be 1.0000000 as of the Closing
Date; thereafter, the Note Pool Factor will decline to reflect reductions in
the Outstanding Amount of each Class of Notes.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the
Class D Notes.
"Noteholders" shall mean the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders, the Class B
Noteholders, the Class C Noteholders or the Class D Noteholders.
"Obligor" the obligor or obligors on a Receivable.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, the vice chairman of the board, the president, an executive vice
president, a senior vice president, a vice president, an assistant vice
president, the treasurer, the secretary or (b) two of the assistant treasurers
and/or assistant secretaries of the Depositor or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel,
who may be an employee of or counsel to the Depositor, the Servicer or the
Trust, which counsel shall be acceptable to the Indenture Trustee, the Owner
Trustee or the Rating Agencies, as applicable, and which shall be addressed to
the Owner Trustee and the Indenture Trustee and which shall be at the expense
of the person required to provide such an Opinion of Counsel, except as
otherwise provided in the other Basic Documents or in the Purchase Agreement.
"Outstanding Amount" means, as of any date of determination and as to
any Notes, the aggregate principal amount of such Notes Outstanding (as
defined in the Indenture) as of such date of determination.
"Overcollateralization Target Amount" means, as of any Distribution
Date, the greater of (x) 2.00% of the outstanding Principal Balance of the
Receivables as of the close of business on the last day of the prior
Collection Period and (y) 1.00% of the Initial Pool Balance.
"Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement.
"Owner Trustee Fee" means the fee payable to the Owner Trustee, as set
forth in a separate fee agreement between the Owner Trustee and the Depositor.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
national banking association, unincorporated organization or government or any
agency or political subdivision thereof or any other entity.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, with respect to any Distribution Date, an amount
equal to the aggregate Principal Balance of the Receivables at the end of the
related Collection Period, after giving effect to all payments of principal
received from Obligors and Repurchase Amounts to be remitted by the Servicer
for the related Collection Period, and after adjustment for Cram Down Losses
and reduction to zero of the aggregate outstanding Principal Balance of all
Receivables that became Defaulted Receivables during such Collection Period.
"Pool Delinquency Percentage" means, for any Determination Date, the
average for the three (3) preceding Collection Periods (or if prior to three
(3) months from the Closing Date, the number of whole Collection Periods since
the Closing Date) of a fraction (expressed as a percentage), the numerator of
which is the aggregate Principal Balance of all Receivables that as of the end
of the immediately preceding Collection Period are thirty (30) or more days
delinquent (excluding Defaulted Receivables from such numerator), and the
denominator of which is the aggregate Principal Balance of the Receivables as
of the end of the immediately preceding Collection Period.
"Principal Balance" means, with respect to any Receivable, as of the
related date of determination, the Amount Financed minus an amount equal to
the sum, as of the close of business on the last day of the related Collection
Period, of (i) that portion of all amounts received by the Servicer (which
amounts shall include any amounts received by (x) HNB or (y) the Servicer
under the Purchase Agreement prior to the Closing Date) from or on behalf of
the related Obligor on or prior to such date and allocable to principal using
the Simple Interest Method plus (ii) Cram Down Losses in respect of such
Receivable.
"Principal Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(c).
"Purchase Agreement" means the Purchase and Servicing Agreement, dated
as of February 28, 2003, between The Huntington National Bank, as seller and
servicer, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as purchaser.
"Rating Agency" means Moody's or Standard & Poor's, as the context may
require. If none of Moody's, Standard & Poor's or a successor thereto remains
in existence, "Rating Agency" shall mean any nationally recognized statistical
rating organization or other comparable Person designated by the Depositor.
"Rating Agency Condition" means, with respect to any specified action
or determination, that each Rating Agency shall have been given 10 days' (or
such shorter period as shall be acceptable to each Rating Agency) prior notice
thereof and that each Rating Agency shall have notified the Issuer or the
Indenture Trustee in writing that such action will not result in a reduction,
withdrawal or downgrade of the then-current rating of any Class of Notes.
"Realized Losses" means, as to any Distribution Date, the amount, if
any, by which the aggregate outstanding Principal Balance of all Receivables
that became Defaulted Receivables during the related Collection Period exceeds
that portion allocable to principal of all Liquidation Proceeds, Insurance
Proceeds and Deficiency Balance recoveries received with respect to such
Defaulted Receivables.
"Receivable File" means the following documents or instruments with
respect to each Receivable:
(i) the original Receivable or a copy of the original Receivable
together with an affidavit of HNB as to the original Receivable;
(ii) the original credit application fully executed by the Obligor or
a photocopy thereof or a record thereof on a computer file or diskette or on
microfiche;
(iii) the original certificate of title, or if the original
certificate of title is required to be held by the agency, department or
office that issued such original certificate of title, a receipt thereof
(which for Michigan and Arizona shall be in the form of RD-108 and for
Kentucky shall be in the form of a "Lien Statement"), or such documents that
the Servicer shall keep on file, in accordance with its customary standards,
policies and procedures, evidencing the security interest of the Issuer in the
related Financed Vehicle;
(iv) if the odometer reading of the Financed Vehicle at the time of
sale to the Obligor is not listed on the certificate of title or the original
credit application, the odometer statement; and
(v) any and all other documents that the Servicer, in its capacity as
servicer under the Purchase Agreement prior to the date hereof, or in its
capacity as Servicer under this Agreement effective as of the date hereof, as
applicable, shall have kept on file in accordance with its customary
procedures relating to a Receivable, an Obligor or a Financed Vehicle.
"Receivables" means all of the retail automobile and light truck loan
and installment sale contracts listed on Schedule A (which Schedule may be in
electronic form).
"Record Date" means, as to any Distribution Date, the day immediately
preceding such Distribution Date unless Definitive Notes are issued, in which
case the Record Date with respect to such Definitive Notes as to any
Distribution Date shall be the last day of the immediately preceding calendar
month.
"Regular Principal Allocation" means, with respect to any Distribution
Date, the excess, if any, of the aggregate Outstanding Amount of the Notes as
of the day immediately preceding such Distribution Date over the result of (a)
the Pool Balance with respect to such Distribution Date minus (b) the
Overcollateralization Target Amount with respect to such Distribution Date;
provided, however, that the Regular Principal Allocation on any Distribution
Date shall not exceed the Outstanding Amount of the Notes; and provided
further that the Regular Principal Allocation on or after the Final Scheduled
Distribution Date of any Class of Notes shall not be less than the amount that
is necessary to reduce the Outstanding Amount of such Class of Notes to zero.
"Remittance Date" means, with respect to each Collection Period, the
11th day of the following month, or if such day is not a Business Day, the
first Business Day immediately preceding such date.
"Repurchase Amount" means, as to each Repurchased Receivable, an
amount equal to (a) the remaining Principal Balance of the Receivable as of
the last day of the Collection Period related to the Distribution Date on
which the purchase or repurchase occurs, plus (b) accrued interest on such
outstanding Principal Balance at the Contract Rate from the date the Obligor
on such Receivable last made a payment of interest through the last day of the
Collection Period related to the Distribution Date on which the purchase or
repurchase occurs, less (c) Monthly Advances in respect of such Receivable
which have not been reimbursed in accordance with this Agreement.
"Repurchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by or on behalf of HNB
pursuant to Section 3.03 or by or on behalf of the Servicer pursuant to
Section 4.08.
"Responsible Officer" means the chairman of the board, the president,
any executive vice president, senior vice president, vice president, assistant
vice president, the treasurer, any assistant treasurer, the secretary, the
assistant secretary or any other officer or assistant officer of such Person
customarily performing (or supervising the performance of) functions similar
to those performed by any of the above designated officers and also, with
respect to a particular matter, any other officer to whom such matter is
required because of such officer's knowledge and familiarity with the
particular subject. Responsible Officer of the Owner Trustee shall be as
defined in the Indenture.
"Review Period" shall have the meaning set forth in Section 4.11(a).
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act" means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification" means as and to the extent required by
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules adopted by the Securities and Exchange
Commission with respect thereto, the certification or certifications as comply
in form and substance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and
regulations promulgated thereunder required to be filed in all Annual Reports
on Form 10-K filed with the Securities and Exchange Commission with respect to
the Trust.
"Second Allocation of Principal" means, with respect to any
Distribution Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes and the Class B Notes as of the day immediately preceding
such Distribution Date over (y) the Pool Balance with respect to such
Distribution Date.
"Securities" means the Notes and the Certificates.
"Securities Account Control Agreement" means the Securities Account
Control Agreement dated as of April 1, 2003 among the Issuer, the Indenture
Trustee and the Accountholder, as the same may be amended, supplemented or
otherwise modified from time to time.
"Securityholders" means the Noteholders and/or the Certificateholders,
as the context may require.
"Seller" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and its successors in
interest, as assignor of the Receivables to the Depositor pursuant to the
Assignment, Assumption and Recognition Agreement.
"Sequential Principal Payment Trigger Percentage" means, with respect
to each Determination Date occurring in the time periods set forth below, the
percentage corresponding thereto:
Determination
Date Percentage
---- ----------
May 2003 through and including March 2004 1.50%
April 2004 through and including March 2005 2.25%
April 2005 and thereafter 2.50%
"Servicer" means HNB, as the servicer of the Receivables, and each
successor to HNB (in the same capacity) pursuant to Section 7.03 or 8.03.
"Servicer Annual Certification" shall have the meaning set forth in
Section 4.11(a).
"Servicer Employees" shall have the meaning set forth in Section 4.15.
"Servicer Termination Event" shall have the meaning set forth in
Section 8.01(a).
"Servicer's Certificate" means a Certificate of the Servicer delivered
pursuant to Section 4.10(a), substantially in the form of Exhibit B.
"Servicer's Officer's Certificate" means an Officers' Certificate of
the Servicer delivered pursuant to Section 4.11(a), substantially in the form
of Exhibit C.
"Servicing Advances" means all customary, reasonable and necessary
"out-of- pocket" costs and expenses other than Monthly Advances (including
reasonable attorney's fees and disbursements) incurred in the performance by
the Servicer of its servicing obligations, including, but not limited to, the
cost of (a) repossessing a Financed Vehicle, (b) restoring and reconditioning
a Financed Vehicle in preparation of such Financed Vehicle for auction, (c)
any enforcement or judicial proceedings, or (d) the sale or other disposition
of repossessed Financed Vehicles.
"Servicing Fee" shall have the meaning set forth in Section 4.09(a).
"Servicing Fee Rate" means 1.00% per annum.
"Servicing Reimbursement Amount" shall have the meaning set forth in
Section 4.09(c).
"Servicing Rights" means all rights relating to the servicing of the
Receivables.
"Servicing Standard" shall have the meaning set forth in Section
4.01(a).
"Simple Interest Method" means the method of allocating a fixed level
payment between principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the Contract
Rate multiplied by the unpaid Principal Balance multiplied by the period of
time (expressed as a fraction of a year, based on the actual number of days in
the month and a 365-day year or, in the event of a leap year, a 366-day year)
elapsed since the preceding payment was made and the remainder of such payment
is allocable to principal.
"Standard & Poor's" means Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Termination Trigger Event" means, with respect to any Determination
Date, any of the following conditions shall exist: (a) the Pool Delinquency
Percentage as of the last day of the related Collection Period is greater than
2.625%, (b) the Annualized Net Loss Ratio as of such Determination Date is
greater than 1.500% and (c) for any Determination Date on or after the
Determination Date occurring in July 2003, the Cumulative Net Loss Ratio
exceeds the percentage set forth opposite such Determination Date on Schedule
C hereto.
"Third Allocation of Principal" means, with respect to any
Distribution Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes, the Class B Notes and the Class C Notes as of the day
immediately preceding such Distribution Date over (y) the Pool Balance with
respect to such Distribution Date.
"Three-Month Annualized Net Loss Ratio" means, with respect to any
Determination Date, the average for the three (3) preceding Collection Periods
(or if prior to three (3) months from the Closing Date, the number of whole
Collection Periods since the Closing Date), of the product of 12 times a
fraction (expressed as a percentage), the numerator of which is equal to the
Net Liquidation Losses during the Collection Period plus the Cram Down Losses
that occurred during the Collection Period, and the denominator of which is
equal to the aggregate Principal Balance of the Receivables as of the first
day of the Collection Period.
"Total Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the related Collection Period: (i) all collections on the Receivables during
such Collection Period allocable to interest in accordance with the Simple
Interest Method and all collections on the Receivables during such Collection
Period allocable to principal in accordance with the Simple Interest Method,
(ii) Liquidation Proceeds for such Collection Period, (iii) Insurance Proceeds
for such Collection Period (other than proceeds to be applied to the
restoration or repair of the related Financed Vehicle or released to the
related Obligor in accordance with the terms of the related Receivable), (iv)
GAP Amounts for such Collection Period, (v) Monthly Advances for such
Collection Period, (vi) the Repurchase Amount of each Receivable that became a
Repurchased Receivable during or in respect of such Collection Period, (vii)
Deficiency Balance recoveries for such Collection Period, (viii) any rebate of
an unearned insurance premium, service warranty or other amount received by
the Servicer with respect to such Collection Period which was financed in the
contract for a Financed Vehicle and (ix) any other amounts received by the
Servicer in respect of a Receivable; provided, however, that the Total
Distribution Amount shall not include: (A) all payments and proceeds
(including Liquidation Proceeds and Insurance Proceeds) of any Repurchased
Receivables the Repurchase Amount of which has been included in the Total
Distribution Amount in a prior Collection Period, (B) any Late Fees collected
by and paid to the Servicer during the related Collection Period and (C) costs
and expenses incurred by the Servicer for or on behalf of an Obligor (such as
retitling costs) that such Obligor repays to the Servicer.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise) and all proceeds of the foregoing.
"Trust Accounts" shall mean the Collection Account, the Note Interest
Distribution Account and the Principal Distribution Account.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of April 1, 2003, between the Depositor and the Owner Trustee, as the
same may be amended, supplemented or modified from time to time.
"Trust Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions with respect to corporate trust matters and having direct
responsibility for the administration of the Indenture and the other Basic
Documents and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject, in each case having direct
responsibility for the administration of the Basic Documents.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"VSI Policy" means that certain "Ultimate Loss Insurance Blanket
Single Interest Policy" issued by Ohio Indemnity Company to The Huntington
National Bank and currently in force, together with all endorsements thereto.
Section 1.02 Other Definitional Provisions.
(a) Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in the Indenture or, if not
defined therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any
such certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; "or" shall include "and/or"; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01 Conveyance of Receivables.
(a) In consideration of the Issuer's delivery to or upon the
order of the Depositor of the Notes and the Certificates, the Depositor does
hereby sell, transfer, assign, set over and otherwise convey to the Issuer,
without recourse (subject to the obligations of the Depositor set forth
herein), and the Issuer hereby purchases, all right, title and interest of the
Depositor in, to and under each of the Receivables, including:
(i) all interest, principal, and any other amounts
received on or with respect to each of the Receivables after the
Cut-Off Date;
(ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Receivables and any other interest
of the Depositor in such Financed Vehicles;
(iii) all other security interests or other property
interests created by or constituting each Receivable;
(iv) all of the Depositor's rights with respect to
each Receivable and the documentation relating to the Receivables,
including, without limitation, all rights under the VSI Policy with
respect to such Receivable and the contents of each Receivable File,
including, without limitation, all of the Depositor's enforcement and
other rights under the UCC and other Applicable Law;
(v) rebates of premiums on insurance policies and all
other items financed as part of the Receivables in effect as of the
Cut-Off Date, including but not limited to, service warranties;
(vi) all Servicing Rights with respect to, and all
proceeds of and rights to enforce, any of the foregoing, including,
without limitation, any Insurance Proceeds and Liquidation Proceeds;
(vii) all of the Depositor's rights (but not its
obligations) under the Assignment, Assumption and Recognition
Agreement;
(viii) all funds on deposit from time to time in the
Trust Accounts and the Certificate Distribution Account and in all
investments therein and proceeds thereof (including all Investment
Earnings thereon);
(ix) all accounts, money, chattel paper, securities,
instruments, documents, deposit accounts, certificates of deposit,
letters of credit, advices of credit, banker's acceptances,
uncertificated securities, general intangibles, contract rights, goods
and other property consisting of, arising from or relating to any and
all of the foregoing; and
(x) the proceeds of any and all of the foregoing
(collectively, with the assets listed in clauses (i) through (ix)
above, the "Conveyed Assets").
(b) Upon the sale of the Receivables, the ownership of each
Receivable, including the contents of the related Receivable File, and all
rights, benefits, payments, proceeds and obligations arising from or in
connection with any of the foregoing (but excluding all rights and obligations
under any Dealer Agreement), shall be vested in the Trust, and the ownership
of all records and documents with respect to the related Receivable prepared
by or which come into the possession of the Depositor shall immediately vest
in the Trust and shall be retained and maintained, in trust, by the Servicer
for the benefit of the Trust, as the owner thereof, in a custodial capacity
only.
(c) It is the intention of the parties hereto that the transfer
and assignment contemplated by this Agreement shall constitute a sale of the
Receivables and other related property (for non-tax purposes) from the
Depositor to the Trust and the beneficial interest in and title to the
Receivables and that such Conveyed Assets shall not be treated as property of
the Depositor by the Seller as debtor-in-possession or by a bankruptcy trustee
in any insolvency, bankruptcy or other similar proceeding in respect of the
Seller under any Applicable Law. Further, it is not the intent of the parties
hereto that any such transfer and conveyance be deemed a grant by the
Depositor to the Trust of a mere security interest in any of the Conveyed
Assets in order to secure a debt or other obligation of the Depositor.
