Exhibit 10.2
EXECUTION COPY
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SALE AND SERVICING
AGREEMENT
Among
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but solely as owner
trustee of M&I Auto Loan Trust 2002-1
as
Owner Trustee
M&I DEALER AUTO SECURITIZATION, LLC
as
Seller
M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ BANK
as Servicer
and
BANK ONE, NATIONAL ASSOCIATION
as Indenture Trustee
Dated as of October 10, 2002
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2002-1 Sale and Servicing Agreement
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS. ......................................................................... 1
SECTION 1.1. Definitions ............................................................ 1
SECTION 1.2. Other Interpretive Provisions .......................................... 1
ARTICLE II. CONVEYANCE OF RECEIVABLES. ........................................................... 2
SECTION 2.1. Conveyance of Receivables on the Closing Date .......................... 2
SECTION 2.2. Conveyance of Receivables on each Funding Date ......................... 2
SECTION 2.3. Sale of Receivables .................................................... 3
ARTICLE III. THE RECEIVABLES ...................................................................... 4
SECTION 3.1. Representations and Warranties as to Each Receivable on
the Closing Date ....................................................... 4
SECTION 3.2. Representations and Warranties as to Each Subsequent
Receivable on the Related Funding Date ................................. 8
SECTION 3.3. Purchase by Servicer upon Breach of Representation or
Warranty ............................................................... 8
SECTION 3.4. Custodian of Receivable Files .......................................... 9
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES .......................................... 11
SECTION 4.1. Duties of Servicer ..................................................... 11
SECTION 4.2. Collection of Receivable Payments ...................................... 12
SECTION 4.3. Realization upon Receivables ........................................... 13
SECTION 4.4. Physical Damage Insurance .............................................. 14
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles ................. 14
SECTION 4.6. Covenants of Servicer .................................................. 14
SECTION 4.7. Purchase by Servicer upon Breach of Covenant ........................... 15
SECTION 4.8. Servicing Fee .......................................................... 15
SECTION 4.9. Servicer's Report ...................................................... 15
SECTION 4.10. Annual Statement as to Compliance; Notice of Default ................... 16
SECTION 4.11. Annual Independent Certified Public Accountants' Report ................ 16
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables .................................................. 17
SECTION 4.13. Reports to the Rating Agencies ......................................... 17
SECTION 4.14. Servicer Expenses ...................................................... 17
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TABLE OF CONTENTS
(continued)
Page
ARTICLE V. DISTRIBUTIONS; ACCOUNTS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS; ADVANCES .................... 17
SECTION 5.1. Establishment of Accounts .............................. 17
SECTION 5.2. Collections ............................................ 19
SECTION 5.3. Pre-Funding Account .................................... 20
SECTION 5.4. Additional Deposits .................................... 20
SECTION 5.5. Distributions .......................................... 20
SECTION 5.6. Statements to Certificateholders and Noteholders ....... 22
SECTION 5.7. Net Deposits ........................................... 23
SECTION 5.8. Reserve Account ........................................ 23
SECTION 5.9. Monthly Advances ....................................... 23
ARTICLE VI. SELLER ........................................................... 24
SECTION 6.1. Representations of Seller .............................. 24
SECTION 6.2. Continued Existence .................................... 25
SECTION 6.3. Liability of Seller; Indemnities ....................... 26
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller ................................. 26
SECTION 6.5. Limitation on Liability of Seller and Others ........... 27
SECTION 6.6. Seller May Own Certificates or Notes ................... 27
SECTION 6.7. Security Interest ...................................... 27
SECTION 6.8. Purchase of Receivables on a Funding Date .............. 27
ARTICLE VII. SERVICER ......................................................... 27
SECTION 7.1. Representations of Servicer ............................ 27
SECTION 7.2. Indemnities of Servicer ................................ 29
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer ............................... 30
SECTION 7.4. Limitation on Liability of Servicer and Others ......... 30
SECTION 7.5. M&I Bank Not To Resign as Servicer ..................... 31
SECTION 7.6. Existence .............................................. 31
SECTION 7.7. Servicer May Own Notes or Certificates ................. 31
ARTICLE VIII. SERVICER TERMINATION EVENTS ...................................... 32
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TABLE OF CONTENTS
(continued)
Page
SECTION 8.1. Servicer Termination Event ................................................. 32
SECTION 8.2. Appointment of Successor ................................................... 33
SECTION 8.3. Payment of Servicing Fee ................................................... 34
SECTION 8.4. Notification to Noteholders and Certificateholders ......................... 34
SECTION 8.5. Waiver of Past Defaults .................................................... 34
ARTICLE IX. TERMINATION ......................................................................... 34
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice ................... 34
ARTICLE X. MISCELLANEOUS PROVISIONS ............................................................ 35
SECTION 10.1. Amendment .................................................................. 35
SECTION 10.2. Protection of Title to Trust Property ...................................... 36
SECTION 10.3. Notices .................................................................... 37
SECTION 10.4. Assignment ................................................................. 38
SECTION 10.5. Litigation and Indemnities ................................................. 38
SECTION 10.6. Limitations on Rights of Others ............................................ 38
SECTION 10.7. Severability ............................................................... 39
SECTION 10.8. Separate Counterparts ...................................................... 39
SECTION 10.9. Headings ................................................................... 39
SECTION 10.10. Governing Law .............................................................. 39
SECTION 10.11. Assignment to Indenture Trustee ............................................ 39
SECTION 10.12. Nonpetition Covenant ....................................................... 39
SECTION 10.13. Limitation of Liability .................................................... 39
SECTION 10.14. Further Assurances ......................................................... 40
SECTION 10.15. No Waiver; Cumulative Remedies ............................................. 40
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TABLE OF CONTENTS
(continued)
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivables
Schedule C - Perfection Representations
EXHIBITS
Exhibit A - Form of Servicer's Report
Exhibit B - Form of Funding Date Certificate
APPENDIX
Appendix X - Definitions
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SALE AND SERVICING AGREEMENT dated as of October 10, 2002, (this
"Agreement") among THE BANK OF NEW YORK (DELAWARE), not in its individual
capacity but solely as owner trustee of M&I Auto Loan Trust 2002-1, a Delaware
common law trust ("Owner Trustee"), M&I DEALER AUTO SECURITIZATION, LLC, a
Delaware limited liability company (in its capacity as Seller, "Seller"), M&I
▇▇▇▇▇▇▇▇ & ILSLEY BANK, a banking corporation organized under the laws of the
State of Wisconsin ("M&I Bank" and in its capacity as servicer, "Servicer") and
BANK ONE, NATIONAL ASSOCIATION, a national banking association (in its capacity
as indenture trustee, "Indenture Trustee").
WHEREAS, Owner Trustee desires to purchase from Seller a portfolio of
Receivables arising in connection with Motor Vehicle Loans secured by new and
used automobiles and light trucks purchased from motor vehicle dealers by M&I
Bank or its Affiliates some of which have been sold to Seller by Bank One,
National Association, a national banking association (on behalf of Preferred
Receivables Funding Corporation) ("Bank One"), by M&I Northwoods III LLC, a
Delaware limited liability company ("Northwoods") and by M&I Bank under the
Purchase Agreement;
WHEREAS, Seller is willing to sell such receivables to Owner Trustee; and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
SECTION 1.1. Definitions. Capitalized terms are used in this Agreement as
defined in Appendix X to this Agreement.
SECTION 1.2. Other Interpretive Provisions. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC as in effect in the relevant jurisdiction and not otherwise
defined in this Agreement are used as defined in that Article; (c) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (d)
references to any Article, Section, Schedule, Appendix or Exhibit are references
to Articles, Sections, Schedules, Appendices and Exhibits in or to this
Agreement and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (e) the
term "including" means "including without limitation"; (f) except as otherwise
expressly provided herein, references to any law or regulation refer to that law
or regulation as amended from time to time and include any successor law or
regulation; (g) references to any Person include that Person's successors and
assigns; and (h) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
2002-1 Sale and Servicing Agreement
ARTICLE II. CONVEYANCE OF RECEIVABLES.
SECTION 2.1. Conveyance of Receivables on the Closing Date. In
consideration of Owner Trustee's delivery to, or upon the order of, Seller of
the Notes and the Certificates, in aggregate principal amounts equal to the
initial principal amounts of the Notes and the initial Certificate Percentage
Interests, respectively, on the Closing Date, Seller does hereby sell, transfer,
assign, set over and otherwise convey to Owner Trustee, without recourse,
subject to the obligations herein (collectively, the "Initial Trust Property"):
(a) all right, title and interest of Seller in and to the Receivables
identified on the Schedule of Receivables delivered on the Closing Date, and all
moneys received thereon after the Initial Cutoff Date;
(b) all right, title and interest of Seller in the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of Seller in the Financed Vehicles and any other property that
shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the
Receivables from claims on any Insurance Policies covering Financed Vehicles or
the Obligors;
(d) rebates of premiums relating to Insurance Policies and rebates of
other items such as extended warranties financed under the Receivables, in each
case, to the extent the Servicer would, in accordance with its customary
practices, apply such amounts to the Principal Balance of the related
Receivable;
(e) the interest of Seller in any proceeds from (i) any Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement, (ii) a default by
an Obligor resulting in the repossession of the Financed Vehicle under the
applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other rights
relating to the Receivables under Dealer Agreements;
(f) all right, title and interest in all funds on deposit from time to
time in the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);
(g) all right, title and interest of Seller under the Purchase
Agreement;
(h) all right, title and interest of Seller in any instrument or
document relating to the Receivables; and
(i) the proceeds of any and all of the foregoing.
SECTION 2.2. Conveyance of Receivables on each Funding Date. In
consideration of the payment of the purchase price of the Subsequent Receivables
from the Pre-Funding Account, on each Funding Date Seller does hereby sell,
transfer, assign, set over and otherwise convey to Owner Trustee, without
recourse, subject to the obligations herein (collectively, the "Subsequent Trust
Property"; and together with the Initial Trust Property, the "Trust Property"):
2 2002-1 Sale and Servicing Agreement
(a) all right, title and interest of Seller in and to the Subsequent
Receivables identified on the Schedule of Receivables delivered on each related
Funding Date, and all moneys received thereon after the Subsequent Cutoff Date;
(b) all right, title and interest of Seller in the security interests in
the Financed Vehicles granted by Obligors pursuant to the Subsequent Receivables
and any other interest of Seller in the Financed Vehicles and any other property
that shall secure the Subsequent Receivables;
(c) the interest of Seller in any proceeds with respect to the
Subsequent Receivables from claims on any Insurance Policies covering Financed
Vehicles or the Obligors;
(d) rebates of premiums relating to Insurance Policies and rebates of
other items such as extended warranties financed under the Subsequent
Receivables, in each case, to the extent the Servicer would, in accordance with
its customary practices, apply such amounts to the Principal Balance of the
related Subsequent Receivable;
(e) the interest of Seller in any proceeds from (i) any Subsequent
Receivable repurchased by a Dealer, pursuant to a Dealer Agreement, as a result
of a breach of representation or warranty in the related Dealer Agreement, (ii)
a default by an Obligor resulting in the repossession of the Financed Vehicle
under the applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other
rights relating to the Subsequent Receivables under Dealer Agreements;
(f) all right, title and interest in all funds on deposit from time to
time in the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);
(g) all right, title and interest of Seller under the Purchase
Agreement;
(h) all right, title and interest of Seller in any instrument or
document relating to the Subsequent Receivables; and
(i) the proceeds of any and all of the foregoing.
The purchase of the Subsequent Receivables on each Funding Date shall be
made in accordance with the Purchase Agreement and this Agreement. On each
Funding Date (a) M&I Bank will transfer and assign all of its right, title and
interest in and to the Receivables and other Purchased Assets to the Seller, as
purchaser, (b) the Seller will sell all of its right, title and interest in and
to the Receivables and other Trust Property to the Owner Trustee, and (c) the
Owner Trustee will grant all of its right, title and interest in and to the
Receivables and other Trust Property to the Indenture Trustee for the benefit of
the Noteholders. The Subsequent Receivables transferred on each Funding Date and
the Receivables transferred on the Closing Date are collectively referred to
herein as the "Receivables".
SECTION 2.3. Sale of Receivables. It is the express intention of Seller
and Owner Trustee that:
3 2002-1 Sale and Servicing Agreement
(a) the assignment and transfer herein contemplated constitute a sale
of the Receivables and the other Trust Property described above, conveying good
title thereto free an clear of any Liens, encumbrances, security interests or
rights of other Persons, from Seller to Owner Trustee; and
(b) the Receivables and the other Trust Property described above not be
a part of Seller's estate in the event of a bankruptcy or insolvency of Seller.
If, notwithstanding the intention of Seller and Owner Trustee, such
conveyance is deemed to be a pledge in connection with a financing or is
otherwise deemed not to be a sale, Seller hereby grants, and the parties intend
that Seller shall have granted, to Owner Trustee a first priority perfected
security interest in all of Seller's right, title and interest in the items of
the Trust Property and all proceeds of the foregoing, and that this Agreement
shall constitute a security agreement under applicable law and Owner Trustee
shall have all of the rights and remedies of a secured party and creditor under
the UCC as in force in the relevant jurisdictions.
ARTICLE III. THE RECEIVABLES.
SECTION 3.1. Representations and Warranties as to Each Receivable on the
Closing Date. Servicer hereby makes the following representations and warranties
on the Closing Date as to each Receivable conveyed by it to Owner Trustee
hereunder on which Owner Trustee shall rely in acquiring the Receivables. Unless
otherwise indicated, such representations and warranties shall speak as of the
Closing Date, but shall survive the transfer and assignment of the Receivables
to Owner Trustee and the pledge thereof to Indenture Trustee pursuant to the
Indenture.
(a) Characteristics of Receivables. The Receivable has been fully and
properly executed by the parties thereto and (i) has been originated by a Dealer
in the ordinary course of such Dealer's business to finance the retail sale by a
Dealer of the related Financed Vehicle and has been purchased by M&I Bank,
Dealer Finance or their predecessors in interest in the ordinary course of their
business, (ii) was underwritten in accordance with M&I Bank's underwriting
standards, (iii) is secured by a valid, subsisting, binding and enforceable
first priority perfected security interest in favor of Dealer Finance or M&I
Bank in the Financed Vehicle (subject to administrative delays and clerical
errors on the part of the applicable government agency and to any statutory or
other Lien arising by operation of law after the Closing Date which is prior to
such security interest), which security interest is assignable together with
such Receivable, and has been so assigned to Seller, and subsequently assigned
to Owner Trustee pursuant to the Sale and Servicing Agreement, and pledged to
Indenture Trustee pursuant to the Indenture, (iv) contains customary and
enforceable provisions such that the rights and remedies of the holder thereof
are adequate for realization against the collateral of the benefits of the
security, (v) provided, at origination, for level monthly payments (provided
that the amount of the first or last payment may be minimally different), which
fully amortize the Initial Principal Balance over the original term, (vi)
provides for interest at the Contract Rate specified in the Schedule of
Receivables, (vii) was originated in the United States and (viii) constitutes
"chattel paper" as defined in the UCC.
4 2002-1 Sale and Servicing Agreement
(b) Individual Characteristics. The Receivables have the following
individual characteristics as of the Initial Cutoff Date (i) each Receivable is
secured by a Motor Vehicle; (ii) each Receivable has a Contract Rate of no less
than 5.50% and not more than 16.76%; (iii) each Receivable had an original term
to maturity of not more than 72 months and not less than 12 months and each
Receivable has a remaining term to maturity, as of the Initial Cutoff Date, of
six months or more; (iv) each Receivable had an Initial Principal Balance less
than or equal to $124,365.69; (v) each Receivable has a Cutoff Date Principal
Balance of greater than or equal to $513.79; (vi) no Receivable has a scheduled
maturity date later than September 21, 2009; (vii) no Receivable was more than
29 days past due as of the Cutoff Date; (viii) no Financed Vehicle was noted in
the related records of M&I Bank as being the subject of any pending bankruptcy
or insolvency proceeding as of the Initial Cutoff Date; (ix) no Receivable is
subject to a force placed Physical Damage Insurance Policy on the related
Financed Vehicle; (x) each Receivable is a Simple Interest Receivable; and (xi)
the Dealer of the Financed Vehicle has no participation in, or other right to
receive, any proceeds of such Receivable. The Receivables were selected using
selection procedures that were not intended by M&I Bank or Dealer Finance to be
adverse to the Seller.
(c) Schedule of Receivables. The information with respect to each
Receivable set forth in the Schedule of Receivables delivered on the Closing
Date, including (without limitation) the account number, the Cutoff Date
Principal Balance, the maturity date and the Contract Rate, was true and correct
in all material respects as of the close of business on the Cutoff Date.
(d) Compliance with Law. The Receivable and the sale of the related
Financed Vehicle complied at the time it was originated or made, and will comply
as of the Closing Date, in all material respects with all requirements of
applicable federal, state and local laws, and regulations thereunder, including,
to the extent applicable, usury laws, the Federal Truth in Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Federal Trade
Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Fair Debt Collection
Practices Act, Federal Reserve Board Regulations B and Z and any other consumer
credit, consumer protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable in
all material respects by the holder thereof in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally, and the
Receivable is not subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury.
(f) Lien in Force. The Receivable has not been satisfied, subordinated
or rescinded and M&I Bank or Dealer Finance has not taken any action which would
have the effect of releasing the related Financed Vehicle from the Lien granted
by the Receivable in whole or in part.
(g) No Amendment or Waiver. No material provision of the Receivable has
been amended, waived, altered or modified in any respect, except such waivers as
would be permitted under the Sale and Servicing Agreement and as are reflected
in the Receivable File, and no
5 2002-1 Sale and Servicing Agreement
amendment, waiver, alteration or modification causes such Receivable not to
conform to the other representations or warranties contained in this Section
3.1.
(h) No Liens. There are no Liens or claims, including Liens for work,
labor, materials or unpaid state or federal taxes, relating to the Financed
Vehicle securing the Receivable, that are or may be prior to or equal to the
Lien granted by the Receivable.
(i) No Default. Except for payment delinquencies continuing for a
period of less than 30 days as of the Initial Cutoff Date, no default, breach,
violation or event permitting acceleration under the terms of the Receivable
exists and no continuing condition that with notice or lapse of time, or both,
would constitute a default, breach, violation or event permitting acceleration
under the terms of the Receivable has arisen.
(j) Insurance. The Receivable requires the Obligor to insure the
Financed Vehicle under a Physical and Damage Insurance Policy, pay the premiums
for such insurance and keep such insurance in full force and effect.
(k) Good Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Seller to Owner Trustee and that the beneficial interest in and title to the
Receivables not be part of the Seller's estate in the event of the filing of a
bankruptcy petition or insolvency proceeding by or against the Seller under any
bankruptcy or insolvency law. No Receivable has been sold, transferred,
assigned, or pledged (i) by M&I Bank to any other Person other than Northwoods
or the Seller, (ii) by Northwoods to any other person other than Bank One (as
agent on behalf of PREFCO) or the Seller, (iii) by Bank One (as agent on behalf
of PREFCO) to any other person other than the Seller, and (iv) 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 the
Receivable free and clear of any Lien and had full right and power to transfer
and assign the Receivable to Owner Trustee and immediately upon the transfer and
assignment of the Receivable to Owner Trustee, Owner Trustee shall have good and
marketable title to the Receivable, free and clear of any Lien; and Owner
Trustee's interest in the Receivable resulting from the transfer has been
perfected under the UCC. All filings (including UCC filings) necessary in any
jurisdiction, to give Owner Trustee a first priority perfected ownership
interest in the Receivables, and to give Indenture Trustee a first priority
perfected security interest therein, shall have been presented to Indenture
Trustee for filing in the appropriate filing offices. Upon such filing by the
Indenture Trustee, the Indenture Trustee will have a first priority perfected
security interest in the Receivables.
(l) Obligations. M&I Bank has duly fulfilled all material obligations
on its part to be fulfilled under, or in connection with, the Receivable.
(m) Possession. There is only one original executed Receivable, and
immediately prior to the Closing Date, M&I Bank or one of its Affiliates will
have possession of such original executed Receivable.
