Exhibit 4.2
BAY VIEW SECURITIZATION CORPORATION
Seller
BAY VIEW ACCEPTANCE CORPORATION
Servicer
and
,
----------------------
Owner Trustee
TRUST AND SERVICING AGREEMENT,
Dated as of __________, ____
Bay View ____-__ Owner Trust
TABLE OF CONTENTS
ARTICLE I Creation of Trust...................................................1
SECTION 1.01. Name......................................................1
SECTION 1.02. Office....................................................1
SECTION 1.03. Purposes and Powers.......................................1
SECTION 1.04. Appointment of Owner Trustee..............................2
SECTION 1.05. Initial Capital Contribution of Trust Estate..............2
SECTION 1.06. Declaration of Trust......................................2
SECTION 1.07. Title to Trust Property...................................2
SECTION 1.08. Situs of Trust............................................2
ARTICLE II Definitions........................................................2
SECTION 2.01. Definitions...............................................2
SECTION 2.02. Usage of Terms...........................................10
SECTION 2.03. Cutoff Date and Record Date..............................10
SECTION 2.04. Section References.......................................10
ARTICLE III Conveyance of Receivables........................................10
ARTICLE IV Acceptance by Trustee.............................................11
ARTICLE V Information Delivered to the Rating Agencies.......................11
ARTICLE VI Agent for Service.................................................11
ARTICLE VII The Receivables..................................................12
SECTION 7.01. Representations and Warranties of Seller.................12
SECTION 7.02. Repurchase Upon Breach...................................12
SECTION 7.03. Custody of Receivable Files..............................12
SECTION 7.04. Duties of Servicer as Custodian..........................13
SECTION 7.05. Instructions; Authority to Act...........................13
SECTION 7.06. Custodian's Indemnification.............................13
SECTION 7.07. Effective Period and Termination.........................13
ARTICLE VIII Administration and Servicing of Receivables.....................14
SECTION 8.01. Duties of Servicer.......................................14
SECTION 8.02. Collection of Receivable Payments........................14
SECTION 8.03. Realization Upon Receivables.............................14
SECTION 8.04. Physical Damage Insurance................................15
SECTION 8.05. Maintenance of Security Interests in Financed Vehicles...15
SECTION 8.06. Covenants of Servicer. .................................15
SECTION 8.07. Purchase of Receivables Upon Breach......................15
SECTION 8.08. Servicing Fee............................................15
SECTION 8.09. Servicer's Certificate...................................16
SECTION 8.10. Annual Statement as to Compliance; Notice of Default.....16
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SECTION 8.11. Annual Independent Certified Public Accountant's Report..17
SECTION 8.12. Access to Certain Documentation and Information
Regarding Receivables................................17
SECTION 8.13. Servicer Expenses........................................17
SECTION 8.14. Reports to Noteholders...................................17
ARTICLE IX Collections; Distributions to Noteholders and Certificateholders..17
SECTION 9.01. Collection Account.......................................17
SECTION 9.02. Collections..............................................17
SECTION 9.03. Purchase Amounts.........................................18
SECTION 9.04. Application of Funds.....................................18
SECTION 9.05. Advances.................................................19
SECTION 9.06. Net Deposits.............................................19
SECTION 9.07. No Segregation of Moneys; No Interest....................19
SECTION 9.08. Accounting and Reports to the Certificateholder,
the Internal Revenue Service and Others..............19
SECTION 9.09. Payahead Account.........................................20
ARTICLE X Intentionally Blank................................................20
ARTICLE XI The Certificates..................................................20
SECTION 11.01. The Certificates.........................................20
SECTION 11.02. Authentication of Certificates...........................20
SECTION 11.03. Registration of Transfer and Exchange of Certificates....21
SECTION 11.04. Mutilated, Destroyed, Lost, or Stolen Certificates.......21
SECTION 11.05. Agreement Regarding Tax Matters..........................21
SECTION 11.06. Signature on Returns; Tax Matters Partner................21
ARTICLE XII The Seller.......................................................22
SECTION 12.01. Representations and Undertakings of Seller...............22
SECTION 12.02. Liability of Seller; Indemnities.........................23
SECTION 12.03. Merger or Consolidation of, or Assumption of the
Obligations of Seller................................24
SECTION 12.04. Limitation on Liability of Seller and Others.............24
ARTICLE XIII The Servicer....................................................24
SECTION 13.01. Representations of Servicer..............................24
SECTION 13.02. Indemnities of Servicer..................................25
SECTION 13.03. Merger or Consolidation of, or Assumption of the
Obligations of Servicer..............................26
SECTION 13.04. Limitation on Liability of Servicer and Others...........26
SECTION 13.05. Servicer Not to Resign...................................26
SECTION 13.06. Delegation of Duties.....................................26
ARTICLE XIV Servicer Default.................................................27
SECTION 14.01. Events of Servicer Default...............................27
SECTION 14.02. Appointment of Successor.................................28
SECTION 14.03. Notice of Events of Servicer Default.....................28
SECTION 14.04. Waiver of Past Defaults..................................28
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ARTICLE XV The Owner Trustee.................................................29
SECTION 15.01. Duties of Owner Trustee..................................29
SECTION 15.02. Owner Trustee's Certificate..............................30
SECTION 15.03. Owner Trustee's Assignment of Purchased Receivables......30
SECTION 15.04. Certain Matters Affecting the Owner Trustee..............31
SECTION 15.05. Owner Trustee Not Liable for Certificates or
Receivables..........................................32
SECTION 15.06. Owner Trustee May Own Notes..............................32
SECTION 15.07. Owner Trustee's and Indenture Trustee's Fees and
Expenses.............................................32
SECTION 15.08. Eligibility Requirements for Owner Trustee...............33
SECTION 15.09. Resignation or Removal of Owner Trustee..................33
SECTION 15.10. Successor Owner Trustee..................................33
SECTION 15.11. Merger or Consolidation of Owner Trustee.................34
SECTION 15.12. Appointment of Co-Trustee or Separate Owner Trustee. ...34
SECTION 15.13. Representations and Warranties of Owner Trustee..........35
ARTICLE XVI Termination......................................................35
SECTION 16.01. Termination of the Trust.................................35
SECTION 16.02. Optional Disposition of All Receivables..................35
ARTICLE XVII Miscellaneous Provisions........................................36
SECTION 17.01. Amendment................................................36
SECTION 17.02. Protection of Title to Trust.............................36
SECTION 17.03. Limitation on Rights of Certificateholders...............37
SECTION 17.04. Governing Law............................................38
SECTION 17.05. Notices..................................................38
SECTION 17.06. Severability of Provisions...............................38
SECTION 17.07. Assignment...............................................38
SECTION 17.08. Certificates Nonassessable and Fully Paid................38
SECTION 17.09. Nonpetition Covenants....................................39
SECTION 17.10. Counterparts.............................................39
SECTION 17.11. Third Party Beneficiary..................................39
EXHIBIT 1 - Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 2 - Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 3 - Servicer's Certificate
EXHIBIT A - Form of Certificate of Trust
EXHIBIT B - Form of Certificate
SCHEDULE A - Schedule of Receivables
SCHEDULE B - Location of Receivables
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This TRUST AND SERVICING AGREEMENT, dated as of _________, ____, is made
with respect to the formation of the Bay View ____-__ Owner Trust, among BAY
VIEW SECURITIZATION CORPORATION, a Delaware corporation, as depositor (the
"Seller"), BAY VIEW ACCEPTANCE CORPORATION, a Nevada corporation, as servicer
(the "Servicer"), and __________________, a Delaware banking corporation, as
owner trustee (the "Owner Trustee").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Creation of Trust
Upon the execution of this Agreement by the parties hereto and the prompt
filing thereafter of the Certificate of Trust in the State of Delaware, there is
hereby created the Bay View ____-__ Owner Trust.
SECTION 1.01. Name. The Trust created hereby shall be known as "Bay View
____-__ Owner Trust", in which name the Owner Trustee may conduct the business
of the Trust, make and execute contracts and other instruments on behalf of the
Trust and ▇▇▇ and be sued. The Trust shall constitute a business trust within
the meaning of Section 3801(a) of the Delaware Business Trust Act for which the
Owner Trustee has filed a certificate of trust with the Secretary of State of
the State of Delaware pursuant to Section 3810(a) of the Delaware Business Trust
Act.
SECTION 1.02. Office. The office of the Trust shall be in care of the Owner
Trustee at its Corporate Trust Office or at such other address as the Owner
Trustee may designate by written notice to the Certificateholders, the Servicer,
the Seller, the Insurer and the Indenture Trustee.
SECTION 1.03. Purposes and Powers. The purpose of the Trust is to engage in
the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement and to sell or transfer the Notes and
the Certificates in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to fund the Spread Account pursuant to Section 10.02 of the
Indenture and to purchase the Receivables pursuant to this Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust estate pursuant to the Indenture and to hold, manage and distribute to the
Certificateholders pursuant to the terms of this Agreement any portion of the
Trust estate released from the Lien of, and remitted to the Trust pursuant to,
the Indenture;
(iv) to enter into and perform its obligations under the related
documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the related documents, to engage in
such other activities as may be required in connection with conservation of the
Trust estate and the making of distributions to the Certificateholders, the
Noteholders and the others specified in this Agreement.
The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other related documents.
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SECTION 1.04. Appointment of Owner Trustee. The Seller hereby appoints the
Owner Trustee as trustee of the Trust effective as of the date hereof, to have
all the rights, powers and duties set forth herein.
SECTION 1.05. Initial Capital Contribution of Trust Estate. The Seller
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the Trust estate. The Owner Trustee hereby acknowledges
receipt in trust from the Seller, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Trust estate. The Seller shall
pay the organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
SECTION 1.06. Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Trust estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Certificateholders, subject to the
obligations of the Trust under the other related documents. It is the intention
of the parties hereto that the Trust constitute a business trust under Delaware
law and that this Agreement constitute the governing instrument of such trust.
It is the intention of the parties hereto that the Trust will be disregarded and
that the Certificateholders will be treated as the owner of the Trust estate,
and that the Notes will be treated as indebtedness of the Certificateholders for
all federal and state income and franchise tax purposes. The Owner Trustee and
the Certificateholders, by acceptance of the Certificates, agree to treat the
Notes for purposes of federal, state and local income or franchise taxes as
indebtedness.
SECTION 1.07. Title to Trust Property. Legal title to all of the Trust
estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 1.08. Situs of Trust. The Trust will be located and administered in
the State of Delaware. Any bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware. The Trust shall
not have any employees in any state other than Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. Payments, if any, will be
received by the Trust only in Delaware, and payments, if any, will be made by
the Trust only from Delaware. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
ARTICLE II
Definitions
SECTION 2.01. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Accrued Interest" means all interest accrued on the Receivables prior to
the opening of business on the day following the Cutoff Date.
"Administration Agreement" means the Administration Agreement dated as of
__________, _____ among the Trust, the Owner Trustee and BVAC as administrator.
"Administrator" means the Administrator under the Administration Agreement,
which is initially BVAC, and its successors and assigns thereunder.
"Advance" means, with respect to a Receivable and with respect to a
Collection Period, the amount that the Servicer is required to advance pursuant
to Section 9.05.
"Agreement" means this Trust and Servicing Agreement executed by the
Seller, the Servicer and the Owner Trustee, and all amendments and supplements
thereto.
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"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.
"Approved Rating" means a rating of ___ by _______ or ____ by
_________________.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, the City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Available Spread Amount" means, on any Payment Date, the amount on deposit
in the Spread Account, including any income or gain from any investment of funds
in the Spread Account, net of any losses from such investment before giving
effect to deposits into or withdrawals from the Spread Account pursuant to
Article IX of the Indenture.
"Available Funds" means the amount defined as such in Section 9.04(a)(i).
"BVAC" means Bay View Acceptance Corporation, a Nevada corporation, and its
successors and assigns, other than in its capacity as Servicer.
"Business Day" means, unless otherwise specified, any day other than a
Saturday, a Sunday or a day on which banking institutions in Wilmington,
Delaware, San Francisco, California or New York, New York shall be authorized or
obligated by law, executive order, or governmental decree to be closed.
"Certificate" means a certificate executed on behalf of the Trust and
authenticated by the Owner Trustee substantially in the form attached hereto as
Exhibit B, which represents ownership of a 100% interest in the Trust.
"Certificate of Trust" means the Certificate of Trust of the Trust in
substantially the form of Exhibit A hereto.
"Certificate Register" means the register maintained by the Owner Trustee
pursuant to Section 11.03.
"Certificateholder" or "Holder" means the Person in whose name the
Certificate shall be registered in the Certificate Register.
"Closing Date" means _________________.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 9.01.
"Collected Interest" on a Receivable, as of the last day of a Collection
Period, means the portion of all payments received by the Servicer allocable to
interest relating to such Collection Period.
"Collected Principal" on a Receivable, as of the last day of a Collection
Period, means the portion of all payments received by the Servicer allocable to
principal relating to such Collection Period.
"Collection Period" means (i) initially, the period from the day after the
Cutoff Date to the end of the calendar month of ________, ____, and (ii)
thereafter, each calendar month, until the Trust shall terminate pursuant to
Article XVI.
"Consolidated Net Income" means, for any period, the consolidated net
income of BVAC and its subsidiaries determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means the excess, if any, of the
consolidated assets of BVAC and its subsidiaries over the consolidated
liabilities of BVAC and its subsidiaries less any goodwill, trade names,
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trademarks, patents, unamortized debt discount and expense, and other
intangibles, except that dealer premium rebates and excess servicing shall not
be so deducted, determined in accordance with GAAP.
"Contract Rate" means, with respect to a Receivable, the contract rate of
interest on such Receivable, exclusive of prepaid finance charges.
"Corporate Trust Office" means the office of the Owner Trustee at which its
corporate trust business shall, at any particular time, be administered, which
office at the date of the execution of this Agreement is located at
___________________________________________________________; Attention:
__________________________; Telecopy ______________ or at such other address as
the Owner Trustee may designate from time to time by notice to the
Certificateholders, the Seller, the Servicer and the Indenture Trustee.
"Cutoff Date" means __________, ____.
"Dealer" means the seller of a Financed Vehicle, who originated and
assigned the related Receivable to BVAC under an existing agreement with BVAC or
who arranged for a loan from BVAC to the purchaser of a Financed Vehicle under
an existing agreement with BVAC.
"Defaulted Receivable" means, for any Collection Period, a Receivable as to
which any of the following has occurred: (i) any payment, or part thereof,
is 120 days or more delinquent as of the last day of such Collection Period,
(ii) the Financed Vehicle that secures the Receivable has been repossessed and
liquidated, or (iii) the Receivable has been determined to be uncollectible in
accordance with the Servicer's customary practices on or before the last day of
such Collection Period; provided, however, that "Defaulted Receivable" shall not
include any Receivable that is to be repurchased pursuant to Section 7.02 or
purchased pursuant to Section 8.07; provided further, that any Advances made
with respect to a Receivable shall not be considered in the determination of the
delinquency status of such Receivable.
"Determination Date" means, for each Collection Period, the second Business
Day prior to the related Payment Date.
"Dissolution Payment Date" means the Payment Date following the liquidation
of the trust corpus pursuant to Section 16.02.