However, in the event and to the extent that, notwithstanding the intent of
the parties hereto, the transfer and assignment contemplated hereby is held
not to be a true or absolute sale, this Agreement shall constitute a security
agreement under Applicable Law, and, in such event, the Depositor shall be
deemed to have granted, and the Depositor hereby grants, to the Issuer a first
priority security interest in all accounts, money, chattel paper, securities,
instruments, documents, deposit accounts, certificates of deposit, letters of
credit, advices of credit, banker's acceptances, uncertificated securities,
general intangibles, contract rights, goods and other property consisting of,
arising from or relating to such Conveyed Assets, for the benefit of the Trust
and its assignees as security for the Depositor's obligations hereunder and
the Depositor consents to the pledge of the foregoing Conveyed Assets under
the Indenture to the Indenture Trustee. The Depositor shall file and deliver,
prior to the Closing Date, financing statements on form UCC-1 in respect of
such security interest, and the Depositor hereby authorizes, on or after the
Closing Date, the filing of any financing statements or continuation
statements, and amendments to financing statements, or any similar document in
any jurisdictions and with any filing offices as the Issuer or the Indenture
Trustee may determine, in its sole discretion, are necessary or advisable to
perfect the security interest granted to the Trust herein and pledged to the
Indenture Trustee under the Indenture. Such financing statements shall contain
a statement to the following effect: "A purchase of or security interest in
any collateral described in this financing statement other than by the Issuer
or the Indenture Trustee on behalf of the Noteholders will violate the rights
of the Issuer and the Indenture Trustee on behalf of the Noteholders" and may
describe the Collateral in the same manner as described herein or may contain
an indication or description of collateral that describes such property as
necessary, advisable or prudent to ensure the perfection of the security
interest in the Collateral granted to the Trust herein and pledged to the
Indenture Trustee under the Indenture.
(d) The Depositor has determined that the Depositor's
disposition of the Receivables pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes and shall treat the disposition
of the Receivables pursuant to this Agreement in such manner. The sale of each
Receivable shall be reflected on the Depositor's balance sheet and other
financial statements and income tax returns as a sale of assets by the parties
hereto and the Depositor shall treat the disposition of the Receivables
hereunder as a sale for accounting and tax purposes.
ARTICLE III
THE RECEIVABLES
Section 3.01 Representations and Warranties of HNB.
(a) Pursuant to Section 1 of the Assignment, Assumption and
Recognition Agreement, the Seller, as assignor, has assigned to the Depositor,
as assignee, all of its right, title and interest in and to the Receivables
and the Purchase Agreement, to the extent relating to the Receivables (other
than the rights of the Seller to indemnification thereunder), and the
Depositor has thereby assumed all of the Seller's obligations under the
Purchase Agreement. Pursuant to Section 2.01 of this Agreement, the Depositor
has sold, assigned, transferred and conveyed to the Issuer, as part of the
assets of the Issuer, its rights under the Purchase Agreement, including the
representations and warranties of HNB made pursuant to Section 3.01 of the
Purchase Agreement with regard to the Receivables, upon which representations
and warranties the Issuer relies in accepting the Receivables and delivering
the Securities, together with all rights with respect to any breach thereof,
including the right to require HNB to repurchase Receivables in accordance
with the Purchase Agreement. It is understood and agreed that the
representations and warranties referred to in this Section 3.01 speak as of
the Cut-Off Date and/or the Closing Date (each as defined in the Purchase
Agreement) under the Purchase Agreement but shall survive the sale, assignment
and delivery of the Receivables to the Depositor and the Issuer and the pledge
of such Receivables to the Indenture Trustee and in connection herewith, HNB
hereby makes each such representation and warranty as of such Cut-Off Date
and/or such Closing Date, as applicable, under the Purchase Agreement, to, and
for the benefit of, the Issuer and the Indenture Trustee, as if the same were
set forth in full herein.
(b) HNB hereby agrees that the Issuer shall have the right to
enforce any and all rights under the Purchase Agreement assigned to the Issuer
herein, including the right to cause HNB to repurchase any Receivable with
respect to which it is in breach of any of its representations and warranties
set forth in Section 3.01 of the Purchase Agreement, directly against HNB as
though the Issuer were a party to the Purchase Agreement, and the Issuer shall
not be obligated to exercise any such rights indirectly through the Depositor,
in each case, subject to the terms of this Agreement.
Section 3.02 Representations and Warranties of the Depositor.
The Depositor makes the following representations and warranties, on
which the Issuer relies in accepting the Receivables and delivering the
Securities. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables by the Depositor to the
Issuer and the pledge thereof to the Indenture Trustee in accordance with the
terms of the Indenture:
(a) Title. The Depositor shall convey to the Issuer all right,
title and interest of the Depositor in and to the Receivables, including all
right, title and interest of the Depositor in and to the security interests in
the related Financed Vehicles.
(b) All Filings Made. The Depositor has caused all filings
(including UCC filings) to be made in Delaware with respect to the sale of the
Receivables to the Issuer and the pledge contemplated in the Basic Agreements
to the Indenture Trustee.
(c) Liens. The Depositor has not taken any actions to create,
incur or suffer to exist any Lien on or restriction on transferability of any
Receivable except for the Lien of the Indenture and the restrictions on
transferability imposed by this Agreement.
(d) Perfection. The Depositor further makes all the
representations, warranties and covenants set forth in Exhibit E.
Section 3.03 Repurchase Upon Breach.
Each of the Depositor, the Owner Trustee, the Indenture Trustee, the Seller
and the Servicer shall inform the other parties to this Agreement and HNB
promptly, in writing, upon the discovery by it of any breach of HNB's
representations and warranties made pursuant to the Purchase Agreement. Within
sixty (60) days of the earlier of either discovery by, or notice to, HNB of
any breach of a representation or warranty contained in the Purchase Agreement
with respect to a Receivable, (i) HNB shall use its best efforts promptly to
cure such breach in all material respects and (ii) if such breach cannot be
cured, HNB shall, at the option of the Issuer, repurchase such Receivable in
an amount equal to the Repurchase Amount. If such breach of a representation
or warranty is curable and HNB shall have timely commenced such cure or remedy
but notwithstanding its due and diligent efforts, the remedy or cure shall not
be capable of cure within such sixty (60) day period, HNB shall, upon receipt
of written consent by the Issuer, the Indenture Trustee or the Owner Trustee,
have up to two additional thirty (30) day periods to effectuate the cure (up
to an aggregate total of 120 days) so long as it is acting in good faith to
effectuate such cure. In the event that a breach shall involve any
representation or warranty set forth in Section 3.01 of the Purchase
Agreement, and such breach cannot be cured within a maximum of 120 days of the
earlier of either discovery by, or notice to, HNB of such breach (or within
sixty (60) or ninety (90) days, if the applicable extension was not granted by
the written consent of the Issuer, the Indenture Trustee or the Owner
Trustee), the affected Receivable shall, at the option of the Issuer, the
Indenture Trustee or the Owner Trustee, be repurchased by HNB in an amount
equal to the Repurchase Amount; provided, however, that the Repurchase Amount
to be paid by HNB shall be reduced by any amounts being held by the Servicer
at the time of such repurchase with respect to such Repurchased Receivable for
remittance to the Collection Account in accordance with Section 4.02(c). For
so long as (i) HNB is the Servicer and (ii) the Servicer has the Minimum
Required Rating, HNB shall remit the amount owed with respect to the
Repurchased Receivable to the Servicer on the Remittance Date relating to the
Collection Period in which such repurchase was determined to be required;
provided, however, that if either clause (i) or (ii) is not met, such amount
shall be paid to the Servicer on the date of such repurchase. The Servicer
shall remit such amount to the Collection Account in the manner specified in
Section 5.04 and shall notify in writing the Indenture Trustee of such
deposit. It is understood and agreed that the obligations of HNB set forth in
this Section 3.03 constitute the sole remedy respecting a breach of HNB's
representations and warranties made pursuant to the Purchase Agreement or
deemed made pursuant to this Agreement.
(a) Notwithstanding clause (a) above, HNB shall be required to
cure each exception set forth on Schedule 2-A to the Purchase Agreement in the
manner set forth and within the time period allotted on Schedule 2-B thereto.
In the event that an exception is not cured in the time allotted therein, HNB
shall, at the option of the Issuer, the Indenture Trustee or the Owner
Trustee, repurchase the Receivable to which the exception relates in an amount
equal to the amount set forth in clause (i) of the definition of "Receivables
Repurchase Price" in the Purchase Agreement.
(b) At the time of repurchase of a Receivable, the Issuer and
HNB shall arrange for the reassignment of the Repurchased Receivable to HNB.
In the event of a repurchase of a Receivable, HNB shall give written notice to
the Issuer and the Servicer that such repurchase has taken place and the
Schedule of Receivables shall be amended to reflect the withdrawal of the
Repurchased Receivable from the terms of this Agreement. Upon repurchase by
HNB, a Repurchased Receivable is not, and shall not be considered, a
Receivable for purposes of this Agreement or the Purchase Agreement.
(c) The Indenture Trustee shall not have any duty to conduct
any affirmative investigation as to the occurrence of any conditions requiring
the repurchase of any Receivable pursuant to this Section 3.03 and will not be
deemed to have discovered any breach hereunder or under Section 4.08 hereof
unless and until a Trust Officer shall have actual knowledge thereof.
Section 3.04 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the Receivable Files, which are hereby constructively delivered
by the Issuer to the Indenture Trustee.
Section 3.05 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files,
in trust, as custodian for the benefit of the Issuer and the Indenture
Trustee, and shall maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable the Issuer
to comply with this Agreement.
In performing its duties under this Section 3.05 as custodian, the
Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files
relating to all comparable motor vehicle receivables that the Servicer
services for itself or others. The Servicer shall conduct, or cause to be
conducted, periodic internal 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 Issuer and the Indenture Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Issuer and the Indenture Trustee any 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. Nothing herein shall be deemed to require an initial review or
any periodic review by the Issuer or the Indenture Trustee of the Receivable
Files. In acting as custodian of the Receivable Files, the Servicer further
agrees not to assert any beneficial ownership interests in the Receivables or
the Receivable Files.
(b) Maintenance of and Access to Receivable Files.
(i) The Servicer shall maintain each Receivable File
at one of its offices specified in Schedule B to this Agreement or at
such other office in the United States as shall be specified to the
Issuer and the Indenture Trustee by written notice not later than
ninety (90) days prior to any change in location. Upon request, the
Servicer shall also make available to the Issuer and the Indenture
Trustee or their duly authorized representatives, attorneys or
auditors a current list of locations of the Receivable Files and shall
allow the Issuer and the Indenture Trustee or their duly authorized
representatives, attorneys or auditors access to the Receivables and
the related accounts, records and computer systems maintained by the
Servicer. The Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Receivable
which shall be marked clearly to reflect the ownership of each
Receivable by the Issuer. To the extent that original documents are
not required for purposes of realization of Liquidation Proceeds or
Insurance Proceeds, as certified in an Officer's Certificate to the
Issuer or the Indenture Trustee, documents maintained by the Servicer
may be in the form of microfilm or microfiche or such other reliable
means of recreating original documents, including but not limited to,
optical imagery techniques so long as the Servicer complies with the
requirements of all Applicable Laws.
(ii) The Servicer shall maintain its computer systems,
in accordance with its customary standards, policies and procedures,
so that, from and after the time of conveyance hereunder of the
Receivables to the Issuer, the Servicer's master computer records
(including any back-up archives) that refer to a Receivable shall
indicate clearly the interest of the Issuer in such Receivable and
that such Receivable is owned by the Issuer. The Servicer shall take
no action to remove, alter or obliterate the stamp placed on the
contract to show the ownership of the Receivable by the Issuer.
Indication of the Issuer's ownership of a Receivable shall be deleted
from or modified on the Servicer's computer systems or from the
contract itself when, and only when, the Receivable shall have been
paid in full or repurchased by HNB or purchased by the Servicer in
accordance with the terms of this Agreement and the Purchase
Agreement.
(c) Release of Documents. Upon written instruction from the
Indenture Trustee or, if the Notes have been paid in full, from the Owner
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee or the Owner Trustee, as the case may be, or to the agent or designee
of the Indenture Trustee or the Owner Trustee, as the case may be, at such
place or places as the Indenture Trustee or the Owner Trustee, as applicable,
may designate, as soon as practicable (but in no event more than five (5) days
after the date of such release) and the Issuer shall reimburse the Servicer
for its reasonable out-of-pocket expenses incurred in connection with any such
release and delivery. Upon the release and delivery of any such document in
accordance with the instructions of the Indenture Trustee or the Owner
Trustee, as the case may be, the Servicer shall be released from any further
liability and responsibility under this Section 3.05 with respect to such
documents and any other provision of this Agreement if the fulfillment of the
Servicer's responsibilities is dependent upon possession of such documents,
unless and until such time as such documents shall be returned to the
Servicer. In no event shall the Servicer be responsible for any loss
occasioned by the Indenture Trustee's or the Owner Trustee's failure to return
any Receivable File or any portion thereof in a timely manner.
(d) Reimbursement for Reasonable Out-of-Pocket Expenses.
Pursuant to Section 4.09(c), the Servicer shall be entitled to reimbursement
for all reasonable out-of-pocket expenses incurred in connection with the
performance of its obligations as custodian of the Receivable Files under this
Section 3.05.
(e) Destruction of Receivable Files. In the event the
Receivable Files held by the Servicer are destroyed due to fire or other
casualty, the Servicer will bear the responsibility for (i) having new titles
issued for each Financed Vehicle and providing printed copies of the destroyed
title from the Servicer's imaging system which shall remain in the Receivable
File until such new titles are received, (ii) replacing each Receivable (by
printing a copy thereof held on the Servicer's imaging system), and (iii)
creating a lost note affidavit to accompany each replaced Receivable,
certifying that the original Receivable was destroyed; provided, however, that
in the event any additional document is needed in order to service the
Receivable, the Servicer shall print a copy thereof from its imaging system.
All costs incurred in connection with this clause (e) shall be paid by the
Servicer and the Servicer shall indemnify the Issuer and the Indenture Trustee
for any losses suffered by the Issuer as a result of the loss or destruction
of the original Receivable Files.
Section 3.06 Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee or, if the Notes have been paid in full, of the Owner
Trustee. A certified copy of a by-law or of a resolution of the Board of
Directors of the Indenture Trustee or Owner Trustee, as applicable, shall
constitute conclusive evidence of the authority of any such Trust Officer to
act and shall be considered in full force and effect until receipt by the
Servicer of written notice to the contrary given by the Indenture Trustee or
Owner Trustee, as applicable.
Section 3.07 [Intentionally Omitted]
Section 3.08 Effective Period and Termination. The Servicer shall act
as custodian of the Receivables and shall continue to act in such capacity
unless and until terminated pursuant to this Section 3.08. If the Servicer or
any successor Servicer shall resign as Servicer in accordance with the
provisions of this Agreement or if all of the rights and obligations of the
Servicer or any successor Servicer shall have been terminated under Section
8.02, (i) such Servicer may also resign as custodian of the Receivables and
(ii) the appointment of such Servicer as custodian may be terminated by the
Issuer or by the Holders of Notes evidencing not less than 25% of the
Outstanding Amount of the Notes, or, if no Notes are outstanding, by Holders
of Certificates evidencing not less than 25% of the percentage interests in
the Certificates, in the same manner as the Indenture Trustee or such
Securityholders may terminate the rights and obligations of the Servicer under
Section 8.02. The Indenture Trustee or, with the consent of the Indenture
Trustee, the Owner Trustee may terminate the Servicer's appointment as
custodian, with cause, at any time upon written notification to the Servicer
and without cause, only by written notification to the Servicer pursuant to
Section 8.02. As soon as practicable after any termination of such appointment
(but in no event more than ten (10) Business Days after any such termination
of appointment), the Servicer shall deliver the Receivable Files to the
Indenture Trustee, at such place or places as the Indenture Trustee may
reasonably designate; provided, however, that, if the Servicer shall have been
terminated as custodian without cause pursuant to this Section 3.08, the
Servicer shall be entitled to reimbursement by the Issuer for all reasonable
out-of-pocket expenses incurred in connection with such delivery of the
Receivable Files. Notwithstanding the termination of the Servicer as
custodian, the Indenture Trustee and the Owner Trustee agree that, upon any
such termination and for so long as the Servicer remains the Servicer
hereunder, the Indenture Trustee or the Owner Trustee, as the case may be,
shall provide, or cause its agent to provide, access to the Receivable Files
to the Servicer for the purpose of enabling the Servicer to perform its
obligations under this Agreement with respect to the servicing of the
Receivables.
ARTICLE IV
SERVICING OF RECEIVABLES
Section 4.01 Duties of Servicer.
(a) The Servicer, as an independent contract servicer, for the
benefit of the Issuer and the Indenture Trustee, shall manage, service,
administer and make collections on the Receivables and perform the other
actions required by the Servicer under this Agreement. The Servicer will
service the Receivables in accordance with the servicing standard set forth in
the Purchase Agreement, or in the event that the Purchase Agreement does not
specify a particular standard, in accordance with its usual and customary
procedures, consistent with the procedures employed by institutions that
service motor vehicle installment sale contracts or motor vehicle installment
loan notes for their own account or for the account of third parties (the
foregoing, the "Servicing Standard").