(n) No Government Obligor. The Obligor on the Receivable is not the
United States of America or any state thereof or any local government, or any
agency, department, political
6 2002-1 Sale and Servicing Agreement
subdivision or instrumentality of the United States of America or any state
thereof or any local government.
(o) Marking Records. By the Closing Date, M&I Bank shall have caused
the portions of M&I Bank's electronic master record of Motor Vehicle Loans
relating to the Receivables to be clearly and unambiguously marked to show that
the Receivable is owned by the Owner Trustee in accordance with the terms of
this Agreement.
(p) No Assignment. As of the Closing Date neither M&I Bank nor any of
its Affiliates shall have taken any action to convey any right to any Person
that would result in such Person having a right to payments received under the
Insurance Policies or Dealer Agreements, or payments due under the Receivable,
that is senior to, or equal with, that of the Owner Trustee.
(q) Lawful Assignment. The Receivable has not been originated in, and
is not subject to the laws of, any jurisdiction under which the sale, transfer
or assignment of such Receivable hereunder or pursuant to transfers of the Notes
or Certificates are unlawful, void or voidable. Neither M&I Bank nor any of its
Affiliates has entered into any agreement with any Obligor that prohibits,
restricts or conditions the assignment of any portion of the Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Receivable is in
effect whereby the Dealer warrants title to the Motor Vehicle and indemnifies
Dealer Finance and its assigns against the unenforceability of each Receivable
sold thereunder, and the rights of Dealer Finance thereunder, with regard to the
Receivable sold hereunder, have been validly assigned to and are enforceable
against the Dealer by the Seller, along with any Dealer Recourse.
(s) Composition of Receivable. No Receivable has a Principal Balance
which includes capitalized interest, late charges or amounts attributable to the
payment of the premium for any Physical Damage Insurance Policy.
(t) Database File. The information included with respect to each
Receivable in the database file delivered pursuant to Section 4.9(b) of this
Agreement is accurate and complete in all material respects.
(u) No Bankruptcies. No Obligor on any Receivable was noted in the
related Receivable File as having filed for bankruptcy in a proceeding which
remained undischarged as of the Initial Cutoff Date.
(v) Amounts. The Original Pool Balance was $432,770,483.68.
(w) Aggregate Characteristics. The Receivables had the following
characteristics in the aggregate as of the Initial Cutoff Date: (i)
approximately 44.37% of the Original Pool Balance was attributable to loans for
purchases of new Financed Vehicles, and approximately 55.63% of the Original
Pool Balance was attributable to loans for purchases of used Financed Vehicles;
(ii) approximately 22.21% of the Original Pool Balance was attributable to
Receivables the mailing addresses of the Obligors with respect to which are
located in the State of Minnesota, 56.54% of the Original Pool Balance was
attributable to Receivables the mailing addresses of the Obligors with respect
to which are located in the State of Wisconsin and no other state accounts for
more than 10% of the Original Pool Balance; (iii) the weighted average
7 2002-1 Sale and Servicing Agreement
Contract Rate of the Receivables was 7.32%; (iv) there are 32,439 Receivables
being conveyed by M&I Bank to the Owner Trustee; (v) the average Cutoff Date
Principal Balance of the Receivables was $13,341.06; (vi) the weighted average
original term and weighted average remaining term of the Receivables were 59.94
months and 50.23 months, respectively; and (vii) 100 % of the Receivables (other
than those Receivables that have been paid ahead as of the Initial Cutoff Date)
have their next scheduled payment date in either September, October or November
of 2002.
(x) Perfection Representations. The Perfection Representations shall be
a part of this Agreement.
SECTION 3.2. Representations and Warranties as to Each Subsequent
Receivable on the Related Funding Date. Servicer shall make the representations
and warranties on each Funding Date as to each Subsequent Receivable conveyed by
it to Owner Trustee hereunder on which Owner Trustee shall rely in acquiring the
Subsequent Receivables in the form of Exhibit B attached hereto. Unless
otherwise indicated, such representations and warranties shall speak as of the
related Funding Date, but shall survive the transfer and assignment of the
Subsequent Receivables to Owner Trustee and the pledge thereof to Indenture
Trustee pursuant to the Indenture.
SECTION 3.3. Purchase by Servicer upon Breach of Representation or
Warranty. Seller, Servicer, Indenture Trustee or Owner Trustee, as the case may
be, shall inform the other parties to this Agreement promptly, in writing, upon
the discovery (or, with respect to the Indenture Trustee or Owner Trustee, upon
actual knowledge of a Responsible Officer) of any breach or failure to be true
of the representations or warranties made by the Servicer in Section 3.1;
provided that such breach or failure materially and adversely affects the
interests of the Owner Trustee and the Holders in any Receivables; and provided
further that the failure to give such notice shall not affect any obligation of
the Servicer. If the breach or failure shall not have been cured by the last day
of the Collection Period which includes the 60th day (or if the Servicer elects,
the 30th day) after the date on which Servicer becomes aware of, or receives
written notice from Owner Trustee or Indenture Trustee of, such breach or
failure, and such breach or failure materially and adversely affects the
interests of Owner Trustee and the Holders in any Receivable, the Servicer shall
purchase each such affected Receivable from Owner Trustee as of such last day of
such Collection Period at a purchase price equal to the Purchase Amount for such
Receivable as of such last day of such Collection Period, which amount shall be
deposited in the Collection Account. Notwithstanding the foregoing, any such
breach or failure with respect to the representations and warranties contained
in Section 3.1 will not be deemed to have such a material and adverse effect
with respect to a Receivable if the facts resulting in such breach or failure do
not affect the ability of Owner Trustee to receive and retain payment in full on
such Receivable. In consideration of the purchase of a Receivable hereunder, the
Servicer shall remit the Purchase Amount of such Receivable, no later than the
close of business on the next Deposit Date, in the manner specified in Section
5.4. The sole remedy (except as provided in Section 7.2 of this Agreement) of
the Owner Trustee, the Indenture Trustee or the Holders with respect to a breach
or failure to be true of the representations or warranties made by Servicer
pursuant to Section 3.1 shall be to require the Servicer to purchase Receivables
pursuant to this Section 3.3; provided that this Section 3.3 shall not limit the
right of
8 2002-1 Sale and Servicing Agreement
the Servicer, Owner Trustee or Indenture Trustee to enforce (or to cause Seller
to enforce) the obligation of M&I Bank pursuant to the Purchase Agreement.
With respect to all Receivables purchased pursuant to this Section 3.3,
Owner Trustee shall assign to the Servicer without recourse, representation or
warranty all of Owner Trustee's right, title and interest in and to such
Receivables and all security and documents, relating thereto.
SECTION 3.4. Custodian of Receivable Files. (a) Custody. To assure
uniform quality in servicing the Receivables and to reduce administrative costs,
Owner Trustee, upon the execution and delivery of this Agreement, revocably
appoints Custodian, as agent, and Custodian accepts such appointment, to act as
agent on behalf of Owner Trustee to maintain custody of the following documents
or instruments, which are hereby constructively delivered to Owner Trustee with
respect to each Receivable (collectively, a "Receivable File"):
(i) the fully executed original Receivable;
(ii) the original credit application, fully executed by the
Obligor or a photocopy thereof, or a record thereof on a computer file,
diskette or on microfiche;
(iii) the original certificate of title or confirmation of
security interest, or such other documents as M&I Bank or its Affiliates
keeps on file, in accordance with its customary procedures, evidencing
the security interest of M&I Bank or Dealer Finance in the Financed
Vehicle;
(iv) originals or true copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the Receivable
or a photocopy thereof, or a record thereof on a computer file, diskette
or on microfiche; and
(v) any and all other documents or electronic records that M&I
Bank or its Affiliates, keep on file, in accordance with their customary
procedures, relating to the Receivable, any Insurance Policies, the
Obligor or the Financed Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall hold the
Receivable Files as agent on behalf of Owner Trustee and maintain such accurate
and complete accounts, records and computer systems pertaining to each
Receivable as shall enable Servicer and Owner Trustee to comply with the terms
and provisions of this Agreement applicable to them. In performing its duties as
Custodian hereunder, Custodian shall act with reasonable care, exercising the
degree of skill, attention and care that Custodian exercises with respect to
receivable files relating to other similar motor vehicle loans owned and/or
serviced by Custodian and that is consistent with industry standards. In
accordance with its customary practice with respect to its retail installment
sale contracts, Custodian 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, and shall maintain the
Receivable Files in such a manner as shall enable the Owner Trustee and the
Indenture Trustee to verify, if the Owner Trustee or the Indenture Trustee so
elects, the accuracy of the record keeping of Custodian. Custodian shall
promptly report to Owner Trustee any failure on its part to hold the Receivable
Files and maintain its accounts, records and computer systems as herein
provided, and promptly
9 2002-1 Sale and Servicing Agreement
take appropriate action to remedy any such failure. Custodian hereby
acknowledges receipt of the Receivable File for each Receivable listed on the
Schedule of Receivables. Nothing herein shall be deemed to require Owner
Trustee, Owner Trustee or Indenture Trustee to verify the accuracy of the record
keeping of the Custodian.
(c) Maintenance of and Access to Records. Custodian shall maintain each
Receivable File at the location specified in Schedule B to this Agreement, or at
such other office of Custodian within the United States (or, in the case of any
successor Custodian, within the State in which its principal place of business
is located) as shall be specified to Owner Trustee by 30 days' prior written
notice. Custodian shall make available to Owner Trustee, Indenture Trustee and
their respective agents (or, when requested in writing by Owner Trustee or
Indenture Trustee, their respective attorneys or auditors) the Receivable Files
and the related accounts, records and computer systems maintained by Custodian
at such times as Owner Trustee or Indenture Trustee shall instruct for purposes
of inspecting, auditing or making copies of abstracts of the same, but only upon
reasonable notice and during the normal business hours at the respective offices
of Custodian.
(d) Release of Documents. Upon written instructions from Indenture
Trustee (or, if no Notes are then Outstanding, Owner Trustee), Custodian shall
release any document in the Receivable Files to Indenture Trustee or Owner
Trustee or its respective agent or designee, as the case may be, at such place
or places as Indenture Trustee or Owner Trustee may designate, as soon
thereafter as is practicable. Any document so released shall be handled by
Indenture Trustee or Owner Trustee with due care and returned to Custodian for
safekeeping as soon as Indenture Trustee or Owner Trustee or its respective
agent or designee, as the case may be, shall have no further need therefor.
(e) Title to Receivables. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time have
or in any way attempt to assert any interest in such Receivable File or the
related Receivable, other than solely for the purpose of collecting or enforcing
the Receivable for the benefit of Owner Trustee and that the entire equitable
interest in such Receivable and the related Receivable File shall at all times
be vested in Owner Trustee.
(f) Instructions; Authority to Act. Custodian shall be deemed to have
received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer of Indenture
Trustee or Owner Trustee, as applicable. A certified copy of excerpts of certain
resolutions of the Board of Directors of Indenture Trustee or Owner Trustee, as
applicable, shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by Custodian of written notice to the contrary given by Indenture
Trustee or Owner Trustee, as applicable.
(g) Custodian's Indemnification. Subject to Section 10.5, Custodian
shall indemnify and hold harmless Owner Trustee (individually and in such
capacity) and Indenture Trustee (individually and in such capacity), and each of
their respective officers, directors, employees and agents and the Holders from
and against any and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses (including reasonable legal fees and expenses if
any) of any kind whatsoever that may be imposed on, incurred or asserted against
10 2002-1 Sale and Servicing Agreement
Owner Trustee, Indenture Trustee or the Holders as the result of any act or
omission of Custodian relating to the maintenance and custody of the Receivable
Files; provided that Custodian shall not be liable hereunder to the Owner
Trustee or Indenture Trustee to the extent that such liabilities, obligations,
losses, compensatory damages, payments, costs or expenses result from the
willful misfeasance, bad faith or negligence of Owner Trustee or Indenture
Trustee, as the case may be. Indemnification under this subsection (g) shall
survive termination of this Agreement and the resignation or removal of Owner
Trustee or Indenture Trustee, as the case may be. If Custodian shall have made
any indemnity payments to Owner Trustee or Indenture Trustee pursuant to this
Section 3.4 and Owner Trustee or Indenture Trustee thereafter shall collect any
of such amounts from Persons other than Custodian, Owner Trustee or Indenture
Trustee, as the case may be, shall, as soon as practicable following such
receipt thereof, repay such amounts to Custodian, without interest.
(h) Effective Period and Termination. 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 subsection (h). If
Servicer shall resign as Servicer in accordance with Section 7.5 or if all of
the rights and obligations of Servicer shall have been terminated under Section
8.1, the appointment of Servicer as Custodian hereunder may be terminated by the
Owner Trustee or Indenture Trustee or by the Holders of Notes evidencing not
less than 25% of the aggregate Outstanding Amount of the Notes of the
Controlling Note Class (or, if no Notes are then Outstanding, the Holders of
Certificates representing not less than 50% of the Certificate Percentage
Interests), in each case in the same manner as Owner Trustee or Indenture
Trustee or such Holders may terminate the rights and obligations of Servicer
under Section 8.1. As soon as practicable after any termination of such
appointment Servicer shall deliver, or cause to be delivered, the Receivable
Files to Indenture Trustee or Owner Trustee, as applicable, or its respective
agent or designee at such place or places as Indenture Trustee or Owner Trustee,
as applicable, may reasonably designate. Notwithstanding any termination of
Servicer as Custodian hereunder (other than in connection with a termination
resulting from the termination of Servicer, as such, pursuant to Section 8.1),
from and after the date of such termination, and for so long as Servicer is
acting as such pursuant to this Agreement, Indenture Trustee shall provide, or
cause the successor Custodian to provide, access to the Receivable Files to
Servicer, at such times as Servicer shall reasonably request, for the purpose of
carrying out its duties and responsibilities with respect to the servicing of
the Receivables hereunder.
(i) Delegation. Custodian may, at any time without notice or consent,
delegate any or all of its duties under the Basic Documents to any Affiliate;
provided that no such delegation shall relieve Custodian of its responsibility
with respect to such duties and Custodian shall remain obligated and liable to
Owner Trustee and the Holders for its duties hereunder as if Custodian alone
were performing such duties.
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES.
SECTION 4.1. Duties of Servicer. (a) Servicer is hereby authorized to
act as agent for Owner Trustee and in such capacity shall manage, service,
administer and make collections on the Receivables (other than Purchased
Receivables), and perform the other actions required by Servicer under this
Agreement, with reasonable care. Without limiting the standard set forth in the
preceding sentence, Servicer shall use a degree of skill, attention and care
that is not less than
11 2002-1 Sale and Servicing Agreement
Servicer exercises with respect to comparable Motor Vehicle Loans that it
services for itself or others and that is consistent with prudent industry
standards. Servicer's duties shall include the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by federal,
state or local governmental authorities, investigating delinquencies, sending
payment coupons or monthly invoices to Obligors, reporting required tax
information to Obligors, accounting for Collections, furnishing monthly and
annual statements to Owner Trustee and Indenture Trustee with respect to
distributions, providing collection and repossession services in the event of
Obligor default and performing the other duties specified herein.
Without limiting the generality of the foregoing, Servicer is hereby
authorized and empowered by Owner Trustee to execute and deliver, on behalf of
itself, Indenture Trustee, Owner Trustee and the Holders, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Receivables
or to the Financed Vehicles, all in accordance with this Agreement; provided
that notwithstanding the foregoing, Servicer shall not, except pursuant to an
order from a court of competent jurisdiction, release an Obligor from payment of
any unpaid amount under any Receivable or waive the right to collect the unpaid
balance of any Receivable from the Obligor, except in connection with a de
minimis deficiency which Servicer would not attempt to collect in accordance
with its customary procedures. If Servicer shall commence a legal proceeding to
enforce a Receivable, Owner Trustee shall thereupon be deemed to have
automatically assigned such Receivable to Servicer, which assignment shall be
solely for purposes of collection. Owner Trustee shall furnish Servicer with any
powers of attorney and other documents or instruments necessary or appropriate
to enable Servicer to carry out its servicing and administrative duties
hereunder.
(b) Servicer may, at any time without notice or consent, delegate (i)
any or all duties under this Agreement to any Person that is an Affiliate of the
Servicer, so long as M&I Bank acts as Servicer, or (ii) specific duties to
sub-contractors who are in the business of performing such duties; provided that
no such delegation shall relieve Servicer of its responsibility with respect to
such duties and Servicer shall remain obligated and liable to the Indenture
Trustee, the Owner Trustee and the Holders for servicing and administering the
Receivables in accordance with this Agreement as if Servicer alone were
performing such duties.
(c) The Servicer shall pay the Administrator the fee pursuant to the
Administration Agreement.
(d) To the extent any document are required to be filed with respect to
the Owner Trustee or the Trust pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, the
Servicer shall prepare and execute any such documents and is authorized to file
such documents on behalf of the Owner Trustee and the Trust.
SECTION 4.2. Collection of Receivable Payments. (a) Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and
otherwise act with respect to the Receivables, the Physical Damage Insurance
Policies, the Dealer Agreements and related property in such manner as will, in
the reasonable judgment of Servicer, maximize the amount to be received by Owner
Trustee with respect thereto, in accordance with the standard of care required
by Section 4.1. Servicer
12 2002-1 Sale and Servicing Agreement
shall be entitled to grant extensions, rebates or adjustments on a Receivable,
or amend or modify any Receivable in accordance with its customary procedures if
Servicer believes in good faith that such amendment or modification is in Owner
Trustee's best interests; provided that Servicer may not, unless ordered by a
court of competent jurisdiction or otherwise required by applicable law, (i)
extend a Receivable beyond September 18, 2009 or (ii) reduce the Principal
Balance or Contract Rate of any Receivable. If Servicer fails to comply with the
provisions of the preceding sentence, Servicer shall be required to purchase the
Receivable or Receivables affected thereby, for the Purchase Amount, in the
manner specified in Section 4.7 as of the last day of the Collection Period in
which such failure occurs. Servicer may, in accordance with its customary
standards, policies and procedures, (i) waive any prepayment charge, late
payment charge, extension fee or any other fee that may be collected in the
ordinary course of servicing a Receivable and (ii) treat a partial scheduled
payment as being a full scheduled payment in the ordinary course of servicing a
Receivable.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor against
an amount payable by the Obligor with respect to such Receivable, Servicer shall
deposit the amount so set off in the Collection Account, no later than the close
of business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.
SECTION 4.3. Realization upon Receivables. On behalf of Owner Trustee,
Servicer shall charge off a Receivable in accordance with its customary
standards (and, in no event later than 150 days after a Receivable shall have
become delinquent) and shall use reasonable efforts, consistent with its
customary standards, to repossess and liquidate the Financed Vehicle securing
any Defaulted Receivable as soon as feasible after such Receivable becomes a
Defaulted Receivable, in accordance with the standard of care required by
Section 4.1. In taking such action, Servicer shall follow such customary and
usual practices and procedures as it shall deem necessary or advisable in its
servicing of Motor Vehicle Loans, and as are otherwise consistent with the
standard of care required under Section 4.1, which shall include exercising any
rights under the Dealer Agreements and selling the Financed Vehicle at public or
private sale. Servicer shall be entitled to recover all reasonable expenses
incurred by it in the course of repossessing and liquidating a Financed Vehicle
into cash proceeds or pursuing any deficiency claim against the related Obligor,
but only out of the cash proceeds of such Financed Vehicle or any deficiency
obtained from the Obligor. The foregoing shall be subject to the provision that,
in any case in which a Financed Vehicle shall have suffered damage, Servicer,
consistent with its customary servicing procedures, shall not expend funds in
connection with the repair or the repossession of such Financed Vehicle unless
it shall determine, consistent with its customary servicing procedures, that
such repair and/or repossession will increase the Liquidation Proceeds of the
related Receivable by an amount equal to or greater than the amount of such
expenses.
If Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement, the act of commencement shall be deemed to be an automatic assignment
from Owner Trustee to Servicer of the rights under such Dealer Agreement. If,
however, in any enforcement suit or legal proceeding, it is held that Servicer
may not enforce a Dealer Agreement on the grounds that it is not a real party in
interest or a Person entitled to enforce the Dealer Agreement, Owner Trustee, on
behalf of Owner Trustee and the Indenture Trustee, subject to the Indenture, at
13 2002-1 Sale and Servicing Agreement
Servicer's expense, shall take such steps as Servicer deems necessary to enforce
the Dealer Agreement, including bringing suit in the name of Owner Trustee or
Indenture Trustee.