"Eligible Bank" means any depository institution with trust powers
(including the Owner Trustee and the Indenture Trustee), organized under the
laws of the United States or any State having a net worth in excess of
$50,000,000, the deposits of which are insured to the full extent permitted by
law by the Federal Deposit Insurance Corporation, which is subject to
supervision and examination by Federal or State authorities and which (i) has a
long-term unsecured debt rating of at least ____ from _______ or (ii) is
approved by each Rating Agency.
"Eligible Investment" means any of the following:
(i) direct obligations of, and obligations the full and timely payment
of principal and interest on which is fully guaranteed by, the United States of
America, ▇▇▇▇▇▇ ▇▇▇, or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and credit of the
United States of America;
(ii)(A) demand and time deposits in, certificates of deposits of, bankers'
acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Owner Trustee, the
Indenture Trustee or any of their agents, acting in their
respective commercial capacities) incorporated under the laws of
the United States of America, any State thereof or the District of
Columbia or any foreign depository institution with a branch or
agency licensed under the laws of the United States of America or
any State, in each case subject to supervision and examination by
Federal and/or State banking authorities and having an Approved
Rating at the time of such investment or contractual commitment
providing for such investment or
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(B) any other demand or time deposit or certificate of deposit which
is fully insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to:
(A) any security described in clause (i) above or
(B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either case
entered into with a depository institution or trust company
(acting as principal) described in clause (ii) (A) above;
(iv) short-term securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United States of
America or any State the short-term unsecured obligations of which have an
Approved Rating, or higher, at the time of such investment; provided, however,
that securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and held
as part of the corpus of the Trust to exceed 10% of amounts held in the
Collection Account;
(v) commercial paper having an Approved Rating at the time of such
investment;
(vi) a guaranteed investment contract issued by any insurance company
or other corporation acceptable to the Rating Agency, provided that the Owner
Trustee or the Indenture Trustee shall have received written notice from the
Rating Agency to the effect that the investment of funds in such a contract will
not result in the reduction or withdrawal of any rating on the Notes;
(vii) interests in any money market fund having a rating of ___ by
_______ or ____ by _________________; and
(viii) any other investment approved in advance in writing by the Rating
Agencies and the Insurer.
"Event of Servicer Default" means an event specified in Section 14.01.
"Financed Vehicle" means a new or used automobile, light-duty truck,
recreational vehicle, motorcycle or van, together with all accessions thereto,
securing an Obligor's indebtedness under the respective Receivable.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements that are
described in Statement on Auditing Standards No. 69 "The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles in the
Independent Auditor's Report" that are applicable to the circumstances as of the
date of determination, applied on a consistent basis.
"Holder" -- see "Certificateholder."
"Indenture" means the Indenture dated as of __________________ among the
Owner Trustee as issuer (on behalf of the Trust) and ____________________ as
Indenture Trustee, which provides for the issuance of the Notes.
"Indenture Trustee" means _____________________ in its role as Indenture
Trustee under the Indenture and its permitted successors and assigns.
"Indenture Trustee Office" means the office of the Indenture Trustee at
which its business as Indenture Trustee under the Indenture shall be
administered, which office is presently located at
______________________________________; telecopy _______________ or at such
other address as the
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Indenture Trustee may designate from time to time by notice to the Owner
Trustee, the Servicer and the Noteholders.
"Insolvency Event" with respect to a party means (i) the entry of a decree
or order by a court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a trustee-in-bankruptcy or similar official
for such party in any insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings, or for the winding up or liquidation of
their respective affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or (ii) the consent
by such party to the appointment of a trustee-in- bankruptcy or similar official
in any insolvency, readjustment of debt, marshaling of assets and liabilities,
or similar proceedings of or relating to such party or of or relating to
substantially all of its property; or (iii) such party shall admit in writing
its inability to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations.
"Insolvency Proceeding" means the commencement, after the date hereof, of
any bankruptcy, insolvency, readjustment of debt, reorganization, marshaling of
assets and liabilities or similar proceedings by or against BVAC or the Seller,
the commencement, after the date hereof, of any proceedings by or against BVAC
or the Seller for the winding up or liquidation of its affairs or the consent,
after the date hereof, to the appointment of a trustee, conservator, receiver,
or liquidator in any bankruptcy, insolvency, readjustment of debt,
reorganization, marshaling of assets and liabilities or similar proceedings of
or relating to BVAC or the Seller.
"Insurance Agreement" means the Insurance and Reimbursement Agreement,
dated as of the Closing Date, among the Trust, the Seller, BVAC individually and
as Servicer, BVAC and the Insurer pursuant to which the Insurer issued the
Policy.
"Insurer" means __________________________, a ________ domiciled insurance
company.
"Interest Advance Amount" with respect to a simple interest Receivable as
to which an Advance is required to be made on the last day of a Collection
Period, shall mean an amount equal to 30 days of interest upon the Principal
Balance of such Receivable as of such date; and, with respect to a Precomputed
Receivable as to which an Advance is required to be made on the last day of a
Collection Period, shall mean an amount equal to that portion of the earliest
delinquent Scheduled Payment allocable to interest (using the actuarial or
constant yield method).
"Interest Shortfall" means, as to any simple interest Receivable as of the
last day of any Collection Period, the amount, if any, by which (a) interest due
on such Receivable exceeds (b) the Collected Interest on such Receivable.
"Interest Shortfall" with respect to a Precomputed Receivable as of the
last day of any Collection Period means the amount, if any, by which the portion
of the Scheduled Payment due during such Collection Period allocable to interest
(using the actuarial or constant yield method) exceeds the Collected Interest on
such Receivable (computed using the same method except that the amount of
Collected Interest in respect of Precomputed Receivables shall be increased by
giving effect to the withdrawal for the related Payment Date of any previously
received Scheduled Payments in respect of such Receivable from the Payahead
Account in accordance with Sections 8.02(b) and 9.09 hereof).
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics' liens, and any liens
which attach to the respective Receivable or related Financed Vehicle by
operation of law.
"Liquidation Proceeds" means the monies collected from whatever source,
including insurance proceeds, on Defaulted Receivables, net of the sum of any
amounts expended by the Servicer for the account of the Obligor plus any amounts
required by law to be remitted to the Obligor. "Liquidation Proceeds" with
respect to a Payment Date means such monies collected during the preceding
Collection Period. In no event shall Liquidation Proceeds be less than zero.
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"Monthly Interest" means the amount of interest which is payable to the
Noteholders on any Payment Date pursuant to the terms of the Indenture.
"Monthly Principal" means the amount of principal which is payable to the
Noteholders on any Payment Date pursuant to the terms of the Indenture.
"Monthly Servicing Fee" means, (i) for the first Payment Date, the product
of the following: the (a) monthly Servicing Rate (b) the number of days
remaining in the month of the Closing Date from and including the Closing Date,
assuming a 30-day month, divided by 30 and (c) the Original Pool Balance and
(ii) for any subsequent Payment Date, the product of (a) the Pool Balance as of
the beginning of the related Collection Period and (b) the monthly Servicing
Rate.
"Notes" mean the Notes issued by the Trust pursuant to the Indenture.
"Noteholders" mean the holders of the Notes issued pursuant to the
Indenture.
"Obligor" on a Receivable means the purchaser or the co-purchasers of the
Financed Vehicle or any other Person who owes payments under the Receivable. The
phrase "payment made on behalf of an Obligor" shall mean all payments made with
respect to a Receivable except payments made by BVAC, the Seller or the
Servicer.
"Officers' Certificate" means a certificate signed by any two of the
chairman of the board, the president, any vice chairman of the board, any vice
president, the treasurer, or the controller of BVAC, the Seller or the Servicer,
as the case may be; provided that no individual shall sign in a dual capacity.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
to the Seller and/or Servicer, which counsel shall be acceptable to the Owner
Trustee.
"Optional Disposition Price" means the amount specified as such in Section
16.02.
"Original Pool Balance" means $______________.
"Outstanding Advances" as of any date, with respect to a Receivable, means
the total amount of Advances made on such Receivable for which the Servicer has
not been reimbursed.
"Owner Trustee" means ________________________, a banking corporation
organized under the laws of the State of Delaware and its successors or any
corporation resulting from or surviving any merger or consolidation to which it
or its successors may be a party or any successor trustee at the time serving as
successor trustee hereunder.
"Owner Trustee's Certificate" means a certificate completed and executed by
the Owner Trustee by a Responsible Officer pursuant to Section 15.02,
substantially in the form of, in the case of an assignment to BVAC, Exhibit 1,
and in the case of an assignment to the Servicer, Exhibit 2.
"Payahead" on a Precomputed Receivable means the amount, as of the close of
business on the last day of a Collection Period, computed in accordance with
Section 8.02(b) with respect to such Receivable.
"Payahead Account" means the account designated as such, established and
maintained pursuant to Section 9.09.
"Payahead Balance" on a Precomputed Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Precomputed Receivable, as
reduced by applications of previous Payaheads with respect to such Precomputed
Receivable, pursuant to Sections 8.02(b) and 9.09.
7
"Payment Date" means, for each Collection Period, the fifteenth calendar
day of the month or, if such day is not a Business Day, the first Business Day
thereafter. The first Payment Date shall be , .
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Policy" means the irrevocable Financial Guaranty Insurance Policy dated as
of the Closing Date issued by the Insurer to the Indenture Trustee for the
benefit of the Noteholders as required under the Indenture.
"Pool Balance" as of any date means the aggregate Principal Balance of the
Receivables as of such date; provided, however, that for purposes of determining
Monthly Principal, the Principal Balance of a Defaulted Receivable or a
Purchased Receivable (if actually purchased by the Servicer or repurchased by
BVAC) shall be deemed to be zero on and after the close of business on the last
day of the Collection Period in which the Receivable becomes a Defaulted
Receivable or a Purchased Receivable that is actually purchased or repurchased.
"Precomputed Receivable" means any Receivable under which the portion of a
payment allocable to earned interest (which may be referred to in the related
contract as an add-on finance charge) and the portion allocable to the Amount
Financed is determined according to the sum of periodic balances, the sum of
monthly balances, the rule of 78's or any equivalent method.
"Prepayment Charges," as used in the Agreement, shall be interpreted to
include, without limitation, in the case of a Precomputed Receivable that is
prepaid in full, the difference between the Principal Balance of such Receivable
(plus accrued interest to the date of prepayment) and the Principal Balance of
such Receivable computed in accordance with the method provided for in the
contract governing such Receivable, such as the rule of 78's.
"Principal Balance" of a simple interest Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
that portion of all payments received on or before the close of business on such
last day allocable to principal of such Receivable. "Principal Balance" with
respect to a Precomputed Receivable, as of the close of business on the Cutoff
Date, means the gross principal balance of such Receivable on the records of the
Servicer, net of unearned or accrued interest reflected therein, and as of the
close of business on the last day of a Collection Period, means the Principal
Balance as of the Cutoff Date minus that portion of all Scheduled Payments
received with respect to such Receivable in respect of such Collection Period
and all prior Collection Periods allocable to principal of such Receivable using
the actuarial or constant yield method.
"Purchase Agreement" means the Purchase Agreement dated as of the date
hereof by and between the Seller and BVAC, as amended, supplemented or modified
from time to time pursuant to which the Seller purchases Receivables which have
been or shall be transferred to the Trust.
"Purchase Amount" of any Receivable, as of the close of business on the
last day of any Collection Period, means the amount equal to the sum of the
Principal Balance of such Receivable plus any unpaid interest accrued and due
during or prior to such Collection Period on such Receivable.
"Purchased Receivable" means a Receivable purchased by the Servicer
pursuant to Section 8.07 or repurchased by BVAC pursuant to Section 7.02 not
later than the respective dates required thereby.
"Rating Agency" means each of _________ and _________ and their successors
and assigns.
"Rating Agency Condition" has the meaning specified in the Indenture.
"Receivable" means any simple interest or pre-computed (add-on) interest
installment sales contract or installment loan and security agreement which
shall appear on Schedule A to the Agreement.
"Receivable Files" means the documents specified in Section 7.03.
8
"Receivables" or "Receivables Pool" means those Receivables conveyed to the
Trust by the Seller listed as of the Cutoff Date in Schedule A.
"Record Date" has the meaning specified in the Indenture.
"Recoveries of Advances" means, for any Collection Period, all payments
received by the Servicer by or on behalf of Obligors (other than Obligors with
respect to Defaulted Receivables and excluding reimbursements of Outstanding
Advances on Defaulted Receivables pursuant to Sections 9.04(a)(i) and 9.05)
during such Collection Period representing recoveries of Interest Shortfalls for
which Advances were made for prior Collection Periods.
"Responsible Officer" means, when used with respect to the Owner Trustee,
any officer within the Corporate Trust Office (or any successor group of the
Owner Trustee) including any managing director, vice president, assistant vice
president, assistant treasurer, assistant secretary or any other officer of the
Owner Trustee customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Scheduled Payment" on a Receivable means that portion of the payment
required to be made by the Obligor during the respective Collection Period
sufficient to amortize the Principal Balance and to provide interest at the
Contract Rate.
"Secured Parties" means each of the Indenture Trustee, the Noteholders and
the Insurer pursuant to the Indenture.
"Seller" means Bay View Securitization Corporation, a Delaware corporation,
in its capacity as the seller of the Receivables under this Agreement, and each
successor to Bay View Securitization Corporation (in the same capacity) pursuant
to Section 12.03.
"Servicer" means Bay View Acceptance Corporation, a Nevada corporation, in
its capacity as the servicer of the Receivables and each successor to Bay View
Acceptance Corporation (in the same capacity) pursuant to Section 13.03 or
14.02.
"Servicer's Certificate" means a certificate completed and executed by an
officer of the Servicer pursuant to Section 8.09.
"Servicing Rate" means 1.00% per annum, payable monthly at one-twelfth of
the annual rate, subject to adjustment with respect to a successor Servicer
pursuant to Section 14.02.
"Spread Account" means the account designated as such, established and
maintained pursuant to the Indenture.
"Spread Account Surplus" means, on any Payment Date, the excess, if any, of
the Available Spread Amount on such Payment Date, after giving effect to
deposits into and withdrawals from the Spread Account pursuant to Article IX of
the Indenture on such Payment Date, over the Required Spread Amount on such
Payment Date (after giving effect to any payments of Monthly Principal and
Monthly Interest and all amounts owing to the Insurer on such Payment Date
pursuant to the Indenture).
"State" means (i) any state of the United States of America or (ii) the
District of Columbia.
"Stated Final Payment Date" means ____________________.
"Trigger Event" means any of the events identified as such in Section 6.01
of the Insurance Agreement.
"Trust" means the Delaware business trust created by the Agreement, the
estate of which shall generally comprise the Receivables (other than Purchased
Receivables) and all monies paid thereon, and all monies due
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thereon, including Accrued Interest, as of and after the Cutoff Date (but
excluding Accrued Interest paid on or prior to the Closing Date); security
interests in the Financed Vehicles; funds deposited in the Collection Account;
all documents contained in the Receivable Files; any property that shall have
secured a Receivable and that shall have been acquired by or on behalf of the
Trust; any Liquidation Proceeds and any rights of the Seller in proceeds from
claims or refunds of premiums on any physical damage, lender's single interest,
credit life, disability, and hospitalization insurance policies covering
Financed Vehicles or Obligors; the interest of the Seller in recourse to Dealers
relating to certain of the Receivables; the proceeds of the foregoing; amounts
on deposit from time to time in the Spread Account; and certain rights of the
Seller under the Purchase Agreement, including, without limitation, Section 3.04
thereof.