(b) The Servicer's duties shall include, but not be limited to,
the collection and posting of all payments, responding to inquiries of
Obligors on the Receivables, investigating delinquencies, sending payment
coupons to Obligors, reporting tax information to Obligors, monitoring the
Receivables, accounting for collections, preparing tax forms required by any
federal, state or local tax authority, if any, furnishing Servicer Reports,
including the Servicer's Certificate, and annual statements as required
herein, making Monthly Advances and performing the other duties specified
herein. The Servicer is hereby authorized and empowered to execute and
deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture
Trustee, the Certificateholders and the Noteholders, or any of them, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments with respect to the
Receivables and with respect to the Financed Vehicles; provided, however,
that, notwithstanding the foregoing, the Servicer shall not, except as
permitted by the Servicing Standard or pursuant to an order from a court of
competent jurisdiction or as otherwise required by Applicable Law, (i) release
the Financed Vehicle securing a Receivable from the security interest granted
by such Receivable in whole or in part except in the event of payment in full
by or on behalf of the Obligor thereunder or repossession, (ii) impair the
rights of the Trust or the Indenture Trustee in the Receivables, (iii) change
the Contract Rate with respect to any Receivable, (iv) waive the right to
collect the unpaid balance of any Receivable from an Obligor or (v) modify the
Principal Balance or the total number of originally scheduled due dates of any
Receivable.
(c) The Servicer is hereby authorized to commence, in its own
name or in the name of the Indenture Trustee or the Owner Trustee, a legal
proceeding to enforce a Receivable pursuant to Section 4.03 or to commence or
participate in any other legal proceeding (including a bankruptcy proceeding)
relating to or involving a Receivable, an Obligor or a Financed Vehicle. If
the Servicer commences or participates in any such legal proceeding in its own
name, the Indenture Trustee or the Issuer shall thereupon be deemed to have
automatically assigned the applicable Receivable to the Servicer solely for
purposes of commencing or participating in such proceeding as a party or
claimant. The Servicer is authorized and empowered by the Indenture Trustee to
execute and deliver in the Indenture Trustee's name any notices, demands,
claims, complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding and to bring suit in the name of the
Indenture Trustee. 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 is
not a real party in interest or a holder entitled to enforce such Receivable,
the Owner Trustee shall, at the Servicer's direction, take steps to enforce
such Receivable, including bringing suit in its name or in the name of the
Indenture Trustee or, with the prior written permission of the Depositor, the
Issuer. The Owner Trustee and the Indenture Trustee shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder, and the Owner
Trustee and the Indenture Trustee shall not be held responsible for any acts
by the Servicer in its uses of any such powers of attorney or other document
other than as authorized or permitted by this Agreement.
Section 4.02 Collection of Receivable Payments; Modifications of
Receivables; Monthly Advances.
(a) Consistent with the Servicing Standard, the Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables. The Servicer is authorized, in accordance with
the Servicing Standard, to waive any Late Fees that may be collected in the
ordinary course of servicing any Receivable.
(b) The Servicer may, in accordance with the Servicing
Standard, grant payment extensions on a Receivable for which the related
Obligor is delinquent for failure of payment. The Servicer shall not grant
more than one (1) extension on such Receivable in any calendar year and not
more than three (3) extensions on any such Receivable; provided, however, that
if the Servicer extends the date for the final payment by any Obligor of any
Receivable beyond six (6) months past December 10, 2009 the Servicer shall
promptly purchase such Receivable at the Repurchase Amount. The use of a
pass-a-payment coupon shall not be considered an extension on a Receivable
pursuant to this Section 4.02(b).
(c) On each Remittance Date, the Servicer shall remit to the
Collection Account from its own funds or from amounts held for future
distribution an amount equal to the interest portion of all Monthly Payments
that were (i) due on the Receivables during the applicable Collection Period
and that were delinquent at the close of business on the last day of the
Collection Period immediately preceding the related Distribution Date or (ii)
not due during the applicable Collection Period because payment in the
Collection Period was deferred by the Servicer (including, for this purpose,
any extension made in connection with the use of a pass-a-payment coupon). Any
amounts held for future distribution used in the manner provided in the
preceding sentence shall be reimbursed by the Servicer on or before any future
Remittance Date, if funds available on such Remittance Date shall be less than
amounts required to be deposited into the Collection Account on such
Remittance Date. Notwithstanding the foregoing, unless the Servicer has a
long-term credit rating of at least "A" by Standard & Poor's and "A2" by
▇▇▇▇▇'▇, the Servicer shall not be permitted to make any Monthly Advances
pursuant to this Section from amounts held for future distribution, and
instead shall be required to make all Monthly Advances from its own funds. The
Servicer's obligation to make such Monthly Advances as to any Receivable shall
continue through the earlier to occur of (i) the last Monthly Payment due
prior to the payment in full of the Receivable or (ii) the last Remittance
Date prior to the Remittance Date for the remittance of all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds) with
respect to the Receivable; provided, however, that if requested by a Rating
Agency, the Servicer shall be obligated to make such Monthly Advances through
the Remittance Date prior to the Distribution Date prior to the date on which
cash is received in connection with the liquidation of the related Financed
Vehicle; provided, further, however, that the obligation to pay Monthly
Advances shall cease if the Servicer determines, in its sole reasonable
opinion, that advances with respect to such Receivable are non-recoverable by
the Servicer from Liquidation Proceeds or otherwise from amounts allocable to
interest with respect to the Receivables.
Section 4.03 Realization upon Receivables.
In the event that any payment due under any Receivable is not paid when the
same becomes due and payable, or in the event the related Obligor fails to
perform any other covenant or obligation under the Receivable and such failure
continues beyond any applicable grace period, the Servicer shall take such
actions as (i) it would take under similar circumstances with respect to a
similar motor vehicle retail installment contract or motor vehicle installment
loan note held for its own account for investment, (ii) shall be consistent
with Servicing Standard, and (iii) it shall determine prudently to be in the
best interest of the Trust. The Servicer shall begin such repossession and
conversion procedures as soon as practicable after a default on such
Receivable in accordance with the Servicing Standard. In connection herewith,
the Servicer shall from its own funds make all necessary and proper Servicing
Advances, subject to reimbursement pursuant to Section 4.09; provided,
however, that the foregoing shall not be construed to require the Servicer to
undertake repossession, restoration or preservation of any Financed Vehicle,
unless the Servicer shall determine (x) that such preservation, restoration
and/or repossession will increase the proceeds of liquidation of the
Receivable after reimbursement to itself for such expenses and (y) that
expenses in connection with such repossession, restoration or repossession
will be recoverable either through Liquidation Proceeds or through Insurance
Proceeds. The recovery of expenses incurred by the Servicer shall be limited
to Liquidation Proceeds, Insurance Proceeds and Deficiency Balance recoveries
with respect to such Receivable.
(a) In connection with any Deficiency Balance, the Servicer in
accordance with the Servicing Standards will (A)(i) pursue collection of the
deficiency for a period of no more than 120 days, which may be extended an
additional 60 days if, in the Servicer's reasonable judgment such extension
will maximize recovery of the Deficiency Balance and then (ii) refer the
related account to (x) its routinely preferred third party collector or (y)
such other third party collector as approved by the Issuer (the entity hired
pursuant to clause (x) or (y), the "Collector"), which will pursue collection
of such Deficiency Balance; or (B) refer the related account directly to the
Collector as provided in (A)(ii) above, if, in the Servicer's reasonable
judgment referral of such account to the Collector will maximize recovery of
the Deficiency Balance. In the event the Servicer refers the related account
to the Collector, the Servicer shall no longer remain obligated or be liable
to any other party for the collection of such Receivable. The Servicer shall,
in accordance with Section 5.02(a), remit any amounts collected by it or
remitted to it by the Collector (from which the Collector may net all of the
Collector's costs, expenses and other charges) in regards to such Deficiency
Balance.
Section 4.04 Satisfaction of Receivable.
Upon payment in full on any Receivable, or otherwise in accordance
with the Servicer's customary policies and procedures consistent with the
Servicing Standard, the Servicer is authorized to execute an instrument in
satisfaction of such Receivable and to do such other acts and execute such
other documents as the Servicer deems necessary to discharge the Obligor
thereunder and eliminate the security interest in the Financed Vehicle related
thereto. To the extent that insufficient payments are received on a Receivable
credited by the Servicer as prepaid or paid in full and satisfied, the
shortfall shall be paid by the Servicer out of its own funds if the shortfall
is in excess of $25.
Section 4.05 Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with the Servicing Standard take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle on behalf of the
Issuer and the Indenture Trustee. The Servicer is hereby authorized to take
such steps as are necessary to re-perfect such security interest on behalf of
the Issuer and the Indenture Trustee in the event of the relocation of a
Financed Vehicle, or for any other reason. Notwithstanding the foregoing, the
Servicer shall have no obligation to audit the perfection or re-perfection of
security interests in the Financed Vehicles and the Servicer shall have no
obligation to perfect or re-perfect unless it is aware that perfection or
re-perfection is necessary. Pursuant to Section 4.09(c), the Servicer shall be
reimbursed for all reasonable out-of-pocket expenses incurred in connection
with the performance of its obligations under this Section 4.05.
Section 4.06 Additional Servicing Covenants.
The Servicer further agrees:
(a) Except as permitted by the Servicing Standard, the Servicer
shall not (i) release the Financed Vehicle securing each Receivable from the
security interest granted by such Receivable, in whole or in part, except (x)
in the event of payment in full (or within $25.00 of payment in full) by or on
behalf of the Obligor thereunder or (y) upon repossession and liquidation of
such Financed Vehicle, (ii) impair the rights of the Issuer in the
Receivables, (iii) change the Contract Rate applicable to any Receivable or
(iv) modify the Principal Balance or the total number of originally scheduled
due dates of any Receivable; and
(b) The Servicer shall not (1) create or incur, or agree to
create or incur or consent to or permit in the future (upon the occurrence of
a contingency or otherwise) the creation, incurrence or existence of any Lien
on or restriction on transferability of any Receivable except for the Lien of
the Indenture and the restrictions on transferability imposed by this
Agreement or (2) other than as contemplated herein, sign or file any UCC
financing statements in any jurisdiction that names the Seller or the
Depositor as a debtor, and any Person other than the Depositor, the Indenture
Trustee or the Issuer as a secured party, or sign any security agreement
authorizing any secured party thereunder to file any such financing statement,
in each case with respect to the Receivables or any other Conveyed Assets.
Section 4.07 [Intentionally Omitted].
Section 4.08 Purchase of Receivables Upon Breach.
Upon discovery by any of the Servicer, the Seller, the Depositor, the
Owner Trustee or the Indenture Trustee of a breach of any of the covenants set
forth in Sections 4.02(b), 4.05 or 4.06 or of any of the representations and
warranties made by the Servicer as set forth in Section 7.01(b) (or, as to
clauses (xxxix), (xlii), (xliii) and (xlvi), the Receivables taken as a
whole), the party discovering such breach shall give prompt written notice to
the others; provided, however, that the failure to give any such notice shall
not affect any obligation of the Servicer under this Section 4.08. Within
sixty (60) days of the earlier of either discovery by, or notice to, the
Servicer of a breach of any covenant set forth in Sections 4.02(b), 4.05 or
4.06 or any of the representations set forth in Section 7.01(b), (i) the
Servicer shall use its best efforts promptly to cure such breach in all
material respects and (ii) if such breach cannot be cured, the Servicer shall
be required to purchase such Receivable. If such breach of a covenant set
forth in Sections 4.02(b), 4.05 or 4.06 or a representation or warranty set
forth in Section 7.01(b) is curable and the Servicer shall have timely
commenced such cure or remedy but notwithstanding its due and diligent
efforts, the remedy or cure shall not be capable of cure within such sixty
(60) day period, the Servicer shall, upon receipt of written consent by the
Issuer, the Indenture Trustee or the Owner Trustee, have up to two additional
thirty (30) day period to effectuate the cure (up to an aggregate total of 120
days) so long as it is acting in good faith to effectuate such cure. In the
event that such breach cannot be cured within a maximum of 120 days of the
earlier of either discovery by, or notice to, the Servicer of such breach (or
within sixty (60) or ninety (90) days, if the applicable extension was not
granted), the affected Receivable shall, at the option of the Issuer, the
Indenture Trustee or the Owner Trustee, be purchased by the Servicer in an
amount equal to the Repurchase Amount. The Servicer shall remit such amount to
the Collection Account in the manner specified in Section 5.04 and shall
notify in writing the Indenture Trustee of such deposit. Subject to Section
7.02, it is understood and agreed that the obligation of the Servicer to
purchase any Receivable with respect to which such breach has occurred and is
continuing shall, if such obligation is fulfilled, be the sole remedy against
the Servicer for such breach available to the Issuer, the Indenture Trustee,
the Noteholders, or the Certificateholders. Notwithstanding anything to the
contrary, the Servicer shall not intentionally breach any of the covenants set
forth in Sections 4.02(b), 4.05 or 4.06 or any of the representations set
forth in Section 7.01(b) for the purpose of acquiring any Receivable.
Section 4.09 Servicing Fee; Costs and Expenses.
(a) In compensation for performing the servicing obligations
described in this Agreement during each Collection Period, the Servicer shall
be paid a monthly fee, for all Receivables that are not Defaulted Receivables
serviced pursuant to this Agreement, equal to one-twelfth of the product of
(i) the Servicing Fee Rate and (ii) the Principal Balance of the Receivables
as of the first day of such Collection Period, except for the first Collection
Period, which shall be the Initial Pool Balance as of the Cut-Off Date (such
monthly fee, the "Servicing Fee"). As additional servicing compensation, the
Servicer shall be entitled to receive all Late Fees with respect to the
Receivables serviced pursuant to this Agreement and all interest accrued on
any funds held by the Servicer constituting collections of any of the
Receivables.
(b) In addition to the Servicing Fee set forth above, the
Servicer shall also be entitled to receive on each Distribution Date
reimbursement for amounts set forth below for the related Collection Period.
The Servicer shall be paid the Servicing Fee and the Servicing Reimbursement
Amount (as defined below) payable for each Collection Period on the
Distribution Date related to such Collection Period in accordance with
Sections 5.06(b)(i) and (xi).
(c) The Servicer shall pay all expenses incurred by it in
connection with its servicing activities hereunder as follows:
(i) The Servicer shall be entitled to reimbursement
for Monthly Advances; provided, that reimbursement for Monthly
Advances can only come from that portion of collections that are
allocated or allocable to payment of interest in accordance with the
Simple Interest Method and the terms of each Receivable;
(ii) To the extent set forth under Section 4.03, the
Servicer shall be entitled to reimbursement for unreimbursed Servicing
Advances in connection with the realization upon a Receivable;
provided that, in accordance with Section 4.03, such right of
reimbursement shall be limited to the amount of Liquidation Proceeds,
Insurance Proceeds and Deficiency Balance recoveries with respect to
such Receivable; and
(iii) The Servicer shall be entitled to the
reimbursement of certain reasonable out-of-pocket expenses to the
extent permitted under Sections 3.05(d), 4.05, 4.11 and 10.02(g).
The aggregate amount of all amounts set forth in clauses (i) through (iii) of
this Section 4.08(c) that the Servicer shall incur during any Collection
Period shall be referred to herein as the "Servicing Reimbursement Amount" for
such Collection Period.
(d) For so long as (i) HNB is the Servicer, (ii) the Servicer
has the Minimum Required Rating and (iii) no Servicer Termination Event shall
have occurred and be continuing, the Servicer may net the Servicing Fee and
the Servicing Reimbursement Amount payable to the Servicer on the related
Distribution Date from any remittance it makes pursuant to Section 5.02(a).
The Servicing Fee shall be retained from the interest portion of Monthly
Payments collected or the interest portion of Liquidation Proceeds received on
the Receivables. To the extent the interest portions are insufficient to pay
the full amount of the Servicing Fee in a particular month, the Servicer shall
be entitled to retain the interest portions of Monthly Payments collected and
Liquidation Proceeds received in subsequent months to recover the unpaid
portion.
Section 4.10 Servicer's Certificate and Servicer Reports.
(a) Servicer's Certificate. Not later than 10:00 a.m. (New York
City time) on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee and the Depositor, with a copy to each Rating
Agency, a Servicer's certificate (a "Servicer's Certificate") substantially in
the form of Exhibit B which shall be delivered in electronic format or through
any other means mutually acceptable to the Indenture Trustee and the Servicer
and which shall contain the amount of collections received on the Receivables
during the related Collection Period. Such Servicer's Certificate shall be
certified by a Responsible Officer of the Servicer that the information
provided is accurate and complete and no defaults have occurred. With respect
to each Collection Period, Receivables to be repurchased by the Seller and
each Receivable that became a Defaulted Receivable, in each case, during such
Collection Period shall be identified by the Servicer by account number with
respect to such Receivable (as specified in the applicable Schedule of
Receivables).
(b) Servicer Reports. Not later than 10:00 a.m. (New York City
time) on each Determination Date, the Servicer shall deliver to the Owner
Trustee (for delivery to the Certificateholders pursuant to the Trust
Agreement) each of the Servicer Reports listed as an exhibit to the Purchase
Agreement and each Servicer Report shall be substantially in the form set
forth in the Purchase Agreement. Each Servicer Report shall be certified by a
Responsible Officer of the Servicer that the information provided is accurate
and complete and no defaults have occurred. In addition, the Servicer shall at
all times maintain a complete system backup file with respect to the
Receivables and shall, by no later than each Determination Date, deliver to
the Owner Trustee a copy of (i) the loan file tape and (ii) the extracts from
other applicable servicing systems of the Servicer.
Section 4.11 Annual Statement as to Compliance.