SECTION 4.4. Physical Damage Insurance. (a) The Receivables require that
each Financed Vehicle be insured under a Physical Damage Insurance Policy. If
Servicer receives notice that an Obligor has failed to obtain or maintain a
Physical Damage Insurance Policy covering the related Financed Vehicle, Servicer
shall use reasonable efforts in accordance with its customary servicing
procedures to enforce the rights of the holder of the Receivable under the
Receivable to require the Obligor to obtain such physical damage insurance,
provided that Servicer shall not be required to take such actions if there is in
place a lender's single interest policy with respect to the related Financed
Vehicle that complies with Servicer's customary requirements. It is understood
that Servicer will not "force-place" any Physical Damage Insurance Policy on any
Financed Vehicle.
(b) Servicer may ▇▇▇ to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Owner Trustee.
If Servicer elects to commence a legal proceeding to enforce a Physical Damage
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of Owner Trustee under such Physical Damage Insurance
Policy to Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that Servicer may not enforce a
Physical Damage Insurance Policy on the grounds that it is not a real party in
interest or a holder entitled to enforce the Physical Damage Insurance Policy,
Owner Trustee, on behalf of the Trust and the Indenture Trustee, subject to the
Indenture, at Servicer's expense and written direction, shall take such steps as
Servicer deems necessary to enforce such Physical Damage Insurance Policy,
including bringing suit in Owner Trustee's name or the name of the Trust or
Indenture Trustee. Servicer shall make all claims and enforce its rights under
any lender's single interest insurance policy (to the extent such claims or
rights relate to Receivables) for the benefit of the Owner Trustee and shall
treat as Collections all related proceeds of such policies.
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.
Servicer, in accordance with the standard of care required under Section 4.1,
shall take such reasonable steps as are necessary and as are consistent with its
customary business practices to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle for the benefit of
Owner Trustee and the Indenture Trustee. Owner Trustee hereby authorizes
Servicer, and Servicer hereby agrees, to take such reasonable steps as are
necessary and as are consistent with its customary business practices to
re-perfect such security interest on behalf of Owner Trustee in the event
Servicer receives notice of the relocation of a Financed Vehicle.
SECTION 4.6. Covenants of Servicer. Servicer makes the following
covenants on which Owner Trustee relies in acquiring the Receivables:
(a) Security Interest to Remain in Force. Servicer shall not release
any Financed Vehicle from the security interest granted by the related
Receivable in whole or in part, except upon payment in full of the Receivable or
as otherwise contemplated herein.
(b) No Impairment. Servicer shall not impair in any material respect
the rights of the Owner Trustee or the Holders in the Receivables, the Dealer
Agreements or the Physical
14 2002-1 Sale and Servicing Agreement
Damage Insurance Policies or, subject to clause (c) below, otherwise amend or
alter the terms thereof if, as a result of such amendment or alteration, the
interests of Owner Trustee and the Holders hereunder would be materially
adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify any
Receivable (including the grant of any extension thereunder), except in
accordance with Section 4.2.
SECTION 4.7. Purchase by Servicer upon Breach of Covenant. Seller,
Servicer, Indenture Trustee or Owner Trustee, as the case may be, shall inform
the other parties promptly, in writing, upon the discovery (or, in the case of
the Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach by Servicer of its covenants under Section 4.5 or 4.6;
provided that the failure to give such notice shall not affect any obligation of
Servicer. Unless the breach shall have been cured by the last day of the
Collection Period which includes the 60th day (or the 30th day, if Servicer so
elects) after the date on which Servicer becomes aware of, or receives written
notice of, such breach, and such breach materially and adversely affects the
interests of Owner Trustee and the Holders in any Receivable, Servicer shall
purchase such Receivable from Owner Trustee as of the last day of the Collection
Period at a purchase price equal to the Purchase Amount for such Receivable as
of the last day of such Collection Period, which amount shall be deposited in
the Collection Account; provided that in the case of a breach of the covenant
contained in Section 4.6(c), Servicer shall be obligated to purchase the
affected Receivable or Receivables on the Business Day preceding the Deposit
Date immediately succeeding the Collection Period during which Servicer becomes
aware of, or receives written notice of, such breach. In consideration of the
purchase of a Receivable hereunder, Servicer shall remit the Purchase Amount of
such Receivable in the manner specified in Section 5.4. The sole remedy (except
as provided in Section 7.2) of Owner Trustee, Owner Trustee, Indenture Trustee
or the Holders against Servicer with respect to a breach pursuant to Section 4.5
or 4.6 shall be to require Servicer to purchase Receivables pursuant to this
Section 4.7.
With respect to all Receivables purchase pursuant to this Section 4.7,
Owner Trustee shall assign to Servicer, without recourse, representation or
warranty, all of Owner Trustee's right, title and interest in and to such
Receivables and all security and documents relating thereto.
SECTION 4.8. Servicing Fee. The servicing fee for each Payment Date
shall equal the product of one-twelfth of the Servicing Rate and the Pool
Balance as of the first day of the Collection Period or as of the Initial Cutoff
Date in the case of the initial Collection Period (the "Servicing Fee").
Servicer shall also be entitled to retain any extension fees and certain
non-sufficient funds charges and other administrative fees or similar charges
allowed by applicable law with respect to Receivables collected (from whatever
source) on the Receivables (the "Supplemental Servicing Fee"). It is understood
and agreed that Available Collections shall not include any amounts retained by
Servicer which constitute Supplemental Servicing Fees. The Servicing Fee in
respect of a Collection Period (together with any portion of the Servicing Fee
that remains unpaid from prior Payment Dates), if the Rating Agency Condition is
satisfied, may be paid at the beginning of such Collection Period out of
Collections for such Collection Period.
SECTION 4.9. Servicer's Report. (a) On each Determination Date, Servicer
shall deliver to Owner Trustee, Indenture Trustee, each Paying Agent and Seller,
with a copy to the
15 2002-1 Sale and Servicing Agreement
Rating Agencies, a Servicer's Report substantially in the form of Exhibit A,
containing all information necessary to make the transfers and distributions
pursuant to Sections 5.4 and 5.5 (including amounts required to be transferred
from the Reserve Account to the Collection Account) for the Collection Period
preceding the date of such Servicer's Report together with all information
necessary for the Owner Trustee to send statements to Certificateholders
pursuant to Section 5.6 and Indenture Trustee to send copies of statements
received by the Indenture Trustee to Noteholders pursuant to the Indenture and
Section 5.6 of this Agreement. Receivables to be purchased by the Servicer shall
be identified by Servicer by account number with respect to such Receivable (as
specified in the Schedule of Receivables).
(b) Servicer shall provide Indenture Trustee with a database file for
the Receivables at or prior to the Closing Date and on each Funding Date (but
with information as of the close of business on the Initial Cutoff Date and each
Subsequent Cutoff Date).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
Servicer shall deliver to Owner Trustee, Indenture Trustee and each Rating
Agency, on or before March 31 of each year beginning on March 31, 2003, an
Officer's Certificate, dated as of December 31 of the preceding year, stating
that (i) a review of the activities of Servicer during the preceding 12-month
period (or, in the case of the first such report, during the period from the
Closing Date to December 31, 2002) 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, Servicer has fulfilled all its
obligations in all material respects under this Agreement throughout such year
or, if there exists any uncured 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 4.11 may be obtained by any Noteholder by a request in writing to
Indenture Trustee addressed to the Corporate Trust Office.
(b) Servicer shall deliver to Owner Trustee, Indenture Trustee and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five (5) Business Days thereafter, written notice in an
Officer's Certificate of any event which constitutes, or with the giving of
notice or lapse of time, or both, would become a Servicer Termination Event
under Section 8.1.
SECTION 4.11. Annual Independent Certified Public Accountants' Report.
The Servicer shall cause a firm of independent certified public accountants (who
may also render other services to the Servicer or Seller and their Affiliates)
to deliver to the Seller, Owner Trustee, Indenture Trustee and each Rating
Agency on or before March 31 of each year beginning on March 31, 2003, a report
to the effect that, as to objectively determinable matters, such firm has
examined the Servicer's assertion that it has fulfilled its obligations in all
material respects under this Agreement for the twelve months ended December 31
of the preceding year (or, in the case of the first such certificate, from the
Closing Date until December 31, 2002) set forth in the Officer's Certificate
delivered pursuant to Section 4.10(a), and that (1) such examination was made in
accordance with the standards established by the American Institute of Certified
Public Accountants, (2) except as described in the report, the assertions in the
Officer's Certificate are, as to objectively determinable matters, fairly stated
in all material respects and (3) that the firm is independent of Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
16 2002-1 Sale and Servicing Agreement
In the event such firm requires the Indenture Trustee or Owner Trustee
to agree to the procedures performed by such firm, Servicer shall direct the
Indenture Trustee or Owner Trustee, as the case may be, in writing to so agree;
it being understood and agreed that the Indenture Trustee or Owner Trustee, as
the case may be, will deliver such letter of agreement in conclusive reliance
upon the direction of Servicer, and the Indenture Trustee or Owner Trustee, as
the case may be, need not make any independent inquiry or investigation as to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. Servicer shall provide to the Owner Trustee, Indenture Trustee,
Certificateholders, Noteholders, Bank Regulatory Authorities, and the
supervisory agents and examiners of Bank Regulatory Authorities access to the
Receivable Files, as to the latter in such cases where the Certificateholders,
Noteholders or Bank Regulatory Authorities shall be required by applicable
statutes or regulations to review such documentation as demonstrated by evidence
satisfactory to Servicer in its reasonable judgment. Access shall be afforded
without charge, but only upon reasonable request and during the normal business
hours at the respective offices of Servicer. Nothing in this Section 4.12 shall
affect the obligation of Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 4.12. Any Holder, by its acceptance of a
Certificate or Note, as applicable, shall be deemed to have agreed to keep any
information obtained by it pursuant to this Section 4.12 confidential and not to
use such information for any other purpose, except as required by applicable
law.
SECTION 4.13. Reports to the Rating Agencies. Servicer shall deliver to
each Rating Agency a copy of all reports or notices furnished or delivered
pursuant to this Article and a copy of any amendments, supplements or
modifications to this Agreement and any other information reasonably requested
by such Rating Agency to monitor this transaction.
SECTION 4.14. Servicer Expenses. Except as otherwise provided herein,
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder, including fees and disbursements of the Owner Trustee,
Indenture Trustee, independent accountants, taxes imposed on Servicer and
expenses incurred in connection with distributions and reports to
Certificateholders and Noteholders.
ARTICLE V. DISTRIBUTIONS; ACCOUNTS;
STATEMENTS TO CERTIFICATEHOLDERS
AND NOTEHOLDERS; ADVANCES.
SECTION 5.1. Establishment of Accounts. (a) Servicer shall cause to be
established:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of Indenture Trustee, an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders, which Eligible
Deposit Account shall be established by and maintained with the
Indenture Trustee or its designee.
17 2002-1 Sale and Servicing Agreement
(ii) For the benefit of the Noteholders, in the name of Indenture
Trustee, an Eligible Deposit Account (the "Note Distribution Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders, which Eligible
Deposit Account shall be established by and maintained with the
Indenture Trustee or its designee.
(iii) An administrative subaccount within the Note Distribution
Account at the Eligible Institution then maintaining the Note
Distribution Account, which subaccount shall be designated the "Interest
Distribution Account". The Interest Distribution Account is established
and maintained solely for administrative purposes.
(iv) An administrative subaccount within the Note Distribution
Account at the Eligible Institution then maintaining the Note
Distribution Account, which subaccount shall be designated the
"Principal Distribution Account". The Principal Distribution Account is
established and maintained solely for administrative purposes.
(b) Funds on deposit in the Collection Account and the Note
Distribution Account (collectively, the "Trust Accounts") shall be invested by
Indenture Trustee with respect to the Trust Accounts and by Owner Trustee with
respect to the Certificate Distribution Account (or any custodian with respect
to funds on deposit in any such account) in Eligible Investments selected in
writing by Servicer and of which Servicer provides notification (pursuant to
standing instructions or otherwise); provided that it is understood and agreed
that neither Servicer, Indenture Trustee nor Owner Trustee shall be liable for
any loss arising from such investment in Eligible Investments. All such Eligible
Investments shall be held by or on behalf of Indenture Trustee for the benefit
of the Noteholders and the Certificateholders or by Owner Trustee for the
benefit of Certificateholders, as applicable; provided that on each Payment Date
all interest and other investment income (net of losses and investment expenses)
on funds on deposit in the Trust Accounts shall be distributed to Servicer and
shall not be available to pay the distributions provided for in Section 5.5 and
shall not otherwise be subject to any claims or rights of Holders. Funds on
deposit in the Trust Accounts shall be invested in Eligible Investments that
will mature so that such funds will be available at the close of business on the
Business Day prior to the Deposit Date preceding the next Payment Date; provided
that with the approval of the Indenture Trustee, funds on deposit in the Trust
Accounts may be invested in Eligible Investments that mature on such Payment
Date. No Eligible Investment shall be sold or otherwise disposed of prior to its
scheduled maturity unless a default occurs with respect to such Eligible
Investment and Servicer directs Indenture Trustee in writing to dispose of such
Eligible Investment. Funds deposited in the Trust Accounts or Certificate
Distribution Account on a Deposit Date shall be invested overnight.
(c) Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (excluding investment income thereon) and all such funds, investments
and proceeds shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and control
of Indenture Trustee for the benefit of the Noteholders and the
Certificateholders; provided, however, the Indenture Trustee shall not be
charged with any obligation for the benefit of the Certificateholders except as
provided by the terms of this Agreement. If, at any time, any of the Trust
Accounts or the Certificate Distribution Account
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ceases to be an Eligible Deposit Account, the Servicer or Owner Trustee, as
applicable, shall within 10 Business Days (or such longer period as to which
each Rating Agency may consent) establish a new Trust Account or Certificate
Distribution Account, as applicable, as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust Account or new
Certificate Distribution Account, as applicable. In connection with the
foregoing, Servicer agrees that, in the event that the Collection Account is not
an account with Indenture Trustee or its designee, Servicer shall notify
Indenture Trustee in writing promptly upon the Collection Account ceasing to be
an Eligible Deposit Account.
(d) With respect to the Trust Account Property, Servicer and the
Indenture Trustee agree that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts and, except as
otherwise provided herein, each such Eligible Deposit Account shall be
subject to the exclusive custody and control of Indenture Trustee, and,
except as otherwise provided in the Basic Documents, Indenture Trustee
and its designee shall have sole signature authority with respect
thereto;
(ii) any Trust Account Property that constitutes Physical
Property shall be delivered to Indenture Trustee or its designee, in
accordance with paragraph (a) of the definition of "Delivery" and shall
be held, pending maturity or disposition, solely by Indenture Trustee or
such designee;
(iii) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(ii) above shall be delivered to Indenture Trustee or its designee in
accordance with paragraph (c) of the definition of "Delivery" and shall
be maintained by Indenture Trustee or such designee, pending maturity or
disposition, through continued registration of Indenture Trustee's (or
its designee's) ownership of such security.
(iv) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by Indenture Trustee or
its designee or a financial intermediary (as such term is defined in
Section 8-313(4) of the UCC) acting solely for Indenture Trustee or such
designee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph; and
Effective upon Delivery of any Trust Account Property, Servicer shall be deemed
to have represented that it has purchased such Trust Account Property for value,
in good faith and without notice of any adverse claim thereto.
SECTION 5.2. Collections. Servicer shall remit within two Business Days
of receipt thereof to the Collection Account all payments by or on behalf of the
Obligors with respect to the Receivables (other than any amounts constituting
Supplemental Servicing Fees) and all Liquidation Proceeds, both as collected
during the Collection Period. Notwithstanding the foregoing, if M&I Bank is the
Servicer and (i) shall have the Required Rating or (ii) Indenture
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Trustee otherwise shall have received written notice from each of the Rating
Agencies that the then outstanding rating on the Notes would not be lowered,
qualified or withdrawn as a result, Servicer may deposit all amounts referred to
above for any Collection Period into the Collection Account not later than 11:00
a.m. (New York time) on the Deposit Date with respect to such Collection Period;
provided that (i) if a Servicer Termination Event has occurred and is
continuing, (ii) Servicer has been terminated as such pursuant to Section 8.1 or
(iii) Servicer ceases to have the Required Rating, Servicer shall deposit such
amounts (including any amounts then being held by Servicer) into the Collection
Account as provided in the preceding sentence. For purposes of this Article V
the phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than Servicer or any Affiliate.
SECTION 5.3. Pre-Funding Account. (a) On or before the Closing Date
pursuant to Section 8.7 of the Indenture, the Owner Trustee shall establish or
cause to be established in the name of the Indenture Trustee, as secured party
of and agent for the Noteholders and Certificateholders, an Eligible Deposit
Account (the "Pre-Funding Account"). The Pre-Funding Account and any amounts
therein shall be pledged to the Indenture Trustee and held for the benefit of
the Noteholders and Certificateholders. The Pre-Funding Account shall be
established by and maintained with the Indenture Trustee or its designee (the
"Securities Intermediary").
(b) On the Closing Date, the Seller shall purchase investments meeting
the requirements of subparagraph (c) of the definition of Eligible Investments
and having a principal amount on the Closing Date equal to the Pre-Funding
Amount (the "Initial Pre-Funding Deposit") and shall transfer the Initial
Pre-Funding Deposit to the Owner Trustee. Immediately upon receipt of the
Initial Pre-Funding Deposit on the Closing Date, the Owner Trustee shall deliver
the Initial Pre-Funding Deposit to the Indenture Trustee and the Indenture
Trustee shall deposit the Initial Pre-Funding Deposit into the Pre-Funding
Account.
SECTION 5.4. Additional Deposits. Servicer shall deposit or cause to be
deposited in the Collection Account the aggregate Purchase Amounts with respect
to Purchased Receivables and Servicer shall deposit therein all amounts, if any,
to be paid under Section 9.1. All such deposits shall be made not later than the
11:00 a.m. (New York time) on the Deposit Date following the end of the related
Collection Period.
SECTION 5.5. Distributions. (a) On or before 11:00 a.m. (New York time)
on the Deposit Date related to each Payment Date, Servicer shall instruct
Indenture Trustee in writing (based on the information contained in the
Servicer's Report delivered on the related Determination Date pursuant to
Section 4.9) (i) to withdraw from the Reserve Account and deposit in the
Collection Account, and Indenture Trustee shall so withdraw and deposit in the
Collection Account by 11:00 a.m. (New York time) on such Deposit Date, the
Reserve Account Excess Amount, if any, and the Reserve Account Transfer Amount,
if any, for such Payment Date (ii) to withdraw from the Pre-Funding Account and
deposit in the Collection Account, and the Indenture Trustee shall so withdraw
and deposit in the Collection Account by 11:00 (New York time) on such Deposit
Date, the investment income and earnings accrued on Funds in the Pre-Funding
Account during the related Collection Period.
20 2002-1 Sale and Servicing Agreement
(b) On or before each Payment Date, the Indenture Trustee shall
transfer from the Collection Account to the Servicer, in immediately available
funds, reimbursement of Outstanding Simple Interest Advances made pursuant to
Section 5.9.
(c) Subject to the last paragraph of this Section 5.5(c), on or before
11:00 a.m. (New York time) on the Deposit Date related to each Payment Date,
Servicer shall instruct Indenture Trustee in writing (based on the information
contained in the Servicer's Report delivered on the related Determination Date
pursuant to Section 4.9) to make, and Indenture Trustee shall withdraw from the
Collection Account and deposit in the Note Distribution Account and then make,
the following deposits, distributions and payments from the Note Distribution
Account by 11:00 a.m. (New York time) on such Payment Date, to the extent of the
Total Distribution Amount in the following order of priority:
(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the Interest Distribution Account, the Accrued
Class A Note Interest;
(iii) third, to the Interest Distribution Account, the Accrued
Class B Note Interest;
(iv) fourth, to the Principal Distribution Account, the Principal
Distribution Amount, if any;
(v) fifth, to the Reserve Account, the amount, if any, required
to reinstate the amount in the Reserve Account up to the Specified
Reserve Balance; and
(vi) sixth, to the Certificate Distribution Account, the Total
Distribution Amount remaining on deposit in the Collection Account.