"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
SECTION 2.02. Usage of Terms. With respect to all terms in this Agreement,
the singular includes the plural and the plural the singular; words importing
any gender include the other genders; references to "writing" include printing,
typing, lithography and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 2.03. Cutoff Date and Record Date. All references to the Record
Date prior to the first Record Date in the life of the Trust shall be to the
Closing Date.
SECTION 2.04. Section References. All section references in this Agreement
shall be to Sections in this Agreement unless otherwise specified.
ARTICLE III
Conveyance of Receivables
In consideration of the Owner Trustee's delivery to the Seller of the
Certificates and the proceeds to be realized by the Trust from the issuance of
the Notes pursuant to the Indenture, the Seller does hereby sell, transfer,
assign, and otherwise convey to the Owner Trustee, in trust without recourse
(subject to the obligations herein):
(i) all right, title, and interest of the Seller in and to the
Receivables listed in Schedule A hereto;
(ii) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables;
(iii) any Liquidation Proceeds and any proceeds from claims or refunds of
premiums on any physical damage, lender's single interest, credit life,
disability and hospitalization insurance policies covering Financed Vehicles or
Obligors;
(iv) funds deposited in the Collection Account;
(v) the interest of the Seller in any proceeds from recourse to Dealers
relating to the Receivables;
(vi) all documents contained in the Receivable Files;
(vii) all monies paid and all monies due, including Accrued Interest, as
of and after the Cutoff Date, with respect to the Receivables held by the
Servicer or Seller (but excluding Accrued Interest paid on or prior to the
Closing Date);
(viii) the rights of the Seller pursuant to the Purchase Agreement to
require BVAC to repurchase any Receivables as to which there has been a breach
of the representations and warranties contained therein;
(ix) the benefits of the Policy; and
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(x) all proceeds of the foregoing.
The Seller does hereby further assign, convey, pledge and grant a security
interest in (i) any and all other right, title and interest, including any
beneficial interest the Seller may have in the Collection Account, the Spread
Account and the funds deposited therein, and (ii) any proceeds of any of the
foregoing, to the Owner Trustee and for the benefit of the Noteholders to secure
amounts payable to Noteholders as provided under this Agreement. The Seller
acknowledges that all of the foregoing shall constitute the "Pledged Assets"
pursuant to the terms of the Indenture and the Seller hereby consents to the
pledge of all of such assets to the Indenture Trustee for the benefit of the
Secured Parties pursuant to the Indenture.
The Seller does not convey to the Owner Trustee any interest in any
contracts with Dealers related to any
"dealer reserve" or any rights to the recapture of any dealer reserve.
ARTICLE IV
Acceptance by Trustee
The Owner Trustee does hereby accept all consideration conveyed by the
Seller pursuant to Article III, and declares that the Owner Trustee shall hold
such consideration upon the trusts herein set forth for the benefit of all
present and future Certificateholders, subject to the terms and provisions of
this Agreement.
ARTICLE V
Information Delivered to the Rating Agencies
(a) The Servicer hereby expresses its intention to deliver promptly to
each Rating Agency (i) a copy of each Servicer's Certificate that it delivers to
the Owner Trustee, the Indenture Trustee and the Insurer pursuant to Section
8.09, (ii) a copy of each annual Officers' Certificate as to compliance and any
notice of default that it delivers to the Indenture Trustee or the Owner Trustee
pursuant to Section 8.10, (iii) delinquency and loss information for the
Receivables, the amount of any draws on the Policy, written notice of any
merger, consolidation, or other succession of the Servicer, pursuant to Section
13.03, or the Seller, pursuant to Section 12.03, (iv) a copy of each amendment
to this Agreement and (v) any Opinion of Counsel delivered to the Owner Trustee
pursuant to Section 17.02(i).
(b) The Owner Trustee hereby expresses its intention to deliver promptly
to each Rating Agency (i) a copy of each annual certified public accountant's
report received by the Owner Trustee pursuant to Section 8.11, (ii) a copy of
each amendment to this Agreement and (iii) a copy of the notice of termination
of the Trust provided to Certificateholders pursuant to Section 16.01.
(c) For purposes of delivery pursuant to paragraphs (a) and (b) of this
Article V, the addresses for the Rating Agencies are:
(d) The provisions of this Article V are included herein for convenience
of reference only and shall not be construed to be contractual undertakings or
obligations. The failure of the Servicer or the Owner Trustee to comply with any
or all of the provisions of this Article V shall not constitute an Event of
Default or a default of any kind under this Agreement or make any remedy
available to any Person.
ARTICLE VI
Agent for Service
The agent for service for the Seller shall be ___________, Vice President
of the Seller. Any and all service on the agent for service of the Seller shall
be sent to Bay View Securitization Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other address as the Seller shall provide notice
thereof pursuant to Sections 17.02(c) or 17.05.
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The agent for service for the Servicer shall be __________, Vice President
of the Servicer. Any and all service on the agent for service of the Servicer
shall be sent to Bay View Acceptance Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE VII
The Receivables
SECTION 7.01. Representations and Warranties of Seller. Pursuant to Article
III, the Seller has assigned to the Trust the benefit of, and its rights
respecting, the representations and warranties made to the Seller in the
Purchase Agreement as to the Receivables on which the Owner Trustee relies in
accepting the Receivables in trust and executing and authenticating the
Certificates and executing and delivering the Indenture. The Seller agrees that
the representations shall also be for the benefit of the Secured Parties. Such
representations and warranties speak as of the execution and delivery of the
Purchase Agreement but shall survive the sale, transfer, and assignment of the
Receivables to the Owner Trustee.
(a) The Seller hereby represents and warrants to the Owner Trustee that
it has entered into the Purchase Agreement with BVAC, that BVAC has made the
representations and warranties set forth therein, that such representations and
warranties run to and are for the benefit of the Seller, and that pursuant to
Article III of this Agreement the Seller has transferred and assigned to the
Owner Trustee all rights of the Seller to cause BVAC under the Purchase
Agreement to repurchase Receivables in the event of a breach of such
representations and warranties.
(b) It is the intention of the Seller that the transfer and assignment
herein contemplated, taken as a whole, constitute a sale of the Receivables from
the Seller to the Trust and that the beneficial interest in and title to the
Receivables not be part of the receivership estate in the event of the
appointment of a receiver for the Seller. No Receivable has been sold,
transferred, assigned, or pledged by the Seller to any Person other than the
Owner Trustee. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Receivable free
and clear of all liens, and, immediately upon the transfer thereof, the Owner
Trustee (for the benefit of the Certificateholders and the Secured Parties
pursuant to the Indenture) shall have good and marketable title to each
Receivable, free and clear of all liens and rights of others, except for the
rights of the Certificateholders and the Insurer; and the transfer has been
perfected under the UCC. On or prior to the Closing Date, all filings
(including, without limitation, UCC filings) necessary in any jurisdiction to
give the Owner Trustee a first perfected ownership interest in the Receivables
shall have been made.
SECTION 7.02. Repurchase Upon Breach. The Seller, BVAC, the Servicer, or
the Owner Trustee, as the case may be, shall inform the Indenture Trustee, the
Insurer and the other parties promptly, in writing, upon the discovery of any
breach of the representations and warranties contained in the Purchase
Agreement. This obligation shall not constitute an obligation on the part of the
Owner Trustee to actively seek to discover any such breaches. Unless the breach
shall have been cured by the second Record Date following the discovery, BVAC,
pursuant to its obligations under the Purchase Agreement, shall repurchase any
Receivable materially and adversely affected by the breach as of such Record
Date (or, at BVAC's option, the first Record Date following the discovery). In
consideration of the purchase of the Receivable, BVAC shall remit the Purchase
Amount, in the manner specified in Section 9.03. The sole remedy of the Owner
Trustee, the Trust, or the Indenture Trustee with respect to a breach of the
representations and warranties referred to in Section 7.01 shall be to require
BVAC to repurchase Receivables pursuant to the Purchase Agreement and this
Section 7.02.
SECTION 7.03. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Owner Trustee,
upon the execution and delivery of the Agreement, hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, for the benefit of
the Trust and the Indenture Trustee, to act as the agent of the Owner Trustee as
custodian of the following documents or instruments which are hereby
constructively delivered to the Owner Trustee with respect to each Receivable:
(i) The original of the Receivable.
(ii) The original credit application fully executed by the Obligor.
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(iii) The original certificate of title or such documents that the
Seller or Servicer shall keep on file, in accordance with its customary
procedures, evidencing the security interest of the Seller in the Financed
Vehicle.
(iv) Any and all other documents that the Servicer or the Seller
shall keep on file, in accordance with its customary procedures, relating to a
Receivable, an Obligor, or a Financed Vehicle.
SECTION 7.04. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian,
shall hold the Receivable Files on behalf of the Owner Trustee for the use and
benefit of all present and future Owner Trustees, and maintain such accurate and
complete accounts, records, and computer systems pertaining to each Receivable
File as shall enable the Owner Trustee to comply with this Agreement. In
performing its duties as custodian the Servicer shall act with reasonable care,
using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable automotive
receivables that the Servicer services for itself. The Servicer shall conduct,
or cause to be conducted, periodic audits of the Receivable Files held by it
under this Agreement, and of the related accounts, records, and computer
systems, in such a manner as shall enable the Owner Trustee to verify the
accuracy of the Servicer's record keeping. The Servicer shall promptly report to
the Owner Trustee 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 promptly take appropriate action to remedy any such failure;
provided, however, notwithstanding anything to the contrary in Section 7.03 or
this Section 7.04, the Servicer shall not be required to possess the original of
Receivables representing less than 2% of the Original Pool Balance until 30 days
following the Closing Date.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B to
this Agreement, or at such other office as shall be specified to the Owner
Trustee and the Indenture Trustee by prior written notice. The Servicer shall
make available to the Owner Trustee and the Indenture Trustee and their duly
authorized representatives, attorneys, or auditors a list of locations of the
Receivable Files, the Receivable Files, and the related accounts, records, and
computer systems maintained by the Servicer at such times as the Owner Trustee
shall instruct.
(c) Release of Documents. Upon instruction from the Owner
Trustee, the Servicer shall release any document in a Receivable File to the
Owner Trustee, the Owner Trustee's agent, or the Owner Trustee's designee, as
the case may be, at such place or places as the Owner Trustee may designate, as
soon as practicable.
SECTION 7.05. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer of the
Owner Trustee.
SECTION 7.06. Custodian's Indemnification. The Servicer, shall
indemnify the Trust, the Owner Trustee and the Indenture Trustee (which shall
include, for purposes of this Section 7.06, their directors, officers, employees
and agents) for any and all liabilities, obligations, losses, compensatory
damages, payments, costs, or expenses of any kind whatsoever that may be imposed
on, incurred, or asserted against the Trust, the Owner Trustee or the Indenture
Trustee as the result of any improper act or omission in any way relating to the
maintenance and custody by the Servicer of the Receivable Files; provided,
however, that the Servicer shall not be liable for any portion of any such
amount resulting from the willful misfeasance, bad faith, or negligence of the
Owner Trustee or the Indenture Trustee. This indemnity shall survive the
termination of this Agreement and the resignation or removal of the Owner
Trustee or the Indenture Trustee.
SECTION 7.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section
7.07. If the Servicer shall resign in accordance with the provisions of this
Agreement or if all of the rights and obligations of the Servicer shall have
been terminated under Section 14.01, the appointment of the Servicer as
custodian may be terminated by the Owner Trustee with the consent of the
Indenture Trustee and the Insurer (so long as the Insurer is not in default of
its obligations under the Policy). In addition, the Owner Trustee may terminate
the Servicer's appointment as custodian with cause at any time upon written
notification to the Servicer and the Indenture Trustee. As soon as practicable
after any termination of such appointment, the Servicer shall
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deliver the Receivable Files to the Owner Trustee or the Owner Trustee's agent
at such place or places as the Owner Trustee, with the consent of the Insurer
and the Indenture Trustee, may reasonably designate.
ARTICLE VIII
Administration and Servicing of Receivables
SECTION 8.01 Duties of Servicer. The Servicer, for the benefit of the
Trust and the Secured Parties, shall manage, service, administer, and make
collections on the Receivables with reasonable care, using that degree of skill
and attention that the Servicer exercises with respect to all comparable
automotive receivables that it services for itself. The Servicer's duties shall
include collection and posting of all payments, making Advances (in the
Servicer's sole discretion), responding to inquiries of Obligors or of federal,
state or local governmental authorities with respect to the Receivables,
investigating delinquencies, sending payment coupons to Obligors, accounting for
collections, and furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to distributions. The Servicer shall
follow its customary standards, policies, and procedures in performing its
duties as Servicer. Without limiting the generality of the foregoing, the
Servicer is authorized and empowered by the Owner Trustee to execute and
deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee or any of them, any and all instruments of satisfaction or cancellation,
or partial or full release or discharge, and all other comparable instruments,
with respect to such Receivables or to the Financed Vehicles securing such
Receivables. If the Servicer shall commence a legal proceeding to enforce a
Receivable or a Defaulted Receivable, the Owner Trustee and the Indenture
Trustee shall thereupon be deemed to have automatically assigned, solely for the
purpose of collection, such Receivable to the Servicer. The Owner Trustee and
the Indenture Trustee shall execute any documents prepared by the Servicer and
delivered to the Owner Trustee for execution that are necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 8.02 Collection of Receivable Payments. (a) The Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of such Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
automotive receivables that it services for itself. If payments are extended in
the ordinary course of the Servicer's collection procedures, and, as a result,
any Receivable would be outstanding at the Stated Final Payment Date, then the
Servicer shall be obligated to purchase such Receivable pursuant to Section 8.07
(unless such Receivable is otherwise being purchased pursuant to Section 16.02)
as of the last day of the Collection Period immediately preceding the Stated
Final Payment Date. The Servicer may in its discretion waive any late payment
charge or any other fees that it is entitled to retain under Section 8.08, or
other fee (to the extent consistent with its credit and collection policy on the
Closing Date) that may be collected in the ordinary course of servicing a
Receivable.
(b) All allocations of payments with respect to a simple-interest
Receivable to principal and interest and determinations of periodic charges and
the like shall be made using the simple interest method, based on either the
actual number of days elapsed and the actual number of days in the calendar year
or on the basis of a thirty-day month and a 360-day calendar year, as specified
in the related installment sales contract or installment loan and security
agreement. Each payment on a simple interest Receivable shall be applied first
to the amount of interest accrued on such Receivable to the date of receipt;
second, to principal due on such Receivable; third, to late charges, if any,
accrued on such Receivable; and last, to reduce the remaining principal amount
outstanding on such Receivable. Payments made by or on behalf of an Obligor
including any Payaheads previously made and added to the Payahead Balance with
respect to a Precomputed Receivable shall be applied first to overdue Scheduled
Payments (including reduction of Outstanding Advances as provided in Section
9.04). Next, any excess shall be applied to the Scheduled Payment and any
remaining excess shall be added to the Payahead Balance, and shall be applied to
prepay the Precomputed Receivable, but only if such Payahead Balance shall be
sufficient to prepay the Receivable in full Otherwise, any such remaining excess
payments shall constitute a Payahead and shall increase the Payahead Balance.