(a) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Depositor and each Rating Agency, on or before March 15
each year, beginning March 15, 2004, an Officer's Certificate (the "Servicer
Annual Certification") substantially in the form of Exhibit C, signed by a
Responsible Officer of the Servicer, stating, based on the knowledge of the
officer of the Servicer who is signing such certification, that (i) a review
of the activities of the Servicer and of the performance of its obligations
under this Agreement during the preceding calendar year (or, with respect to
the first Servicer Annual Certification, the period from the Closing Date to
December 31 of such year) (each such period being a "Review Period") has been
made under such officer's supervision, (ii) based on such review, except as
otherwise disclosed pursuant to clause (iii) below, the Servicer has fulfilled
its obligations under this Agreement during the applicable Review Period,
(iii) to the extent there has been a default in the fulfillment of any
obligations of the Servicer under this Agreement during the applicable Review
Period, stating each such default known to such officer and the nature and
status thereof and the action being taken by the Servicer to cure such default
and shall state that there is no default known to such officer with respect to
the applicable Review Period which has not been disclosed, (iv) the servicing
information provided by the Servicer in such Servicer Annual Certification in
respect of the Receivables, including information relating to actions of the
Servicer and/or payments and other collections on and characteristics of the
Receivables, taken as a whole, does not contain any untrue statement of
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the applicable Review Period
and (v) the Servicer has provided all of the reports and certificates required
under Sections 4.10, 4.11 and 4.12 to the parties to which such reports and
certificates are required to be provided with respect to the applicable Review
Period.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency, promptly after having obtained
knowledge thereof, but in no event later than three (3) Business Days
thereafter, written notice in an Officer's Certificate of any event that is,
or with the giving of notice or lapse of time or both would become, a Servicer
Termination Event under Section 8.01(a) or an Additional Servicer Termination
Event under Section 8.01(b).
Section 4.12 Annual Report of Accountants.
On or before March 15 of each year, beginning March 15, 2004, the
Servicer, at its expense, shall cause a firm of independent certified public
accountants that is a member of the American Institute of Certified Public
Accountants to furnish a statement addressed to the Owner Trustee, the
Indenture Trustee and each Rating Agency to the effect that such firm of
independent certified public accountants has audited the documents or records
of the Servicer relating to the Receivables and issued its report thereon and
that such audit (a) was conducted in accordance with generally accepted
auditing standards, and (b) included tests relating to retail motor vehicle
loan and installment sale contracts serviced for others and that such firm is
of the opinion that the provisions of this Agreement have been complied with
during the preceding calendar year (or, with respect to the first report, the
period from the Closing Date through December 31 of such year), and that, on
the basis of such examination, nothing has come to their attention that would
indicate that such servicing has not been conducted therewith during such
calendar year or other applicable period, except for (x) such exceptions as
such firm shall believe to be immaterial and (y) such other exceptions as
shall be set forth in such statement.
Section 4.13 Access to Certain Documentation and Information Regarding
Receivables.
The Servicer shall provide to representatives of the Owner Trustee,
the Indenture Trustee and the Certificateholders reasonable access to the
documentation regarding the Receivables and the related Trust property. Access
shall be afforded without charge, but only upon reasonable request, which does
not unreasonably interfere with the Servicer's normal business operations or
employee or customer relations, and during the normal business hours at the
offices of the Servicer. Nothing in this Section shall affect the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
Section 4.14 Access to Information Regarding Trust and Basic
Documents. The Servicer shall furnish to the Owner Trustee from time to time
such information regarding the Trust or the Basic Documents as the Owner
Trustee shall reasonably request. Upon written request, the Indenture Trustee
shall furnish to the Owner Trustee annually a copy of the Note Register;
provided, however, the Indenture Trustee shall not be obligated to furnish a
copy of the Note Register more than once each calendar year. The Servicer
shall furnish to the Owner Trustee copies of all documents and reports
required to be provided by the Servicer pursuant to Sections 4.10, 4.11, 4.12
and 4.14 of this Agreement.
Section 4.15 Maintenance of Errors and Omission Policy. The Servicer
shall maintain, at its own expense, an errors and omissions insurance policy
on all officers, employees or other persons acting in any capacity with regard
to the Receivables to handle funds, money, documents or papers relating to the
Receivables ("Servicer Employees"), which policy shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions, and negligent acts of such Servicer Employees. Such errors and
omissions insurance policy shall also protect and insure the Servicer, against
losses in connection with the release or satisfaction of a Receivables without
having obtained payment in full of the indebtedness secured thereby.
Notwithstanding the foregoing, such errors and omission policy may have a
deductible consistent with prudent corporate practice. No provision of this
Section 4.15 requiring such errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. Without limiting the generality of the indemnification provisions
of this Agreement, the Servicer hereby acknowledges that any amounts payable
by it pursuant to any such deductible are indemnified obligations payable by
it pursuant to Section 7.02. Upon the request of the Issuer or the Indenture
Trustee, the Servicer shall cause to be delivered to the Issuer or the
Indenture Trustee a certified true copy of such fidelity bond and insurance
policy.
ARTICLE V
DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS
Section 5.01 Establishment of Accounts.
(a) An Eligible Deposit Account (the "Collection Account") in
the name of the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, shall be established and maintained, bearing a designation
clearly indicating that the funds deposited therein are held for the benefit
of the Noteholders and the Certificateholders. The Collection Account shall be
established initially at the Indenture Trustee.
(b) The Indenture Trustee shall establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible
Deposit Account (the "Note Interest Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Noteholders. The Note Interest Distribution Account shall
be established initially at the Indenture Trustee.
(c) The Indenture Trustee shall establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible
Deposit Account (the "Principal Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit
of the Noteholders. The Principal Distribution Account shall be established
initially at the Indenture Trustee.
(d) Funds on deposit in the Collection Account shall be
invested by the Indenture Trustee, in Eligible Investments selected in writing
by the Seller (it being understood that the Seller may select a particular
Eligible Investment pursuant to an instruction letter which shall be executed
by the Seller as of the Closing Date); provided, however, that if the Seller
fails to select any Eligible Investment, the Indenture Trustee, shall invest
such funds in an Eligible Investment described in clause (d) of the definition
of "Eligible Investment" herein. The Indenture Trustee shall have no duty or
obligation to confirm or verify whether any Eligible Investment selected by
the Seller is in fact an Eligible Investment. All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders
and/or the Certificateholders, as applicable; provided, that in connection
with each Distribution Date, (i) the Seller shall be entitled to receive all
interest and other investment income accrued (net of Net Investment Losses) on
funds on deposit in the Collection Account through and including the day which
is two calendar days prior to such Distribution Date and (ii) all funds on
deposit in the Collection Account for the calendar day prior to such
Distribution Date shall remain uninvested. Other than as permitted in writing
by the Rating Agencies, funds on deposit in the Trust Accounts shall be
invested in Eligible Investments that will mature not later than the Business
Day immediately preceding the next Distribution Date. Funds deposited in a
Trust Account on a day that immediately precedes a Distribution Date upon the
maturity of any Eligible Investments are not required to be invested
overnight.
(e) (i) The Indenture Trustee shall possess all right, title
and interest in all funds and investment property on deposit from time to time
in or credited to the Trust Accounts and in all proceeds thereof (including
Investment Earnings thereon) and all such funds, investment property, proceeds
and income shall be part of the Trust Estate, except as otherwise set forth
herein. The Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders and the
Certificateholders, as applicable. If, at any time, any Trust Account ceases
to be an Eligible Deposit Account, the Indenture Trustee, shall within ten
(10) Business Days (or such longer period, not to exceed thirty (30) calendar
days, as to which each Rating Agency shall have consented) establish a new
Trust Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments from the account that is no longer an Eligible Deposit
Account to the new Trust Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in the Eligible Deposit
Accounts, subject to the last sentence of Section 5.01(e)(i); and each
such Eligible Deposit Account shall be subject to the exclusive
custody and control of the Indenture Trustee, and the Indenture
Trustee, shall have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be delivered to the Indenture Trustee, in
accordance with paragraph (a) of the definition of "Delivery" and
shall be held, pending maturity or disposition, solely by the
Indenture Trustee, or a securities intermediary (as such term is
defined in Section 8-102 of the UCC) acting solely for the Indenture
Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with paragraph
(b) of the definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through continued
book-entry registration of such Trust Account Property as described in
such paragraph;
(D) any Trust Account Property that is an
"uncertificated security" under Article 8 of the UCC and that is not
governed by clause (C) above shall be delivered to the Indenture
Trustee, in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continued registration of the
Indenture Trustee's (or its nominee's) ownership of such security; and
(E) any Trust Account Property that is a security
entitlement shall be delivered in accordance with paragraph (d) of the
definition herein of "Delivery" and shall be held pending maturity or
disposition by the Indenture Trustee or a securities intermediary
acting solely for the Indenture Trustee.
(iii) The Servicer shall have the power, revocable by
the Indenture Trustee, or by the Owner Trustee with the consent of the
Indenture Trustee, following a Servicer Termination Event to instruct
the Indenture Trustee in writing, to make withdrawals and payments
from the Trust Accounts and the Certificate Distribution Account for
the purpose of withdrawing any amounts deposited in error into such
accounts.
Section 5.02 Collections; Deposits into Collection Account.
(a) The Servicer shall remit to the Collection Account the
Total Distribution Amount on each Remittance Date for so long as (i) HNB is
the Servicer, (ii) the Servicer has the Minimum Required Rating and (iii) no
Servicer Termination Event shall have occurred and be continuing.
Notwithstanding anything herein to the contrary, so long as the conditions set
forth in clauses (i) through (iii) above are satisfied, the Servicer may make
any remittance pursuant to the preceding sentence net of the Servicing Fee and
any Servicing Reimbursement Amount payable to the Servicer on the related
Distribution Date. If (i) HNB is no longer the Servicer, (ii) HNB no longer
has the Minimum Required Rating, or (iii) a Servicer Termination Event shall
have occurred and be continuing, the Servicer shall remit to the Collection
Account within two (2) Business Days of receipt thereof any amounts received
by it that are to be included in the Total Distribution Amount for such
Collection Period. Notwithstanding anything herein to the contrary, so long as
HNB is the Servicer, HNB may withhold from deposit into the Collection Account
any amounts indicated on the related Servicer's Certificate as being due and
payable to the Servicer.
(b) The Issuer hereby directs the Depositor (in accordance with
Section 2.01(a)(i) hereof) to cause the Seller, and the Depositor hereby
directs the Seller (in accordance with the Assignment, Assumption and
Recognition Agreement) to deliver to the Indenture Trustee on the Closing Date
for deposit into the Collection Account all moneys received by the Seller in
respect of the Receivables from (but excluding) the Cut-Off Date to (and
including) the Closing Date, and the Indenture Trustee shall deposit all such
moneys so delivered to it into the Collection Account on the Closing Date.
Section 5.03 Application of Collections.
All payments received from or on behalf of an Obligor during each
Collection Period with respect to each Receivable (other than a Receivable
that is a Repurchased Receivable), shall be applied, to interest and principal
in accordance with the Simple Interest Method and the Servicer's customary
procedures. Generally, subject to the foregoing sentence, the Servicer applies
obligor payments, first to interest, second to Late Fees and third, to unpaid
principal; provided, that with respect to Defaulted Receivables for which the
Servicer disposes of or sells a Financed Vehicle, and the Liquidation Proceeds
from the disposition of the Financed Vehicle do not equal the Principal
Balance of such Receivable, the Servicer applies such Liquidation Proceeds,
first to unpaid principal, second to interest and third to unpaid Late Fees.
Section 5.04 Repurchase Amounts.
For so long as (i) HNB is the Servicer, (ii) HNB has the Minimum
Required Rating, and (iii) no Servicer Termination Event shall have occurred
and be continuing, the Servicer shall be entitled, pursuant to the first
sentence of Section 5.02, to deposit or cause to be deposited the aggregate
Repurchase Amounts (x) paid to the Servicer by HNB pursuant to Section 3.03 or
(y) owed by the Servicer pursuant to Sections 4.08 and 9.01, in the Collection
Account on the related Remittance Date. If, however, (i) HNB no longer is the
Servicer, (ii) HNB no longer has the Minimum Required Rating, or (iii) a
Servicer Termination Event shall have occurred and be continuing, the
Servicer, (A) in the case of a purchase by HNB pursuant to Section 3.03 or a
purchase by the Servicer pursuant to Section 4.08, shall deposit or cause to
be deposited in the Collection Account the aggregate Repurchase Amount
pursuant to Sections 3.03 or 4.08 within two (2) Business Days' of the
purchase of the Repurchased Receivable (by HNB pursuant to Section 3.03 or by
the Servicer pursuant to Section 4.08) and (B) in the case of Section 9.01,
shall deposit or cause to be deposited in the Collection Account such amount
on the date of such purchase.
Section 5.05 Permitted Withdrawals from Collection Account.
(a) On each Distribution Date, the Indenture Trustee, at the
written direction of the Servicer, shall, in addition to, and prior to, the
withdrawals from the Collection Account on such Distribution Date pursuant to
Section 5.06(b), make withdrawals from the Collection Account to withdraw any
amount not required to be deposited in the Collection Account or deposited
therein in error.
(b) The Indenture Trustee shall make withdrawals from the
Collection Account to clear and terminate the Collection Account in connection
with the termination of this Agreement, provided that all conditions to the
termination of this Agreement set forth herein and in the other Basic
Documents shall have been met.
It is understood that whenever reference is made in this Agreement to
withdrawals by the Servicer from the Collection Account and distributions by
the Servicer of amounts so withdrawn, such withdrawals and distributions shall
be made or caused to be made by the Indenture Trustee upon the written
direction of the Servicer.
Section 5.06 Distributions.
(a) On each Distribution Date, the Indenture Trustee shall
determine all amounts required to be deposited pursuant to this Section.
(b) On each Distribution Date, the Indenture Trustee (based in
relevant part on the information provided by the Servicer in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.10(a)) shall make the following payments, deposits and distributions from
amounts on deposit in the Collection Account, to the extent of the Total
Distribution Amount for such Distribution Date, to make required payments and
distributions on such date pursuant to clauses (i) through (xii) below, in the
following order and priority:
(i) to the Servicer, the amount of the Servicing Fee
and Servicing Reimbursement Amount for the related Collection Period
(and any accrued and unpaid Servicing Fees and Servicing Reimbursement
Amounts from prior Collection Periods);
(ii) (x) to the Indenture Trustee and the Owner
Trustee pro rata, the Indenture Trustee Fee for the related Collection
Period (and any accrued and unpaid Indenture Trustee Fees from prior
Collection Periods) and the Owner Trustee Fee for the related
Collection Period (and any accrued and unpaid Owner Trustee Fees from
prior Collection Periods) and then (y) to the Indenture Trustee and
the Owner Trustee pro rata, any other accrued and unpaid amounts
(including reasonable legal fees and expenses) owed to the Indenture
Trustee and the Owner Trustee not to exceed $100,000 in the aggregate
in any consecutive twelve (12) month period;
(iii) to the Note Interest Distribution Account for
payment to the Class A Noteholders pursuant to Section 5.06(c)(i),
from the Total Distribution Amount remaining after the application of
clauses (i) and (ii), the Class A Noteholders' Interest Distributable
Amount;
(iv) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Total Distribution
Amount remaining after the application of clauses (i) through (iii),
the First Allocation of Principal, if any;
(v) to the Note Interest Distribution Account for
payment to the Class B Noteholders pursuant to Section 5.06(c)(ii),
from the Total Distribution Amount remaining after the application of
clauses (i) through (iv), the Class B Noteholders' Interest
Distributable Amount;
(vi) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Total Distribution
Amount remaining after the application of clauses (i) through (v), the
Second Allocation of Principal, if any, reduced by any First
Allocation of Principal paid pursuant to clause (iv) above;
(vii) to the Note Interest Distribution Account for
payment to the Class C Noteholders pursuant to Section 5.06(c)(iii),
from the Total Distribution Amount remaining after the application of
clauses (i) through (vi), the Class C Noteholders' Interest
Distributable Amount;
(viii) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Total Distribution
Amount remaining after the application of clauses (i) through (vii),
the Third Allocation of Principal, if any, reduced by any First
Allocation of Principal paid pursuant to clause (iv) above and any
Second Allocation of Principal paid pursuant to clause (vi) above;
(ix) to the Note Interest Distribution Account for
payment to the Class D Noteholders pursuant to Section 5.06(c)(iv),
from the Total Distribution Amount remaining after the application of
clauses (i) through (viii), the Class D Noteholders' Interest
Distributable Amount;
(x) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Total Distribution
Amount remaining after the application of clauses (i) through (ix),
the Regular Principal Allocation, if any, reduced by any First
Allocation of Principal paid pursuant to clause (iv) above, any Second
Allocation of Principal paid pursuant to clause (vi) above and any
Third Allocation of Principal paid pursuant to clause (viii) above;
(xi) to the applicable party, from the Total
Distribution Amount remaining after the application of clauses (i)
through (x), any accrued and unpaid fees or expenses (including
reasonable legal fees and expenses) or any other amounts owed to such
party under any of the Basic Documents, to the extent not paid
pursuant to clauses (i) through (x); and
(xii) the remainder, if any, of the Total Distribution
Amount, to the Certificate Distribution Account for distribution to
the Certificateholders.
Notwithstanding that the Notes have been paid in full, the Indenture
Trustee, shall continue to maintain the Collection Account hereunder until all
amounts distributable on the Certificates have been distributed to the
Certificateholders.
(c) On each Distribution Date, the Indenture Trustee (based in
relevant part on the information provided to it by the Servicer in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.10(a)) shall withdraw the funds on deposit in the Note Interest
Distribution Account with respect to the Collection Period preceding such
Distribution Date and make payments on such date pursuant to clauses (i)
through (iv) below, in the following order and priority:
(i) first, to the Class A Noteholders, ratably, the
Class A Noteholders' Interest Distributable Amount for such
Distribution Date;
(ii) second, to the Class B Noteholders, the Class B
Noteholders' Interest Distributable Amount for such Distribution Date;
(iii) third, to the Class C Noteholders, the Class C
Noteholders' Interest Distributable Amount for such Distribution Date;
and
(iv) fourth, to the Class D Noteholders, the Class D
Noteholders' Interest Distributable Amount for such Distribution Date.