Notwithstanding any other provision of this Section 5.5, following the
occurrence and during the continuation of an Event of Default specified in
Section 5.1(a), 5.1(b), 5.1(d) or 5.1(e) of the Indenture which has resulted in
an acceleration of the Notes (or following the occurrence of any such event
after an Event of Default specified in Section 5.1(c) of the Indenture has
occurred and the Trust has been liquidated), the Servicer shall instruct the
Indenture Trustee at or before aforesaid time to transfer the funds on deposit
in the Collection Account pursuant to Section 5.4(b) of the Indenture.
In the event that the Collection Account is maintained with an
institution other than Indenture Trustee, Servicer shall instruct and cause such
institution to make all deposits and distributions pursuant to this Section
5.5(c) on the related Deposit Date.
(d) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to zero and
the Indenture has been discharged in accordance with its terms. The protections,
immunities and standard of care afforded the Indenture Trustee under the
Indenture shall apply to the performance of its duties hereunder.
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SECTION 5.6. Statements to Certificateholders and Noteholders. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to Owner Trustee
for Owner Trustee to forward to each Certificateholder of record, a statement
setting forth at least the following information (based on the information
contained in the Servicer's Report delivered on the related Determination Date
pursuant to Section 4.9) as to the Notes and the Certificates to the extent
applicable:
(a) the amount of such distribution allocable to principal of each
class of Notes;
(b) the amount of such distribution allocable to interest on or with
respect to each class of Notes;
(c) the Reserve Account Transfer Amount, if any, for such Payment Date,
the Specified Reserve Balance for such Payment Date, the amount deposited into
the Reserve Account on such Payment Date, and the balance of the Reserve Account
(if any) on such Payment Date, after giving effect to changes therein on such
Payment Date;
(d) the amount of the Servicing Fee paid to Servicer with respect to
the related Collection Period and with respect to previously accrued and unpaid
Servicing Fees;
(e) the Noteholders' Interest Carryover Shortfall if any, in each case
as applicable to each class of Securities, and the change in such amounts from
the preceding statement;
(f) the amount of any previously due and unpaid payment of principal on
the Notes, and the change in such amount from that of the prior Payment Date;
(g) the aggregate outstanding principal balance of each class of the
Notes and the Note Pool Factor for each such class after giving effect to
payments allocated to principal reported under clause (a) above;
(h) the aggregate Purchase Amounts paid by Servicer with respect to the
related Collection Period;
(i) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(j) the number, and aggregate Principal Balance outstanding, of
Receivables past due 30-59, 60-89 and 90 and over days;
(k) the weighted average Contract Rates of the Receivables, weighted
based on the Principal Balance of each such Receivable as of the last day of the
related Collection Period;
(l) the weighted average remaining term to maturity of the Receivables,
weighted based on the Principal Balance of each such Receivable as of the last
day of the related Collection Period;
22 2002-1 Sale and Servicing Agreement
(m) the amount of the aggregate Principal Balances of any Receivables
that became Defaulted Receivables, if any, during such Collection Period;
(n) the aggregate net losses on the Receivables incurred during the
period from the Cutoff Date to and including the last day of the related
Collection Period;
(o) the amount distributed to Certificateholders;
(p) the amount of Outstanding Simple Interest Advances on such Payment
Date; and
(q) the amount on deposit in the Pre-Funding Account (until the
termination of the Pre-Funding Period).
Each amount set forth pursuant to paragraph (a), (b), (e) or (f) above relating
to the Notes shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes (or Class thereof).
SECTION 5.7. Net Deposits. As an administrative convenience, unless
Servicer is required to remit Collections within two Business Days of receipt
thereof, Servicer will be permitted to make the deposit of Collections and
Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to Servicer with respect to the Collection Period.
Servicer, however, will account to Owner Trustee, Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.8. Reserve Account. (a) On or before the Closing Date pursuant
to Section 8.6 of the Indenture, the Owner Trustee shall establish or cause to
be established in the name of the Indenture Trustee, as secured party of and
agent for the Noteholders and Certificateholders, an Eligible Deposit Account
(the "Reserve Account"). The Reserve Account and any amounts therein shall be
pledged to the Indenture Trustee and held for the benefit of the Noteholders and
Certificateholders. The Reserve Account shall be established by and maintained
with the Indenture Trustee or its designee (the "Securities Intermediary").
(b) On the Closing Date, the Seller shall purchase investments meeting
the requirements of subparagraph (c) of the definition of Eligible Investments
and having a principal amount on the Closing Date equal to the Initial Reserve
Account Deposit Amount (the "Initial Reserve Account Deposit") and shall
transfer the Initial Reserve Account Deposit to the Owner Trustee. Immediately
upon receipt of the Initial Reserve Account Deposit on the Closing Date, the
Owner Trustee shall deliver the Initial Reserve Account Deposit to the Indenture
Trustee and the Indenture Trustee shall deposit the Initial Reserve Account
Deposit into the Reserve Account.
SECTION 5.9. Monthly Advances. On or before each Deposit Date, the
Servicer shall advance into the Collection Account with respect to each Simple
Interest Receivable that was past due as of the last day of the related
Collection Period an amount equal to the amount of interest that was due on such
Simple Interest Receivable during the related Collection Period (assuming that
the scheduled payment on such Simple Interest Receivable was received on its
respective due date) but was not received by the Servicer on or before the last
day of such Collection Period. The Servicer shall not make any advance with
respect to principal of any
23 2002-1 Sale and Servicing Agreement
Simple Interest Receivable and the Servicer shall only make advances of interest
with respect to any Receivable to the extent that the Servicer, in accordance
with its customary servicing procedures, shall determine that such advance shall
be recoverable from subsequent collections or recoveries on such Receivable.
ARTICLE VI. SELLER
SECTION 6.1. Representations of Seller. On the Closing Date and on each
Funding Date, Seller makes the following representations to each of the parties
hereto on which Owner Trustee is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate and the Indenture Trustee is deemed to have relied in accepting
administration of its trusts. The representations speak as of the execution and
delivery of this Agreement and shall survive the sale of the Receivables to
Owner Trustee and the pledge thereof to Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. Seller has been duly organized and
is validly existing as a Delaware limited liability company in good standing
under the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted and had at all relevant times, and has,
full power, authority and legal right to acquire, own and sell the Receivables
and the other properties and rights included in the Owner Trust Estate assigned
to Owner Trustee pursuant to Article II.
(b) Due Qualification. Seller is duly qualified to do business as a
limited liability company in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications,
except where the failure to so obtain would not have a material adverse impact
either on Seller, the transactions contemplated in the Basic Documents or the
Receivables.
(c) Power and Authority. Seller has the power, authority and legal
right to execute and deliver this Agreement and the Basic Documents to which it
is a party and to carry out their respective terms and to sell and assign the
property to be sold and assigned to and deposited with Owner Trustee as the
Owner Trust Estate; and the execution, delivery and performance of this
Agreement and the Basic Documents to which it is a party have been duly
authorized by Seller by all necessary action.
(d) No Consent Required. No approval, authorization, consent, license
or other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement or the Basic Documents to which it is
a party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(e) Valid Sale; Binding Obligation. Seller intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the other
properties and rights included in the Owner Trust Estate conveyed by Seller to
Owner Trustee hereunder, enforceable against
24 2002-1 Sale and Servicing Agreement
creditors of and purchasers from Seller; and each of this Agreement and the
Basic Documents to which it is a party constitutes a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its
respective terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and other
similar laws affecting enforcement of the rights of creditors generally and to
equitable limitations on the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by Seller of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under or result in the creation or imposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the limited liability company
agreement of Seller, (ii) any material indenture, contract, lease, mortgage,
deed of trust or other instrument or agreement to which Seller is a party or by
which Seller is bound, or (iii) any law, order, rule or regulation applicable to
Seller of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over Seller.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of Seller, threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over Seller or its properties: (i) asserting
the invalidity of this Agreement, any other Basic Document, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or Certificates
or the consummation of any of the transactions contemplated by this Agreement or
any other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Seller of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable, or (iv) that
may materially and adversely affect the federal or state income, excise
franchise or similar tax attributes of Owner Trustee, the Notes or the
Certificates.
(h) Chief Executive Office. The chief executive office of Seller is
770 North Water Street NW5, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(i) Good Title. Immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to the Receivables
free and clear of any lien and had full right and power to transfer and assign
the Receivables to the Owner Trustee.
SECTION 6.2. Continued Existence. During the term of this Agreement,
subject to Section 6.4, Seller will keep in full force and effect its existence,
rights and franchises as a limited liability company organized under the laws of
the State of Delaware and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby.
25 2002-1 Sale and Servicing Agreement
SECTION 6.3. Liability of Seller; Indemnities. Subject to Section 10.5,
Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by Seller under this Agreement.
(a) Seller shall indemnify, defend and hold harmless Issuer, Owner
Trustee (individually and in its capacity as such), Indenture Trustee
(individually and in its capacity as such), the Certificateholders and the
Noteholders and the respective officers, directors, employees and agents of
Issuer, Owner Trustee and Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent arising out of,
or imposed upon such Person through or as a result of (i) Seller's wilful
misfeasance, bad faith or gross negligence (other than errors in judgement) in
the performance of its duties under this Agreement, or by reason of breach of
contract or reckless disregard of its obligations and duties under this
Agreement or any other Basic Document and (ii) Seller's violation of Federal or
state securities laws in connection with the offering and sale of the Notes and
the Certificates or in connection with any application relating to the Notes or
Certificates under any state securities laws.
(b) Seller shall pay any and all taxes levied or assessed upon the
Issuer or upon all or any part of the Owner Trust Estate.
Indemnification under this Section 6.3 shall survive the resignation or
removal of Owner Trustee or Indenture Trustee and the termination of this
Agreement or any other Basic Document, and shall include reasonable fees and
expenses of counsel and other expenses of litigation. If Seller shall have made
any indemnity payments pursuant to this Section 6.3 and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Seller,
without interest.
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Seller shall be a party or (c) which may succeed to the properties and assets of
Seller substantially as a whole, shall be the successor to Seller without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided that Seller hereby covenants that it will not
consummate any of the foregoing transactions except upon satisfaction of the
following: (i) the surviving Seller if other than M&I Dealer Auto
Securitization, LLC, executes an agreement of assumption to perform every
obligation of Seller under this Agreement, (ii) immediately after giving effect
to such transaction, no representation or warranty made pursuant to Section 3.1
or 6.1 shall have been breached, (iii) Seller shall have delivered to Owner
Trustee and Indenture Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 6.3 and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, and that the Rating Agency Condition shall have been satisfied
with respect to such transaction, (iv) the surviving Seller shall have a
consolidated net worth at least equal to that of the predecessor Seller, (v)
such transaction will not result in a material adverse federal or state tax
consequence to Owner Trustee, the Noteholders or the Certificateholders and (vi)
unless M&I Dealer Auto Securitization, LLC is the surviving entity, Seller shall
have delivered to Owner Trustee and Indenture Trustee an Opinion of Counsel
either (A) stating that, in the opinion of such counsel,
26 2002-1 Sale and Servicing Agreement
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 Owner Trustee and Indenture Trustee, respectively, 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 interests.
SECTION 6.5. Limitation on Liability of Seller and Others. Seller and
any director or officer or employee or agent of 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 under any
Basic Document (provided that such reliance shall not limit any way Seller's
obligations under Section 3.3 or Section 6.3). 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.
SECTION 6.6. Seller May Own Certificates or Notes. Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not Seller or an Affiliate thereof, except as expressly provided herein or
in any Basic Document. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to Seller or any such
Affiliate shall have an equal and proportionate benefit under the provisions of
this Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates of the same class.
SECTION 6.7. Security Interest. During the term of this Agreement,
Seller will not take any action to assign the security interest in any Financed
Vehicles other than pursuant to the Basic Documents.
SECTION 6.8. Purchase of Receivables on a Funding Date. Seller shall
use its best efforts in good faith to make available for assignment to the Owner
Trustee, on each Funding Date, all Receivables acquired by the Seller which meet
the eligibility criteria set forth herein as of such date. This covenant and
agreement shall be for the benefit of the Owner Trustee and the Indenture
Trustee and any such Person may enforce its legal or equitable rights, remedies
or claims hereunder.
ARTICLE VII. SERVICER.
SECTION 7.1. Representations of Servicer. Servicer makes the following
representations on which Owner Trustee is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate and the Indenture Trustee and the Owner Trustee are deemed to have relied
in accepting administration of their trusts. The representations speak as of the
execution and delivery of the Agreement and shall survive the sale, transfer and
assignment of the Receivables to Owner Trustee and the pledge thereof to
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Servicer has been duly organized
and is validly existing as a state banking corporation in good standing under
the laws of the State of
27 2002-1 Sale and Servicing Agreement
Wisconsin, with the power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted, and had at all relevant times, and shall have, the power, authority
and legal right to service the Receivables and the other properties and rights
included in the Owner Trust Estate.
(b) Due Qualification. Servicer is duly qualified to do business as a
foreign corporation in good standing, and has 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.
(c) Power and Authority. Servicer has the power, authority and legal
right to execute and deliver this Agreement and the Basic Documents to which it
is a party and to carry out their respective terms; and the execution, delivery
and performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.
(d) No Consent Required. No approval, authorization, consent, license
or other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement, the Basic Documents to which it is a
party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(e) Binding Obligation. Each of this Agreement and the Basic Documents
to which it is a party constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by Servicer
of this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under, or result in the creation or disposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the organizational documents
of Servicer, (ii) any material indenture, contract, lease, mortgage, deed of
trust or other instrument or agreement to which Servicer is a party or by which
Servicer is bound, or (iii) any law, order, rule or regulation applicable to
Servicer of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over Servicer.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to Servicer's knowledge, threatened, before any court, regulatory
body, administrative agency, or tribunal or other governmental instrumentality
having jurisdiction over Servicer or its properties: (i) asserting the
invalidity of this Agreement, any other Basic Document, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Certificates or the
Notes or the consummation of any of the transactions contemplated by this
Agreement or any other Basic
28 2002-1 Sale and Servicing Agreement
Document, (iii) seeking any determination or ruling that might materially and
adversely affect the performance by Servicer of its obligations under, or the
validity or enforceability of, this Agreement, any other Basic Document, the
Notes or the Certificates, to the extent applicable, or (iv) that may materially
and adversely affect the federal or state income, excise, franchise or similar
tax attributes of the Certificates.
SECTION 7.2. Indemnities of Servicer. (a) Subject to Section 10.5,
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by Servicer under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), Bank One (as agent on behalf of
PREFCO), Indenture Trustee (individually and in its capacity as such), Seller,
the Certificateholders and the Noteholders and any of the respective officers,
directors, employees and agents of Owner Trustee, Indenture Trustee, Bank One
(as agent on behalf of PREFCO), Northwoods or Seller from any and all costs,
expenses, losses, claims, damages and liabilities (including reasonable
attorneys' fees and expenses) to the extent arising out of, or imposed upon any
such Person through, the gross negligence, willful misfeasance, breach of
contract or bad faith (other than errors in judgment) of Servicer in the
performance of its obligations and duties under this Agreement or any other
Basic Document or in the performance of the obligations and duties of any
subcustodian or subservicer in the performance of its obligations and duties
under any custody or subservicing agreement. Notwithstanding the foregoing, if
Servicer is rendered unable, in whole or in part, by virtue of an act of God,
act of war, fires, earthquake or other natural disasters, to satisfy its
obligations under this Agreement, Servicer shall not be deemed to have breached
any such obligation upon the sending of written notice of such event to the
other parties hereto, for so long as Servicer remains unable to perform such
obligation as a result of such event. This provision shall not be construed to
limit Servicer's or any other party's rights, obligations, liabilities, claims
or defenses which arise as a matter of law or pursuant to any other provision of
this Agreement.
(c) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), and Indenture Trustee and their
respective officers, directors, employees and agents from and against any taxes
that may at any time be asserted against any such Person with respect to the
transactions contemplated in this Agreement or in the other Basic Documents,
including any sales, gross receipts, general corporation, tangible or intangible
personal property, franchise, privilege, or license taxes, or any taxes of any
kind which may be asserted (not including any federal or other income taxes
arising out of transactions contemplated by this Agreement and the other Basic
Documents) against the Owner Trustee (individually and in its capacity as such),
and costs and expenses in defending against the same.
(d) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), Bank One (as agent on behalf of
PREFCO), Northwoods, Indenture Trustee (not individually but solely in its
capacity as Indenture Trustee), Seller, Certificateholders and the Noteholders
or any of the respective officers, directors, employees and agents of Owner
Trustee, Indenture Trustee, Bank One (as agent on behalf of PREFCO), Northwoods
or Seller from any and all costs, expenses, losses, claims, damages and
liabilities (including reasonable attorneys' fees and expenses) to the extent
arising out of or imposed upon any such Person as a result of any compensation
payable to any subcustodian or subservicer
29 2002-1 Sale and Servicing Agreement
(including any fees payable in connection with the release of any Receivable
File from the custody of such subservicer or in connection with the termination
of the servicing activities of such subservicer with respect to any Receivable)
whether pursuant to the terms of any subservicing agreement or otherwise.
(e) Servicer shall indemnify, defend and hold harmless Owner Trustee
(individually and in its capacity as such), Indenture Trustee (individually and
in its capacity as such), Seller, the Certificateholders and the Noteholders or
any of the respective directors, officers, employees and agents of Owner
Trustee, Indenture Trustee and Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting from
the use, ownership, or operation by the Servicer or any Affiliate thereof of any
Financed Vehicle.
Indemnification under this Section 7.2 shall survive the resignation or removal
of Owner Trustee or Indenture Trustee and the termination of this Agreement and
the other Basic Documents, as applicable, and shall include reasonable fees and
expenses of counsel and other expenses of litigation. If Servicer shall have
made any indemnity payments pursuant to this Section 7.2 and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Servicer,
without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Servicer shall be a party, (c) which may succeed to the properties and assets of
Servicer, substantially as a whole, or (d) 50% of the voting stock of which is
owned directly or indirectly by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation may become the
successor to Servicer; provided that, unless M&I Bank is the surviving party to
such transaction, Servicer hereby covenants that it will not consummate any of
the foregoing transactions except upon satisfaction of the following: (i) the
surviving Servicer if other than M&I Bank, executes an agreement of assumption
to perform every obligation of Servicer under this Agreement, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 7.1 shall have been breached and no Servicer Termination
Event, and no event that, after notice or lapse of time, or both, would become a
Servicer Termination Event shall have occurred and be continuing, (iii) Servicer
shall have delivered to Owner Trustee and Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
7.3 and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Servicer shall have a consolidated net worth at least equal to that of
the predecessor Servicer, and (v) such transaction will not result in a material
adverse federal or state tax consequence to Owner Trustee, the Noteholders or
the Certificateholders.
SECTION 7.4. Limitation on Liability of Servicer and Others. Neither
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to Owner Trustee, Indenture Trustee, Bank One (as agent on behalf
of PREFCO), Northwoods, Seller, the Noteholders or the Certificateholders,
except as provided under this Agreement, for any action
30 2002-1 Sale and Servicing Agreement
taken or for refraining from the taking of any action by Servicer or any
subservicer pursuant to this Agreement or for errors in judgment; provided that
this provision shall not protect Servicer or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith, breach of contract or gross negligence in the performance of duties
(except for errors in judgment) under this Agreement. Servicer or any
subservicer and any of their respective directors, officers, employees or agents
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, 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 and that in its opinion may involve it in any expense or liability;
provided that Servicer may (but shall not be required to) undertake any
reasonable action that it may deem necessary or desirable in respect of the
Basic Documents to protect the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the legal
expense and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
SECTION 7.5. M&I Bank Not To Resign as Servicer. Subject to the
provisions of Section 7.3, M&I Bank hereby agrees not to resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties hereunder shall no
longer be permissible under applicable law or if such resignation is required by
regulatory authorities. Notice of any such determination permitting the
resignation of M&I Bank as Servicer shall be communicated to Owner Trustee and
Indenture Trustee at the earliest practicable time (and, if such communication
is not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel to
such effect delivered to Owner Trustee and Indenture Trustee concurrently with
or promptly after such notice. No such resignation shall become effective until
the earlier of Indenture Trustee or a Successor Servicer having assumed the
responsibilities and obligations of the resigning Servicer in accordance with
Section 8.2 or the date upon which any regulatory authority requires such
resignation.