SECTION 8.03 Realization Upon Receivables. (a) On behalf of the Trust
and the Secured Parties the Servicer shall use its best efforts, consistent with
its customary servicing procedures, to repossess or otherwise convert the
ownership of the Financed Vehicle securing any Receivable as to which the
Servicer shall have determined that eventual payment in full is unlikely. The
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of automotive receivables,
which may include
14
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession will increase the
Liquidation Proceeds. After appropriate disposition of the Financed Vehicle, the
Servicer shall also take such measures as it deems reasonable and appropriate to
realize value in respect of any deficiency balance of the Receivable including
pursuit of action on behalf of the Trust and/or the Secured Parties against the
Obligor or public or private sale of the remaining interest of the Trust and/or
the Secured Parties in such Receivable.
(b) Unless otherwise stated in this Agreement, the Servicer shall either
purchase or liquidate each Financed Vehicle that has not previously been
liquidated and that secures, or previously secured, a Defaulted Receivable
either (i) by the end of the Collection Period preceding the final scheduled
Payment Date during the life of the Trust or (ii) if earlier, by the end of the
ninth Collection Period following the Collection Period during which such
Receivable became a Defaulted Receivable. Any purchase of a Financed Vehicle by
the Servicer shall be made at a price equal to the fair market value of the
Financed Vehicle as determined by the Servicer in accordance with the Servicer's
normal servicing standards.
SECTION 8.04 Physical Damage Insurance. The Servicer, in accordance with
its customary servicing procedures and underwriting standards, shall require
that each Obligor shall have obtained and shall maintain physical damage
insurance covering the Financed Vehicle.
SECTION 8.05 Maintenance of Security Interests in Financed Vehicles. The
Servicer shall, in accordance with its customary servicing procedures, take such
steps as are necessary to ensure that perfection of the security interest
created by each Receivable in the related Financed Vehicle has been obtained,
and to maintain such security interest. The Owner Trustee and the Indenture
Trustee hereby authorize the Servicer to take such steps as are necessary to
re-perfect such security interest on behalf of the Trust in the event of the
relocation of a Financed Vehicle or for any other reason. Without limiting the
forgoing, in the event that the Servicer consigns a repossessed Financed Vehicle
to an affiliate for liquidation, it shall take such measures as are necessary or
appropriate to maintain the security interest in the Financed Vehicle in the
hands of the consignee until such Financed Vehicle is liquidated, including
appropriate precautionary UCC-1 filings. In addition, BVAC and/or such affiliate
will notify the creditors, if any, of such affiliate that have entered into a
consignment arrangement on or before such arrangements are made.
SECTION 8.06 Covenants of Servicer. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the Certificateholders or the Secured Parties in the Receivables, nor shall
the Servicer change the amount of the Scheduled Payment under a Receivable or
change the Amount Financed under a Receivable or reduce the Contract Rate of a
Receivable (except if so ordered by a bankruptcy court in a proceeding
concerning the Obligor or otherwise mandated by law).
SECTION 8.07 Purchase of Receivables Upon Breach. The Servicer or the Owner
Trustee shall inform the other party and the Insurer promptly, in writing, upon
the discovery of (i) any breach by the Servicer of its obligations under Section
8.06 or (ii) the existence of the Servicer's obligation to purchase a Receivable
pursuant to Section 8.02(a). This obligation shall not constitute an obligation
on the part of the Owner Trustee to discover any such breaches or circumstances.
Unless the breach under Section 8.06 shall have been cured by the second Record
Date following the discovery, the Servicer shall purchase any Receivable
materially and adversely affected by such breach as of such day (or, at the
Servicer's election, as of the first Record Date following the discovery). In
consideration of the purchase of such Receivable, the Servicer shall remit the
Purchase Amount with respect to such Receivable in the manner specified in
Section 9.03. The sole remedy of the Owner Trustee, the Trust, or the Secured
Parties with respect to a breach pursuant to Section 8.06 or the grant of an
extension which triggers an obligation of the Servicer under Section 8.02(a)
shall be to require the Servicer to purchase Receivables pursuant to this
Section 8.07, except as provided in Section 13.02.
SECTION 8.08. Servicing Fee. The servicing fee for a Collection Period
shall equal the Monthly Servicing Fee (except that in the case of a successor
Servicer, the servicing fee shall equal such amount as is
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arranged in accordance with Section 14.02). The Servicer shall be entitled to
retain from payments of interest on the Receivables collected during a
Collection Period an amount equal to the Monthly Servicing Fee due the Servicer
in respect of such Collection Period and need not deposit such amount in the
Collection Account. The Servicer shall also be entitled to retain, and need not
deposit in the Collection Account, all late fees, Prepayment Charges, other
administrative fees or similar charges allowed by applicable law with respect to
Receivables, if any, collected (from whatever source) on the Receivables. The
Monthly Servicing Fee will be paid only out of the funds of the Trust and not
from the Owner Trustee's own funds. So long as Bay View Acceptance Corporation
is the Servicer, if the Servicer fails to pay the fees and expenses of the Owner
Trustee or the Indenture Trustee pursuant to Section 15.07 hereof or the
Indenture, the Owner Trustee and Indenture Trustee shall be entitled to receive
such amount from the Monthly Servicing Fee prior to payment thereof to the
Servicer and the Servicer shall not retain from collections that portion of the
Monthly Servicing Fee equal to any fees of the Owner Trustee and Indenture
Trustee that are due and payable and any unpaid amount that the Servicer has
received notice is due the Owner Trustee as reimbursement for expenses.
SECTION 8.09. Servicer's Certificate. On or before the Determination Date
following each Collection Period, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee and the Insurer a Servicer's Certificate in
substantially the form of Exhibit 3 attached hereto containing all information
necessary to make the distributions pursuant to Section 9.04 of the Indenture
(so long as the Notes remain outstanding) for the Collection Period preceding
the date of such Servicer's Certificate and all information necessary for the
Indenture Trustee to send statements to the Noteholders, including (A) the
amount of aggregate collections on the Receivables, (B) the aggregate Purchase
Amount of the Receivables repurchased by BVAC and purchased by the Servicer, (C)
with respect to Precomputed Receivables the net deposit from the Collection
Account to the Payahead Account or the net withdrawal from the Payahead Account
to the Collection Account required for the Collection Period in accordance with
Section 9.09, and in the case of a net withdrawal, the Monthly Interest and
Monthly Principal reported on such Servicer's Certificate shall reflect the
portions of such withdrawal allocable to interest and principal, respectively,
in accordance with this Agreement, (D) the amount, if any, to be withdrawn from
the Spread Account and the amount, if any, to be drawn on the Policy, (E)
information respecting (i) delinquent Receivables that are 30, 60 and 90 days
past due, and (ii) the number of repossessions of Financed Vehicles during the
preceding Collection Period, number of unliquidated repossessed Financed
Vehicles, gross and net losses on the Receivables, and recoveries on charged off
Receivables; and (F) each other item listed in Section 9.04 of the Indenture
reasonably requested by a Rating Agency, the Indenture Trustee or the Insurer in
order to monitor the performance of the Receivables. Receivables purchased by
BVAC as of the last day of such Collection Period shall be identified by the
BVAC account number with respect to such Receivable (as specified in Schedule A
to this Agreement).
SECTION 8.10. Annual Statement as to Compliance; Notice of Default. (a) The
Servicer shall deliver to the Owner Trustee, the Indenture Trustee and the
Insurer, on or before April 30 of each year, beginning on the first April 30
that is at least six months after the Closing Date, an Officers' Certificate,
dated as of December 31 of the preceding year, stating that (i) a review of the
activities of the Servicer during the preceding 12-month period (or in the case
of the initial Officer's Certificate, the period from the Closing Date to and
including the date of such Officer's Certificate) and of its performance under
this Agreement has been made under such officer's supervision and (ii) to the
best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof. A
copy of such certificate and the report referred to in Section 8.11 may be
obtained by any Certificateholder at its own expense by a request in writing to
the Owner Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to a Responsible Officer of the Owner
Trustee, the Indenture Trustee and the Insurer, promptly after having obtained
knowledge thereof, but in no event later than 5 Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become an Event of Default under Section
14.01. The Seller or BVAC shall deliver to a Responsible Officer of the Owner
Trustee, the Indenture Trustee and the Insurer, promptly after having obtained
knowledge thereof, but in no event later than 5 Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become an Event of Default under clause
(ii) of Section 14.01.
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SECTION 8.11. Annual Independent Certified Public Accountant's Report. The
Servicer shall cause a firm of independent certified public accountants, who may
also render other services to the Servicer, to deliver to the Owner Trustee, the
Indenture Trustee and the Insurer on or before September 30 of each year
concerning the 12-month period ended June 30 of such year (or shorter period
since the date of this Agreement), beginning on the first September 30 following
the first June 30 after the Closing Date, a report addressed to the Board of
Directors of the Servicer to the effect that such firm has reviewed the
servicing of the Receivables by the Servicer and that such review (1) included
tests relating to new or used automobile, van, light-duty truck, recreational
vehicle or motorcycle loans serviced for others in accordance with the
requirements of the Uniform Single Audit Program for Mortgage Bankers, to the
extent the procedures in such program are applicable to the servicing
obligations set forth in the Agreement, and (2) except as described in the
report, disclosed no exceptions or errors in the records relating to automobile,
van, light-duty truck, recreational vehicle or motorcycle loans serviced for
others that, in the firm's opinion, paragraph four of such program requires such
firm to report.
The report will also indicate that the firm is independent of the Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 8.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Owner Trustee, Indenture Trustee
and the Insurer access to the Receivables Files in such cases where such parties
shall be required by applicable statutes or regulations to review such
documentation. Access shall be afforded without charge, but only upon reasonable
request and during the normal business hours at the respective offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section 8.12.
SECTION 8.13. Servicer Expenses. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the
Servicer, and expenses incurred in connection with regular payments and reports
to Noteholders.
SECTION 8.14. Reports to Noteholders. The Owner Trustee shall provide to
any Noteholder who so requests in writing (addressed to the Corporate Trust
Office) a copy of any certificate described in Section 8.09, the annual
statement described in Section 8.10, or the annual report described in Section
8.11. The Owner Trustee may require the requesting party to pay a reasonable sum
to cover the cost of the Owner Trustee's complying with such request.
ARTICLE IX
Collections; Distributions to Noteholders and Certificateholders
SECTION 9.01. Collection Account. The Seller shall establish the Collection
Account with an Eligible Bank as a segregated trust account in the name of the
Trust for the benefit of the Secured Parties with the Indenture Trustee (at the
Indenture Trustee Office) or another Eligible Bank. The Servicer shall direct
the Indenture Trustee to invest the amounts in the Collection Account in
Eligible Investments that mature not later than the Business Day prior to the
next succeeding Payment Date and to hold such Eligible Investments to maturity.
The Indenture Trustee (or its custodian) shall (i) maintain possession of any
negotiable instruments or securities evidencing Eligible Investments until the
time of sale or maturity and each certificated security or negotiable instrument
evidencing an Eligible Investment shall be endorsed in blank or to the Indenture
Trustee or registered in the name of the Owner Trustee and (ii) cause any
Eligible Investment represented by an uncertificated security to be registered
in the name of the Indenture Trustee.
SECTION 9.02. Collections. (a) The Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors on the Receivables and all
Liquidation Proceeds, both as collected during the Collection Period net of
Monthly Servicing Fees and administrative fees allowed to be retained by the
Servicer pursuant to Section 8.08 and net of charge backs (attributable to
errors in posting, returned checks, or rights of offset for amounts that should
not have been paid or that must be refunded as the result of a successful claim
or defense under bankruptcy or similar laws) not later than the second Business
Day following the Business Day on which such amounts are received by the
Servicer. Notwithstanding the foregoing, for so long as (a) BVAC remains the
Servicer, (b) no Event of Default shall have occurred and be continuing and
(c)(1) BVAC maintains a short-term
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rating of at least A-1 by Standard & Poor's and P-1 by Moody's (and for five
Business Days following a reduction in either such rating) or (2) prior to
ceasing daily remittances, the Rating Agency Condition shall have been satisfied
(and any conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with) and the prior written consent of the Insurer (not
to be unreasonably withheld) shall have been obtained, the Servicer may remit
all such payments and Liquidation Proceeds with respect to any Collection Period
to the Collection Account on a less frequent basis, but in no event later than
the Determination Date immediately preceding each Payment Date. The Servicer
shall remit any Advances with respect to a Collection Period to the Collection
Account on or before the Determination Date.
(b) The Servicer, the Owner Trustee and/or Indenture Trustee shall
deposit in the Collection Account any funds received by such parties in respect
of funds drawn under the Policy from the Insurer.
(c) If the Available Funds for a Payment Date are insufficient to pay
current and past due Insurance Premiums, or any amounts owing to the Insurer
pursuant to the Insurance Agreement including, without limitation,
reimbursements, indemnities, fees and expenses, plus accrued interest thereon,
to the Insurer, the Servicer shall notify the Owner Trustee and the Indenture
Trustee of such deficiency, and the Available Spread Amount, if any, then on
deposit in the Spread Account (after giving effect to any withdrawal to satisfy
a deficiency in Monthly Interest or Monthly Principal) shall be available to
cover such deficiency.
SECTION 9.03. Purchase Amounts. Not later than the Determination Date, the
Servicer or BVAC shall remit to the Collection Account the aggregate Purchase
Amount for such Collection Period pursuant to Sections 7.02 and 8.07.
SECTION 9.04. Application of Funds. (a) On each Determination Date, the
Servicer shall determine (i) the amount of payments on all Receivables and all
Liquidation Proceeds received during such Collection Period, the amount of
Advances for such Collection Period, and the Purchase Amount for all Receivables
purchased or repurchased with respect to such Collection Period which have been
deposited in the Collection Account (net of amounts required to be paid pursuant
to Section 9.04(d) of the Indenture and excluding amounts required to be paid
pursuant to Sections 7.02, 8.07, and 9.05 but not so paid) after giving effect
to the net transfer from the Collection Account to the Payahead Account or from
the Payahead Account to the Collection Account as provided in Section 9.09, (the
"Available Funds"), and (ii) the amount of funds necessary to make the
distributions required pursuant to Section 9.04(a) of the Indenture, inclusive,
on the next Payment Date. The Servicer shall by a Servicer's Certificate on or
before the Determination Date notify the Owner Trustee and the Indenture Trustee
of such amounts by telecopy to the Corporate Trust Office and the Indenture
Trustee Office or to such numbers as the Owner Trustee or Indenture Trustee may
from time to time provide, followed promptly by mailing such notice to the Owner
Trustee and the Indenture Trustee and to the Insurer.
(b) On any Payment Date on which there are not sufficient Available
Funds to make the distributions required pursuant to Section 9.04(a) of the
Indenture, the Indenture Trustee, or the Servicer on its behalf, shall withdraw
from the Spread Account, to the extent of the Available Spread Amount, an amount
equal to such deficiency and promptly deposit such amount in the Collection
Account. If such deficiency exceeds the Available Spread Amount, the Servicer
shall simultaneously and in the same manner also notify the Owner Trustee, the
Indenture Trustee and the Insurer of the amount of such excess deficiency.