(d) On each Distribution Date, the Indenture Trustee (based in
relevant part on the information provided to it by the Servicer in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.10(a)) shall withdraw the funds on deposit in the Principal
Distribution Account with respect to the Collection Period preceding such
Distribution Date and make payments on such date pursuant to clauses (i)
through (iv) below, in the following order and priority:
(i) to the Class A Noteholders, in the following order
and priority, the Class A Principal Distributable Amount for such
Payment Date:
(A) first, to the Class A-1 Noteholders on account
of principal until the Outstanding Amount of the Class A-1 Notes is
reduced to zero;
(B) second, to the Class A-2 Noteholders on account
of principal until the Outstanding Amount of the Class A-2 Notes is
reduced to zero;
(C) third to the Class A-3 Noteholders on account
of principal until the Outstanding Amount of the Class A-3 Notes is
reduced to zero; and
(D) fourth, to the Class A-4 Noteholders on account
of principal until the Outstanding Amount of the Class A-4 Notes is
reduced to zero;
(ii) to the Class B Noteholders, the Class B Principal
Distributable Amount for such Payment Date;
(iii) to the Class C Noteholders, the Class C
Principal Distributable Amount for such Payment Date; and
(iv) to the Class D Noteholders, the Class D Principal
Distributable Amount for such Payment Date.
(e) Notwithstanding the foregoing, subject to the provisions of
Section 5.04(b) of the Indenture:
If the Notes have been accelerated following the occurrence and during
the continuation of an Event of Default specified in Section 5.01(i),
5.01(ii), 5.01(iv) or 5.01(v) of the Indenture (or following the occurrence of
any such event after an Event of Default specified in Section 5.01(iii) of the
Indenture has occurred and the Notes have been accelerated) but prior to any
liquidation of the Trust Estate, the Indenture Trustee shall (w) transfer the
funds on deposit in the Collection Account remaining after the application of
clauses 5.06(b)(i) through (iii) above to the Principal Distribution Account
to the extent necessary to reduce the Outstanding Amount of all the Class A
Notes to zero, or, (x) if the Class A Notes shall have been paid in full,
transfer the funds on deposit in the Collection Account remaining after the
application of clauses 5.06(b)(i) through (v) above to the Principal
Distribution Account to the extent necessary to reduce the Outstanding Amount
of all the Class B Notes to zero, or, (y) if the Class A Notes and Class B
Notes shall have been paid in full, transfer the funds on deposit in the
Collection Account remaining after the application of clauses 5.06(b) (i)
through (vii) above to the Principal Distribution Account to the extent
necessary to reduce the Outstanding Amount of all the Class C Notes to zero,
or, (z) if the Class A Notes, Class B Notes and Class C Notes shall have been
paid in full, to transfer the funds on deposit in the Collection Account
remaining after the application of clauses 5.06(b)(i) through (ix) above to
the Principal Distribution Account to the extent necessary to reduce the
Outstanding Amount of all the Class D Notes to zero. Any amounts transferred
to the Principal Distribution Account pursuant to clause (w) shall be applied
to the repayment of principal of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes pro rata based on the respective
Outstanding Amounts of the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes.
Section 5.07 Statements to Securityholders. On each Distribution Date,
the Indenture Trustee shall prepare and make available via its website at
▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇ to each Noteholder of record as of the most recent
Record Date, and shall provide to each Rating Agency, the Seller and to the
Owner Trustee (with a copy to each Paying Agent (if any)) for the Owner
Trustee to forward to each Certificateholder of record as of the most recent
Record Date, a statement substantially in the form of Exhibit A setting forth
at least the following information as to the Securities to the extent
applicable:
(a) the amount of collections received with respect to the
Receivables during the related Collection Period and allocable to principal
allocable to each Class of Notes on such Distribution Date;
(b) the amount of collections received with respect to the
Receivables during the related Collection Period and allocable to interest
allocable to each Class of Notes on such Distribution Date;
(c) the amount of the Regular Principal Allocation for such
Distribution Date;
(d) the amount of the First Allocation of Principal, if any,
for such Distribution Date;
(e) the amount of the Second Allocation of Principal, if any,
for such Distribution Date;
(f) the amount of the Third Allocation of Principal, if any,
for such Distribution Date;
(g) the Pool Balance with respect to such Distribution Date,
after giving effect to payments allocated to principal reported under clause
(a) above;
(h) the Outstanding Amount of each Class of Notes, the Note
Pool Factor for each such Class, and the Note Balance for each such Class as
of the close of business on the preceding Distribution Date, after giving
effect to payments allocated to principal reported under clause (a) above;
(i) the amount of the Servicing Fee and Servicing Reimbursement
Amount paid to the Servicer with respect to the related Collection Period;
(j) the respective amounts of the Owner Trustee Fee paid to the
Owner Trustee and the Indenture Trustee Fee paid to the Indenture Trustee in
each case with respect to the related Collection Period;
(k) the aggregate amounts of Realized Losses, if any, and Cram
Down Losses, if any, separately identified, with respect to the related
Collection Period;
(l) the aggregate Principal Balance of all Receivables that
became Defaulted Receivables or Repurchased Receivables during the related
Collection Period;
(m) the aggregate Principal Balance and number of Receivables
that are 30 to 59 days, 60 to 89 days or 90 days or more delinquent as of the
last day of the related Collection Period;
(n) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall, the
Class A-4 Interest Carryover Shortfall, the Class B Interest Carryover
Shortfall, the Class C Interest Carryover Shortfall and the Class D Interest
Carryover Shortfall, in each case after giving effect to payments on such
Distribution Date, and any change in such amounts from the preceding
statement;
(o) the aggregate Repurchase Amounts for Repurchased
Receivables, if any, that were or are to be purchased during or with respect
to such Collection Period;
(p) the aggregate Principal Balance and number of all
Receivables with respect to which the related Financed Vehicle was
repossessed;
(q) the aggregate Principal Balance and number of Receivables
with respect to which the Servicer granted an extension;
(r) the Overcollateralization Target Amount for the next
Distribution Date;
(s) the Cumulative Net Loss Ratio as of such Determination
Date;
(t) the Annualized Net Loss Ratio as of such Determination
Date;
(u) the Three-Month Annualized Net Loss Ratio as of such
Determination Date; and
(v) the Pool Delinquency Percentage as of such Determination
Date.
Each amount set forth on the Distribution Date Statement under clauses
(a), (b), (c), (d), (e), (f), (i) or (j) above shall be expressed as a dollar
amount per $1,000 of original principal balance of a Note.
Section 5.08 Subcertifications of Indenture Trustee in Connection with
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certifications. No later than ten (10) Business Days prior to
the date on which any Annual Report on Form 10-K with respect to the Trust is
required to be filed, the Indenture Trustee shall deliver to the Depositor an
officer's certificate in the form set forth in Exhibit F. The Indenture
Trustee shall prepare or cause to be prepared for filing with the Securities
and Exchange Commission (other than the initial Current Report on Form 8-K to
be filed by the Depositor in connection with the issuance of the Securities)
and the Depositor shall sign and certify any and all reports, statements and
information respecting the Trust and/or the Notes required to be filed, and
shall solicit any and all proxies of the Securityholders whenever such proxies
are required to be solicited, pursuant to the Securities Exchange Act of 1934,
as amended, and the rules thereunder ("1934 Act Documents"). Upon execution
and certification of the 1934 Act Documents by the Depositor, the Indenture
Trustee shall file such documents with the Securities and Exchange Commission.
Unless otherwise advised by the Depositor, the Indenture Trustee shall assume
that all 1934 Act Documents shall consist of only the following: Form 8-K
reports attaching the related Servicer Certificate, to be filed each month
beginning in May of 2003 through January 2004, a Form 15D to be filed in
January 2004 (provided, however, that if the criteria for filing a Form 15D is
not met, the Indenture Trustee shall continue filing the monthly and annual
forms), and a Form 10-K to be filed each March beginning in March of 2004. The
Indenture Trustee shall promptly file, and exercise its reasonable best
efforts to obtain a favorable response to, no-action requests with, or other
appropriate exemptive relief from the Securities and Exchange Commission
seeking the usual and customary exemption from such reporting requirements
granted to issuers of securities similar to the Notes if and to the extent the
Depositor shall deem any such relief to be necessary or appropriate. Unless
otherwise advised by the Depositor, the Indenture Trustee shall assume that
the Depositor is in compliance with the preceding sentence. In no event shall
the Indenture Trustee have any liability for the execution or content of any
1934 Act Documents.
ARTICLE VI
THE DEPOSITOR
Section 6.01 Representations of Depositor. The Depositor makes the
following representations to the Issuer, the Servicer, the Indenture Trustee
and the Seller. The Issuer relies on such representations in accepting the
Receivables and delivering the Securities. Such representations and warranties
speak as of the execution and delivery of this Agreement and as of the Closing
Date, and shall survive the sale, transfer and assignment of the Receivables
by the Depositor to the Issuer and the pledge thereof to the Indenture Trustee
in accordance with the terms of the Indenture.
(a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a corporation in good standing under the
laws of the State of Delaware, with the corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions where the failure to do
so would materially and adversely affect the Depositor's ability to transfer
the Receivables to the Issuer pursuant to this Agreement or the validity or
enforceability of the Receivables.
(c) Power and Authority. The Depositor has the corporate power
and authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their respective terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Issuer, and the Depositor shall
have duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this
Agreement and the other Basic Documents to which the Depositor is a party have
been, duly authorized by the Depositor by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered
by the other parties hereto and thereto, shall constitute legal, valid and
binding obligations of the Depositor, enforceable against the Depositor in
accordance with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization or similar laws now
or hereafter in effect relating to or affecting creditors' rights generally
and to general principles of equity (whether applied in a proceeding at law or
in equity).
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the
fulfillment of the terms of this Agreement and the other Basic Documents shall
not conflict with, result in any breach of any of the terms or provisions of
or constitute (with or without notice or lapse of time, or both) a default
under, the certificate of incorporation or bylaws of the Depositor, or any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Depositor is a party or by which it is bound; or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement and the other Basic Documents; or violate any law, order,
rule or regulation applicable to the Depositor of any court or federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor.
(f) No Proceedings. No legal or governmental proceedings are
pending to which the Depositor is a party or of which any property of the
Depositor is subject and no such proceedings are, to the Depositor's
knowledge, threatened or contemplated, against the Depositor before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Depositor or its properties: (i)
asserting the invalidity of this Agreement or any other Basic Document; (ii)
seeking to prevent the issuance of the Securities or the consummation of any
of the transactions contemplated by this Agreement or any other Basic
Document; (iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement or any other Basic Document;
or (iv) seeking to adversely affect the federal income tax attributes of the
Trust, the Notes or the Certificates.
(g) No Litigation Pending. There is no action, suit, regulatory
or other proceeding of any kind pending or, to the Depositor's knowledge,
threatened against or materially affecting the Depositor or the properties of
the Depositor before any Governmental Authority which, if determined adversely
to the Depositor, would adversely affect the Depositor ability to execute,
deliver and perform its obligations under this Agreement.
(h) No Consents. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
(i) No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished in writing
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains or will contain any materially untrue statement of fact.
Section 6.02 Corporate Existence.
During the term of this Agreement, the Depositor will keep in full
force and effect its existence, rights and franchises as a corporation under
the laws of the jurisdiction of its incorporation and will obtain and preserve
its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Basic Documents and each other
instrument or agreement necessary or appropriate to the proper administration
of this Agreement and the transactions contemplated hereby. In addition, all
transactions and dealings between the Depositor and its Affiliates will be
conducted on an arm's-length basis.
Section 6.03 Liability of Depositor; Indemnities.
The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Depositor under this
Agreement (which shall not include distributions on account of the Notes or
the Certificates).
Section 6.04 Merger or Consolidation of, or Assumption of the
Obligations of, Depositor.
Any Person with which the Depositor shall merge or consolidate or
which the Depositor shall permit to become the successor to the Depositor's
business shall execute an agreement of assumption of every obligation of the
Depositor under this Agreement and the other Basic Documents. Whether or not
such assumption agreement is executed, such successor Person shall be the
successor to the Depositor under this Agreement without the execution or
filing of any document or any further act on the part of any of the parties to
this Agreement. The Depositor shall provide prompt notice of any merger,
consolidation or succession pursuant to this Section 6.04 to the Owner
Trustee, the Indenture Trustee, the Servicer, the Securityholders and the
Rating Agencies. Notwithstanding the foregoing, the Depositor shall not merge
or consolidate with any other Person or permit any other Person to become a
successor to the Depositor's business unless (w) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.02 or 6.01 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation
of such transaction), (x) the Depositor shall have delivered to the Owner
Trustee, the Indenture Trustee and the Servicer an Officer's Certificate and
an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section 6.04 and
that all conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (y) the Rating Agency Condition shall
have been satisfied and (z) the Depositor shall have delivered to the Owner
Trustee, the Indenture Trustee and the Servicer an Opinion of Counsel stating
that, in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary to preserve and protect the interest of the Trust in the
Receivables and reciting the details of such filings or (B) no such action is
necessary to preserve and protect such interest.
Section 6.05 Limitation on Liability of Depositor and Others.
The Depositor and any director, officer, employee or agent of the
Depositor may rely in good faith on the advice of counsel or on any document
of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor shall be under no
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its obligations under this Agreement and that in its opinion
may involve it in any expense or liability.
Section 6.06 Depositor May Own Securities. The Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Securities with the same rights as it would have if it were not
the Depositor or an Affiliate thereof, except as expressly provided herein or
in any Basic Document.
Section 6.07 Depositor to Provide Copies of Relevant Securities
Filings. The Depositor shall provide or cause to be provided to the Indenture
Trustee a copy of any document filed by the Depositor subsequent to the date
hereof with the Securities and Exchange Commission pursuant to the Securities
Act of 1933 or the Securities Exchange Act of 1934 that relate specifically to
the Trust, the Notes or the Certificates.
Section 6.08 Amendment of Depositor's Organizational Documents. The
Depositor shall not amend its organizational documents except in accordance
with the provisions thereof.
Section 6.09 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certifications. The Depositor shall
provide on a timely basis for filing with the 1934 Act Documents, the
certification (the "Depositor's Annual ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification"),
substantially in the form of Exhibit D, required by Section 302 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act to be included in those reports.
ARTICLE VII
THE SERVICER
Section 7.01 Representations of Servicer.
(a) The Servicer makes the following representations and
warranties to the Issuer, the Depositor, the Indenture Trustee and the Seller
and upon which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations speak as of the execution and delivery of
this Agreement and as of the Closing Date (and in the case of subsections (a),
(b), (i) and (j) as of any point during the term of the Agreement), and shall
survive the sale of the Receivables to the Issuer and the pledge thereof to
the Indenture Trustee in accordance with the terms of the Indenture.
(i) Organization and Qualification. The Servicer (A)
is duly organized and validly existing as a national banking
association under the laws of the United States of America, (B) is in
good standing under such laws and (C) is duly qualified to transact
the business and is in good standing in each jurisdiction in the
United States of America in which the conduct of its business or the
ownership of its property requires such qualification. The Servicer is
an insured depository institution under the provisions of the Federal
Deposit Insurance Act, 12 U.S.C. Sections 1811-1831 and the Servicer's
status as an insured depository institution has not been terminated
under the provisions of Section 8 of the Federal Deposit Insurance
Act, 12 U.S.C. Section 1818. The Servicer has, and at all relevant
times had, the power, authority and legal right to service the
Receivables.
(ii) Licenses and Approvals. The Servicer has obtained
all the licenses and approvals necessary for the conduct of Servicer's
business in the jurisdictions where the failure to do so would
materially and adversely affect (x) its performance of its obligations
under this Agreement or (y) render any of the Receivables
unenforceable.
(iii) Power and Authority; Due Authorization;
Enforceability. The Servicer has full power and authority to perform
its obligations under this Agreement and has duly authorized the
performance of its obligations under this Agreement by all necessary
action. The Agreement has been duly authorized, executed and delivered
by the Servicer and constitutes the legal, valid, binding and
enforceable obligation of the Servicer except as the same may be
limited by insolvency, bankruptcy, reorganization or other laws
relating to or affecting the enforcement of creditors' rights or by
general equity principles.
(iv) No Consent Required. The Servicer is not required
to obtain the consent of any other Person or any consent, license,
approval or authorization from, or registration or declaration with,
any governmental authority, bureau or agency in connection with the
execution, delivery or performance of this Agreement, except for such
consents, licenses, approvals and authorizations as have been
obtained, effected or made or will be obtained on or prior to the
Closing Date.
(v) No Violation. The Servicer is not in default under
any indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or instrument to which
the Servicer is a party, as borrower or guarantor, and the
consummation of the transactions contemplated by this Agreement and
the other Basic Documents to which it is a party and the fulfillment
of their respective terms shall not conflict with or result in any
breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
of the property or assets of the Servicer, pursuant to the terms of
any such indenture, mortgage, deed of trust, loan agreement,
guarantee, lease financing agreement or similar agreement or
instrument to which the Servicer is a party or by which it is bound;
in each case where such a default, conflict or breach would materially
and adversely affect the performance by the Servicer of its
obligations under this Agreement and the consummation of the
transactions contemplated by this Agreement; and the fulfillment of
the terms hereof will not result in any violation of the provisions of
the organizational documents of the Servicer.