SECTION 7.6. Existence. Subject to the provisions of Section 7.3,
during the term of this Agreement, M&I Bank will keep in full force and effect
and its existence, rights and franchises as a Wisconsin state banking
corporation and as a foreign corporation in all jurisdictions which the
ownership or lease of property or the conduct of its business (including the
servicing of Receivables as required by this Agreement) shall require such
qualifications.
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer, and
any Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Notes or Certificates with the same rights as it
would have if it were not the Servicer or an Affiliate thereof, except as
expressly provided herein or in any Basic Document. Except as set forth herein
or in the other Basic Documents, Notes and Certificates so owned by or pledged
to Servicer or any such Affiliate shall have an equal and proportionate benefit
under the provisions of this Agreement and the other Basic Documents, without
preference, priority, or distinction as among all of the Notes and Certificates
of the same class.
31 2002-1 Sale and Servicing Agreement
ARTICLE VIII. SERVICER TERMINATION EVENTS.
SECTION 8.1. Servicer Termination Event. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing:
(a) any failure by Servicer to deliver to Indenture Trustee and Owner
Trustee the Servicer's Report in accordance with Section 4.9, or any failure by
Servicer to deliver to Indenture Trustee or Owner Trustee for deposit in any of
the Trust Accounts or the Certificate Distribution Account any required payment
or to direct Indenture Trustee or Owner Trustee to make any required
distributions therefrom that shall continue unremedied for a period of five
Business Days after written notice of such failure is received by Servicer from
Owner Trustee or Indenture Trustee or after discovery of such failure by an
Authorized Officer of Servicer; or
(b) failure on the part of Servicer duly to observe or to perform in
any material respect any other covenants or agreements of Servicer set forth in
this Agreement or any other Basic Document to which it is a party (other than a
breach of the representations and warranties regarding the Receivables set forth
in Section 3.1), which failure shall (i) materially and adversely affect the
rights of either the Certificateholders or Noteholders and (ii) continue
unremedied for a period of 60 days after discovery of such failure by an
Authorized Officer of Servicer or after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to
Servicer or Seller by Owner Trustee or Indenture Trustee or (B) to Servicer or
Seller and to Owner Trustee and Indenture Trustee by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes of the
Controlling Note Class or, if no Notes are outstanding, Holders of Certificates
evidencing not less than 25% of the outstanding Certificate Percentage
Interests, as applicable; or
(c) an Insolvency Event occurs with respect to Servicer or any of its
respective successors;
then, and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of Notes
evidencing greater than 50% of the Outstanding Amount of the Notes of the
Controlling Note Class (or, if no Notes are then Outstanding, either the Owner
Trustee or the Holders of the Certificates evidencing greater than 50% of the
Certificate Percentage Interests), by notice then given in writing to Servicer
(and to Owner Trustee or Indenture Trustee, as applicable, if given by the
Holders, and the Rating Agencies) may terminate all the rights and obligations
(other than the obligations set forth in Section 7.2) of Servicer under this
Agreement and the rights and obligations of any subcustodian or subservicer
pursuant to the terms of any related custody or subservicing agreement. On or
after the receipt by Servicer of such written notice, all authority and power of
Servicer under this Agreement, whether with respect to the Notes, the
Certificates or the Receivables or otherwise, shall, without further action,
pass to and be vested in Indenture Trustee or such Successor Servicer as may be
appointed under Section 8.2; and, without limitation, Indenture Trustee and
Successor Servicer are hereby authorized and empowered to execute and deliver,
on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with
32 2002-1 Sale and Servicing Agreement
the Successor Servicer, Indenture Trustee and 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 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 by it with
respect to a Receivable. Servicer shall promptly transfer its electronic records
relating to the Receivables to the Successor Servicer in such electronic form as
the Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. 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 8.1 shall be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses.
SECTION 8.2. Appointment of Successor. (a) Upon Servicer's receipt of
notice of termination, pursuant to Section 8.1 or Servicer's resignation (if and
to the extent permitted 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 earlier of (i) the date 45 days from the delivery to Owner Trustee and
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (ii) the date
upon which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of Servicer's termination or resignation hereunder, Indenture Trustee
shall appoint a Successor Servicer (which may be the Indenture Trustee), and the
Successor Servicer shall accept its appointment by a written assumption in form
acceptable to Owner Trustee and 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 8.2, Indenture Trustee
without further action shall automatically be appointed the Successor Servicer
and Indenture Trustee shall be entitled to the Servicing Fee. Notwithstanding
the above, Indenture Trustee shall, if it shall be unwilling or unable so to
act, appoint or petition a court of competent jurisdiction to appoint, any
established institution, having a net worth of not less than $100,000,000 and
whose regular business shall include the servicing of consumer receivables, as
the successor to Servicer under this Agreement; provided, that the appointment
of any such Successor Servicer will not result in the withdrawal, qualification
or reduction of the outstanding rating assigned to the Certificates or Notes by
any Rating Agency.
(b) Upon appointment, the Successor Servicer (including Indenture
Trustee acting as Successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement. No Successor Servicer shall be liable for any acts or omissions of
any predecessor Servicer.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
the predecessor Servicer pursuant
33 2002-1 Sale and Servicing Agreement
to Section 4.7, 7.1 or 7.2) other than those relating to the management,
administration, servicing, custody or collection of the Receivables and the
other rights and properties included in the Owner Trust Estate. The Successor
Servicer shall, upon its appointment pursuant to Section 8.2 and as part of its
duties and responsibilities under this Agreement, promptly take all action it
deems necessary or appropriate so that the predecessor Servicer (in whatever
capacity) is paid or reimbursed all amounts it is entitled to receive under this
Agreement on each Payment Date subsequent to the date on which it is terminated
as Servicer hereunder.
SECTION 8.3. Payment of Servicing Fee. If Servicer shall be replaced,
the predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees and any Supplemental Servicing Fees and any Outstanding Simple
Interest Advances accrued and unpaid or received to the effective date of the
termination of the predecessor Servicer, in each case, in accordance with
Section 4.8.
SECTION 8.4. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, Owner Trustee shall give prompt written notice thereof to
Certificateholders and Indenture Trustee shall give prompt written notice
thereof to Noteholders.
SECTION 8.5. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes of the
Controlling Note Class (or the Holders of Certificates evidencing not less than
a majority of the outstanding Certificate Percentage Interests, as applicable,
in the case of any default which does not adversely affect Indenture Trustee or
the Noteholders) may, on behalf of all Noteholders and Certificateholders, waive
in writing any default by Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any required deposits
to any of the Trust Accounts in accordance with this Agreement. Upon any such
waiver of a past default, such default shall cease to exist, and any Servicer
Termination Event arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
ARTICLE IX. TERMINATION.
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice.
(a) On the last day of any Collection Period immediately preceding a
Determination Date as of which the then outstanding Pool Balance is 5% or less
of the sum of (i) the Original Pool Balance plus (ii) each of the Funding Date
Pool Balances, Servicer shall have the option to purchase the Owner Trust Estate
other than the Trust Accounts, the Certificate Distribution Account and any
funds or investments therein; provided that the proceeds from the exercise of
such option must be at least sufficient to fully repay all accrued and unpaid
interest on and principal of the Outstanding Notes. To exercise such option,
Servicer shall deposit pursuant to Section 5.4 in the Collection Account an
amount which, when added to the amounts on deposit in the Collection Account for
such Payment Date, equals the sum of (a) the lesser of (i) the fair market value
of the Receivables and (ii) the aggregate Principal Balance of the Receivables
plus (b) accrued and unpaid interest on the Outstanding Notes. The Notes and the
Certificates will be redeemed concurrently therewith.
34 2002-1 Sale and Servicing Agreement
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.
(c) Notice of any termination of the Trust shall be given by Servicer
to Owner Trustee, Indenture Trustee and the Rating Agencies as soon as
practicable after Servicer has received notice thereof.
ARTICLE X. MISCELLANEOUS PROVISIONS.
SECTION 10.1. Amendment. (a) This Agreement may be amended by Seller,
Servicer, Owner Trustee and Indenture Trustee, but without the consent of any of
the Noteholders or the Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; provided that such action
shall not adversely affect in any material respect the interests of any
Noteholder or Certificateholder;
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of the Trust
to qualify as, and to permit an election to be made to cause all or a
portion of the Trust to be treated as, a "financial asset
securitization investment trust" under the Code and (B) in connection
with any such election, to modify or eliminate existing provisions set
forth in this Agreement relating to the intended federal income tax
treatment of the Notes or Certificates and the Trust in the absence of
the election; it being a condition to any such amendment that the
Rating Agency Condition shall have been satisfied; and
(iii) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to Owner
Trustee of all or any portion of the Receivables to be recognized as a
sale under generally accepted accounting principles ("GAAP") by Seller
to Owner Trustee, (b) the Trust to avoid becoming a member of M&I
Bank's consolidated group under GAAP or (c) M&I Bank, the Seller or any
of their Affiliates to otherwise comply with or obtain more favorable
treatment under any law or regulation or any accounting rule or
principle; it being a condition to any such amendment that the Rating
Agency Condition shall have been satisfied;
provided that any amendment entered into pursuant to this Section 10.1(a) shall
not significantly change the permitted activities of the Trust.
(b) This Agreement may also be amended from time to time by Seller,
Servicer, Owner Trustee and Indenture Trustee, with the consent of the Holders
of Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Percentage Interests for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders or
the
35 2002-1 Sale and Servicing Agreement
Certificateholders; provided that no such amendment shall (i) increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Percentage Interests, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the Holders of all the outstanding Certificates of each class affected thereby.
(c) Prior to the execution of any such amendment or consent, Servicer
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section 10.1 to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied has been
delivered. Owner Trustee and Indenture Trustee may, but shall not be obligated
to, enter into any such amendment which affects Owner Trustee's or Indenture
Trustee's, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
SECTION 10.2. Protection of Title to Trust Property. (a) 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 Owner
Trustee and the interests of Indenture Trustee in the Receivables and the
proceeds thereof. Seller shall deliver (or cause to be delivered) to Owner
Trustee and 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 Seller nor Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of ss. 9-507 of the UCC, unless it shall
have given Owner Trustee and Indenture Trustee at least thirty days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) Each of Seller and Servicer shall have an obligation to give Owner
Trustee and Indenture 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 and shall promptly file any such amendment or new financing
36 2002-1 Sale and Servicing Agreement
statement. 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) Servicer shall maintain (or shall cause its subservicer to
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) Servicer shall maintain (or shall cause its subservicer to
maintain) its computer systems so that, from and after the time of sale under
this Agreement of the Receivables, Servicer's and its subservicer's master
computer records (including any backup archives) that refer to a Receivable
shall indicate clearly the interest of Owner Trustee and Indenture Trustee in
such Receivable and that such Receivable is owned by Owner Trustee and has been
pledged to Indenture Trustee pursuant to the Indenture. Indication of Owner
Trustee's and Indenture Trustee's interest in a Receivable shall be deleted from
or modified on Servicer's and its subservicer's computer systems when, and only
when, the related Receivable shall have been paid in full or purchased by
Servicer.
(f) If at any time 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, Servicer shall give to such
prospective purchaser, lender or other transferee computer tapes, records or
printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate clearly that
such Receivable has been sold and is owned by Owner Trustee and has been pledged
to Indenture Trustee.
(g) Servicer, upon receipt of reasonable prior notice, shall permit
Indenture Trustee, Owner Trustee and their respective agents at any time during
normal business hours to inspect, audit and make copies of and abstracts from
Servicer's and its subservicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall
have reasonable grounds to believe that such request is necessary in connection
with the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to Owner Trustee or to Indenture Trustee,
within thirty Business Days, a list of all Receivables (by contract number and
name of Obligor) then owned by Owner Trustee, together with a reconciliation of
such list to the Schedule of Receivables and to each of Servicer's Reports
furnished before such request indicating removal of Receivables from Owner
Trustee.
SECTION 10.3. Notices. All demands, notices and communications upon or
to Seller, Servicer, Owner Trustee, Indenture Trustee or the Rating Agencies
under this Agreement shall be sent by telecopy or by any other means acceptable
to the parties hereto or be in writing, personally delivered, sent by overnight
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been duly given upon receipt (a) in the case of Seller, to M&I
Dealer Auto Securitization, LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇,
37 2002-1 Sale and Servicing Agreement
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, (b) in the case of Servicer, to M&I ▇▇▇▇▇▇▇▇ &
Ilsley Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (c) in the case of Owner Trustee, at the Corporate Trust Office
with a copy to The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust - ABS Group, fax no. (▇▇▇) ▇▇▇-▇▇▇▇, (d) in
the case of Indenture Trustee, at the Corporate Trust Office, (e) in the case of
Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Securities Group, and (f) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention of Asset Backed Surveillance Department. Any notice required or
permitted to be mailed to a Noteholder or Certificateholder shall be given by
first-class mail, postage prepaid, at the address of such Person as shown in the
Note Register or the Certificate Register, as applicable. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
SECTION 10.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 4.1, 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
Servicer, this Agreement may not be assigned by Seller or Servicer without the
prior written consent of the Owner Trustee, Indenture Trustee, the Noteholders
evidencing not less than 66 2/3% of the Outstanding Amount of the Notes and the
Certificateholders evidencing not less than 66 2/3% of the outstanding
Certificate Percentage Interests.
SECTION 10.5. Litigation and Indemnities. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against any Person in respect of which
indemnity may be sought pursuant to Section 7.2, such Person (the "Indemnified
Person") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. The
Indemnifying Person shall not be liable for any settlement of any claim or
proceeding effected without written consent, but if settled with such consent of
if there be a final judgment for the plaintiff, the Indemnifying Person agrees
to indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
SECTION 10.6. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of Seller, Bank One (as agent on behalf of
PREFCO), Northwoods, Servicer, Owner Trustee (individually and in its capacity
as such) and Indenture Trustee (not individually but solely in its capacity as
Indenture Trustee) and for the benefit of the Certificateholders and the
Noteholders, as third-party beneficiaries, and nothing in this
38 2002-1 Sale and Servicing Agreement
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 10.7. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.
SECTION 10.8. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.9. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.10. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.11. Assignment to Indenture Trustee. Seller hereby
acknowledges and consents to any pledge, assignment and grant of a security
interest by Owner Trustee to Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders of all right, title and interest of Owner Trustee in,
to and under the Receivables and/or the assignment of any or all of Owner
Trustee's rights and obligations hereunder to Indenture Trustee.
SECTION 10.12. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, Owner Trustee, Indenture Trustee, Servicer and
Seller 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 Owner Trustee 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. This
Section 10.2 shall survive the termination of this Agreement.
SECTION 10.13. Limitation of Liability. (a) It is expressly understood
and agreed by and between the parties hereto (i) that this Agreement is executed
and delivered by The Bank of New York (Delaware), not in its individual capacity
but solely as Owner Trustee under the Trust Agreement dated as of October 10,
2002 between M&I Dealer Auto Securitization, LLC and M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Bank
(the "Trust Agreement") in the exercise of the power and authority conferred and
vested in it as such Owner Trustee, (ii) each of the representations,
undertakings
39 2002-1 Sale and Servicing Agreement
and agreements made herein by the Owner Trustee are not personal
representations, undertaking and agreements of The Bank of New York (Delaware),
but are binding only on the Trust Estate created pursuant to the Trust
Agreement, (iii) nothing contained herein shall be construed as creating any
liability on The Bank of New York (Delaware), individually or personally, to
perform any covenant of the Owner Trustee either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any person claiming by, through or under any such party, and (iv) under
no circumstances shall The Bank of New York (Delaware) be personally liable for
the payment of any indebtedness or expense of the Owner Trustee or be liable for
the reach of failure of any obligations, representation, warranty or covenant
made or undertaken by the Owner Trustee under this Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bank One, National Association, not in its
individual capacity but solely as Indenture Trustee, and in no event shall it
have any liability for the representations, warranties, covenants, agreements or
other obligations of Owner Trustee hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of Owner Trustee. For the purposes of this
Agreement, in the performance of its duties or obligations hereunder, Indenture
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Article VI of the Indenture.
SECTION 10.14. Further Assurances. Seller and the Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by Owner Trustee or
Indenture Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 10.15. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, Indenture Trustee,
the Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
40 2002-1 Sale and Servicing Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
THE BANK OF NEW YORK (DELAWARE), not in its
individual capacity but solely as owner
trustee of M&I Auto Loan Trust 2002-1
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
S-1 2002-1 Sale and Servicing Agreement
M&I DEALER AUTO SECURITIZATION, LLC,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: -----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
S-2 2002-1 Sale and Servicing Agreement
M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ BANK, Servicer,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: -----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
S-3 2002-1 Sale and Servicing Agreement
Acknowledged and Agreed to:
Bank One, National Association,
not in its individual capacity
but solely as Indenture Trustee,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: ---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
S-4 2002-1 Sale and Servicing Agreement
SCHEDULE A
SCHEDULE OF RECEIVABLES
[On File with M&I ▇▇▇▇▇▇▇▇ & Ilsley Bank]
Schedule A-1 2002-1 Sale and Servicing Agreement
SCHEDULE B
Location of Receivables Files
The Receivables sold by M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Bank, M&I Northwoods III LLC and
Preferred Receivables Funding Corporation to Seller and sold by Seller to Owner
Trustee are located at the offices of M&I ▇▇▇▇▇▇▇▇ & Ilsley Bank listed below:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Schedule B-1 2002-1 Sale and Servicing Agreement
SCHEDULE C
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained
in the Sale and Servicing Agreement, the Servicer hereby represents, warrants,
and covenants to the Seller and the Owner Trustee as to itself as follows on the
Closing Date and on each Funding Date and on each Payment Date thereafter:
1. The Sale and Servicing Agreement creates a valid and continuing
security interest (as defined in UCC Section 9-102) in the Receivables in favor
of the Owner Trustee, which security interest is prior to all other Liens, and
is enforceable as such as against creditors of and purchasers from the Seller.
2. The Receivables constitute "tangible chattel paper" within the
meaning of UCC Section 9-102.
3. M&I Bank has taken all steps necessary to perfect its security
interest against the Obligor in the property securing the Receivables that
constitute chattel paper.
4. The Seller owns and has good and marketable title to the
Receivables free and clear of any Lien, claim or encumbrance of any Person,
excepting only Liens for taxes, assessments or similar governmental charges or
levies incurred in the ordinary course of business that are not yet due and
payable or as to which any applicable grace period shall not have expired, or
that are being contested in good faith by proper proceedings and for which
adequate reserves have been established, but only so long as foreclosure with
respect to such a Lien is not imminent and the use and value of the property to
which the Lien attaches is not impaired during the pendency of such proceeding.
5. The Servicer has caused or will have caused, within ten days after
the effective date of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from M&I Bank,
M&I Northwoods III LLC and Bank One, National Association (as agent on behalf of
Preferred Receivables Funding Corporation) ("Bank One") to the Seller, the
transfer and sale of the Receivables from the Seller to the Owner Trustee, and
the security interest in the Receivables granted to the Indenture Trustee
hereunder.
6. With respect to Receivables that constitute tangible chattel
paper, such tangible chattel paper is in the possession of the Custodian and the
Indenture Trustee has received a written acknowledgment from the Custodian that
the Custodian is holding such tangible chattel paper solely on behalf and for
the benefit of the Indenture Trustee.
7. The Servicer has not authorized the filing of, or is aware of any
financing statements against Bank One (as agent on behalf of PREFCO), M&I Bank,
the Seller or the Servicer that include a description of collateral covering the
Receivables, the Trust Estate and proceeds related thereto other than any
financing statement (i) relating to the sale of Receivables
Schedule C-1 2002-1 Sale and Servicing Agreement
by M&I Bank and Bank One (as agent on behalf of PREFCO) to the Seller under the
Purchase Agreement, (ii) relating to the sale of Receivables by the Seller to
the Owner Trustee under the Sale and Servicing Agreement, (iii) relating to the
security interest granted to the Indenture Trustee hereunder, or (iv) that has
been terminated.