(c) On each Payment Date, the Owner Trustee shall distribute to each
Certificateholder such Certificateholder's interest and principal, if any, for
such Distribution Date, as received from the Indenture Trustee pursuant to
Section 9.04 of the Indenture on such Distribution Date.
(d) On each Payment Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 9.04 of this Agreement on such Distribution Date.
(e) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section 9.04. The Owner Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by
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the Trust (but such authorization shall not prevent the Owner Trustee from
contesting any such tax in appropriate proceedings, and withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to a Certificateholder shall
be treated as cash distributed to such Certificateholder at the time it is
withheld by the Trust to be remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-U.S. Certificateholder), the Owner
Trustee in its sole discretion may (but unless otherwise required by law shall
not be obligated to) withhold such amounts in accordance with this paragraph.
(e). In the event that a Certificateholder wishes to apply for a refund of any
such withholding tax, the Owner Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder agrees
to reimburse the Owner Trustee for any out-of-pocket expenses incurred.
(f) Subject to Section 16.01, distributions required to be made to
Certificateholders on any Payment Date shall be made to each Certificateholder
of record on the preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Certificateholder at a bank or other
entity having appropriate facilities therefor, or by check mailed to such
Certificateholder at the address of such Certificateholder appearing in the
Certificate Register.
SECTION 9.05. Advances. (a) As of the last day of the initial Collection
Period, the Servicer shall advance funds equal to the excess, if any, of Monthly
Interest due in respect of the initial Collection Period, over the Collected
Interest for such Collection Period; and (b) as of the last day of each
subsequent Collection Period, the Servicer shall advance funds in the amount of
the Interest Advance Amount (or such other amount as the Servicer shall
reasonably determine to cover an Interest Shortfall) with respect to each
Receivable that is delinquent for more than 30 days, in each such case, to the
extent that the Servicer, in its sole discretion, determines that the Advance
will be recoverable from payments by or on behalf of the Obligor, the Purchase
Amount, or Liquidation Proceeds. With respect to each Receivable, the Advance
paid pursuant to this Section 9.05 shall increase Outstanding Advances.
Outstanding Advances shall be reduced by subsequent payments by or on behalf of
the Obligor, collections of Liquidation Proceeds, or payments of the Purchase
Amount. The Servicer shall remit any Advances with respect to a Collection
Period to the Collection Account by the related Determination Date.
If the Servicer shall determine that an Outstanding Advance with respect to
any Receivable shall not be recoverable, the Servicer shall be reimbursed from
any collections made on other Receivables in the Trust, and Outstanding Advances
with respect to such Receivable shall be reduced accordingly.
SECTION 9.06. Net Deposits. For so long as Bay View Acceptance Corporation
is the Servicer, Bay View Acceptance Corporation (in whatever capacity) may make
the remittances with respect to any Payment Date pursuant to Section 9.02 above,
net of amounts to be distributed to itself or its delegee under Section 13.06
(also in whatever capacity), if it determines pursuant to Section 9.02 that
there is no deficiency in Available Funds for such Payment Date. Nonetheless,
the Servicer shall account for all of the above described amounts as if such
amounts were deposited and distributed.
SECTION 9.07. No Segregation of Moneys; No Interest. Subject to Section
9.04, moneys received by the Owner Trustee hereunder need not be segregated in
any manner except to the extent required by law or this Agreement and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 9.08. Accounting and Reports to the Certificateholder, the Internal
Revenue Service and Others. The Owner Trustee shall deliver to the
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, or as may be requested by such Certificateholder, such information,
reports or statements as may be necessary to enable each Owner to prepare its
federal and state income tax returns. Consistent with the Trust's
characterization for tax purposes as a security arrangement for the issuance of
non-recourse debt so long as the Seller or any other Person is the sole
beneficiary owner of the Trust, no federal income tax return shall be filed on
behalf of the Trust unless either (i) the Owner Trustee shall receive an Opinion
of Counsel that, based on a change in applicable law occurring after the date
hereof, or as a result of a transfer by the Company permitted by Section
11.03, the Code requires such a filing or (ii) the Internal Revenue Service
shall determine that the Trust is required to file such a return. In the event
that there shall be two or more beneficial owners of the Trust, the Owner
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Trustee shall inform the Indenture Trustee in writing of such event, (x) the
Owner Trustee shall prepare or shall cause to be prepared federal and, if
applicable, state or local partnership tax returns required to be filed by the
Trust and shall remit such returns to the Seller (or if the Seller no longer
owns the Certificate, to the Seller to the extent its tax liability is affected
thereby and otherwise to the successor Certificateholder) at least (5) days
before such returns are due to be filed, and (y) capital accounts shall be
maintained for each beneficial owner in accordance with the Treasury Regulations
under Section 704(b) of the Code reflecting each such beneficial owner's share
of the income, gains, deductions, and losses of the Trust and/or guaranteed
payments made by the Trust and contributions to, and distributions from, the
Trust. The Seller (or such successor Certificateholder, as applicable) shall
promptly sign such returns and deliver such returns after signature to the Owner
Trustee and such returns shall be filed by the Owner Trustee with the
appropriate tax authorities. In the event that a "tax matters partner" (within
the meaning of Code Section 6231(a)(7)) is required to be appointed with respect
to the Trust, the Seller is hereby designated as tax matters partner or, if the
Seller is not the Certificateholder, the Seller to the extent its tax liability
is affected thereby and otherwise the successor Certificateholder, shall be
designated as tax matters partner. In no event shall the Owner Trustee or the
Seller (or such designee Certificateholder, as applicable) be liable for any
liabilities, costs or expenses of the Trust or the Noteholders arising out of
the application of any tax law, including federal, state, foreign or local
income or excise taxes or any other tax imposed on or measured by income (or any
interest, penalty or addition with respect thereto or arising from a failure to
comply therewith) except for any such liability, cost or expense attributable to
any act or omission by the Owner Trustee or the Seller (or such designee
Certificateholder as applicable), as the case may be, in breach of its
obligations under this Agreement.
SECTION 9.09. Payahead Account. The Servicer shall establish the Payahead
Account in the name of the Trust on behalf of the Obligors and the Secured
Parties as their interests may appear. The Payahead Account shall be a
segregated interest bearing trust account established with the Indenture Trustee
or another Eligible Bank. Amounts in the Payahead Account shall be invested in
Eligible Investments that mature not later than the Business Day prior to the
next succeeding Payment Date. The Payahead Account is not property of the Trust.
Investment income or interest earned on the Payahead Account shall be remitted
to the Servicer at least monthly, or as frequently as the Servicer may
reasonably request. On or prior to each Payment Date, the Servicer shall
transfer or the Indenture Trustee (as instructed in the Servicer's Certificate)
shall transfer (a) from the Collection Account to the Payahead Account, in
immediately available funds, all Payaheads received by the Servicer and
previously deposited to the Collection Account during the Collection Period
described in Section 8.02(b); and (b) from the Payahead Account to the
Collection Account, in immediately available funds, the aggregate amount of
previously deposited Payaheads to be applied to Scheduled Payments on
Precomputed Receivables for the related Collection Period or prepayments for the
related Collection Period, pursuant to Section 8.02(b), each in the amounts set
forth in the Servicer's Certificate delivered on the related Determination Date.
A single, net transfer between the Payahead Account and the Collection Account
may be made. Any amount deposited in the Payahead Account shall not constitute
Available Funds under Section 9.02. Any amount deposited to the Collection
Account from the Payahead Account pursuant to Section 9.09(b) shall be included
in Available Funds under Section 9.02.
ARTICLE X
Intentionally Blank
ARTICLE XI
The Certificates
SECTION 11.01. The Certificates. The Certificates shall be issued in the
form of one or more certificates and shall initially be issued to the Seller.
The Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of a Responsible Officer of the Owner Trustee. Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be valid and binding obligations of the Trust, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to
the authentication and delivery of such Certificates or did not hold such
offices at the date of such Certificates.
SECTION 11.02. Authentication of Certificates. The Owner Trustee shall
cause the Certificates to be executed on behalf of the Trust, authenticated, and
delivered to or upon the written order of the Seller, signed by its
20
chairman of the board, its president, or any vice president, without further
corporate action by the Seller, in authorized denominations, pursuant to this
Agreement. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication, substantially as set forth in the
forms of Certificate attached as exhibits to this Agreement, executed by a
Responsible Officer of the Owner Trustee by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
SECTION 11.03. Registration of Transfer and Exchange of Certificates. The
Owner Trustee shall keep or cause to be kept, at the Corporate Trust Office, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Owner Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates subject to the restrictions
provided herein.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Owner Trustee shall execute, authenticate, and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates in authorized denominations of a like aggregate amount dated
the date of authentication by the Owner Trustee, provided, however, that
registration of transfer of the Certificates may not be effected unless (A) the
Owner Trustee receives an Opinion of Counsel, satisfactory to it, to the effect
that (i) such transfer may be made in reliance upon an exemption from the
registration requirements of the Securities Act of 1933, as amended, and (ii)
such transfer will not adversely affect the tax treatment of the Trust or the
Notes; (B) the Insurer has consented to such transfer and (C) the Rating Agency
Condition shall have been satisfied with respect to such transfer.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee duly executed by the Holder or his attorney
duly authorized in writing. Each Certificate surrendered for registration of
transfer and exchange shall be canceled and subsequently destroyed by the Owner
Trustee.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
SECTION 11.04. Mutilated, Destroyed, Lost, or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Owner Trustee, or if the
Owner Trustee shall receive evidence to its satisfaction of the destruction,
loss, or theft of any Certificate and (b) there shall be delivered to the Owner
Trustee such security or indemnity as may be required by it to save it harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate
of like tenor and denomination. In connection with the issuance of any new
Certificate under this Section 11.04, the Owner Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 11.04 shall constitute conclusive evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen, or destroyed
Certificate shall be found at any time.
SECTION 11.05. Agreement Regarding Tax Matters. The Owner Trustee, the
Seller as initial Certificateholder and each successor Certificateholder (as a
condition to acquiring its Certificate) agree to disregard the Trust as a
separate entity and to treat the Notes as indebtedness for federal, state and
local income and franchise tax purposes.
SECTION 11.06. Signature on Returns; Tax Matters Partner. (a) The Seller
shall sign on behalf of the Trust the tax returns of the Trust.
(b) If Subchapter K of the Code should be applicable to the Trust, the
Seller shall be designated the "tax matters partner" of the Trust pursuant to
Section 6231(a)(7)(A) of the Code and applicable Treasury Regulations.
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ARTICLE XII
The Seller
SECTION 12.01. Representations and Undertakings of Seller. (a) The Seller
makes the following representations on which the Owner Trustee relies in
accepting the Receivables in trust and executing and authenticating the
Certificates and undertaking its obligations under the Indenture. The Seller
agrees that the representations shall also be for the benefit of the Secured
Parties. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to the Owner Trustee.
(i) Organization and Good Standing. The Seller shall have been
duly organized and shall be validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire and own the
Receivables.
(ii) Due Qualification. The Seller shall be duly qualified to
do business as a foreign corporation in good standing, and shall have obtained
all necessary licenses and approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business shall require such
qualifications.
(iii) Power and Authority. The Seller shall have the power and
authority to execute and deliver this Agreement and to carry out its terms; the
Seller shall have full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Owner Trustee as part of the Trust
and shall have duly authorized such sale and assignment to the Owner Trustee by
all necessary corporate action; and the execution, delivery, and performance of
the Agreement shall have been duly authorized by the Seller by all necessary
corporate action.
(iv) Valid Sale; Binding Obligations. This Agreement shall
evidence a valid sale, transfer, and assignment of the Receivables, enforceable
against creditors of and purchasers from the Seller; and shall evidence a legal,
valid, and binding obligation of the Seller enforceable in accordance with its
terms.
(v) No Violation. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
charter or by-laws of the Seller, or any indenture, agreement, or other
instrument to which the Seller is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, or other instrument
(other than this Agreement); nor violate any law or, to the best of the Seller's
knowledge, any order, rule, or regulation applicable to the Seller of any court
or of any federal or State regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or, to the Seller's best knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Seller or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement, (C) seeking any determination
or ruling that might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforceability of, this
Agreement, or (D) which might adversely affect the federal income tax attributes
of the Trust.
(b) The Seller further covenants that, prior to termination of the
Trust:
(i) It will not engage at any time in any business or business
activity other than such activities expressly set forth in its Certificate
of Incorporation delivered to the Insurer on or prior to the Closing Date,
and will not amend its Certificate of Incorporation without the prior
written consent of the Insurer.
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(ii) It will not, without the consent of the Insurer (not to be
unreasonably withheld), sell, assign, pledge or otherwise transfer, in
whole, or in part or in any series of related or unrelated transactions any
of its right, title or interest in or to the Certificates.
(iii) It will not:
(A) Fail to do all things necessary to maintain its corporate
existence separate and apart from BVAC and any other Person,
including, without limitation, holding regular meetings of its
stockholders and board of directors and maintaining appropriate
corporate books and records (including a current minute book);
(B) Suffer any limitation on the authority of its own directors
and officers to conduct its business and affairs in accordance with
their independent business judgment or authorize or suffer any
Person other than its own officers and directors to customarily
delegated to others under powers of attorney) for which a
corporation's own Officers and directors would customarily be
responsible;
(C) Fail to (I) maintain or cause to be maintained by an agent
of the Seller under the Seller's control physical possession of all
its books and records, (II) maintain capitalization adequate for
the conduct of its business, (III) account for and manage all its
liabilities separately from those of any other Person, including
payment by it of all payroll, administrative expenses and taxes, if
any, from its own assets, (IV) segregate and identify separately
all of its assets from those of any other Person, (V) to the extent
any such payments are made, pay its employees, officers and agents
for services performed for the Seller or (VI) maintain a separate
office address with a separate telephone number from those of BVAC
or any other affiliate thereof; or
(D) Except as may be provided in this Agreement, or a similar
agreement relating to other securitizations in which the Seller has
similar rights and/or obligations, commingle its funds with those
of BVAC or any affiliate thereof or use its funds for other than
the Seller's uses.
SECTION 12.02. Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(i) The Seller shall indemnify, defend, and hold harmless the Owner
Trustee, the Indenture Trustee, their respective officers, directors, employees
and agents, the Trust and the Noteholders from and against any taxes that may at
any time be asserted against such parties with respect to, and as of the date
of, the sale of the Receivables to the Owner Trustee or the issuance and
original sale of the Certificates and the Notes, including any sales, gross
receipts, general corporation, tangible or intangible personal property,
privilege, or license taxes (but, in the case of the Trust, not including any
taxes asserted with respect to ownership of the Receivables or federal or other
income taxes arising out of distributions on the Certificates or the Notes) and
costs and expenses in defending against the same.
(ii) The Seller shall indemnify, defend, and hold harmless the Owner
Trustee, its officers, directors, employees and agents and the Trust from and
against any loss, liability, or expense incurred by reason of (a) the Seller's
willful misfeasance, bad faith, or negligence in the performance of its duties
under this Agreement, or by reason of reckless disregard of its obligations and
duties under this Agreement and (b) the Seller's violation of federal or State
securities laws in connection with the registration of the sale of the
Certificates.