(vi) No Proceedings. There are no legal or
governmental proceedings or investigations pending to which the
Servicer is a party or of which any property of the Servicer is
subject, and no such proceedings are threatened or contemplated by
governmental authorities or threatened by others, against the Servicer
before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over the
Servicer or its properties (other than such proceedings which will not
have a material adverse effect upon the general affairs, financial
position, net worth or results of operations (on an annual basis) of
the Servicer and its subsidiaries considered as a whole): (x)
asserting the invalidity of this Agreement or any of the other Basic
Documents; (y) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by this
Agreement or any of the other Basic Documents; or (z) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity
or enforceability of, this Agreement or any of the other Basic
Documents to which the Servicer is a party.
(vii) Ability to Perform. The Servicer has the
facilities, procedures and experienced personnel necessary for the
servicing of retail motor vehicle loan and installment sale contracts
of the same type as the Receivables in accordance with the Servicing
Standard. The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every one of its
obligations under this Agreement.
(viii) No Litigation Pending. There is no action,
suit, proceeding or investigation pending or, to the Servicer's
knowledge, threatened against the Servicer or any of its Affiliates
which, if determined adversely against the Servicer, would materially
adversely affect the execution, delivery or enforceablility of this
Agreement or the other Basic Documents, as applicable, or draw into
question the validity of this Agreement, the other Basic Documents, as
applicable, or any of the Receivables or have a material adverse
effect on the financial conditions of the Servicer or the Servicer's
ability to perform its obligations under the terms of this Agreement
or the other Basic Documents, as applicable.
(ix) No Untrue Information. None of this Agreement,
the other Basic Documents or any statement, report or other document
furnished or to be furnished in writing by the Servicer pursuant to
this Agreement or the other Basic Documents, as applicable, or in
connection with the transactions contemplated hereby contains or will
contain any materially untrue statement of fact.
(b) The Servicer makes the following representations and
warranties with respect to the Receivables, to the Issuer, the Depositor, the
Indenture Trustee and the Seller and upon which the Issuer is deemed to have
relied in acquiring the Receivables and pledging the same to the Indenture
Trustee. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables to the Issuer pursuant to
this Agreement and the pledge of the Receivables by the Issuer to the
Indenture Trustee pursuant to the Indenture:
(i) Schedule of Receivables. The information set forth
in the Schedule of Receivables is true, correct and complete
(including any information included in any underlying computer file or
other listing), and is consistent in all respects with the underlying
computer file or other listing.
(ii) Perfection of Security Interest in Financed
Vehicle. If such Receivable was originated in a state in which
notation of a security interest on the certificate of title is
required or permitted to perfect the security interest in the related
Financed Vehicle, the certificate of title for such Financed Vehicle
shows HNB as the sole holder of a security interest in such Financed
Vehicle. If such Receivable was originated in a state in which the
filing of a financing statement under the UCC is required to perfect a
security interest in the related Financed Vehicle, such filings have
been duly made and show HNB as the sole holder of a first priority
security interest in such Financed Vehicle.
(iii) Receivable Files. Immediately prior to the
conveyance of such Receivable by the Depositor to the Issuer pursuant
to Section 2.01(a) hereof, the Servicer is in possession of the items
listed in (i) through (iv) of the definition of "Receivable File" of
each Receivable.
(iv) Assignment. HNB has not entered into any
agreement with the Obligor on such Receivable that prohibits,
restricts or conditions the assignment of all or part of such
Receivable.
(v) Location of Receivable Files. The Receivable File
with respect to such Receivable is kept at one or more of the
locations listed in Schedule B hereto.
(vi) Marking of Servicer Computer Files. As of the
Closing Date, the Servicer, has (or will have) clearly and
unambiguously marked its computer files and other applicable
electronic records to indicate that such Receivable is owned by the
Issuer.
(vii) No Liens. To the best of the Servicer's
knowledge, no liens or claims have been filed for work, labor, or
materials relating to the related Financed Vehicle that are liens
prior to, or equal with, the security interest in the Financed Vehicle
granted by such Receivable.
(viii) Compliance with Law. The servicing of such
Receivable has complied and now complies in all respects with
Applicable Law.
(ix) Doing Business. The Servicer is (A) in compliance
with any and all applicable licensing requirements of the Applicable
Laws of the state where the Receivable was originated and with any
other Applicable Laws, or (B) is otherwise exempt, except in each
instance to the extent that the failure to comply with such licensing
requirements would have no effect on the ability of the Issuer to
enforce the Receivable or the ability of the Servicer to discharge its
obligations under this Agreement.
(x) Original Copies. The sole original counterpart of
each Receivable, and the related certificate of title, does not have
any marks or notations indicating that it has been pledged, assigned
or otherwise conveyed to any Person other than HNB or the Seller
(except as to notations required under the terms of this Agreement).
(xi) Form of Contract. The contract evidencing such
Receivable is substantially similar to one of HNB's standard form
retail motor vehicle loan contracts or retail motor vehicle
installment sale contracts attached to the Purchase Agreement as
Exhibit F, except for immaterial modifications or deviations therefrom
in accordance with Applicable Law which will not have a material
adverse effect on the Issuer and will not reduce the scheduled
payments thereunder or other payments due under such Receivable.
(xii) No Fraud. No material error, omission,
misrepresentation, negligence or fraud in respect of such Receivable
has taken place on the part of any employee or agent in connection
with the servicing of such Receivable.
(xiii) Compliance with Terms. The Servicer has duly
fulfilled all obligations to be fulfilled on the Servicer's part under
or in connection with the servicing of such Receivable and has done
nothing to impair the rights of the Issuer in such Receivable or
payments with respect thereto.
(xiv) Servicing and Collection Practices. The
servicing and collection practices used with respect to such
Receivable have been consistent with the Servicer's servicing and
collection policies and procedures as in effect since the date of the
origination of such Receivable through the date of the Purchase
Agreement, and thereafter, the Servicer has serviced the Receivables
in accordance with the Servicing Standard (as defined in the Purchase
Agreement).
(xv) No Defenses. No right of rescission, set-off,
counterclaim or defense, including defenses arising out of violations
of usury laws or the Truth in Lending Act or any other Applicable Law,
has been asserted or threatened with respect to the unpaid principal
or interest due under such Receivable.
(xvi) Enforceability. Such Receivable contains
customary and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization against
the related Financed Vehicle of the benefits of the security.
(xvii) Original Terms Unmodified. The Servicer has not
impaired, waived, altered or modified the terms of such Receivable in
any respect, except as permitted by the Servicing Standard (as defined
in the Purchase Agreement).
(xviii) Entire Agreement. To the best of the
Servicer's knowledge, such Receivable constitutes the entire agreement
between the Issuer and the related Obligor.
(xix) Binding Obligation. To the best of the
Servicer's knowledge, such Receivable represents the genuine, legal,
valid, and binding payment obligation of the related Obligor,
enforceable by the holder thereof in accordance with its terms subject
to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally,
including the Soldiers' and Sailors' Civil Relief Act of 1940 or
similar laws.
(xx) Receivable in Force. Such Receivable has not been
satisfied, canceled, subordinated or rescinded, in whole or in part,
and the related Financed Vehicle has not been released from the lien
of the Receivable, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation,
subordination or rescission.
(xxi) Payments; No Obligor Defaults. As of the Cut-Off
Date, except for (a) payment defaults continuing for a period of less
than thirty (30) days and (b) no more than 0.17% of the Initial Pool
Balance with payment defaults continuing for a period of between
thirty (30) and fifty-nine (59) days, (x) all payments required to be
made have been made and credited and (y) no payment under such
Receivable has been (i) thirty (30) or more days delinquent more than
three times within twelve (12) months, (ii) sixty (60) days delinquent
more than once within twelve (12) months or (iii) ninety (90) days
delinquent within twelve (12) months and (B)(i) to the best of the
Servicer's knowledge, there is no default, breach, violation or event
of acceleration existing under such Receivable and no event which,
with the passage of time or with notice or with both, would constitute
a default, breach, violation or event of acceleration under such
Receivable, (ii) the Servicer has not waived any such default, breach,
violation or event of acceleration other than waivers made in the
ordinary course of business in accordance with the Servicer's policies
and procedures for the servicing and collection of such loans, (iii)
neither the Servicer nor the related Obligor has suspended or reduced
any payments or obligations due or to become due thereunder by reason
of a default by the other party to such Receivable, (iv) there are no
proceedings pending, or to the best of the Servicer's knowledge,
threatened, asserting insolvency of the related Obligor, there has
been no previous default on such Receivable that resulted in
repossession of the related Financed Vehicle and (v) there are no
proceedings pending, or to the best of the Servicer's knowledge,
threatened, wherein the related Obligor or any governmental agency has
alleged that such Receivable is illegal or unenforceable.
(xxii) Monthly Payments. Such Receivable provides for
level monthly payments that fully amortize the amount financed by
maturity and yield interest at the Contract Rate; provided, that the
payment in the first monthly period and the last monthly period of
such Receivable may be different but in no event more than twice the
amount of the level payment.
(xxiii) Prepayment. Such Receivable provides for, in
the event that such Receivable is prepaid, an amount due on prepayment
that fully pays the Principal Balance of such Receivable and includes
any accrued and unpaid interest due on the date of prepayment at the
applicable Contract Rate pursuant to the related contract.
(xxiv) Insurance Coverage. The Obligor with respect to
each Receivable is required pursuant to the terms of the related
Receivable to obtain insurance covering the Financed Vehicle insuring
against loss and damage due to fire, theft, collision and other risks
generally covered by comprehensive and collision insurance coverage
and each Financed Vehicle is covered by the VSI Policy.
(xxv) No other Delinquencies. The primary borrower
under the Receivable does not have any other motor vehicle loan and
installment sale contract for which it is the primary borrower owing
to the Servicer that is thirty (30) or more days contractually
delinquent at the Cut-Off Date.
(xxvi) No other Defaults. The primary borrower under
the Receivable is not the primary borrower under a motor vehicle loan
and installment sale contract with HNB which is defaulted and has not
been fully repaid.
(xxvii) Chattel Paper. Such Receivable constitutes
"tangible chattel paper" as defined in the UCC.
(xxviii) Currency. Such Receivable is payable in U.S.
dollars.
(xxix) Non-Military Obligors. Other than with respect
to the twelve (12) Receivables listed on Schedule D attached hereto,
no relief has been allowed to any Obligor on a Receivable under the
Soldiers' and Sailors' Civil Relief Act of 1940 as of the Cut-Off
Date.
(xxx) No Government Obligor. The Obligor under such
Receivable is not, and such Receivable is not due in whole or in part
from, the United States of America or any State, political subdivision
thereof, or from any agency, department or instrumentality of the
United States of America or any State or political subdivision
thereof.
(xxxi) Obligor Social Security Number. Such Receivable
has a social security number for the Obligor under such Receivable and
such social security number is a non-business social security number.
(xxxii) Obligor FICO Score. Based on the information
set out in the Receivable File related to such Receivable, the Obligor
under such Receivable had a FICO score as of the origination date of
such Receivable of at least 600.
(xxxiii)Geographic. No Receivable was originated in
Maryland or Pennsylvania and no Obligor under a Receivable has a
current billing address in Maine.
(xxxiv) No Bankruptcy. As of the Cut-Off Date, the
Servicer has not received notice that the Obligor under such
Receivable has filed for bankruptcy, and to the best of the Servicer's
knowledge, the Obligor under such Receivable is not in bankruptcy or
similar proceedings.
(xxxv) No Extensions. The number of scheduled due
dates on such Receivable will not have been extended on or before the
Cut-Off Date, except as permitted by the Servicing Standard (as
defined in the Purchase Agreement).
(xxxvi) Application of Funds. The scheduled payments
on such Receivable are applicable only to payment of principal of and
interest on such Receivable and not to the payment of any insurance
premiums (although the proceeds of the extension of credit on such
Receivable may have been used to pay insurance premiums).
(xxxvii) No Substitution. The Obligor under such
Receivable does not have the unilateral right to substitute, exchange
or add any Financed Vehicle under such Receivable.
(xxxviii) Receivable Not Assumable. Such Receivable is
not assumable by another Person in a manner that would release the
related Obligor from such Obligor's obligations to the Servicer with
respect to such Receivable.
(xxxix) Principal Balance. As of the Cut-Off Date, (A)
such Receivable has a remaining Principal Balance of not more than
$78,888 and not less than $1,310 and (B) the aggregate Principal
Balance of all Receivables was $527,442,461.
(xl) Simple Interest Receivables. Such Receivable is a
Receivable under which the portion of a payment allocated to interest
and the portion of the payment allocated to principal is determined in
accordance with the Simple Interest Method.
(xli) Date of Origination. Such Receivable has an
origination date on or after April 1, 2002.
(xlii) Original Maturity of Receivable. Such
Receivable has an original term to scheduled maturity of not less than
24 months and not greater than 84 months. The percentage of
Receivables by Principal Balance with original terms greater than 60
months is 47.45%.
(xliii) Remaining Maturity of Receivable. As of the
Cut-Off date, such Receivable has a remaining term to scheduled
maturity of not less than 15 months and not greater than 81 months.
The percentage of Receivables by Principal Balance with remaining
terms greater than 60 months is 29.24%.
(xliv) Contract Rate. Such Receivable has a Contract
Rate that is a fixed rate of interest fixed for the term of the
Receivable that is not less than 3.90% and not greater than 19.99%.
(xlv) First Scheduled Payment. Each Receivable has a
first scheduled due date on or after to May 1, 2002 and has had its
first scheduled payment made.
(xlvi) Certain Additional Characteristics of Financed
Vehicles. (A) Approximately 56.5% of the aggregate Principal Balance
of the Receivables as of the Cut-Off Date represents Receivables that
finance new automobiles and light trucks and 43.5% of the aggregate
Principal Balance of the Receivables as of the Cut-Off Date represents
Receivables that finance used automobiles and light trucks; (B)
approximately 48.3% of the Financed Vehicles are new automobiles and
light trucks and 51.7% of the Financed Vehicles are used automobiles
and light trucks; (C) each Receivable finances not more than one
Financed Vehicle; and (D) approximately 16.55% of the Receivables are
Receivables with respect to which the Obligor has obtained GAP
coverage in accordance with the related contract.
Section 7.02 Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer and the representations made by the Servicer under
this Agreement and:
(a) The Servicer shall indemnify, defend and hold harmless the
Seller, the Issuer, the Owner Trustee, the Indenture Trustee, the
Securityholders and the Depositor and any of the officers, directors, agents,
partners, members, shareholders and employees of the Seller, the Issuer, the
Owner Trustee, the Indenture Trustee (collectively, the "Indemnified Parties"
and each, an "Indemnified Party") from and against any and all claims, losses,
damages, penalties, fines, forfeitures, liabilities, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and
expenses, arising out of or resulting from claims of third parties arising
from (i) the failure of the Servicer to perform its duties as servicer and
custodian and to service the Receivables in compliance with the terms of this
Agreement, (ii) the breach of any representation or warranty, covenant or
other agreement set forth in this Agreement or the other Basic Documents
applicable to it, (iii) the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle or (iv) any information delivered by
the Servicer to the Indenture Trustee and/or the Depositor pursuant to this
Agreement that is false, incorrect, incomplete or misleading in any material
respect when delivered.
(b) The Servicer or the Indemnified Party, as applicable, shall
promptly notify the other upon becoming aware that a claim subject to
indemnification under Section 7.02(a) (an "Indemnified Claim") has been made
by a third party with respect to this Agreement or the Receivables; provided,
however, that the failure of the Indemnified Party to notify the Servicer of
an Indemnified Claim shall not relieve the Servicer from any liability which
it may have to any Indemnified Party, but only to the extent such failure to
notify does not prejudice the Servicer's ability to defend. The Servicer shall
assume the defense of any such Indemnified Claim and be responsible for all
fees and expenses of counsel incurred therewith as well as any other
litigation expenses; provided, that counsel chosen by the Servicer shall be
reasonably acceptable to the Issuer; and provided, however, that at any time
the Indemnified Party shall be entitled to participate therein and, to the
extent that it shall wish, hire counsel (who shall not, except with the
consent of the Servicer, be counsel to the Servicer) and, jointly with the
Servicer, assume the defense thereof. The Servicer shall not be liable to the
Indemnified Party for the cost of the Indemnified Party's counsel. If, in
connection with any Indemnified Claim, the actual or potential defendants in,
or targets of, any such action include both the Servicer and the Indemnified
Party and the Indemnified Party shall have reasonably concluded that there may
be legal defenses available to it which are different from, adverse to or
additional to those available to the Servicer, the Indemnified Party shall
have the right to hire counsel to assume the defense of any such Indemnified
Claim and the Servicer shall be responsible for all fees and expenses of
counsel incurred therewith as well as any other litigation expense. The
Servicer shall not, without the written consent of the Indemnified Party,
effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder (whether or
not the Indemnified Party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnified Party from all liability arising out
of such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or failure to act, by or on behalf of the
Indemnified Party.
For purposes of this Section, in the event of the termination of the
rights and obligations of HNB (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.02, or the resignation by such
Servicer pursuant to this Agreement, such Servicer shall have the rights of
"Servicer" pursuant to Section 7.02(b) with respect to any Indemnified Claim
arising from its capacity as Servicer under this Agreement.
The Servicer shall have no obligation to indemnify any of the
Indemnified Parties in connection with (x) a Receivable being deemed to be
unenforceable in a jurisdiction or (y) any impairment of receipt of
collections on a Receivable if either of the foregoing occurs as a result of
the Issuer's, the Indenture Trustee's or the Owner Trustee's failure to obtain
any license or consent necessary in connection with the ownership or
enforcement of the Receivables or the inability of the Servicer to pursue
litigation as a result of the restrictions set forth in Section 4.01(c).
Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts of the Servicer prior thereto, and shall include reasonable fees and
expenses of counsel and reasonable expenses of litigation. If the Servicer
shall have made any indemnity payments pursuant to this Section 7.02 and the
Person to or on behalf of whom such payments are made thereafter collects any
of such amounts from others, such Person shall promptly repay such amounts to
the Servicer, without interest.
Section 7.03 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. The Servicer shall preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement or any
of the Receivables and to perform its duties under this Agreement.
Any Person (i) into which the Servicer may be merged or consolidated,
(ii) resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or (iii) succeeding to the business of the
Servicer, which Person shall execute an agreement of assumption to perform
every obligation of the Servicer under this Agreement, shall be the successor
to the Servicer under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties to this Agreement
anything herein to the contrary notwithstanding; provided, that, the Servicer
shall provide prompt notice of any merger, consolidation or succession
pursuant to this Section 7.03 to the Owner Trustee, the Indenture Trustee, the
Servicer and the Rating Agencies and immediately after giving effect to such
transaction, (x) no representation or warranty made pursuant to Section 7.01
shall have been breached (for purposes hereof, such representations and
warranties shall speak as of the date of the consummation of such
transaction), (y) no event that, after notice or lapse of time or both, would
become a Servicer Termination Event or an Additional Servicer Termination
Event shall have occurred and be continuing, (iii) the Servicer shall have
delivered to the Indenture Trustee and the Owner Trustee an Officer's
Certificate and Opinion of Counsel each stating that such consolidation,
merger or succession and any such related agreements comply with this Section
7.03 and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with and (iv) the Servicer
shall have delivered to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables or (B) no
such action shall be necessary to preserve and protect such interest.
Furthermore, in the event the Servicer transfers or otherwise disposes of all
or substantially all of its assets to an Affiliate of the Servicer, such
Affiliate shall satisfy the condition described in the preceding sentence and
shall also be fully liable to for all of the Servicer's obligations and
liabilities hereunder.
Section 7.04 Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of its shareholders, directors, officers, employees or
agents shall be under any liability to the Seller, the Issuer, the Depositor,
the Indenture Trustee, the Owner Trustee or the Noteholders for any action
taken or for refraining from the taking of any action pursuant to this
Agreement, or for errors in judgment; provided, however, that this Section
7.04 shall not protect the Servicer against any liability that would otherwise
be imposed by reason of a breach of warranties or representation made in this
Agreement or the failure to perform its obligations in compliance with any
standard of care set forth in this Agreement or any other liability which
would otherwise be imposed under this Agreement. The Servicer and any
director, officer, employee or agent of the Servicer may conclusively 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
under this Agreement.
Section 7.05 Servicer Not to Resign.
(a) Subject to the provisions of Section 7.03, the Servicer
shall not resign from the obligations and duties imposed on it by this
Agreement as Servicer except upon mutual consent of the Servicer, the
Indenture Trustee and the Owner Trustee or upon the determination that the
performance of its duties under this Agreement shall no longer be permissible
under Applicable Law and such incapacity cannot be cured by the Servicer.
(b) Notice of any determination that the performance by the
Servicer of its duties hereunder is no longer permitted under Applicable Law
shall be communicated to the Owner Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered by the Servicer to the Owner Trustee and the Indenture Trustee. No
resignation of the Servicer shall become effective until a successor Servicer
(or if one is not appointed, the Indenture Trustee) shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
8.03, unless the Servicer is prohibited by Applicable Law from serving as
Servicer, in which instance the Indenture Trustee shall act as successor
Servicer or immediately appoint another Person to do so. If the Indenture
Trustee shall be legally unable to act as Servicer and if no successor
Servicer shall have been appointed within thirty (30) days of resignation or
removal of the resigning Servicer, the Indenture Trustee, the Owner Trustee or
the Certificateholders evidencing not less than 25% of the percentage
interests in the Certificates may petition any court of competent jurisdiction
for such appointment.
ARTICLE VIII
DEFAULT
Section 8.01 Servicer Termination Events and Additional Servicer
Termination Events.
(a) For purposes of this Agreement, the occurrence and
continuance of any of the following shall constitute a "Servicer Termination
Event":
(i) any failure by the Servicer to deposit into the
Collection Account (x) any proceeds or payment required to be so
delivered on a Remittance Date under the terms of this Agreement that
continues unremedied for a period of one (1) Business Day after the
date upon which such payment was due or (y) any payment required to be
made under the terms of this Agreement (other than any payment to be
made on a Remittance Date) that continues unremedied for a period of
three (3) Business Days after the date upon which such payment was
due;
(ii) failure on the part of the Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Servicer set forth in this Agreement, which failure
continues unremedied for a period of thirty (30) days after discovery
of such failure by a Responsible Officer of the Servicer or after the
date on which written notice of such failure requiring the same to be
remedied shall have been given to the Servicer by Noteholders
evidencing not less than 25% of the Outstanding Amount of the
Controlling Class;
(iii) failure by the Servicer to maintain its license
to do business in any jurisdiction where the Servicer is required to
be licensed in connection with the servicing of the Receivables or the
performance of its other obligations under this Agreement;
(iv) the occurrence of an Insolvency Event with
respect to the Servicer;
(v) any assignment or delegation by the Servicer of
its duties or rights hereunder except as specifically permitted
hereunder, or any attempt to make such assignment or delegation;
(vi) the indictment of the Servicer, any director or
employee thereof, any Affiliate or any director or employee thereof
for criminal activity related to the origination or servicing
activities of the Servicer, in each case, where such indictment
materially and adversely affects the ability of the Servicer, as
applicable, to perform its obligations under this Agreement subject to
the condition that such indictment is not dismissed within ninety (90)
days; or
(vii) any disqualification of the Servicer as an
Eligible Servicer.
(b) For purposes of this Agreement, the occurrence and
continuance of the following shall constitute an "Additional Servicer
Termination Event":
(i) the occurrence of a Termination Trigger Event;
(ii) any change in the business, assets, operations,
prospects or condition, financial or otherwise, of the Servicer that
has a material adverse effect on the ability of the Servicer to
perform any of its obligations under this Agreement;
(iii) the long-term unsecured debt rating of the
Servicer is withdrawn or reduced to "Baa2" by ▇▇▇▇▇'▇, "BBB" by
Standard & Poor's or "BBB" by Fitch; or
(iv) the Servicer shall default in the payment of
indebtedness for any borrowed monies (after giving effect to all
applicable cure periods in any agreement governing such indebtedness)
in an amount in excess of $10,000,000.
(c) The Servicer shall deliver to the Indenture Trustee and the
Owner Trustee, promptly after having obtained knowledge thereof, but in no
event later than three (3) Business Days thereafter, written notice in an
Officer's Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section 8.01(a)
or an Additional Servicer Termination Event under Section 8.01(b).
(d) Any delinquencies, repossessions or losses on the
Receivables caused by (i) the failure of the Issuer, the Indenture Trustee or
the Owner Trustee to have any licenses or consents necessary in connection
with the ownership or enforcement of the Receivables or (ii) the inability of
the Servicer to pursue litigation as a result of the restrictions set forth in
bringing suit at the direction of the Servicer as required by Section 4.01(c)
shall not be considered in determining the existence of an Additional Servicer
Termination Event.
Section 8.02 Consequences of a Servicer Termination Event or an
Additional Servicer Termination Event.
(a) If a Servicer Termination Event shall occur and be
continuing, the Indenture Trustee may, and at the written direction of
Noteholders evidencing not less than 25% of the Outstanding Amount of the
Controlling Class, or, if no Notes are Outstanding, Certificateholders
evidencing 25% of the percentage interests in the Certificates, shall
terminate all of the rights and obligations of the Servicer under this
Agreement by notice in writing to the Servicer. If an Additional Servicer
Termination Event shall occur, the Indenture Trustee may, and at the written
direction of Certificateholders evidencing not less than 75% of the percentage
interests in the Certificates shall, terminate all of the rights and
obligations of the Servicer under this Agreement by notice in writing to the
Servicer. At the time a notice of termination is delivered to the Servicer or
as soon thereafter as possible, a successor Servicer shall be appointed
pursuant to Section 8.03.
(b) The Indenture Trustee or such other successor Servicer is
authorized and empowered by this Agreement to execute and deliver, on behalf
of the terminated Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and related documents to show the Indenture Trustee (or the Owner
Trustee if the Notes have been paid in full) as lienholder or secured party on
the related certificates of title of the Financed Vehicles or otherwise. In
the event of termination pursuant to Section 8.02(a), the terminated Servicer
agrees to cooperate with the Indenture Trustee or the successor Servicer, as
applicable, in effecting the termination of the responsibilities and rights of
the terminated Servicer under this Agreement, including the transfer to the
Indenture Trustee or such other successor Servicer for administration by it of
all money and property held by the Servicer with respect to the Receivables
and other records relating to the Receivables, including any portion of the
Receivables File held by the Servicer and a computer tape in readable form as
of the most recent Business Day containing all information necessary to enable
the successor Servicer or the Indenture Trustee to service the Receivables.
The terminated Servicer shall also provide the Indenture Trustee or such other
successor Servicer computer records in order to facilitate the orderly and
efficient transfer of servicing duties. Upon such termination, the terminated
Servicer, upon the request of the Indenture Trustee, shall give notice to each
Obligor of the sale of the related Receivable to the Issuer and that such
Obligor shall, effective as of the date of such notice, remit all Monthly
Payments to an account specified by the Indenture Trustee or such other
successor Servicer.
Section 8.03 Appointment of Successor Servicer.
(a) On and after the receipt by the Servicer of a notice of
termination pursuant to Section 8.02 or upon resignation of the Servicer
pursuant to Section 7.05, the Servicer shall continue to perform all servicing
functions under this Agreement until the earlier of the date specified in such
notice of termination or otherwise specified by the Indenture Trustee or until
a date mutually agreed upon by the Servicer and the Indenture Trustee. As
promptly as possible after a notice of termination has been received by the
Servicer, the Certificateholders evidencing not less than a majority of the
percentage interests in the Certificates shall appoint an Eligible Servicer
who satisfies the Rating Agency Condition as successor Servicer, and such
successor Servicer shall accept its appointment by a written assumption in a
form acceptable to the Indenture Trustee. In the event that a successor
Servicer has not been appointed by the requisite percentage of
Certificateholders or has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Indenture Trustee without further
action shall automatically be appointed the successor Servicer.
Notwithstanding the above, if (x) a successor Servicer has not been selected
by the Certificateholders or has not accepted its appointment at the time when
the Servicer ceases to act as Servicer and (y) the Indenture Trustee shall be
legally unable to act as Servicer, the Indenture Trustee, the Owner Trustee or
Noteholders evidencing not less that 25% of the Outstanding Amount of the
Controlling Class or, if no Notes are outstanding, Certificateholders
evidencing not less than 25% of the percentage interests in the Certificates,
may petition a court of competent jurisdiction to appoint any Eligible
Servicer as the successor to the Servicer. Except as provided in Section 7.05,
pending appointment pursuant to the preceding sentence, the outgoing Servicer
shall continue to act as Servicer until a successor has been appointed and
accepted such appointment. The Indenture Trustee shall be entitled to withdraw
from the Collection Account and remit to the successor Servicer (including the
Indenture Trustee as successor Servicer) or such other party entitled thereto
(but not including the terminated Servicer) all reasonably incurred Servicer
transition costs. The sole remedy for termination under Section 8.01(b)(i)
shall be the termination of the Servicer.
(b) The successor Servicer or the Indenture Trustee, as
applicable, shall be the successor in all respects to the Servicer in its
capacity as Servicer under this Agreement and all authority, power,
obligations and responsibilities of the Servicer under this Agreement
automatically shall pass to, be vested in and become obligations and
responsibilities of such successor Servicer or the Indenture Trustee and such
successor Servicer or Indenture Trustee shall be subject to all the rights,
responsibilities, restrictions, duties, liabilities and termination provisions
relating to the Servicer under this Agreement, except as otherwise stated
herein; provided, however, that such successor Servicer or the Indenture
Trustee shall have no liability with respect to any obligation that was
required to be performed by the terminated Servicer prior to the date that the
Indenture Trustee or such other successor Servicer becomes the Servicer or any
claim of a third party based on any alleged action or inaction of the
terminated Servicer. The Depositor, the Owner Trustee, the Indenture Trustee
and the successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(c) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer and shall be subject to
all the responsibilities, duties and liabilities arising thereafter relating
thereto placed on the predecessor Servicer, and shall be entitled to the
Servicing Fee and all the rights granted to the predecessor Servicer by the
terms and provisions of this Agreement.
Section 8.04 Notification to Securityholders. Upon any termination of,
or appointment of a successor to, the Servicer pursuant to this Article VIII,
the Owner Trustee shall give prompt written notice thereof to the
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.
Section 8.05 Waiver of Past Defaults. Noteholders evidencing not less
than a majority of the Outstanding Amount of the Controlling Class, or, if no
Notes are Outstanding, Certificateholders evidencing not less than a majority
of the percentage interests in the Certificates, may, on behalf of all
Securityholders, waive in writing any Servicer Termination Event or default by
the Servicer in the performance of its obligations hereunder and its
consequences, except (i) a default in making any required deposits to or
payments from any of the Trust Accounts in accordance with this Agreement or
(ii) a default that is an Insolvency Event. Certificateholders evidencing not
less than 100% of the percentage interests in the Certificates, may, on behalf
of all Certificateholders, waive in writing any default by the Servicer in the
performance of its obligations hereunder and its consequences that is, or with
the giving of notice or lapse of time or both would become, an Additional
Servicer Termination Event. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event or Additional
Servicer Termination Event, as applicable, arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto except to the extent so expressly waived.
ARTICLE IX
TERMINATION
Section 9.01 Optional Purchase of All Receivables.
(a) On each Determination Date as of which the Pool Balance
with respect to the related Distribution Date will be equal to or less than
10% of the Initial Pool Balance, the Servicer shall have the option to
purchase the Receivables. If the Servicer shall elect not to exercise such
option, a Certificateholder evidencing 100% of the percentage interests in the
Certificates shall have the option to purchase the Receivables; provided that
such Certificateholder shall not be the Seller, the Depositor or any Affiliate
thereof. To exercise such option, the Servicer shall deposit to the Collection
Account, pursuant to Section 5.04, or the Certificateholder shall deposit to
the Collection Account on the day of such purchase, an amount equal to the
fair market value for the Receivables at the time such option is exercised
(including Receivables that became Defaulted Receivables during the related
Collection Period) and shall succeed to all interests in and to the
Receivables; provided, however, that in order for the Servicer or such
Certificateholder to exercise such option the amount deposited into the
Collection Account shall be sufficient to pay the full amount of principal and
interest then due and payable on any Outstanding Notes in full and to pay any
amounts due to the Indenture Trustee or the Owner Trustee; and provided
further, that the Certificateholder shall also be required to deposit into the
Collection Account on the date of such purchase, an amount sufficient
reimburse the Servicer for any Monthly Advances which have not been reimbursed
in accordance with this Agreement. The exercise of such option shall effect a
retirement, in whole but not in part, of all outstanding Notes.
(b) As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Servicer to the Owner
Trustee and the Indenture Trustee as soon as practicable after the Servicer
has received notice thereof.
(c) If the Servicer shall exercise its option to purchase the
Receivables pursuant to Section 9.01(a), any Certificateholder (unless such
Certificateholder is the Seller, the Depositor or an Affiliate thereof) shall
have the option to purchase such Receivables from the Servicer at a price
equal to the price that the Servicer paid for such Receivables pursuant to
Section 9.01(a).
(d) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee, on behalf of the Issuer, will succeed to the rights of the
Indenture Trustee pursuant to this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01 Amendment.
(a) This Agreement may be amended by the Depositor, the
Servicer, the Indenture Trustee and the Issuer, without the consent of any of
the Noteholders or Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of
any Noteholder or Certificateholder; provided further, that such action shall
be deemed not to adversely affect in any material respect the interests of any
Noteholder or Certificateholder and no Opinion of Counsel to that effect shall
be required if the person requesting the amendment obtains a letter from each
Rating Agency stating that the amendment would not result in the downgrading
or withdrawal of the ratings then assigned to the Notes.
(b) This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Issuer, with the prior written consent of the
Indenture Trustee, Noteholders holding not less than a majority of the
Outstanding Amount of the Class A Notes, Noteholders holding not less than a
majority of the Outstanding Amount of the Class B Notes, Noteholders holding
not less than a majority of the Outstanding Amount of the Class C Notes,
Noteholders holding not less than a majority of the Outstanding Amount of the
Class D Notes and Certificateholders evidencing not less than a majority of
the percentage interests in the 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
Securityholders; provided, however, that no such amendment shall (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Securityholders, (ii) reduce the aforesaid
percentage of the Outstanding Amount of the Class A Notes, the Class B Notes,
the Class C Notes or the Class D Notes, the Noteholders of which are required
to consent to any such amendment, without the consent of the Noteholders
holding all Outstanding Class A Notes, Class B Notes, Class C Notes and Class
D Notes or (iii) reduce the aforesaid percentage of the percentage interests
in the Certificates, the Certificateholders of which are required to consent
to any such amendment, without the consent of all of the Certificateholders.
(c) Promptly after the execution of any amendment or consent,
the Indenture Trustee shall furnish written notification of the substance of
such amendment or consent to each Securityholder and each Rating Agency.
(d) It shall not be necessary for the consent of Noteholders or
Certificateholders pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement,
the Owner Trustee, on behalf of the Issuer and the Indenture Trustee shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and,
if applicable, the Opinion of Counsel referred to in Section 10.01(a). The
Owner Trustee, on behalf of the Issuer and the Indenture Trustee may, but
shall not be obligated to, enter into any such amendment that affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties
or immunities under this Agreement or otherwise.
Section 10.02 Protection of Title to Trust.