8. The Servicer is not aware of any judgment, ERISA or tax Lien
filings against either Bank One (as agent on behalf of PREFCO), M&I Northwoods
III LLC, M&I Bank, the Seller or the Servicer.
9. None of the tangible chattel paper that constitute or evidence the
Receivables has any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than the Indenture Trustee.
10. Survival of Perfection Representations. Notwithstanding any other
provision of the Purchase Agreement, the Sale and Servicing Agreement, the
Indenture or any other Basic Document, the Perfection Representations contained
in this Schedule shall be continuing, and remain in full force and effect
(notwithstanding any replacement of the Servicer or termination of Servicer's
rights to act as such) until such time as all obligations under the Purchase
Agreement, Sale and Servicing Agreement and the Indenture have been finally and
fully paid and performed.
11. No Waiver. The parties hereto: (i) shall not, without obtaining a
confirmation of the then-current rating of the Notes, waive any of the
Perfection Representations; (ii) shall provide the Ratings Agencies with prompt
written notice of any breach of the Perfection Representations, and shall not,
without obtaining a confirmation of the then-current rating of the Notes (as
determined after any adjustment or withdrawal of the ratings following notice of
such breach) waive a breach of any of the Perfection Representations.
Schedule C-2 2002-1 Sale and Servicing Agreement
EXHIBIT A
Form of Servicer's Report
Exhibit A-1 2002-1 Sale and Servicing Agreement
M&I Auto Loan Trust 2002-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End
Date:
-----------------------------------------------------------------------------------------------------------------------------------
A. Initial Bond Characteristics Cutoff Coupon Accrual Legal Final Maturity CUSIP
Balance Calendar
-----------------------------------------------------------------------------------------------------------------------------------
i. Class A-1 Notes % Actual/360
ii. Class A-2 Notes % 30/360
iii. Class A-3 Notes % 30/360
iv. Class A-4 Notes % 30/360
v. Class B Notes % 30/360
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
▇. ▇▇▇▇ Balances Balance as of % of Original Balance Unpaid Interest Unpaid Interest
-----------------------------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date] [Date] [Date]
i. Class A-1 Notes %
ii. Class A-2 Notes %
iii. Class A-3 Notes %
iv. Class A-4 Notes %
v. Class B Notes %
-----------------------------------------------------------------------------------------------------------------------------------
Exhibit A-2 2002-1 Sale and Servicing Agreement
M&I Auto Loan Trust 2002-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End
Date:
---------------------------------------------------------------------------------------------------------------------------
C. Reserve Account
---------------------------------------------------------------------------------------------------------------------------
i. Initial Reserve Deposit
ii. Beginning of Period Reserve Balance
iii. Specified Reserve Account Percent % of Initial Pool Balance
iv. Specified Reserve Account Floor
v. Specified Reserve Account Balance
vi. Reserve Account Release
vii. Reserve Account Draws
viii. Reserve Account Deposits
ix. End of Period Reserve Balance
x. Outstanding Simple Interest Advances
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
D. Pre-Funding Account
---------------------------------------------------------------------------------------
i. Pre-Funding Amount %
ii. Pre-Funding transfer amount
iii. Pre-Funding Account balance
iv. Investment earnings and income on funds on
deposit in the Pre-Funding Account during the
Collection Period.
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
E. Servicing
---------------------------------------------------------------------------------------
i. Servicing Fee Percentage %
ii. Beginning of Period Shortfall
iii. End of Period Servicing Shortfall
---------------------------------------------------------------------------------------
Exhibit A-3 2002-1 Sale and Servicing Agreement
M&I Auto Loan Trust 2002-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End
Date:
------------------------------------------------------------------------------------------------------------------------------------
F. Portfolio Characteristics Initial Balance Balance as of Percentage of Original as of
------------------------------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date] [Date]
i. Principal Balance %
ii. Number of Contracts %
iii. Weighted Average Coupon (WAC) % %
iv. Weighted Average Original Term
v. Weighted Average Remaining Term
vi. Weighted Average Seasoning
--------- --------------------------------------------------------------------------------------------------------------------------
Exhibit A-4 2002-1 Sale and Servicing Agreement
M&I Auto Loan Trust 2002-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End
Date:
------------------------------------------------------------------------------------------------------------------------------------
G. Portfolio Performance # of Contracts % of Number of Contracts Principal Balance % of Principal Balance
------------------------------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date] [Date] [Date] [Date] [Date]
i. 30-59 Days Delinquent % %
ii. 60-89 Days Delinquent % %
iii. 90-119 Days Delinquent % %
iv. 120+ Days Delinquent % %
v. Repo in Inventory
(Charged-off) % %
vi. Repo in Inventory (Not
Charged-Off) % %
vii. Gross Charge-Offs in
Period % %
------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
H. Portfolio Charge-Offs $ % of Original Balance
---------------------------------------------------------------------------------------------------------------------
[Date] [Date] [Date] [Date]
▇. ▇▇▇▇▇ Charge-Offs in Period %
ii. Cumulative Gross Charge-Offs %
iii. Net Losses in Period %
iv. Cumulative Net Losses %
---------------------------------------------------------------------------------------------------------------------
Exhibit A-5 2002-1 Sale and Servicing Agreement
M&I Auto Loan Trust 2002-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End
Date:
------------------------------------------------------
I. Pool Collections
------------------------------------------------------
i. Borrower Interest Collections
ii. Borrower Principal Collections
iii. Net Liquidation Proceeds
iv. Recoveries
v. Repurchase Amounts (Interest)
vi. Repurchase Amounts (Principal)
vii. Total Interest Collections
viii. Total Principal Collections
------------------------------------------------------
------------------------------------------------------
J. Pool Balance Reconciliation
------------------------------------------------------
i. Beginning Pool Balance
ii. Principal Collections
iii. Gross Charge-Offs in Period
iv. Ending Pool Balance
------------------------------------------------------
--------------------------------------------------------------------------------
K. Total Available
--------------------------------------------------------------------------------
i. Total Pool Collections
ii. Reserve Account Balance
iii. Specified Reserve Account Amount
iv. Reserve Account Release
v. Collected Funds
--------------------------------------------------------------------------------
Exhibit A-6 2002-1 Sale and Servicing Agreement
M&I Auto Loan Trust 2002-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End
Date:
------------------------------------------------------------------------------------------------------------------------------------
L. Waterfall Calculation Amount Due Amount Reserve Reserve Amount Paid
Steps Available Balance Account Draw
for Distribution
------------------------------------------------------------------------------------------------------------------------------------
Servicing Fee
Previous Servicing Fee Shortfall
i. Total Servicing Fee
ii. Class A Notes Interest Distribution
Class A Notes Balance
Pool Balance
iii. Class B Notes Interest Distribution
Class A and B Notes Balance
Pool Balance
iv. Principal Distribution
v. Reserve Fund Deposit
Outstanding Money Market Securities
Notes and Certificate Balances
Specified Reserve Account Amount
Target Securities Balance
vi. Release to Seller
------------------------------------------------------------------------------------------------------------------------------------
Exhibit A-7 2002-1 Sale and Servicing Agreement
M&I Auto Loan Trust 2002-1
Monthly Servicing Report
Distribution Date: Closing Date
Collection Period Begin Date: Previous Distribution Date:
Collection Period End Date: Previous Collection Period End
Date:
-----------------------------------------------------------------------------------------------------------------------------
▇. ▇▇▇▇ Interest Distributions Coupon Number of Current Previous Accrued Interest on Total Bond
Days in Interest Interest Interest Shortfall Interest Due
Period Shortfall
-----------------------------------------------------------------------------------------------------------------------------
Total Class A Notes -
Class A-1 Notes % -
Class A-2 Notes % -
Class A-3 Notes % -
Class A-4 Notes % -
Class B Notes % -
-----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------
▇. ▇▇▇▇ Interest Distributions Total Bond Interest
Interest Paid Shortfall
----------------------------------------------------------------
Total Class A Notes
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class B Notes
----------------------------------------------------------------
-----------------------------------------------------------------------
▇. ▇▇▇▇ Principal Distributions
-----------------------------------------------------------------------
Principal Distribution
Total Principal Distribution
Class A-1 Notes Principal Distribution
Class A-2 Notes Principal Distribution
Class A-3 Notes Principal Distribution
Class A-4 Notes Principal Distribution
Class B Notes Principal Distribution
-----------------------------------------------------------------------
Exhibit A-8 2002-1 Sale and Servicing Agreement
EXHIBIT B
Form of Funding Date Officer's Certificate
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President of M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Bank, a
banking corporation organized under the laws of the State of Wisconsin (the
"Corporation"), as Servicer pursuant to the Sale and Servicing Agreement, dated
as of October 10, 2002, among the Corporation, The Bank of New York (Delaware),
not in its individual capacity but solely as owner trustee of M&I Auto Loan
Trust 2002-1 (the "Owner Trustee"), M&I Dealer Auto Securitization, LLC, a
Delaware limited liability company, as seller, and Bank One, National
Association, a national banking association, as indenture trustee (the
"Indenture Trustee") hereby certify that the Funding Date shall be [______]
(which [is][is not] the final Funding Date, the Subsequent Cutoff Date shall be
[______]) and that as of the date hereof no Event of Servicing Termination has
occurred and is continuing under the Sale and Servicing Agreement and no Event
of Default has occurred and is continuing under the Indenture.
Unless otherwise indicated, all capitalized terms used herein have the
meanings assigned to them in Appendix X to the Sale and Servicing Agreement.
In addition to the above, I also certify as to the following as of the
Funding Date:
(a) Characteristics of Subsequent Receivables. The Subsequent Receivable
has been fully and properly executed by the parties thereto and (i) has been
originated by a Dealer in the ordinary course of such Dealer's business to
finance the retail sale by a Dealer of the related Financed Vehicle and has been
purchased by M&I Bank, Dealer Finance or their predecessors in interest in the
ordinary course of their business, (ii) was underwritten in accordance with M&I
Bank's underwriting standards, (iii) is secured by a valid, subsisting, binding
and enforceable first priority perfected security interest in favor of Dealer
Finance or M&I Bank in the Financed Vehicle (subject to administrative delays
and clerical errors on the part of the applicable government agency and to any
statutory or other Lien arising by operation of law after the Funding Date which
is prior to such security interest), which security interest is assignable
together with such Subsequent Receivable, and has been so assigned to Seller,
and subsequently assigned to Owner Trustee pursuant to the Sale and Servicing
Agreement, and pledged to Indenture Trustee pursuant to the Indenture, (iv)
contains customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against the collateral of the
benefits of the security, (v) provided, at origination, for level monthly
payments (provided that the amount of the first or last payment may be minimally
different), which fully amortize the Initial Principal Balance over the original
term, (vi) provides for interest at the Contract Rate specified in the Schedule
of Receivables delivered on the Funding Date, (vii) was originated in the United
States and (viii) constitutes "chattel paper" as defined in the UCC.
(b) Individual Characteristics. The Subsequent Receivables have the
following individual characteristics as of the Subsequent Cutoff Date (i) each
Subsequent Receivable is secured by a Motor Vehicle; (ii) each Subsequent
Receivable has a Contract Rate of no less than 5.50% and not more than [_____]%;
(iii) each Subsequent Receivable had an original term to maturity of not more
than 72 months and not less than 12 months and each Subsequent Receivable has a
remaining term to maturity, as of the Subsequent Cutoff Date, of six months or
more; (iv) each Subsequent Receivable had an Initial Principal Balance less than
or equal to
Exhibit B-1
$[________]; (v) each Subsequent Receivable has a Cutoff Date Principal Balance
of greater than or equal to $[________]; (vi) no Subsequent Receivable has a
scheduled maturity date later than September 19, 2009; (vii) no Subsequent
Receivable was more than 29 days past due as of the Subsequent Cutoff Date;
(viii) no Financed Vehicle was noted in the related records of M&I Bank as being
the subject of any pending bankruptcy or insolvency proceeding as of the
Subsequent Cutoff Date; (ix) no Subsequent Receivable is subject to a force
placed Physical Damage Insurance Policy on the related Financed Vehicle; (x)
each Subsequent Receivable is a Simple Interest Receivable; and (xi) the Dealer
of the Financed Vehicle has no participation in, or other right to receive, any
proceeds of such Subsequent Receivable. The Subsequent Receivables were selected
using selection procedures that were not intended by M&I Bank or Dealer Finance
to be adverse to the Seller.
(c) Schedule of Subsequent Receivables. The information with respect
to each Receivable set forth in the Schedule of Receivables delivered on the
Funding Date, including (without limitation) the account number, the Cutoff Date
Principal Balance, the maturity date and the Contract Rate, was true and correct
in all material respects as of the close of business on the Subsequent Cutoff
Date.
(d) Compliance with Law. The Subsequent Receivable and the sale of the
related Financed Vehicle complied at the time it was originated or made, and
will comply as of the Funding Date, in all material respects with all
requirements of applicable federal, state and local laws, and regulations
thereunder, including, to the extent applicable, usury laws, the Federal Truth
in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Federal Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Fair Debt
Collection Practices Act, Federal Reserve Board Regulations B and Z and any
other consumer credit, consumer protection, equal opportunity and disclosure
laws.
(e) Binding Obligation. The Subsequent Receivable constitutes the
genuine, legal, valid and binding payment obligation in writing of the Obligor,
enforceable in all material respects by the holder thereof in accordance with
its terms, subject to the effect of bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally, and
the Subsequent Receivable is not subject to any right of rescission, setoff,
counterclaim or defense, including the defense of usury.
(f) Lien in Force. The Subsequent Receivable has not been satisfied,
subordinated or rescinded and M&I Bank or Dealer Finance has not taken any
action which would have the effect of releasing the related Financed Vehicle
from the Lien granted by the Subsequent Receivable in whole or in part.
(g) No Amendment or Waiver. No material provision of the Subsequent
Receivable has been amended, waived, altered or modified in any respect, except
such waivers as would be permitted under the Sale and Servicing Agreement and as
are reflected in the Receivable File, and no amendment, waiver, alteration or
modification causes such Subsequent Receivable not to conform to the other
representations or warranties contained in this Section.
(h) No Liens. There are no Liens or claims, including Liens for work,
labor, materials or unpaid state or federal taxes, relating to the Financed
Vehicle securing the Subsequent
Exhibit B-2
Receivable, that are or may be prior to or equal to the Lien granted by the
Subsequent Receivable.
(i) No Default. Except for payment delinquencies continuing for a
period of less than 30 days as of the Subsequent Cutoff Date, no default,
breach, violation or event permitting acceleration under the terms of the
Subsequent Receivable exists and no continuing condition that with notice or
lapse of time, or both, would constitute a default, breach, violation or event
permitting acceleration under the terms of the Subsequent Receivable has arisen.
(j) Insurance. The Subsequent Receivable requires the Obligor to
insure the Financed Vehicle under a Physical and Damage Insurance Policy, pay
the premiums for such insurance and keep such insurance in full force and
effect.
(k) Good Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the Subsequent
Receivables from the Seller to Owner Trustee and that the beneficial interest in
and title to the Subsequent Receivables not be part of the Seller's estate in
the event of the filing of a bankruptcy petition or insolvency proceeding by or
against the Seller under any bankruptcy or insolvency law. No Subsequent
Receivable has been sold, transferred, assigned, or pledged (i) by M&I Bank to
any other Person other than the Seller, and (ii) 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 the Subsequent
Receivable free and clear of any Lien and had full right and power to transfer
and assign the Subsequent Receivable to Owner Trustee and immediately upon the
transfer and assignment of the Subsequent Receivable to Owner Trustee, Owner
Trustee shall have good and marketable title to the Subsequent Receivable, free
and clear of any Lien; and Owner Trustee's interest in the Subsequent Receivable
resulting from the transfer has been perfected under the UCC. All filings
(including UCC filings) necessary in any jurisdiction, to give Owner Trustee a
first priority perfected ownership interest in the Subsequent Receivables, and
to give Indenture Trustee a first priority perfected security interest therein,
shall have been presented to Indenture Trustee for filing in the appropriate
filing offices. Upon such filing by the Indenture Trustee, the Indenture Trustee
will have a first priority perfected security interest in the Subsequent
Receivables.
(l) Obligations. M&I Bank has duly fulfilled all material obligations
on its part to be fulfilled under, or in connection with, the Subsequent
Receivable.
(m) Possession. There is only one original executed Subsequent
Receivable, and immediately prior to the Funding Date, M&I Bank or one of its
Affiliates will have possession of such original executed Subsequent Receivable.
(n) No Government Obligor. The Obligor on the Subsequent Receivable is
not the United States of America or any state thereof or any local government,
or any agency, department, political subdivision or instrumentality of the
United States of America or any state thereof or any local government.
(o) Marking Records. By the Funding Date, M&I Bank shall have caused
the portions of M&I Bank's electronic master record of Motor Vehicle Loans
relating to the Subsequent
Exhibit B-3
Receivables to be clearly and unambiguously marked to show that the Subsequent
Receivable is owned by the Owner Trustee in accordance with the terms of this
Agreement.
(p) No Assignment. As of the Funding Date neither M&I Bank nor any of
its Affiliates shall have taken any action to convey any right to any Person
that would result in such Person having a right to payments received under the
Insurance Policies or Dealer Agreements, or payments due under the Subsequent
Receivable, that is senior to, or equal with, that of the Owner Trustee.
(q) Lawful Assignment. The Subsequent Receivable has not been
originated in, and is not subject to the laws of, any jurisdiction under which
the sale, transfer or assignment of such Subsequent Receivable hereunder or
pursuant to transfers of the Notes or Certificates are unlawful, void or
voidable. Neither M&I Bank nor any of its Affiliates has entered into any
agreement with any Obligor that prohibits, restricts or conditions the
assignment of any portion of the Subsequent Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Subsequent
Receivable is in effect whereby the Dealer warrants title to the Motor Vehicle
and indemnifies Dealer Finance and its assigns against the unenforceability of
each Subsequent Receivable sold thereunder, and the rights of Dealer Finance
thereunder, with regard to the Subsequent Receivable sold hereunder, have been
validly assigned to and are enforceable against the Dealer by the Seller, along
with any Dealer Recourse.
(s) Composition of Subsequent Receivable. No Subsequent Receivable has
a Principal Balance which includes capitalized interest, late charges or amounts
attributable to the payment of the premium for any Physical Damage Insurance
Policy.
(t) Database File. The information included with respect to each
Subsequent Receivable in the database file delivered pursuant to Section 4.9(b)
of the Sale and Servicing Agreement is accurate and complete in all material
respects.
(u) No Bankruptcies. No Obligor on any Subsequent Receivable was noted
in the related Subsequent Receivable File as having filed for bankruptcy in a
proceeding which remained undischarged as of the Subsequent Cutoff Date.
(v) Amounts. The Funding Date Pool Balance was $[_______________].
(w) Aggregate Characteristics. The Subsequent Receivables had the
following characteristics in the aggregate as of the Subsequent Cutoff Date: (i)
approximately [_____]% of the Funding Date Pool Balance was attributable to
loans for purchases of new Financed Vehicles, and approximately [_____]% of the
Funding Date Pool Balance was attributable to loans for purchases of used
Financed Vehicles; (ii) approximately [_____]% of the Funding Date Pool Balance
was attributable to Subsequent Receivables the mailing addresses of the Obligors
with respect to which are located in the State of Minnesota, [_____]% of the
Funding Date Pool Balance was attributable to Subsequent Receivables the mailing
addresses of the Obligors with respect to which are located in the State of
Wisconsin and no other state accounts for more than 10% of the Funding Date Pool
Balance; (iii) the weighted average Contract Rate of the Subsequent Receivables
was [____]%; (iv) there are [______] Subsequent Receivables being
Exhibit B-4
conveyed by M&I Bank to the Owner Trustee; (v) the average Cutoff Date Principal
Balance of the Subsequent Receivables was $[___________]; (vi) the weighted
average original term and weighted average remaining term of the Subsequent
Receivables were [______] months and [______] months, respectively; and (vii)
100 % of the Subsequent Receivables (other than those Subsequent Receivables
that have been paid ahead as of the Subsequent Cutoff Date) have their next
scheduled payment date in either [______] or [______] of 2002.
(x) Perfection Representations. The Perfection Representations shall
be a part of this Certificate.