Indemnification under this Section 12.02 shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Seller shall have made any indemnity payments to the Owner Trustee or the Trust
pursuant to this Section and the Owner Trustee or the Trust thereafter shall
collect any of such amounts from others, the Owner Trustee or the Trust, as the
case may be, shall repay such amounts to the Seller, without interest. This
indemnification shall survive the termination of this Agreement and the
resignation or removal of the Owner Trustee.
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SECTION 12.03. Merger or Consolidation of, or Assumption of the Obligations
of Seller. Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller shall
be a party, or (c) which may succeed to all or substantially all of the
properties and assets of the Seller's business, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Seller under this Agreement, shall be the successor to the Seller
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 7.01 shall have been breached and no Event of Default, and
no event that, after notice or lapse of time, or both, would become an Event of
Default shall have happened and be continuing, (ii) the Seller shall have
delivered to the Owner Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger, or succession and such
agreement of assumption comply with this Section 12.03 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with and (iii) the Seller shall have delivered an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Owner Trustee and the Indenture Trustee in the Receivables, and reciting the
details of such filings, or (B) stating that, in the opinion of such Counsel, no
such action shall be necessary to preserve and protect such interest.
Notwithstanding the forgoing, the Seller shall not engage in any merger or
consolidation with any Person, or a disposition of all or substantially all of
its assets without the prior written consent of the Insurer, not to be
unreasonably withheld.
SECTION 12.04. Limitation on Liability of Seller and Others. The Seller and
any director or officer or employee or agent of the Seller 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 Seller shall not be under any obligation to appear in, prosecute,
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
ARTICLE XIII
The Servicer
SECTION 13.01. Representations of Servicer. The Servicer makes the
following representations on which the Owner Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates and
executing and delivering the Indenture. The Servicer agrees that the
representations shall also be for the benefit of the Secured Parties. The
representations speak as of the execution and delivery of this Agreement and
shall survive the sale of the Receivables to the Owner Trustee and the pledge to
the Secured Parties pursuant to the Indenture.
(i) Organization and Good Standing. The Servicer shall have been duly
organized and shall be validly existing as a corporation under the laws of the
State of Indiana, with power and authority to own its properties and to conduct
its business as such properties shall be currently owned and such business is
presently conducted, and had at all relevant times, and shall have, power,
authority, and legal right to acquire, own, sell, and service the Receivables
and to hold the Receivable Files as custodian on behalf of the Owner Trustee.
(ii) Due Qualification. The Servicer shall be duly qualified to do
business as a foreign corporation in good standing, and shall have obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications.
(iii) Power and Authority. The Servicer shall have the power and
authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery, and performance of this Agreement shall have been duly
authorized by the Servicer by all necessary corporate action.
(iv) Binding Obligations. This Agreement shall constitute a legal,
valid, and binding obligation of the Servicer enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights in general and by
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general principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.
(v) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time) a default under, the charter or by-laws of
the Servicer, or any indenture, agreement, or other instrument to which the
Servicer is a party or by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, or other instrument (other than this Agreement); nor
violate any law or, to the best of the Servicer's knowledge, any order, rule, or
regulation applicable to the Servicer of any court or of any federal or State
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Servicer or its properties.
(vi) No Proceedings. There are no proceedings or investigations pending,
or, to the Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over the Servicer or its properties: (A) asserting the invalidity of this
Agreement, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement, or (D)
which might adversely affect the federal income tax attributes of the Trust.
SECTION 13.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(i) The Servicer shall defend, indemnify, and hold harmless the Owner
Trustee, the Indenture Trustee, and their officers, directors, employees and
agents, the Trust, the Certificateholders and the Noteholders from and against
any and all costs, expenses, losses, damages, claims, and liabilities, arising
out of or resulting from the use, ownership, or operation by the Servicer or any
affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee, the Indenture Trustee, their officers, directors, employees and agents
and the Trust from and against any taxes that may at any time be asserted
against such parties with respect to the transactions contemplated herein,
including, without limitation, any sales, gross receipts, general corporation,
tangible or intangible personal property, privilege, or license taxes (but, in
the case of the Trust, not including any taxes asserted with respect to, and as
of the date of, the sale of the Receivables to the Trust or the issuance and
original sale of the Certificates, the Notes, or asserted with respect to
ownership of the Receivables, or federal or other income taxes arising out of
distributions on the Certificates or the Notes) and costs and expenses in
defending against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee, the Indenture Trustee, the Insurer, their officers, directors,
employees and agents, and the Trust, the Certificateholders and the Noteholders
from and against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon such parties through, the
negligence, willful misfeasance, or bad faith of the Servicer in the performance
of its duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement. This indemnity shall survive the
termination of this Agreement or the Trust and the resignation or removal of the
Owner Trustee.
(iv) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee, the Indenture Trustee, their respective officers, directors, employees
and agents and the Trust from and against all costs, expenses, losses, claims,
damages, and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein contained, except to
the extent that such cost, expense, loss, claim, damage or liability: (a) shall
be due to the willful misfeasance, bad faith, or negligence of the Owner Trustee
or the Indenture Trustee; (b) relates to any tax other than the taxes with
respect to which either the Seller or Servicer shall be required to indemnify
the Owner Trustee or the Indenture Trustee; (c) shall arise from the breach of
any of representations or warranties of the Owner Trustee set forth in Section
15.13 or by the Indenture Trustee set forth in Section 15.13 of the Indenture;
(d) shall be one as to which the Seller is required to indemnify the Owner
Trustee or
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the Indenture Trustee; or (e) shall arise out of or be incurred in connection
with the acceptance or performance by the Owner Trustee of the duties of
successor Servicer.
Indemnification under this Section 13.02 shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer shall have made
any indemnity payments pursuant to this Section and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest. This indemnification shall
survive the termination of this Agreement and the removal of the Servicer.
SECTION 13.03. Merger or Consolidation of, or Assumption of the Obligations
of Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Servicer shall be a party, or (c) which may succeed to all or substantially all
of the properties and assets of the Servicer's indirect automobile financing and
receivables servicing business, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Servicer
hereunder, shall be the successor to the Servicer under this Agreement without
further act on the part of any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default shall have happened and be continuing, (ii) the
Servicer shall have delivered to the Owner Trustee an Officers' Certificate and
an Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 13.03 and that all
conditions precedent provided for in this Agreement relating to such transaction
have been complied with and (iii) the Servicer shall have delivered an Opinion
of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Secured Parties in the Receivables, and
reciting the details of such filings, or (B) stating that, in the opinion of
such Counsel, no such action shall be necessary to preserve and protect such
interest. Notwithstanding the forgoing, the Servicer shall not engage in any
merger or consolidation in which it is not the surviving corporation without the
prior written consent of the Insurer, not to be unreasonably withheld.
SECTION 13.04. Limitation on Liability of Servicer and Others. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust, the Indenture Trustee, the
Certificateholders or the Noteholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement; provided, however, that this provision shall not protect the
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith, or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute, or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement (collection actions with respect to Defaulted Receivables are
understood to be incidental to the Servicer's duties to service the
Receivables), and that in its opinion may involve it in any expense or
liability.
SECTION 13.05. Servicer Not to Resign. The Servicer shall not resign from
its obligations and duties under this Agreement except upon determination that
the performance of its duties shall no longer be permissible under applicable
law or otherwise with the consent of the Owner Trustee, the Indenture Trustee
and the Insurer. Any determination described above permitting the resignation of
the Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee. No such resignation shall become effective until
the Owner Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
14.02.
SECTION 13.06. Delegation of Duties. Except as provided in Section 13.03
hereof, it is understood and agreed by the parties hereto that the Servicer or
the Seller may at any time delegate any duties including duties as custodian to
any Person willing to accept such delegation and to perform such duties
(including any affiliate of the
26
Servicer) in accordance with the customary procedures of the Servicer. In
connection with such delegation, the Servicer or the Seller may assign rights to
the delegee or direct the payment to the delegee of benefits or amounts
otherwise inuring to the benefit of, or payable to, the Seller or the Servicer
hereunder. Any such delegation shall not relieve the Servicer or the Seller of
their respective liability and responsibility with respect to such duties, and
shall not constitute a resignation within Section 13.05 hereof. The Servicer
shall give written notice to the Rating Agencies, the Owner Trustee, the
Indenture Trustee and the Insurer of any such delegation.
ARTICLE XIV
Servicer Default
SECTION 14.01. Events of Servicer Default. If any one of the following
events ("Events of Servicer Default") shall occur and be continuing:
(i) Any failure by the Servicer or BVAC to deliver to the Collection
Account (or to the Indenture Trustee for distribution to the Noteholders) any
proceeds or payment required to be so delivered under the terms of the
Indenture, this Agreement or the Purchase Agreement or any failure by the
Servicer to deliver any Servicer's Certificate pursuant to Section 8.09 that, in
either case, shall continue unremedied for a period of two Business Days (A)
after written notice from either the Owner Trustee, the Indenture Trustee or the
Insurer (so long as the Insurer is not in default of its obligations under the
Policy) or by the holders of Notes evidencing not less than 25% of the aggregate
outstanding balance of the Notes is received by the Servicer or BVAC as
specified in this Agreement or (B) after discovery by an officer of the
Servicer; or
(ii) Failure on the part of the Servicer, the Seller or BVAC duly to
observe or to perform in any material respect any other covenants or agreements
of the Servicer, the Seller or BVAC, as the case may be, set forth in this
Agreement or the Purchase Agreement, which failure shall (a) materially and
adversely affect the rights of Certificateholders or the Secured Parties and (b)
continue unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer, BVAC or the Seller, as the case may be, by the Owner Trustee,
the Indenture Trustee or the Insurer (so long as the Insurer is not in default
of its obligations under the Policy) or by the holders of Notes evidencing not
less than 25% of the aggregate outstanding balance of the Notes; or
(iii) The occurrence of an Insolvency Event with respect to the Servicer;
then, and in each and every case, so long as an Event of Default shall not have
been remedied, the Insurer (so long as the Insurer is not in default of its
obligations under the Policy), or the Indenture Trustee (upon direction to do so
by the holders of Notes evidencing not less than 25% of the outstanding
principal balance of the Notes if the Insurer is in default under the Policy),
by notice then given in writing to the Servicer may, terminate all of the rights
and obligations of the Servicer under this Agreement. In addition, if a Trigger
Event (as defined in the Insurance Agreement) shall have occurred, the Insurer
may (A) require that the Owner Trustee deliver a notice of termination to the
Servicer and appoint a successor Servicer designated by the Insurer in such
notice pursuant to Section 14.02; (B) require that the Owner Trustee amend
certificates of title relating to the Financed Vehicles and take other actions
to identify the Indenture Trustee (on behalf of the Secured Parties) as the new
secured party on such certificates of title; (C) as provided in the Insurance
Agreement, require that the Servicer or successor Servicer or the Owner Trustee
instruct Obligors in respect of the Receivables to remit payment on the
Receivable directly to the Owner Trustee or a separate account established
exclusively for the Trust; and (D) as provided in the Insurance Agreement,
compel transfer by the Servicer of all Receivables Files and, if applicable,
certain rights in respect of servicing systems assets to the Insurer or to the
successor Servicer designated by the Insurer. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Certificates, the Notes or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Owner Trustee (except that the Owner Trustee may but shall not be
required to make Advances) or such successor Servicer as may be appointed under
Section 14.02 pursuant to and under this Section 14.01; and, without limitation,
the Owner Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination,
27
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. The predecessor Servicer shall cooperate with the
successor Servicer and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer of electronic records related
to the Receivables in such form as the successor Servicer may reasonably request
and the transfer to the successor Servicer for administration by it of all cash
amounts that shall at the time be held by the predecessor Servicer for deposit,
or shall thereafter be received with respect to a Receivable. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section 14.01
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses.
SECTION 14.02. Appointment of Successor. (a) Upon the Servicer's receipt of
notice of termination pursuant to Section 14.01 or the Servicer's resignation in
accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Owner Trustee and the Indenture Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's resignation or termination hereunder, the Indenture Trustee shall
appoint a successor Servicer, which successor Servicer shall be reasonably
acceptable to the Insurer (so long as the Insurer is not in default of its
obligations under the Policy), and the successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Owner Trustee and
the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section 14.02, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer.
Notwithstanding the above, the Indenture Trustee shall, if it shall be legally
unable or unwilling so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established financial institution, having a net
worth of not less than $50,000,000 and whose business shall include the
servicing of automotive receivables, as the successor to the Servicer under this
Agreement and which financial institution is, in the case of appointment by the
Owner Trustee, reasonably acceptable to the Insurer and the Indenture Trustee.
(b) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, and shall be entitled to the Monthly
Servicing Fee and all of the rights granted to the predecessor Servicer, by the
terms and provisions of this Agreement. The predecessor Servicer shall be
entitled to be reimbursed for Outstanding Advances.
(c) In connection with such appointment, the Owner Trustee may make
such arrangements for the successor Servicer out of payments on Receivables it
and such successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of that permitted the original Servicer under
this Agreement. The Owner Trustee and such successor Servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
SECTION 14.03. Notice of Events of Servicer Default. Upon any notice of an
Event of Servicer Default or upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article XIV, the Owner Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Indenture Trustee for
further notice thereof to the Noteholders.
SECTION 14.04. Waiver of Past Defaults. The Insurer (so long as the Insurer
is not in default of its obligations under the Policy) or the Indenture Trustee
(if the Insurer is in default under the Policy) upon direction from holders of
Notes evidencing not less than 51% of the outstanding principal balance of the
Notes may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in making any
required deposits to or payments from the Collection Account in accordance with
this Agreement; provided, that no waiver of any default or provision of this
Agreement shall become effective without the consent of
28
the Insurer (unless the Insurer is in default of its obligations under the
Policy). Upon any such waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
ARTICLE XV
The Owner Trustee
SECTION 15.01. Duties of Owner Trustee. The Owner Trustee, both prior to
and after the occurrence of an Event of Default, shall undertake to perform such
duties as are specifically set forth in this Agreement. If an Event of Default
shall have occurred and shall not have been cured and, in the case of an Event
of Default described in clause (i) of Section 14.01, the Owner Trustee has
received notice of such Event of Default, the Owner Trustee shall exercise such
of the rights and powers vested in it by this Agreement, and shall use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his own affairs; provided,
however, that if the Owner Trustee shall assume the duties of the Servicer
pursuant to Section 14.02, the Owner Trustee in performing such duties shall use
the degree of skill and attention customarily exercised by a servicer with
respect to automobile receivables that it services for itself or others.
It shall be the duty of the Owner Trustee to discharge (or cause to be
discharged) all its responsibilities pursuant to the terms of this Agreement and
the other documents to which the Trust is a party and to administer the Trust in
the interest of the Certificateholders, subject to and in accordance with the
provisions of this Agreement and the other documents to which the Trust is a
party. Without limiting the foregoing, the Owner Trustee shall on behalf of the
Trust file and prove any claim or claims that may exist on behalf of the Trust
against the Seller in connection with any claims paying procedure as part of an
insolvency or a receivership proceeding involving the Seller. Notwithstanding
the foregoing, the Owner Trustee shall be deemed to have discharged its duties
and responsibilities hereunder and under the other documents to which the Trust
is a party to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any other document to which the Trust is a party, and the
Owner Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration Agreement.