(a) The Seller and the Depositor shall file such financing
statements and cause to be filed such continuation statements, all in such a
manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer and the Indenture Trustee in
the Receivables and the proceeds thereof. The Seller and/or the Depositor, as
applicable, shall deliver or cause to be delivered to the Owner Trustee and
the Indenture Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above as soon as available following such filing.
In addition, the Seller and the Depositor hereby authorize the Issuer and the
Indenture Trustee at any time and from time to time to prepare and file, at
the Depositor's sole cost and expense, financing statements and amendments
thereto in any jurisdiction as may be necessary or desirable to preserve,
maintain and protect the interests of the Issuer and the Indenture Trustee in
the Receivables and the proceeds thereof.
(b) None of the Seller, the Depositor or the Servicer shall
change its name, identity or corporate structure in any manner that would,
could or might make any financing statement or continuation statement filed in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-506(b) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least five (5) days' prior written notice thereof and
shall have promptly filed appropriate amendments to all previously filed
financing statements or continuation statements. Each of the Seller and the
Depositor hereby gives the Issuer the authority to file any continuation
statements or amendments to financing statements, or any similar document in
any jurisdictions and with any filing offices as the Issuer (or the Indenture
Trustee on behalf of the Issuer) may determine, in its sole discretion, are
necessary or advisable to continue or amend the security interest granted to
the Issuer and the Indenture Trustee herein.
(c) Each of Seller, the Depositor and the Servicer shall have
an obligation to give the Owner Trustee and the Indenture Trustee at least
sixty (60) days' prior written notice of (i) any relocation of its registered
location or (ii) any change in the jurisdiction of its organization
(including, with respect to the Servicer, the jurisdiction in which the
Servicer maintains its main office under its national banking association
charter). In addition, 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 each such Receivable, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on or with respect to each
such Receivable and the amounts from time to time held by the Servicer or
deposited in the Collection Account in respect of each such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that refer
to a Receivable shall be coded to reflect that such Receivable is part of the
portfolio of Receivables that is the subject of this Agreement and is owned by
GS Auto Loan Trust 2003-1 and pledged by GS Auto Loan Trust 2003-1 to the
Indenture Trustee for the benefit of the Noteholders. Indication of such
Receivables' inclusion in the portfolio shall be deleted from or modified on
the Servicer's computer systems when, and only when, the related Receivable
shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose
to sell, grant a security interest in or otherwise transfer any interest in
motor vehicle receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to
any Receivable, shall indicate clearly that such Receivable has been sold and
is owned by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall, without charge, permit the Indenture
Trustee and its agents upon reasonable notice and at any time during normal
business hours, which does not unreasonably interfere with the Servicer's
normal operations or customer or employee relations to, at the expense of the
Indenture Trustee (which reasonable expenses shall be reimbursed by the Issuer
pursuant to Section 5.06(b)), inspect, audit and make copies of and abstracts
from the Servicer's records regarding any Receivable.
(h) The Depositor shall deliver to the Owner Trustee and the
Indenture Trustee:
(A) promptly after the execution and delivery of
this Agreement and each amendment hereto, an Opinion of Counsel
stating that, in the opinion of such counsel, either (i) all financing
statements and continuation statements have been executed and filed
that are necessary to fully preserve and protect the interest of the
Trust and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (ii) no such action shall be
necessary to preserve and protect such interest; and
(B) within ninety (90) days after the beginning of
each calendar year beginning with the first calendar year beginning
more than three months after the Cut-Off Date, an Opinion of Counsel,
dated as of a date during such 90-day period, stating that, in the
opinion of such counsel, either (i) all financing statements and
continuation statements have been executed and filed that are
necessary to fully preserve and protect the interest of the Trust and
the Indenture Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (A) or (B) above shall
specify any action necessary (as of the date of such opinion) to be taken in
the following year to preserve and protect such interest.
Section 10.03 Notices. All demands, notices, communications and
instructions upon or to the Depositor, the Servicer, the Issuer, the Owner
Trustee, the Indenture Trustee or any Rating Agency under this Agreement shall
be in writing, personally delivered, faxed and followed by first class mail,
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt (a) in the case of the Depositor, to ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇
▇▇▇▇▇, (b) in the case of the Servicer and the custodian, to The Huntington
National Bank, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (c) in the case of the Issuer
or the Owner Trustee, at the Corporate Trust Administration Department (as
defined in the Trust Agreement); (d) in the case of the Indenture Trustee, to
JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004
(fax no.: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: Structured Finance Administration, GS
Auto Loan Trust 2003-1, (e) in the case of Moody's, to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ABS Monitoring
Department, and (f) in the case of Standard & Poor's, to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇
▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: Asset
Backed Surveillance Department; or, as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
Section 10.04 Assignment by the Depositor or the Servicer.
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 6.04 and 7.03 herein and as provided in the provisions of
this Agreement concerning the resignation of the Servicer, this Agreement may
not be assigned by the Depositor or the Servicer.
Section 10.05 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the
Seller, the Issuer, the Owner Trustee, the Certificateholders, the Indenture
Trustee and the Noteholders, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
Section 10.06 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 10.07 Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which when so executed
and delivered shall be an original, but all of which shall together constitute
but one and the same instrument. Transmission by facsimile of an executed
counterpart hereof shall be deemed to constitute due and sufficient delivery
of such counterpart.
Section 10.08 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 10.09 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 10.10 Assignment by Issuer. The Depositor hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Indenture Trustee in accordance with the terms
of the Indenture for the benefit of the Noteholders of all right, title and
interest of the Issuer in, to and under the Receivables or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
Section 10.11 Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the parties hereto shall not, prior to the date
that is one year and one day after the termination of this Agreement with
respect to the Issuer or the Depositor, acquiesce, petition or otherwise
invoke or cause the Issuer or the Depositor to invoke the process of any court
or government authority for the purpose of commencing or sustaining a case
against the Issuer or the Depositor under any federal or state bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or
the Depositor or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer or the Depositor.
Section 10.12 Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee of the
Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer in accordance
with the priorities set forth herein. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by JPMorgan Chase Bank, not in its individual
capacity but solely as Indenture Trustee, and in no event shall JPMorgan Chase
Bank have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer in accordance
with the priorities set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.
GS AUTO LOAN TRUST 2003-1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Financial Services Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇ ASSET BACKED
SECURITIES CORP.,
as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ SACHS MORTGAGE
COMPANY, as Seller
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
THE HUNTINGTON NATIONAL BANK,
as Servicer and custodian
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Title: Vice President
SCHEDULE A
Schedule of Receivables
-----------------------
{On file with the Indenture Trustee}
SCHEDULE B
Location of Receivable Files
----------------------------
1. The Huntington National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE C
Cumulative Net Loss Ratio
Determination Cumulative Net
Date Loss Ratio
---- ----------
Jul-03 0.24%
Aug-03 0.24%
Sep-03 0.24%
Oct-03 0.57%
Nov-03 0.57%
Dec-03 0.57%
Jan-04 0.86%
Feb-04 0.86%
Mar-04 0.86%
Apr-04 1.12%
May-04 1.12%
Jun-04 1.12%
Jul-04 1.35%
Aug-04 1.35%
Sep-04 1.35%
Oct-04 1.54%
Nov-04 1.54%
Dec-04 1.54%
Jan-05 1.71%
Feb-05 1.71%
Mar-05 1.71%
Apr-05 1.86%
May-05 1.86%
Jun-05 1.86%
Jul-05 1.98%
Aug-05 1.98%
Sep-05 1.98%
Oct-05 2.09%
Nov-05 2.09%
Dec-05 2.09%
Jan-06 2.17%
Feb-06 2.17%
Mar-06 2.17%
Apr-06 2.25%
May-06 2.25%
Jun-06 2.25%
Jul-06 2.31%
Aug-06 2.31%
Sep-06 2.31%
Oct-06 2.35%
Nov-06 2.35%
Dec-06 2.35%
Jan-07 2.39%
Feb-07 2.39%
Mar-07 2.39%
Apr-07 2.42%
May-07 2.42%
Jun-07 2.42%
Jul-07 2.43%
Aug-07 2.43%
Sep-07 2.43%
Oct-07 2.45%
Nov-07 2.45%
Dec-07 2.45%
Jan-08 2.45%
Feb-08 2.45%
Mar-08 2.45%
Apr-08 2.45%
May-08 2.45%
Jun-08 2.45%
SCHEDULE D
Receivables For Which The Obligor Has Received Relief
Under The Soldiers' And Sailors' Civil Relief Act Of 1940
---------------------------------------------------------
Receivable Number
-----------------
20020110963
20020266529
20020175319
20020491860
20019912622
20020512011
20020618106
20020729642
20019833785
20020158310
20020209081
20020684334
EXHIBIT A
Form of Distribution Date Statement to Noteholders
--------------------------------------------------
GS Auto Loan Trust 2003-1 Distribution Date Statement to Securityholders
Principal Distribution Amount
Class A-1 Notes: ($ per $1,000 original Principal Balance)
Class A-2 Notes: ($ per $1,000 original Principal Balance)
Class A-3 Notes: ($ per $1,000 original Principal Balance)
Class A-4 Notes: ($ per $1,000 original Principal Balance)
Class B Notes: ($ per $1,000 original Principal Balance)
Class C Notes: ($ per $1,000 original Principal Balance)
Class D Notes: ($ per $1,000 original Principal Balance)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original Principal Balance)
Class A-2 Notes: ($ per $1,000 original Principal Balance)
Class A-3 Notes: ($ per $1,000 original Principal Balance)
Class A-4 Notes: ($ per $1,000 original Principal Balance)
Class B Notes: ($ per $1,000 original Principal Balance)
Class C Notes: ($ per $1,000 original Principal Balance)
Class D Notes: ($ per $1,000 original Principal Balance)
Regular Principal Allocation ($ per $1,000 original Principal Balance)
First Allocation of Principal ($ per $1,000 original Principal Balance)
Second Allocation of Principal ($ per $1,000 original Principal Balance)
Third Allocation of Principal ($ per $1,000 original Principal Balance)
Class A-1 Interest Carryover Shortfall ($ per $1,000 original Principal Balance)
Class A-2 Interest Carryover Shortfall ($ per $1,000 original Principal Balance)
Class A-3 Interest Carryover Shortfall ($ per $1,000 original Principal Balance)
Class A-4 Interest Carryover Shortfall ($ per $1,000 original Principal Balance)
Class B Interest Carryover Shortfall ($ per $1,000 original Principal Balance)
Class C Interest Carryover Shortfall ($ per $1,000 original Principal Balance)
Class D Interest Carryover Shortfall ($ per $1,000 original Principal Balance)
Distribution Date Payment Shortfall ($ per $1,000 original Principal Balance)
Note Balance
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Class C Notes:
Class D Notes:
Note Pool Factor
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Class C Notes:
Class D Notes:
Servicing Fee ($ per $1,000 original principal balance)
Servicing Reimbursement Amount ($ per $1,000 original principal balance)
Owner Trustee Fee ($ per $1,000 original principal balance)
Indenture Trustee Fee ($ per $1,000 original principal balance)
Pool Balance
Realized Losses
Cram Down Losses
Repossessed Receivables
Defaulted Receivables or Repurchased Receivables
Receivables granted extensions
Repurchase Amounts
Principal Balance of Receivables that were delinquent
30 to 59 days:
60 to 89 days:
90 days or more:
Overcollateralization Target Amount for next Distribution Date
Cumulative Net Loss Ratio as of related Determination Date
Annualized Net Loss Ratio as of related Determination Date
Three-Month Annualized Net Loss Ratio as of related Determination Date
Pool Delinquency Percentage as of related Determination Date
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
------------------------------
{Available from Servicer}
EXHIBIT C
FORM OF SERVICER'S ANNUAL CERTIFICATION
The undersigned, duly authorized representative of The Huntington National
Bank ("Huntington"), as servicer (the "Servicer") pursuant to the Sale and
Servicing Agreement dated as of April 1, 2003, as amended from time to time
(the Sale and Servicing Agreement"), among GS Auto Loan Trust 2003-1, as
issuer (the "Issuer"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company ("GSMC"), as seller,
▇▇▇▇▇▇▇ Sachs Asset Backed Securities Corp., as depositor (the "Depositor"),
Huntington and JPMorgan Chase Bank, as indenture trustee (the "Indenture
Trustee"), does hereby certify that based on the knowledge of the undersigned:
1. Huntington is Servicer under the Sale and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Sale and Servicing
Agreement to execute and deliver this certificate.
3. This certificate is delivered pursuant to Section 4.11(a) of the Sale
and Servicing Agreement.
4. A review of the activities of the Servicer and of the performance of
its obligations under the Sale and Servicing Agreement during the
period from [ ], 200[ ] to and including December 31, 200[ ] (the
"Review Period") [or, with respect to the first Officer's Certificate,
the period from the Closing Date to December 31 of such year] was
conducted under the supervision of the undersigned.
5. Based on such review, except as otherwise disclosed pursuant to
paragraph 6 below, the Servicer has fulfilled its obligations under
the Sale and Servicing Agreement during the applicable Review Period.
6. The following is a description of each default in the performance of
the Servicer's obligations under the provisions of the Sale and
Servicing Agreement known to the undersigned to have been made during
the Review Period, which sets forth in detail (i) the nature and
status of each such default and (ii) the action taken by the Servicer,
if any, to remedy each such default: [List Out]
7. There is no default known to the undersigned with respect to the
applicable Review Period which has not been disclosed herein.
8. The servicing information provided by the Servicer herein in respect
of the Receivables, including information relating to actions of the
Servicer and/or payments and other collections on and characteristics
of the Receivables, taken as a whole, does not contain any untrue
statement of material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the
applicable Review Period.
9. The Servicer has provided all of the reports and certificates required
under Sections 4.10, 4.11 and 4.12 to the parties to which such
reports and certificates are required to be provided with respect to
the applicable Review Period.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate this [ ]
day of [ ], 200[ ].
Responsible Officer of the Servicer
By: ______________________________
Name:
Title:
EXHIBIT D
FORM OF DEPOSITOR'S ANNUAL ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION
-------------------------------------------------------
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution or servicing reports filed in respect
of periods included in the year covered by this annual report, of GS
Auto Loan Trust 2003-1;
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made,
not misleading as of the last day of the period covered by this annual
report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the indenture trustee by the servicer under
the sale and servicing, or similar, agreement, for inclusion in these
reports is included in these reports;
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: [name of the
servicer, sub-servicer, co-servicer, depositor or trustee.]]
Date:__________
_______________________
Name:
Title:
EXHIBIT E
Perfection Representations, Warranties and Covenants
----------------------------------------------------
1. General. The Sale and Servicing Agreement creates a valid and
continuing security interest (as defined in the UCC) in all of the Depositor's
right, title and interest in and to the Receivables in favor of the Issuer
which, (a) is enforceable upon execution of the Sale and Servicing Agreement
against creditors of and purchasers from the Depositor as such enforceability
may be limited by applicable Debtor Relief Laws, now or hereafter in effect,
and by general principles of equity (whether considered in a suit at law or in
equity), and (b) upon filing of the financing statements described in clause 4
below will be prior to all other Liens (other than Liens permitted pursuant to
clause 5 below).
2. Characterization. The Receivables constitute "tangible chattel
paper" within the meaning of UCC Section 9-102. The Depositor has taken all
steps necessary to perfect its security interest against the Obligor in the
Financed Vehicles securing the Receivables.
3. Creation. Immediately prior to the conveyance of the Receivables
pursuant to the Sale and Servicing Agreement, the Depositor owns and has good
and marketable title to, or has a valid security interest in, the Receivables
free and clear of any Lien, claim or encumbrance of any Person.
4. Perfection. The Depositor has caused or will have caused, within
ten days of the Closing Date, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest granted to the Issuer
under the Sale and Servicing Agreement in the Receivables.
5. Priority. Other than the security interests granted to the Issuer
pursuant to the Sale and Servicing Agreement, the Depositor has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of
the Receivables, the Depositor has not authorized the filing of and is not
aware of any financing statements against the Depositor that includes a
description of collateral covering the Receivables other than any financing
statement (i) relating to the security interests granted to the Issuer under
the Sale and Servicing Agreement (ii) that has been terminated, or (iii) that
has been granted pursuant to the terms of the Basic Documents. None of the
tangible chattel paper that constitutes or evidences the Receivables has any
marks or notations indicating that they are pledged, assigned or otherwise
conveyed to any Person other than the Indenture Trustee.
EXHIBIT F
Form of Certification to be Provided to the Depositor by the Indenture Trustee
------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Sachs Asset Backed Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: GS Auto Loan Trust 2003-1
-------------------------
Reference is made to the Sale and Servicing Agreement (the "Sale and
Servicing Agreement"), dated as of April 1, 2003, among GS Auto Loan Trust
2003-1 (the "Issuer"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Backed Securities Corp. (the
"Depositor"), ▇▇▇▇▇▇▇ Sachs Mortgage Company (the "Seller"), The Huntington
National Bank (the "Servicer") and JPMorgan Chase Bank, (the "Indenture
Trustee"). The Indenture Trustee hereby certifies to the Depositor, and its
officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:
(i) The Indenture Trustee has reviewed the annual report on
Form 10-K for the fiscal year [ ], and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year covered
by that annual report, relating to the above-referenced trust;
(ii) Based in relevant part upon the information provided to us
by the Servicer, the information set forth in the reports referenced in (i)
above does not contain any untrue statement of material fact; and
(iii)Based on my knowledge, the distribution information
required to be provided by the Indenture Trustee under the Sale and Servicing
Agreement is included in these reports.
Date:
JPMORGAN CHASE BANK, as Indenture Trustee
By: _______________________________
Name: ______________________________
Title: _____________________________