Exhibit B-5
APPENDIX X
DEFINITIONS
"Accrued Class A Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class A Noteholders' Monthly Accrued Interest for such
Payment Date and the Class A Noteholders' Interest Carryover Shortfall for such
Payment Date.
"Accrued Class B Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class B Noteholders' Monthly Accrued Interest for such
Payment Date and the Class B Noteholders' Interest Carryover Shortfall for such
Payment Date.
"Act" is defined in Section 11.3(a) of the Indenture.
"Administration Agreement" means the Administration Agreement among M&I
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Bank, as Administrator, The Bank of New York (Delaware), not
in its individual capacity but solely as owner trustee of M&I Auto Loan Trust
2002-1 and Bank One, National Association, as Indenture Trustee, dated October
10, 2002, as the same may be amended and supplemented from time to time.
"Administration Fee" is defined in Section 4 of the Administration
Agreement.
"Administrator" means M&I ▇▇▇▇▇▇▇▇ & Ilsley Bank, in its capacity as
administrator under the Administration Agreement, and each successor
Administrator.
"Affiliate" means, with respect to any specified Person, any other
Person controlling, controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
or act as servicer with respect to the financial assets of such specified Person
unless such other Person controls the specified Person through equity ownership
or otherwise.
"Authenticating Agent" is defined in Section 2.13 of the Indenture.
"Authorized Officer" means, with respect to Owner Trustee, Indenture
Trustee and Servicer, any officer of Owner Trustee, Indenture Trustee or
Servicer, as applicable, who is authorized to act for Owner Trustee, Indenture
Trustee or Servicer, as applicable, in matters relating to Owner Trustee,
Indenture Trustee or Servicer and who is identified on the list of Authorized
Officers delivered by each of Owner Trustee, Indenture Trustee and Servicer to
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Available Collections" shall mean, for any Payment Date, the sum of
the following amounts with respect to the Collection Period preceding such
Payment Date: (i) all funds,
2002-1 Definitions
including Liquidation Proceeds, collected with respect to the Receivables other
than Defaulted Receivables; (ii) all Recoveries in respect of Defaulted
Receivables (iii) all Simple Interest Advances with respect to the Receivables,
(iv) the Purchase Amount received with respect to each Receivable that became a
Purchased Receivable during such Collection Period; and (v) partial prepayments
of any refunded item included in the principal balance of a Receivable, such as
extended warranty protection plan costs, or physical damage, credit life,
disability insurance premiums; provided, however, that in calculating the
Available Collections the following will be excluded: (1) amounts paid to the
Servicer to reimburse Outstanding Simple Interest Advances, (2) all payments and
proceeds (including Liquidation Proceeds) of any Receivables the Purchase Amount
of which has been included in the Available Funds in a prior Collection Period,
(3) amounts consisting of the Supplemental Servicing Fee and (4) amounts
representing reimbursement for certain Liquidation Expenses.
"Available Funds" shall mean, for any Payment Date, the sum of (i) the
Available Collections for such Payment Date, (ii) the Reserve Account Excess
Amount for such Payment Date and (iii) the interest and other investment income
on funds on deposit in the Pre-Funding Account.
"Bank One" means Bank One, National Association, a national banking
association (as agent on behalf of PREFCO), as a transferor under the Purchase
Agreement.
"Bank Regulatory Authorities" means the Federal Reserve Board, the
Federal Deposit Insurance Corporation, Office of the Comptroller of Currency and
the Wisconsin Department of Financial Institutions.
"Basic Documents" means the Purchase Agreement, the Indenture, the Note
Depository Agreement, the Sale and Servicing Agreement, the Trust Agreement, the
Administration Agreement, the Notes, the Certificates and other documents and
certificates delivered in connection therewith.
"Benefit Plan" is defined in Section 3.12 of the Trust Agreement.
"Book-Entry Note" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10 of the Indenture.
"Business Day" means a day that is not a Saturday or a Sunday and that
in the States of New York, Wisconsin and the State in which the Corporate Trust
Office is located is neither a legal holiday nor a day on which banking
institutions are authorized by law, regulation or executive order to be closed.
"Certificate" means a certificate evidencing the beneficial interest of
a Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"Certificate Account Property" means the Certificate Distribution
Account, all amounts and investments held from time to time therein (whether in
the form of deposit account, Physical Property, book entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
Appendix X-2 2002-1 Definitions
"Certificate Distribution Account" is defined in Section 5.1 of the
Trust Agreement.
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 of the Trust Agreement and shall
initially be the Owner Trustee.
"Certificate Percentage Interest" shall mean with respect to any
Certificate, the percentage interest of ownership in the Trust represented
thereby as set forth on the face thereof.
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Class" shall mean a class of Notes, which may be the Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes or the Class B
Notes.
"Class A Notes" shall mean, collectively, the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A Noteholders' Interest Carryover Shortfall" shall mean, with
respect to any Payment Date, the excess of the Class A Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class A
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
A Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class A Notes on the preceding Payment Date,
to the extent permitted by law, at the respective Interest Rates borne by such
Class A Notes for the related Interest Period.
"Class A Noteholders' Monthly Accrued Interest" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes at the respective Interest Rate for such Class and on
the outstanding principal amount of the Notes of each such Class on the
immediately preceding Payment Date or the Closing Date, as the case may be,
after giving effect to all payments of principal to the Noteholders of the Notes
of such Class on or prior to such preceding Payment Date.
"Class A-1 Final Scheduled Payment Date" shall mean October 20, 2003.
"Class A-1 Interest Rate" means 1.77% per annum. Interest with respect
to the Class A-1 Notes shall be computed on the basis of actual days elapsed and
a 360-day year for all purposes of the Basic Documents.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1
Note is registered on the Note Register.
"Class A-1 Notes" means the Class A-1 1.77% Asset Backed Notes,
substantially in the form of Exhibit A-1 to the Indenture.
Appendix X-3 2002-1 Definitions
"Class A-2 Final Scheduled Payment Date" shall mean the July 20, 2005
Payment Date.
"Class A-2 Interest Rate" means 1.95% per annum. Interest with respect
to the Class A-2 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class A-2 Noteholder" shall mean the Person in whose name a Class A-2
Note is registered on the Note Register.
"Class A-2 Notes" means the Class A-2 1.95% Asset Backed Notes,
substantially in the form of Exhibit A-2 to the Indenture.
"Class A-3 Final Scheduled Payment Date" shall mean the October 22,
2007 Payment Date.
"Class A-3 Interest Rate" means 2.49% per annum. Interest with respect
to the Class A-3 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class A-3 Noteholder" shall mean the Person in whose name a Class A-3
Note is registered on the Note Register.
"Class A-3 Notes" means the Class A-3 2.49% Asset Backed Notes,
substantially in the form of Exhibit A-3 to the Indenture.
"Class A-4 Final Scheduled Payment Date" shall mean the October 20,
2008 Payment Date.
"Class A-4 Interest Rate" means 3.04% per annum. Interest with respect
to the Class A-4 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class A-4 Noteholder" shall mean the Person in whose name a Class A-4
Note is registered on the Note Register.
"Class A-4 Notes" means the Class A-4 3.04% Asset Backed Notes,
substantially in the form of Exhibit A-4 to the Indenture.
"Class B Final Scheduled Payment Date" shall mean the September 21,
2009 Payment Date.
"Class B Noteholder" shall mean the Person in whose name a Class B Note
is registered on the Note Register.
"Class B Interest Rate" means 3.52% per annum. Interest with respect to
the Class B Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
Appendix X-4 2002-1 Definitions
"Class B Noteholders' Interest Carryover Shortfall" shall mean, with
respect to any Payment Date, the excess of the Class B Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class B
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
B Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class B Notes on the preceding Payment Date,
to the extent permitted by law, at the Class B Rate for the related Interest
Period.
"Class B Noteholders' Monthly Accrued Interest" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class B Notes at the Class B Rate on the outstanding
principal amount of the Class B Notes on the immediately preceding Payment Date
or the Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Class B Notes on or prior to such preceding
Payment Date.
"Class B Noteholder" shall mean the Person in whose name a Class B Note
is registered on the Note Register.
"Class B Notes" means the Class B 3.52% Asset Backed Notes,
substantially in the form of Exhibit B to the Indenture.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means October 10, 2002.
"Code" means the Internal Revenue Code of 1986 and Treasury Regulations
promulgated thereunder.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Collection Period" means, (a) in the case of the initial Collection
Period, the period from but not including the Initial Cutoff Date to and
including October 31, 2002 and (b) thereafter, each calendar month during the
term of the Sale and Servicing Agreement. With respect to any Determination
Date, Deposit Date or Payment Date, the "related Collection Period" means the
Collection Period preceding the month in which such Determination Date, Deposit
Date or Payment Date occurs.
"Collections" means all collections on the Receivables and any proceeds
from Insurance Policies.
Appendix X-5 2002-1 Definitions
"Commission" means the Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate per annum
of interest charged on the outstanding principal balance of such Receivable.
"Controlling Note Class" shall mean, with respect to any Notes
Outstanding, the Class A Notes (voting together as a single class) as long as
any Class A Notes are Outstanding, and thereafter the Class B Notes as long as
any Class B Notes are Outstanding (excluding Notes held by M&I Bank, the
Servicer or their Affiliates).
"Corporate Trust Office" means:
(a) as used in the Indenture, or otherwise with respect to
Indenture Trustee, the principal office of Indenture Trustee at which
at any particular time its corporate trust business shall be
administered which office at date of the execution of the Indenture is
located at 1 Bank One Plaza, Mail Code IL1-0481, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Global Corporate Trust Services Division or at
such other address as Indenture Trustee may designate from time to time
by notice to the Noteholders, Servicer and Trust, or the principal
corporate trust office of any successor Indenture Trustee (the address
of which the successor Indenture Trustee will notify the Noteholders
and the Owner Trustee); and
(b) as used in the Trust Agreement, or otherwise with respect
to Owner Trustee, the principal corporate trust office of Owner Trustee
located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇; or at such other address as Owner Trustee may
designate by notice to the Certificateholders and Seller, or the
principal corporate trust office of any successor Owner Trustee (the
address of which the successor owner trustee will notify the
Certificateholders and Seller).
"Custodian" means Servicer in its capacity as agent of the Trust, as
custodian of the Receivable Files.
"Cutoff Date" means, the Initial Cutoff Date and the Subsequent Cutoff
Date, as applicable.
"Cutoff Date Principal Balance" means, with respect to any Receivable,
the Initial Principal Balance of such Receivable minus the sum of the portion of
all payments received under such Receivable from or on behalf of the related
Obligor on or prior to the Cutoff Date and allocable to principal in accordance
with the terms of such Receivable.
"Dealer" means, with respect to any Receivable, the seller of the
related Financed Vehicle.
"Dealer Agreement" means an agreement between Dealer Finance and a
Dealer pursuant to which Dealer Finance acquires Motor Vehicle Loans from the
Dealer or gives such Dealer the right to induce persons to apply to Dealer
Finance for loans in connection with the retail sale of Motor Vehicles by such
Dealer.
Appendix X-6 2002-1 Definitions
"Dealer Finance" means M&I Dealer Finance, Inc., a Wisconsin
corporation.
"Dealer Recourse" means, with respect to any Dealer, any rights and
remedies against such Dealer under the related Dealer Agreement (other than with
respect to any breach of representation or warranty thereunder) with respect to
credit losses on a Receivable secured by a Financed Vehicle sold by such Dealer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which Servicer has determined to
charge off during such Collection Period in accordance with its customary
servicing practices (and, in no event later than 150 days after a Receivable
shall have become delinquent).
"Definitive Notes" is defined in Section 2.1 of the Indenture.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" as defined in Section 9-102(47) of the UCC and
are susceptible of physical delivery, transfer thereof to the Indenture
Trustee or its nominee or custodian by physical delivery to the
Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a "certificated
security" (as defined in Section 8-102 of the UCC) transfer thereof (i)
by delivery of such certificated security endorsed to, or registered in
the transfer thereof (i) by delivery of such certificated security
endorsed to, or registered in the name of, the Indenture Trustee or its
nominee or custodian to the Indenture Trustee or its nominee or
custodian, or to another person, other than a "securities intermediary"
(as defined in Section 8-102(14) of the UCC), who acquires possession
of the certificated security on behalf of the Indenture Trustee or its
nominee or custodian or, having previously acquired possession of the
certificate, acknowledges that it holds for the Indenture Trustee or
its nominee or custodian or (ii) by delivery thereof to a "securities
intermediary", endorsed to the Indenture Trustee or its nominee or
custodian, and the making by such "securities intermediary" of entries
on its books and records identifying such certificated securities as
belonging to the Indenture Trustee or its nominee or custodian and the
sending by such "securities intermediary" of a confirmation of the
purchase of such certificated security by the Indenture Trustee or its
nominee or custodian, or (iii) by delivery thereof to a "clearing
corporation" (all of the foregoing, "Physical Property"), and, in any
event, any such Physical Property in registered form shall be in the
name of the Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
Appendix X-7 2002-1 Definitions
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such
financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Indenture Trustee
or its nominee or custodian of the purchase by the Indenture Trustee or
its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records
identifying such book entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations as belonging to the
Indenture Trustee or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the
Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Trust Account Property to
the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
and
(c) with respect to any item of Trust Account Property that is
an uncertificated security (as defined in Section 8-102(18) of the UCC)
and that is not governed by clause (b) above, (i) registration on the
books and records of the issuer thereof in the name of the Indenture
Trustee or its nominee or custodian, or (ii) registration on the books
and records of the issuer thereof in the name of another person, other
than a securities intermediary, who acknowledges that is holds such
uncertificated security for the benefit of the Indenture Trustee or its
nominee or custodian.
"Deposit Date" means, with respect to any Collection Period, two
Business Days preceding the related Payment Date.
"Determination Date" means with respect to any Collection Period, the
Business Day preceding the related Payment Date by two Business Days.
"Dollar" and the sign "$" mean lawful money of the United States.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution acting in its fiduciary capacity
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as the long-term unsecured debt of such depository
institution shall have a credit rating from each Rating Agency in one of its
generic rating categories which signifies investment grade. Any such trust
account may be maintained with the Owner Trustee, Indenture Trustee or any of
their respective Affiliates and any such trust account (other than the Reserve
Account and the Pre-Funding Account) may be maintained with M&I ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ Bank, or any of its
Appendix X-8 2002-1 Definitions
Affiliates, if such accounts meet the requirements described in clause (b) of
the preceding sentence.
"Eligible Institution" means a depository institution (which may be
Servicer, Owner Trustee or Indenture Trustee, or any of their respective
Affiliates) organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), (a) which has (i) either a long-term senior unsecured debt rating
of AA- or a short-term senior unsecured debt or certificate of deposit rating of
A-1 or better by Standard & Poor's and (ii)(A) a short-term senior unsecured
debt rating of A-l or better by Standard & Poor's and (B) a short-term senior
unsecured debt rating of P-1 or better by Moody's, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (b) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified, Servicer, any Affiliate of Servicer, Owner Trustee or Indenture
Trustee may be considered an Eligible Institution.
"Eligible Investments" shall mean any one or more of the following
types of investments:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution (including any Affiliate of Seller,
Servicer, Indenture Trustee or Owner Trustee) or trust company
incorporated under the laws of the United States of America or any
state thereof or the District of Columbia (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or
state banking or depository institution authorities (including
depository receipts issued by any such institution or trust company as
custodian with respect to any obligation referred to in clause (a)
above or a portion of such obligation for the benefit of the holders of
such depository receipts); provided that at the time of the investment
or contractual commitment to invest therein (which shall be deemed to
be made again each time funds are reinvested following each Payment
Date), the commercial paper or other short-term senior unsecured debt
obligations (other than such obligations the rating of which is based
on the credit of a Person other than such depository institution or
trust company) of such depository institution or trust company shall
have a credit rating from Standard & Poor's of A-1 and from Moody's of
P-1;
(c) commercial paper (including commercial paper of any
Seller, Servicer and the Indenture Trustee, Owner Trustee or any of
their Affiliates) having, at the time of the investment or contractual
commitment to invest therein, a rating from Standard & Poor's of A-1
and from Moody's of P-1;
(d) investments in money market funds (including funds for
which Indenture Trustee or Owner Trustee or any of their respective
Affiliates or any of Seller's Affiliates is investment manager or
advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G and
from Moody's of Aaa;
Appendix X-9 2002-1 Definitions
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) referred to in clause (b) above;
and
(g) any other investment with respect to which each Rating
Agency has provided written notice that such investment would not cause
such Rating Agency to downgrade, qualify or withdraw its then current
rating of any class of Notes.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" is defined in Section 5.1 of the Indenture.
"Excess Interest" means, for any Payment Date, (a) the sum of funds
available to pay interest on any Payment Date over (b) the amount necessary to
pay Servicing Fees and to make interest payments on the Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any limited
liability company or partnership, a similar official with respect to any direct
or indirect member or general partner thereof.
"Final Scheduled Payment Date," for each Class of Notes, means the
respective Class A-1 Final Scheduled Payment Date, Class A-2 Final Scheduled
Payment Date, Class A-3 Final Scheduled Payment Date, Class A-4 Final Scheduled
Payment Date and Class B Final Scheduled Payment Date or, if such date is not a
Business Day, the next succeeding Business Day.
"Financed Vehicle" means a new or used automobile or light duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"Funding Date" means each date (not more than once per week) after the
Closing Date on which Subsequent Receivables are purchased by the Trust.
"Funding Date Pool Balance" means the Pool Balance of the Subsequent
Receivables transferred on a Funding Date as of each related Subsequent Cutoff
Date.
"GAAP" is defined in Section 10.1 of the Sale and Servicing Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and right of set-off
Appendix X-10 2002-1 Definitions
against, deposit, set over and confirm pursuant to the Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the Granting
party thereunder, including the immediate and continuing right to claim for,
collect, receive and give receipt for principal and interest payments in respect
of the Collateral and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring proceedings in the name of the
Granting party or otherwise and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto. Other forms of the verb "to Grant" shall have correlative meanings.
"Holder" means, as the context may require, a Certificateholder or a
Noteholder or both.
"Indemnified Parties" is defined in Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of October 10, 2002, among M&I
Bank, Owner Trustee and Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Trustee" means Bank One, National Association, not in its
individual capacity but as indenture trustee under the Indenture, or any
successor trustee under the Indenture.
"Independent" means, when used with respect to any specified Person,
that the person (a) is in fact independent of Owner Trustee, any other obligor
upon the Notes, Sellers and any Affiliate of any of the foregoing persons, (b)
does not have any direct financial interest or any material indirect financial
interest (other than less than 5% of the outstanding amount of any publicly
traded security) in Owner Trustee, any such other obligor, Servicer or any
Affiliate of any of the foregoing Persons and (c) is not connected with Owner
Trustee, any such other obligor, Servicer or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Administrator in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"Initial Cutoff Date" means, with respect to the Receivables
transferred on the Closing Date, October 4, 2002.
"Initial Pre-Funding Deposit" is defined in Section 5.3(b) of the Sale
and Servicing Agreement.
"Initial Principal Balance" means, in respect of a Receivable, the
amount advanced under the Receivable toward the purchase price of the Financed
Vehicle and related costs, including accessories, service and warranty
contracts, insurance premiums, other items customarily financed as part of
retail motor vehicle loans and/or retail installment sales contracts
Appendix X-11 2002-1 Definitions
and other fees charged by M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Bank, its Affiliates or the
applicable Dealer and included in the amount to be financed, the total of which
is shown as the initial principal balance in the note and security agreement or
retail installment sale contract evidencing and securing such Receivable.
"Initial Purchase Price" is defined in Section 2.3 of the Purchase
Agreement.
"Initial Purchased Assets" is defined in Section 2.1 of the Purchase
Agreement.
"Initial Reserve Account Deposit" is defined in Section 5.8(b) of the
Sale and Servicing Agreement.
"Initial Reserve Account Deposit Amount" means an amount equal to
$2,163,852.42 which is (i) 0.50% of the aggregate Principal Balance of the
Receivables as of the Initial Cutoff Date plus (ii) $267,452.00 which is the
amount expected to cover the negative arbitrage with respect to funds deposited
in the Pre-Funding Account after the Closing Date.
"Initial Trust Property" is defined in Section 2.1 of the Sale and
Servicing Agreement.