Except as expressly provided in the documents to which the Trust is a party, the
Owner Trustee shall have no obligation to administer, service or collect the
Receivables or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Receivables.
The Owner Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Owner Trustee that shall be specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the Owner
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own bad faith; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Servicer Default that may have occurred, the duties
and obligations of the Owner Trustee shall be determined solely by the express
provisions of this Agreement, the Owner Trustee shall not be liable except for
the performance of such duties and obligations as shall be specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Owner Trustee and, in the absence of bad faith on the
part of the Owner Trustee, or manifest error, the Owner Trustee may conclusively
rely on the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions furnished to the Owner Trustee and
conforming to the requirements of this Agreement;
(ii) The Owner Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that the
Owner Trustee shall have been negligent in ascertaining the pertinent facts;
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(iii) The Owner Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken in good faith in accordance with this
Agreement or at the direction of the Certificates relating to the time, method,
and place of conducting any proceeding for any remedy available to the Owner
Trustee, or exercising any trust or power conferred upon the Owner Trustee,
under this Agreement;
(iv) The Owner Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer referred
to in clauses (i) or (ii) of Section 14.01, or of any failure by the Seller to
comply with the obligations of the Seller referred to in clause (ii) of Section
14.01, unless a Responsible Officer of the Owner Trustee receives written notice
of such failure (it being understood that knowledge of the Servicer or the
Servicer as custodian, in its capacity as agent for the Owner Trustee, is not
attributable to the Owner Trustee) from the Servicer or the Seller, as the case
may be; and
(v) Without limiting the generality of this Section or Section 15.04,
the Owner Trustee shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to therein or any
financing statement evidencing a security interest in the Receivables or the
Financed Vehicles, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing of any thereof,
(B) to see to any insurance of the Financed Vehicles or Obligors or to effect or
maintain any such insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any Lien or encumbrance of any kind
owing with respect to, assessed, or levied against, any part of the Trust, (D)
to confirm or verify the contents of any reports or certificates of the Servicer
delivered to the Owner Trustee pursuant to this Agreement believed by the Owner
Trustee to be genuine and to have been signed or presented by the proper party
or parties, or (E) to inspect the Financed Vehicles at any time or ascertain or
inquire as to the performance or observance of any of the Seller's or the
Servicer's representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the Receivable Files under this
Agreement.
The Owner Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Owner Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Owner Trustee shall be the successor to,
and be vested with the rights, duties, powers, and privileges of, the Servicer
in accordance with the terms of this Agreement. Except for actions expressly
authorized by this Agreement, the Owner Trustee shall take no action reasonably
likely to impair the security interests created or existing under any Receivable
or to impair the value of any Receivable.
SECTION 15.02. Owner Trustee's Certificate. On or as soon as practicable
after each Payment Date on which Receivables shall be (i) assigned to BVAC
pursuant to Section 7.02 or deemed to be assigned to the Seller as a result of
the application of Available Funds in respect of Defaulted Receivables pursuant
to Sections 9.04 and 9.05 or (ii) assigned to the Servicer pursuant to Section
8.07 or to the Certificateholder pursuant to Section 16.02, the Owner Trustee
shall, at the written request of the Servicer, execute a Owner Trustee's
Certificate, substantially in the form of, in the case of an assignment to BVAC,
Exhibit 1, or, in the case of an assignment to the Servicer, Exhibit 2, based on
the information contained in the Servicer's Certificate for the related
Collection Period, amounts deposited to the Collection Account, and notices
received pursuant to this Agreement, identifying the Receivables repurchased or
deemed to be repurchased by BVAC pursuant to Section 7.02 or 9.02 or purchased
by the Servicer pursuant to Section 8.07 or the Certificateholders pursuant to
Section 16.02 during such Collection Period, and shall deliver such Owner
Trustee's Certificate, accompanied by a copy of the Servicer's Certificate for
such Collection Period to BVAC or the Servicer, as the case may be. The Owner
Trustee's Certificate shall be an assignment pursuant to Section 15.03.
SECTION 15.03. Owner Trustee's Assignment of Purchased Receivables. With
respect to each Receivable repurchased by BVAC pursuant to Section 7.02, or
deemed to be so repurchased pursuant to Section 9.02, purchased by the Servicer
pursuant to Section 8.07 or the Certificateholders pursuant to Section 16.02,
the Owner Trustee shall assign, as of the last day of the Collection Period
during which such Receivable became a Defaulted Receivable or became subject to
repurchase by BVAC or purchase by the Servicer or the
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Certificateholders, without recourse, representation, or warranty, to BVAC, the
Servicer or the Certificateholders (as the case may be) all the Owner Trustee's
right, title, and interest in and to such Receivables, and all security and
documents relating thereto, such assignment being an assignment outright and not
for security. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce the Receivable, the
Owner Trustee shall, at the Servicer's expense, take such steps as the Owner
Trustee deems necessary to enforce the Receivable, including bringing suit in
its name and/or the name of the Indenture Trustee.
SECTION 15.04. Certain Matters Affecting the Owner Trustee. Except as
otherwise provided in Section 15.01:
(i) The Owner Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, Servicer's
Certificate, certificate of auditors, or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond,
or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
(ii) The Owner Trustee may consult with counsel and any written advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it under this Agreement in
good faith and in accordance with such written advice or Opinion of Counsel.
(iii) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct,
or defend any litigation under this Agreement or in relation to this Agreement,
at the request, order, or direction of any of the Certificateholders pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Owner Trustee reasonable security or indemnity reasonably
satisfactory to the Owner Trustee against the costs, expenses, and liabilities
that may be incurred therein or thereby. Nothing contained in this Agreement,
however, shall relieve the Owner Trustee of the obligations, upon the occurrence
of an Event of Default (that shall not have been cured), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(iv) The Owner Trustee shall not be liable for any action taken,
suffered, or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement.
(v) Prior to the occurrence of an Event of Default and after the curing
of all Events of Servicer Default that may have occurred, the Owner Trustee
shall not be bound to make any investigation into the facts of matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, or other paper or document, unless
requested in writing so to do by the Indenture Trustee or holders of Notes
evidencing not less than 25% of the outstanding principal balance of the Notes;
provided, however, that if the payment within a reasonable time to the Owner
Trustee of the costs, expenses, or liabilities likely to be incurred by it in
the making of such investigation shall be, in the opinion of the Owner Trustee,
not reasonably assured to the Owner Trustee by the security afforded to it by
the terms of this Agreement, the Owner Trustee may require reasonable indemnity
against such cost, expense, or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Servicer or,
if paid by the Owner Trustee, shall be reimbursed by the Servicer upon demand.
Nothing in this clause (v) shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors.
(vi) The Owner Trustee may execute any of the trusts or powers hereunder
or perform any duties under this Agreement either directly or by or through
agents or attorneys or a custodian. The Owner Trustee shall not be responsible
for any misconduct or negligence solely attributable to the acts or omissions of
the Servicer in its capacity as Servicer or custodian.
(vii) Subsequent to the sale of the Receivables by the Seller to the
Owner Trustee, the Owner Trustee shall have no duty of independent inquiry,
except as may be required by Section 15.01, and the Owner Trustee may rely upon
the representations and warranties and covenants of the Seller and the Servicer
contained in this Agreement with respect to the Receivables and the Receivable
Files.
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SECTION 15.05. Owner Trustee Not Liable for Certificates or Receivables.
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Seller or the Servicer, as the case may be, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
shall make no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of authentication
on the Certificates), or of any Receivable or related document. The Owner
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity, and enforceability of any security interest
in any Financed Vehicle or any Receivable, or the perfection and priority of
such a security interest or the maintenance of any such perfection and priority,
or for or with respect to the efficacy of the Trust or its ability to generate
the payments to be distributed to the Certificateholder or the Noteholders under
this Agreement or the Indenture, including, without limitation: the existence,
condition, location, and ownership of any Financed Vehicle; the existence and
enforceability of any physical damage insurance, lender's single interest
insurance, or credit life or disability and hospitalization insurance with
respect to any Receivable; the existence and contents of any Receivable or any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the completeness of
any Receivable; the performance or enforcement of any Receivable; the compliance
by the Seller or the Servicer with any warranty or representation made under
this Agreement or in any related document and the accuracy of any such warranty
or representation prior to the Owner Trustee's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof; any investment
of monies by the Servicer or any loss resulting therefrom (it being understood
that the Owner Trustee shall remain responsible for any Trust property that it
may hold); the acts or omissions of the Seller, the Servicer, or any Obligor; an
action of the Servicer taken in the name of the Owner Trustee; or any action by
the Owner Trustee taken at the instruction of the Servicer; provided, however,
that the foregoing shall not relieve the Owner Trustee of its obligation to
perform its duties under this Agreement. Except with respect to a claim based on
the failure of the Owner Trustee to perform its duties under this Agreement or
based on the Owner Trustee's negligence or willful misconduct, no recourse shall
be had for any claim based on any provision of this Agreement, the
Certificateholder or the Noteholders, or any Receivable or assignment thereof
against the Owner Trustee in its individual capacity, the Owner Trustee shall
not have any personal obligation, liability, or duty whatsoever to any
Certificateholder or the Noteholders or any other Person with respect to any
such claim, and any such claim shall be asserted solely against the Trust or any
indemnitor who shall furnish indemnity as provided in this Agreement. The Owner
Trustee shall not be accountable for the use or application by the Seller of any
of the Certificates or Notes or of the proceeds thereof, or for the use or
application of any funds paid to the Seller or the Servicer in respect of the
Receivables.
SECTION 15.06. Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes with
the same rights as it would have if it were not Trustee.
SECTION 15.07. Owner Trustee's and Indenture Trustee's Fees and Expenses.
(a) The Servicer shall pay to the Owner Trustee, and the Owner Trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts created by this
Agreement and in the exercise and performance of any of the Owner Trustee's
powers and duties under this Agreement and the Indenture, and the Servicer shall
pay or reimburse the Owner Trustee upon its request for all reasonable expenses,
disbursements, and advances (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) incurred or made by the Owner Trustee in accordance with any
provisions of this Agreement and the Indenture, except any such expense,
disbursement, or advance as may be attributable to its willful misfeasance,
negligence, or bad faith, and the Servicer shall indemnify the Owner Trustee
(which, for purposes of this section, shall include its directors, officers,
employees, and agents) for and hold it harmless against any loss, liability, or
expense incurred without willful misfeasance, negligence, or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the Trust, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties under this Agreement and the Indenture. Additionally, the
Seller, pursuant to Section 12.02, and the Servicer, pursuant to Section 13.02,
respectively, shall indemnify the Owner Trustee with respect to certain matters.
This indemnity shall survive the termination of this Agreement and the Indenture
or the termination of the Trust and the resignation or removal of the Owner
Trustee.
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(b) The Servicer hereby agrees to pay or reimburse the fees and
expenses of the Indenture Trustee as provided in Section 15.07 of the Indenture.
SECTION 15.08. Eligibility Requirements for Owner Trustee. The Owner
Trustee under this Agreement shall at all times be a corporation (i) having an
office in the same State as the location of the Corporate Trust Office as
specified in this Agreement; (ii) organized and doing business under the laws of
such State or the United States of America; (iii) authorized under such laws to
exercise corporate trust powers; (iv) having a net worth of at least
$50,000,000; (v) subject to supervision or examination by federal or State
authorities; and (vi) the long-term unsecured debt of which is rated at least
____ or which is approved by the Insurer and each Rating Agency. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 15.08, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Owner Trustee shall cease to be eligible in accordance with the provisions
of this Section 15.08, the Owner Trustee shall resign immediately in the manner
and with the effect specified in Section 15.09.
SECTION 15.09. Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer, with the prior written consent of the Insurer, shall
promptly appoint a successor Owner Trustee, by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Owner Trustee. If no successor Owner Trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 15.08 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation, or
liquidation, then the Servicer may remove the Owner Trustee. If it shall remove
the Owner Trustee under the authority of the immediately preceding sentence, the
Servicer shall promptly appoint a successor Owner Trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the Owner
Trustee so removed and one copy to the successor Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 15.09
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 15.10.
SECTION 15.10. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 15.09 shall execute, acknowledge, and deliver to
the Servicer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed, or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Trustee. The
predecessor Owner Trustee shall deliver to the successor Owner Trustee all
documents and statements held by it under this Agreement; and the Servicer and
the predecessor Owner Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor Owner Trustee all such rights, powers, duties,
and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 15.10 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 15.08.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 15.10, the Servicer shall mail notice of the successor of such
Trustee under this Agreement to the Indenture Trustee and to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Servicer shall fail to mail such notice
33
within 10 days after acceptance of appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense
of the Servicer.
SECTION 15.11. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion, or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 15.08, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
SECTION 15.12. Appointment of Co-Trustee or Separate Owner Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any requirements of any jurisdiction in which any part of the
Trust or any Financed Vehicle may at the time be located, the Servicer and the
Owner Trustee acting jointly shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Owner Trustee to
act as co-trustee, jointly with the Owner Trustee, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person,
in such capacity and for the benefit of the Certificateholders, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 15.12, such powers, duties, obligations, rights, and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in the case an Event of Default shall
have occurred and be continuing, the Owner Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee under this Agreement
shall be required to meet the terms of eligibility as a successor Owner Trustee
pursuant to Section 15.08 and no notice to Certificateholders of the appointment
of any co-trustee or separate trustee shall be required pursuant to Section
15.10.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee under this Agreement or as successor to the
Servicer under this Agreement), the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties, and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(ii) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(iii) The Servicer and the Owner Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request, or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XV. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Servicer.
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Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign, or be removed, all of its
estates, properties, rights, remedies, and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor Owner Trustee.
SECTION 15.13. Representations and Warranties of Owner Trustee. The Owner
Trustee shall make the following representations and warranties on which the
Seller, the Certificateholders and the Noteholders may rely:
(i) Organization and Existence. The Owner Trustee is a Delaware banking
corporation duly organized and validly existing under the laws of the State of
Delaware and authorized to engage in a banking and trust business under such
laws.
(ii) Power and Authority. The Owner Trustee has full power, authority,
and legal right to execute, deliver, and perform this Agreement, and shall have
taken all necessary action to authorize the execution, delivery, and performance
by it of this Agreement.
(iii) Duly Executed. This Agreement shall have been duly executed and
delivered by the Owner Trustee and shall constitute the legal, valid, and
binding agreement of the Owner Trustee, enforceable in accordance with its
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, liquidation, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereinafter in effect relating to the
enforcement of creditors' rights in general, as such laws would apply in the
event of a bankruptcy, insolvency, liquidation, reorganization, moratorium,
conservatorship, receivership or similar occurrence affecting the Owner Trustee,
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) as well as concepts of
reasonableness, good faith and fair dealing.