"Insolvency Event" means, for a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver (including any
receiver appointed under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended), liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"Insurance Policies" means, all credit life and disability insurance
policies maintained by the Obligors and all Physical Damage Insurance Policies.
"Interest Distribution Account" shall mean the administrative
subaccount of the Note Distribution Account established and maintained as such
pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Interest Period" shall mean, with respect to any Payment Date (i) with
respect to the Class A-1 Notes from and including the Closing Date (in the case
of the first Payment Date) or from and including the most recent Payment Date on
which interest has been paid to but excluding the following Payment Date and
(ii) with respect to each Class of Notes other than the Class A-1 Notes from and
including the Closing Date (in the case of the first Payment Date) or
Appendix X-12 2002-1 Definitions
from and including the twentieth day of the calendar month preceding each
Payment Date to but excluding the twentieth day of the following calendar month.
"Interest Rate" means, with respect to the (a) Class A-1 Notes, the
Class A-1 Interest Rate, (b) Class A-2 Notes, the Class A-2 Interest Rate, (c)
Class A-3 Notes, the Class A-3 Interest Rate, (d) Class A-4 Notes, the Class A-4
Interest Rate and (e) Class B Notes, the Class B Interest Rate.
"IRS" shall mean the Internal Revenue Service.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of Owner Trustee by any one of its Authorized Officers and
delivered to Indenture Trustee.
"Lien" means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind, other than liens for taxes
not yet due and payable, mechanics' or materialmen's liens and other liens for
work, labor or materials, and any other liens that may attach by operation of
law.
"Liquidation Proceeds" means, with respect to any Receivable that is
not a Defaulted Receivable, (a) insurance proceeds received by Servicer with
respect to the Insurance Policies, (b) amounts received by Servicer in
connection with such Receivable pursuant to the exercise of rights under that
Receivable and (c) the monies collected by Servicer (from whatever source,
including proceeds of a sale of a Financed Vehicle or as a result of any Dealer
Recourse) on such Receivable net of any expenses incurred by Servicer in
connection therewith and any payments required by law to be remitted to the
Obligor.
"M&I Bank" means M&I ▇▇▇▇▇▇▇▇ & Ilsley Bank, a banking corporation
organized under the laws of the State of Wisconsin.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Motor Vehicle" means a new or used automobile or light duty truck.
"Motor Vehicle Loan" means retail installment sales contract secured by
a Motor Vehicle originated by a Dealer and purchased by M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Bank or its Affiliates.
"Northwoods" means M&I Northwoods III LLC, a Delaware limited
liability company, as a transferor under the Purchase Agreement.
"Note" means a Class A Note or Class B Note.
"Note Distribution Account" means the account designated as such,
established and maintained as such pursuant to Section 5.1 of the Sale and
Servicing Agreement.
"Note Depository Agreement" means the letter of representations among
the Owner Trustee, the Note Paying Agent and The Depository Trust Company, as
the initial Clearing Agency, dated as of the Closing Date, relating to the
Notes, as the same may be amended or supplemented from time to time.
Appendix X-13 2002-1 Definitions
"Note Owner" means, with respect to a Book-Entry Note, the person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Paying Agent" shall mean the Indenture Trustee or any other
Person that meets the eligibility standards for the Indenture Trustee specified
in Section 6.11 of the Indenture and is authorized by the Owner Trustee to make
payments to and distributions from the Trust Accounts, including payment of
principal of or interest on the Notes on behalf of the Trust.
"Note Pool Factor" for each class of Notes as of the close of business
on a Payment Date means a seven-digit decimal figure equal to the outstanding
principal balance of such class of Notes divided by the original outstanding
principal balance of such class of Notes. The Note Pool Factor for each class of
Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor
for each class of Notes will decline to reflect reductions in the outstanding
principal balance of such class of Notes.
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
"Note Register" and "Note Registrar" are defined in Section 2.4 of the
Indenture.
"Obligor" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the Receivable or
other Person who owes or may be primarily or secondarily liable for payments
under such Receivable.
"Officer's Certificate" means: (a) for purposes of the Indenture, a
certificate signed by any Authorized Officer of the Owner Trustee, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1 and TIA ss. 314, and delivered to Indenture
Trustee; and (b) otherwise, a certificate signed by the chairman, the president,
any vice president or the treasurer of Seller or Servicer, as the case may be,
and delivered to Indenture Trustee. Unless otherwise specified, any reference in
the Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Owner Trustee.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be employees of or
counsel to the Owner Trustee and who shall be satisfactory to Owner Trustee or
Indenture Trustee, as applicable, and which opinion or opinions shall be
addressed to Owner Trustee, or Indenture Trustee, as applicable and shall be in
form and substance satisfactory to the Owner Trustee, and Indenture Trustee, as
applicable.
"Original Pool Balance" means the Pool Balance as of the Initial Cutoff
Date, which is $432,770,483.68.
"Originator" means M&I Dealer Finance, Inc., a Wisconsin corporation.
Appendix X-14 2002-1 Definitions
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:
(a) Notes theretofore canceled by Note Registrar or delivered to Note
Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with Indenture Trustee or
any Paying Agent in trust for the Holders of such Notes (provided that if
such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to the Indenture or provision therefor, satisfactory to
Indenture Trustee); and
(c) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to Indenture Trustee is presented that any such Notes are held
by a bona fide purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Owner Trustee, any other obligor upon the Notes, Seller or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of Indenture
Trustee either actually knows to be so owned or has received written notice
thereof shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of Indenture Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Owner Trustee, any other obligor upon
the Notes, Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
class of Notes, as applicable, Outstanding at the date of determination.
"Outstanding Simple Interest Advances" as of the last day of a Monthly
Period, the sum of all Simple Interest Advances made as of or prior to such date
minus the sum of all payments to the Servicer as of or prior to such date
pursuant to Section 5.5(b) of the Sale and Servicing Agreement; provided,
however, that Outstanding Simple Interest Advances shall never be deemed to be
less than zero.
"Owner Trust Estate" means all right, title and interest of Owner Trustee
in and to the property and rights assigned to Owner Trustee pursuant to Article
II of the Sale and Servicing Agreement, all funds on deposit from time to time
in the Trust Accounts and the Certificate Distribution Account and all other
property of Owner Trustee from time to time, including any rights of Owner
Trustee pursuant to the Sale and Servicing Agreement.
"Owner Trustee" means The Bank of New York (Delaware), a banking
corporation incorporated in the State of Delaware, not in its individual
capacity but solely as owner trustee under the Trust Agreement, and any
successor Owner Trustee hereunder.
Appendix X-15 2002 - I Definitions
"Paying Agent" means: (a) when used in the Indenture or otherwise with
respect to the Notes, Indenture Trustee or any other Person that meets the
eligibility standards for Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by the Owner Trustee to make the payments to and
distributions from the Collection Account and the Note Distribution Account,
including payment of principal of or interest on the Notes on behalf of the
Owner Trustee; and (b) when used in the Trust Agreement or otherwise with
respect to the Certificates, Owner Trustee or any other paying agent or
co-paying agent appointed pursuant to Section 3.9 of the Trust Agreement.
"Payment Date" means the 20th day of each month (or, if the 20th day is not
a Business Day, the next succeeding Business Day), commencing November 20, 2002.
"Perfection Representation" means the representations attached as Schedule
C to the Sale and Servicing Agreement or Schedule A to the Purchase Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Physical Damage Insurance Policy" means a theft and physical damage
insurance policy maintained by the Obligor under a Receivable, providing
coverage against loss or damage to or theft of the related Financed Vehicle.
"Physical Property" is defined in the definition of "Delivery" above.
"Pool Balance" means, at any time, the aggregate Principal Balance of the
Receivables at the end of the preceding Collection Period, or (i) in the case of
the first Collection Period, the Initial Cutoff Date, after giving effect to all
payments received from Obligors, Liquidation Proceeds and Purchased Amounts to
be remitted by the Servicer, all for such Collection Period and all Realized
Losses during such Collection Period or (ii) in the case of the Collection
Period related to a Funding Date, the related Subsequent Cutoff Date, after
giving effect to all payments received from Obligors, Liquidation Proceeds and
Purchased Amounts to be remitted by the Servicer, all for such Collection Period
and all Realized Losses during such Collection Period.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PREFCO" means Preferred Receivables Funding Corporation, a Delaware
corporation.
"Pre-Funding Account" means the account by that name established pursuant
to Section 5.3 of the Sale and Servicing Agreement.
"Pre-Funding Account Property" is defined in Section 8.7(c) of the
Indenture.
Appendix X-16 2002 - I Definitions
"Pre-Funding Amount" means the amount which shall be deposited to the
Pre-Funding Account on the Closing Date, which amount is equal to
$92,229,516.32.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending upon the earliest to occur of (i) the third full calendar month following
the Closing Date, (ii) the date upon which an Event of Default has occurred and
is continuing and (iii) the date on which the amount on deposit in the
Pre-Funding Account has been reduced to $10,000 or less.
"Principal Balance" means, as of any time, for any Receivable, the
principal balance of such Receivable under the terms of the Receivable
determined in accordance with the Servicer's customary practices.
"Principal Distribution Account" shall mean the administrative subaccount
of the Note Distribution Account established and maintained as such pursuant to
Section 5.1 of the Sale and Servicing Agreement.
"Principal Distribution Amount" shall mean, with respect to any Payment
Date, an amount not less than zero equal to the greater of (i) the outstanding
Principal Balance of the Class A-1 Notes as of the preceding Payment Date (after
giving effect to any principal payments made on the Class A-1 Notes on such
preceding Payment Date) or the Closing Date, as the case may be; and (ii) the
excess, if any, of (a) the sum of the outstanding Principal Balance of all the
Notes as of the preceding Payment Date (after giving effect to any principal
payments made on the Notes on such preceding Payment Date) or the Closing Date,
as the case may be, over (b) the Pool Balance at the end of the Collection
Period preceding such Payment Date and the funds on deposit in the Pre-Funding
Account (other than interest and investment income); provided, however, that the
Principal Distribution Amount shall not exceed the sum of the outstanding
Principal Balance of all of the Notes on such Payment Date; and provided,
further, that the Principal Distribution Amount on and after the Final Scheduled
Payment Date of a Class of Notes shall not be less than the amount that is
necessary to reduce the outstanding Principal Balance of such Class of Notes and
all earlier maturing Classes of Notes and all Classes of Notes maturing on the
same date to zero.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Agreement" means the agreement dated as of October 10, 2002
between M&I Bank, Northwoods, Bank One (as agent on behalf of PREFCO) and Seller
under which M&I Bank, Northwoods and Bank One (as agent on behalf of PREFCO)
sold the Receivables to Seller and M&I Bank and Northwoods sold any right, title
and interest it owned in the Receivables to Seller.
"Purchase Amount" of any Receivable means, with respect to any Deposit Date
and the last day of the related Collection Period, an amount equal to the sum of
(a) the outstanding Principal Balance of such Receivable as of the last day of
such Collection Period and (b) the amount of accrued and unpaid interest on such
Principal Balance at the related Contract Rate from the date a payment was last
made by or on behalf of the Obligor through and including the
Appendix X-17 2002 - I Definitions
last day of such Collection Period, in each case after giving effect to the
receipt of monies collected on such Receivable in such Collection Period.
"Purchased Assets" is defined is Section 2.2 of the Purchase Agreement.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by Servicer pursuant to Section
4.7 or Section 3.3 of the Sale and Servicing Agreement.
"Rating Agencies" means Moody's and Standard & Poor's.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified Seller, Servicer, Owner Trustee or
Indenture Trustee in writing that such action will, in and of itself, result in
a reduction, qualification or withdrawal of the then current rating of any class
of Notes, or the Certificates.
"Realized Losses" means, for any Collection Period and for each Receivable
that became a Defaulted Receivable during such Collection Period, the aggregate
Principal Balance of each such Receivable when such Receivable became a
Defaulted Receivable.
"Receivable" means each Motor Vehicle Loan described in the Schedule of
Receivables on the Closing Date and each Motor Vehicle Loan described in the
Schedule of Receivables on each Funding Date, but excluding (i) Defaulted
Receivables to the extent the Principal Balances thereof have been deposited in
the Collection Account and (ii) any Purchased Receivables.
"Receivable Files" is defined in Section 3.4 of the Sale and Servicing
Agreement.
"Record Date" means, with respect to any Payment Date or Redemption Date,
the close of business on the day immediately preceding such Payment Date or
Redemption Date; or, if Definitive Notes or Definitive Certificates have been
issued, the last day of the month preceding such Payment Date or Redemption
Date.
"Recoveries" mean, with respect to any Collection Period, all monies
received by the Servicer with respect to any Defaulted Receivable after such
Receivable became a Defaulted Receivable, net of any fees, costs and expenses
incurred by the Servicer in connection with the collection of such Receivable
and any payments required by law to be remitted to the Obligor.
"Redemption Date" means in the case of a redemption of the Notes pursuant
to Section 10.1 of the Indenture, the Payment Date specified by Servicer or the
Owner Trustee pursuant to such Section 10.1.
"Redemption Price" means, in the case of a redemption of the Notes pursuant
to Section 10.1 of the Indenture, an amount equal to the unpaid principal amount
of the then outstanding Notes plus accrued and unpaid interest thereon to but
excluding the Redemption Date.
Appendix X-18 2002 - I Definitions
"Related Agreements" shall have the meaning specified in the recitals to
the Administration Agreement.
"Required Rating" means a rating with respect to short term deposit
obligations of at least P-1 by Moody's and at least A-1 by Standard & Poor's.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 8.6 of the Indenture.
"Reserve Account Deposit" means (a) on the Closing Date, the Initial
Reserve Account Deposit and (b) on each Funding Date, the Subsequent Reserve
Account Deposit.
"Reserve Account Excess Amount" means, with respect to any Payment Date,
and after the end of the Pre-Funding Period, an amount equal to the excess, if
any, of (a) the amount of cash or other immediately available funds in the
Reserve Account on that Payment Date, prior to giving effect to any withdrawals
from the Reserve Account relating to that Payment Date, over (b) the Specified
Reserve Balance with respect to that Payment Date.
"Reserve Account Property" means the Reserve Account, the Reserve Account
Deposit and all proceeds of the Reserve Account and the Reserve Account Deposit,
including all securities, investments, general intangibles, financial assets and
investment property from time to time credited to and any security entitlement
to the Reserve Account.
"Reserve Account Transfer Amount" means, with respect to any Payment Date,
an amount equal to the lesser of (a) the amount of cash or other immediately
available funds on deposit in the Reserve Account on such Payment Date (after
giving effect to any withdrawal of the Reserve Account Excess Amount on such
Payment Date, but before giving effect to any other withdrawals therefrom
relating to such Payment Date) and (b) the amount, if any, by which (i) the
Total Required Payments for such Payment Date exceeds (ii) the Available Funds
for such Payment Date.
"Responsible Officer" means, with respect to Indenture Trustee, any officer
within the Corporate Trust Office of Indenture Trustee and having responsibility
with respect to the Notes and the other Basic Documents, and, with respect to
the Owner Trustee, any officer within the Corporate Trust Office of the Owner
Trustee and having direct responsibility for the administration of the Trust,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary, or any other officer of Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement among
Owner Trustee, Indenture Trustee, M&I Bank, as Servicer, and M&I Dealer Auto
Securitization, LLC, as Seller, dated as of October 10, 2002, as the same may be
amended and supplemented from time to time.
"Schedule of Receivables" means, with respect to the Motor Vehicle Loans to
be conveyed to Seller by M&I Bank, Northwoods and Bank One (as agent on behalf
of PREFCO)
Appendix X-19 2002 - I Definitions
and to Owner Trustee by Seller, the list identifying such Motor Vehicle Loans
delivered to Indenture Trustee on the Closing Date and on each Funding Date.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Intermediary" is defined in Section 5.8 of the Sale and
Servicing Agreement.
"Seller" means M&I Dealer Auto Securitization, LLC, a Delaware limited
liability company, and any Successors pursuant to Section 6.4 of the Sale and
Servicing Agreement.
"Servicer" means M&I Bank and each Successor Servicer.
"Servicer Termination Event" means an event specified in Section 8.1 of the
Sale and Servicing Agreement.
"Servicer's Report" means a report of Servicer delivered pursuant to
Section 4.9 of the Sale and Servicing Agreement, substantially in the form of
Exhibit A to that agreement.
"Servicing Fee" is defined in Section 4.8 of the Sale and Servicing
Agreement.
"Servicing Rate" means, if M&I Bank or its Affiliate is the Servicer, 0.50%
per annum, otherwise 1.00% per annum.
"Specified Reserve Balance" for a Payment Date will be equal to 0.50% of
the sum of the aggregate Principal Balance of the Receivables as of the Initial
Cutoff Date and the aggregate Principal Balance of all Subsequent Receivables as
of the related Subsequent Cutoff Date. In no event will the Specified Reserve
Balance exceed the aggregate Principal Balance of the Receivables as of the last
day of the related Collection Period.
"Simple Interest Advances" means the amount advanced into the Collection
Account on or before each Payment Date which is equal to the amount of interest
that would have been received during the related Collection Period on all
delinquent Receivables assuming that the payment on each such delinquent
Receivable would have been received on its respective due date during such
Collection Period.
"Simple Interest Method" means the method of allocating fixed level payment
monthly installments between principal and interest, pursuant to which such
payment is allocated first to accrued and unpaid interest at the Contract Rate
on the unpaid principal balance and the remainder of such payment is allocable
to principal.
"Simple Interest Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
Appendix X-20 2002 - I Definitions
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Subsequent Cutoff Date" means, with respect to the Subsequent Receivables
transferred to the Trust on any Funding Date, two Business Days prior to such
Funding Date.
"Subsequent Purchase Price" is defined in Section 2.4 of the Purchase
Agreement.
"Subsequent Purchased Assets" is defined in Section 2.2 of the Purchase
Agreement.
"Subsequent Receivables" means the Receivables originated by the
Originator, purchased by the Seller and transferred to the Trust on each Funding
Date.
"Subsequent Reserve Account Deposit" means, with respect to a Funding Date,
an amount equal to 0.50% of the aggregate Principal Balance as of the related
Subsequent Cutoff Date of the Subsequent Receivables being transferred to the
Owner Trustee on such Funding Date.
"Subsequent Trust Property" is defined in Section 2.2 of the Sale and
Servicing Agreement.
"Successor Servicer" is defined in Section 3.7(e) of the Indenture.
"Supplemental Servicing Fee" is defined in Section 4.8 of the Sale and
Servicing Agreement.
"Total Distribution Amount" means, for each Payment Date, the sum of (a)
the Available Funds, and (b) the Reserve Account Transfer Amount, in each case
in respect of such Payment Date.
"Total Required Payment" shall mean, with respect to any Payment Date, the
sum of the Servicing Fee and all unpaid Servicing Fees from prior Collection
Periods, the Accrued Class A Note Interest, the Accrued Class B Note Interest
and the Principal Distribution Amount (without giving effect to clause (i) of
such definition); provided, however, that following the occurrence and during
the continuation of an Event of Default which has resulted in an acceleration of
the Notes, on any Payment Date until the Payment Date on which the outstanding
principal amount of all the Notes has been paid in full, the Total Required
Payment shall mean the sum of the Servicing Fee and all unpaid Servicing Fees
from prior Collection Periods, the Accrued Class A Note Interest, the Accrued
Class B Note Interest and the amount necessary to reduce the outstanding
Principal Balance of all the Notes to zero.
"Transferors" means M&I Bank, Northwoods and Bank One (as agent on behalf
of PREFCO), collectively.
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code.
Appendix X-21 2002 - I Definitions
"Trust" shall mean M&I Auto Loan Trust 2002-1, a Delaware common law trust
established pursuant to the Trust Agreement.
"Trust Accounts" is defined in Section 5.1 of the Sale and Servicing
Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Agreement" means the Trust Agreement dated as of October 10, 2002,
between Seller and Owner Trustee, as the same may be amended and supplemented
from time to time.
"Trust Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the Lien and security interest of the
Indenture for the benefit of the Noteholders (including all property and
interests Granted to Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 and
the rules and regulations promulgated thereunder, as in force on the date
hereof, unless otherwise specifically provided.
"Trust Property" shall have the meaning set forth in Section 2.2 of the
Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
Appendix X-22 2002 - I Definitions