ARTICLE XVI
Termination
SECTION 16.01. Termination of the Trust. The respective obligations and
responsibilities of the Seller, the Servicer and the Owner Trustee created
hereby and the Trust created by this Agreement shall terminate upon (i) the
disposition of the Trust corpus as of the last day of any Collection Period at
the direction of the Certificateholder, at its option, pursuant to Section
16.02, or (ii) the payment to Noteholders and the Insurer of all amounts
required to be paid to them pursuant to this Agreement, the Indenture and the
Insurance Agreement (as set forth in writing by the Insurer) and the disposition
of all property held as part of the Trust; provided, however, that in no event
shall the trust created by this Agreement continue beyond the expiration of 21
years from the date as of which this Agreement is executed. The Servicer shall
promptly notify the Owner Trustee of any prospective termination pursuant to
this Section 16.01. Notwithstanding the foregoing, the Trust shall continue and
the Owner Trustee shall pursue recovery of any Preference Amounts under the
Policy and the distribution of the same to Noteholders until the Policy
terminates by its own terms.
SECTION 16.02. Optional Disposition of All Receivables. On the last day of
any Collection Period on which the Pool Balance is equal to or less than 10% of
the Original Pool Balance, any Certificateholders owning a majority of interest
in the outstanding Certificates shall have the option to cause the Owner Trustee
to sell (to the Certificateholders or any other person designated by such
Certificateholders) the corpus of the Trust at a price (the "Optional
Disposition Price") equal to the fair market value of the Receivables, but not
less than the sum of (x) 100% of the outstanding principal balance of the Notes
(including any overdue principal or interest thereon), (y) accrued and unpaid
interest on such amount computed at a rate equal to the weighted average
Contract Rate, and (z) all amounts due and owing to the Insurer under this
Agreement, the Indenture and the Insurance Agreement minus any amounts
representing payments received on the Receivables not yet applied to the
interest related thereto or to reduce the principal balance thereof. The
proceeds of such sale will be deposited into the Collection Account for
35
distribution to the Indenture Trustee (and, to the extent applicable, the
Insurer) on the next succeeding Payment Date. In connection with such
disposition, the Certificateholder is required to pay any unpaid fees and
expenses of the Owner Trustee and the Indenture Trustee that it would otherwise
have been entitled to pursuant to this Agreement. The Servicer shall notify the
Owner Trustee and the Certificateholder on or before the Determination Date if
the Pool Balance as of the end of the related Collection Period will be less
than or equal to 10% of the Original Pool Balance. The Certificateholder shall
notify the Owner Trustee on or before the Determination Date if the
Certificateholder intends to exercise its option to purchase the corpus of the
Trust pursuant to this Section 16.02. Such price shall be deposited to the
Collection Account in immediately available funds by 12:00 noon, New York City
time, on the Payment Date and, upon notice to the Owner Trustee of such deposit,
the Owner Trustee shall transfer the Receivables and the Receivable Files to the
purchaser, whereupon the Certificates shall no longer evidence any right or
interest in the Receivables or any proceeds thereof.
ARTICLE XVII
Miscellaneous Provisions
SECTION 17.01. Amendment. This Agreement may be amended by the Seller, the
Servicer and the Owner Trustee, without the consent of any of the
Certificateholders or the Noteholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement, or to add any other provisions with
respect to matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholders or the Secured Parties.
Notwithstanding anything to the contrary in this Agreement (i) no amendment
of this Agreement shall be effective without the prior written consent of the
Insurer and the holders of 51% of the outstanding Note Balances and (ii) except
as provided in the third paragraph of this Section 17.01, no amendment to this
Agreement shall be recognized or be effective without the written consent of the
Owner Trustee and receipt by the Owner Trustee of an Opinion of Counsel to the
effect that such amendment will not cause the Trust to be treated as an
association taxable as a corporation or as a publicly-traded partnership.
Promptly after the execution of any amendment or consent, the Owner Trustee
shall furnish written notification of the substance of such amendment or consent
to each Certificateholder.
It shall not be necessary for the consent of Certificateholders pursuant to
this Section 17.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Owner Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and the Opinion of Counsel referred to in Section 17.02(i)(1). The
Owner Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Owner Trustee's own rights, duties, or immunities under this
Agreement.
SECTION 17.02. Protection of Title to Trust.
(a) The Seller shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain, and
protect the interest of the Trust under this Agreement in the Receivables and in
the proceeds thereof. The Seller shall deliver (or cause to be delivered) to the
Owner Trustee and the Indenture Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee at
least 60 days' prior written notice thereof.
36
(c) The Seller and the Servicer shall give the Owner Trustee at least
60 days' prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement (in which case the
Servicer shall file or cause to be filed such amendment or continuation
statement or new financing statement). The Owner Trustee shall be permitted to
waive the 60 day notice period to any shorter period; provided that such UCC
financing statements or amendments have been filed on or before the effective
date of any such waiver. The Servicer shall at all times maintain each office
from which it shall service Receivables, and its principal executive office,
within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Owner
Trustee, the Servicer's master computer records (including any back-up archives)
that refer to a Receivable shall indicate clearly with reference to the
particular trust that such Receivable is owned by the Owner Trustee. Indication
of the Owner Trustee's ownership of a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the Receivable
shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Servicer shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Owner Trustee.
(g) The Servicer shall permit the Owner Trustee and its agents at any
time during normal business hours to inspect, audit, and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee and
the Indenture Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment thereto, an Opinion of Counsel either (a) stating
that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner Trustee in the
Receivables and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b) stating that,
in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 90-day period, either (a) stating that, in the opinion of such
counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee in the Receivables, and reciting the details
of such filings or referring to prior Opinions of Counsel in which such
details are given, or (b) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interest.
SECTION 17.03. Limitation on Rights of Certificateholders. The death or
incapacity of a Certificateholder shall not operate to terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal
37
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties to
this Agreement or any of them.
No Certificateholder shall have any right to vote (except as provided in
Section 17.01, 17.03 or 17.07) or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties to this Agreement
except as expressly set forth herein, nor shall anything in this Agreement set
forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as members of an
association; nor shall any Certificateholder be under any liability to any third
person by reason of any action taken pursuant to any provision of this
Agreement.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action, or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Owner Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and unless
also the Certificateholder requests in writing to the Owner Trustee to institute
such action, suit, or proceeding in its own name as Trustee under this Agreement
and shall have offered to the Owner Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Owner Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or refused to institute
any such action, suit, or proceeding and during such 30-day period no direction
inconsistent with such written request has been given to the Owner Trustee.
SECTION 17.04. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Delaware applicable to agreements
made and to be performed within the State of Delaware, and the obligations,
rights, and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
SECTION 17.05. Notices. All demands, notices, and communications under this
Agreement shall be in writing, personally delivered, sent by facsimile to, sent
by courier to or mailed by certified mail, return receipt requested, and shall
be deemed to have been duly given unless otherwise provided herein, upon receipt
(a) in the case of the Seller to the agent for service as specified in this
Agreement, at the following address: Bay View Securitization Corporation, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other address as shall be
designated by the Seller in a written notice to the Servicer or Trustee; (b) in
the case of the Servicer to the agent for service as specified in this
Agreement, at the following address, Bay View Acceptance Corporation, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (c) in the case of the Owner Trustee,
at the Corporate Trust Office, (d) in the case of the Insurer, at
____________________________________ and (e) in the case of the Indenture
Trustee __________________________. Unless otherwise provided herein, any notice
so mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder shall
receive such notice.
SECTION 17.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
SECTION 17.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided below or in Sections 12.03 and 13.03 and as
provided in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of the Owner Trustee and the
Certificateholders.
SECTION 17.08. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and, upon
authentication thereof by the Owner Trustee pursuant to Section 11.02,
Certificates shall be deemed fully paid.
38
SECTION 17.09. Nonpetition Covenants. Notwithstanding any prior termination
of this Agreement, the Servicer, BVAC and the Owner Trustee shall not, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Trust or the Seller, acquiesce, petition or otherwise invoke
or cause the Trust or the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Trust or the Seller under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Trust or the Seller.
SECTION 17.10. Counterparts. For the purpose of facilitating the execution
of this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.
SECTION 17.11. Third Party Beneficiary. This Agreement shall inure to the
benefit of the Insurer, the Indenture Trustee and their successors and assigns.
39
IN WITNESS WHEREOF, the parties hereto have caused this Trust and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
BAY VIEW SECURITIZATION CORPORATION,
as Seller
By:______________________________
Title: Vice President
BAY VIEW ACCEPTANCE CORPORATION,
as Servicer
By:______________________________
Title: Vice President
_________________________________,
as Owner Trustee
By:______________________________
Title: Vice President
40
Owner Trustee's Certificate
pursuant to Section 15.02
of the Trust and Servicing Agreement
________________________, as owner trustee (the "Owner Trustee") of the Bay
View ____- __ Owner Trust created pursuant to the Trust and Servicing Agreement
(the "Trust Agreement") dated as of ________________, among Bay View
Securitization Corporation, as depositor (the "Seller"), Bay View Acceptance
Corporation, as servicer (the "Servicer") and the Owner Trustee, does hereby
sell, transfer, assign, and otherwise convey to Bay View Acceptance Corporation
without recourse, representation, or warranty, all of the Owner Trustee's right,
title, and interest in and to all of the Receivables (as defined in the Trust
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which have been repurchased by the Seller pursuant to Section 7.02
and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
____________, ____.
________________________
41
Exhibit 2
Owner Trustee's Certificate
pursuant to Section 15.02
of the Trust and Servicing Agreement
________________________, as trustee (the "Owner Trustee") of the Bay View
____-__ Owner Trust created pursuant to the Trust and Servicing Agreement (the
"Trust Agreement") dated as of ________________, among Bay View Securitization
Corporation, as depositor (the "Seller"), Bay View Acceptance Corporation, as
servicer (the "Servicer") and the Owner Trustee, does hereby sell, transfer,
assign, and otherwise convey to the [Servicer or the Certificateholders],
without recourse, representation, or warranty, all of the Owner Trustee's right,
title, and interest in and to all of the Receivables (as defined in the Trust
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which have been purchased by [the Servicer pursuant to Section
8.07 or by the Certificateholders pursuant to Section 16.02], and all security
and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
____________, ____.
________________________
42
Exhibit 3
Form of Servicer's Certificate
pursuant to Sections 8.09 and 9.02
of the Trust and Servicing Agreement
SERVICER'S CERTIFICATE
EXHIBIT A
CERTIFICATE OF TRUST OF
BAY VIEW OWNER TRUST ______-____
This Certificate of Trust of Bay View Owner Trust ______-____ (the
"Trust"), dated as of ___________________, is being duly executed and filed by
_________________, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, Section
3801 et seq.).
1. Name. The name of the business trust formed hereby is BAY VIEW
OWNER TRUST __________.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware is
____________________, (Address), Attention: ________________.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
___________________________________,
not in its individual capacity but solely as owner
trustee under a Trust Agreement dated as of
______________________,
By: _________________________
Name: _______________________
Title: ______________________
43
EXHIBIT B
[Form of Certificate]
BAY VIEW ____-__ OWNER TRUST
AUTOMOBILE RECEIVABLE
BACKED CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the
property of which includes a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and used
automobiles, light-duty trucks, motorcycles, recreational vehicles and vans. The
contracts were sold to the Owner Trustee by Bay View Securitization Corporation.
(This Certificate does not represent an interest in or obligation of Bay
View Securitization Corporation or any of its affiliates. Neither this
Certificate nor the underlying Receivables, as defined below, are insured or
guaranteed by any other government agency).
NUMBER One Unit
R-1
THIS CERTIFIES THAT Bay View Securitization Corporation, a Delaware
corporation, is the registered owner of a nonassessable, fully-paid interest in
the Bay View ____-__ Owner Trust (the "Trust"), a Delaware business trust. The
Trust was created pursuant to a Trust and Servicing Agreement dated as of
________________ (the "Agreement"), among Bay View Securitization Corporation as
Seller, Bay View Acceptance Corporation, as Servicer and
________________________ (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. A copy of the Agreement may be
examined during normal business hours at the Corporate Trust Office of the Owner
Trustee by any Certificateholder upon request. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions, and conditions of the Agreement, to which Agreement the
holder of this Certificate by virtue of the acceptance hereof assents and by
which such holder is bound. The property of the Trust includes a pool of simple
and precomputed interest loan and security agreements and installment sales
contracts for new and used automobiles, light-duty trucks, motorcycles,
recreational vehicles and vans (the "Receivables"), all monies paid thereon, and
all monies due thereon, including Accrued Interest, after ________________ (but
excluding Accrued Interest paid or due before the Closing Date), security
interests in the vehicles financed thereby, certain bank accounts and the
proceeds thereof and certain other property and rights described in the
Agreement and the proceeds of the foregoing.
This Certificate represents an interest in certain assets of the Trust,
including the right to receive a portion of the collections and other amounts at
the times and in the amounts specified in the Agreement. The rights of the
Certificateholders in the assets of the Trust are subordinated to the rights of
the Noteholders as set forth in the Indenture and the Agreement.
Unless the certificate of authentication hereon shall have been executed by
a Responsible Officer of the Owner Trustee, by manual or facsimile signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose. Registration of transfer of this
Certificate to a person may not be effected unless (a) the Insurer consents to
such transfer, (b) such transfer will not adversely affect the tax treatment of
the Trust or the Notes, and (c) the Rating Agency Condition has been satisfied
with respect to such transfer.
The obligations and responsibilities created by the Agreement and the Trust
created thereby shall terminate upon the payment to Certificateholders of all
amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The holder of a majority
in interest of the outstanding Certificates may at its option cause the Owner
Trustee to sell the corpus of the Trust at a price not to be less than the price
specified in the Agreement; however, such right is exercisable only as of the
last day of a Collection Period on
44
which the Pool Balance is less than or equal to __% of the Original Pool
Balance. The Certificateholders are required to pay any unpaid fees and expenses
of the Owner Trustee and in connection with such disposition.
Although this Certificate summarizes certain provisions of the Agreement,
this Certificate does not purport to summarize the Agreement and reference is
made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Owner Trustee. In the event of any inconsistency
or conflict between the terms of this Certificate and the terms of the
Agreement, the terms of the Agreement shall control. By acceptance of this
Certificate, the holder agrees to be bound by the terms of the Agreement,
including the agreement to treat the Trust as a partnership for income tax
purposes and the Certificates as an equity interest therein.
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in its
individual capacity has caused this Certificate to be duly executed.
Dated:______________________
BAY VIEW ____-__ OWNER TRUST
By ________________________, solely in its
capacity as Owner Trustee
By ________________________,
Responsible Officer
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the Within-mentioned Agreement.
___________________________,
as Owner Trustee
By ________________________,
Signatory
Dated:______________________
45
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or typewrite name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing Attorney to transfer said Certificate on the books
of the Certificate Registrar, with full power of substitution in the premises.
Dated:______________________
*
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must
be guaranteed by a member of the New York Stock Exchange or a commercial
bank, trust company savings bank or other savings and loan institution.
Schedule A
to the Trust and
Servicing Agreement
SCHEDULE OF RECEIVABLES
Seller Name of
Account Number Obligor Amount Financed
(as of the Cutoff Date)
$
A COPY OF THE SCHEDULE OF RECEIVABLES, INCLUDING THE
ABOVE CAPTIONED INFORMATION WITH RESPECT TO EACH
RECEIVABLE, WAS DELIVERED TO THE OWNER TRUSTEE WITH A
COUNTERPART OF THE TRUST AND SERVICING AGREEMENT.
46
Schedule B
to the Trust and
Servicing Agreement
1. Location of Receivables:
Bay View Acceptance Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
47