EXHIBIT 10.1
FORM OF SALE AND SERVICING
AGREEMENT
among
MELLON AUTO TRUST 199_-_,
as Issuer,
MELLON BANK, N.A.,
as Servicer and Seller,
and
MELLON AUTO RECEIVABLES CORPORATION,
as Depositor
Dated as of __________ __, 199_
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.1. Definitions.................................................1
SECTION 1.2. Other Definitional Provisions..............................18
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Receivables..................................19
ARTICLE III.
The Receivables
SECTION 3.1. A. Representations and Warranties of Seller...................20
SECTION 3.1. B. Representations and Warranties of Depositor................24
SECTION 3.2. Repurchase upon Breach.....................................25
SECTION 3.3. Custody of Receivable Files................................25
SECTION 3.4. Duties of Servicer as Custodian............................26
SECTION 3.5. Instructions; Authority To Act.............................27
SECTION 3.6. Custodian's Indemnification................................27
SECTION 3.7. Effective Period and Termination...........................27
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of Servicer.........................................28
SECTION 4.2. Collection and Allocation of Receivable Payments...........28
SECTION 4.3. Realization upon Receivables...............................29
SECTION 4.4. Physical Damage Insurance; Other Insurance.................29
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.....30
SECTION 4.6. Covenants of Servicer......................................30
SECTION 4.7. Purchase of Receivables upon Breach........................31
SECTION 4.8. Servicing Fee..............................................31
SECTION 4.9. Servicer's Certificate.....................................31
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.......31
SECTION 4.11. Annual Independent Certified Public Accountants'
Report.....................................................32
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables......................................32
SECTION 4.13. Servicer Expenses..........................................33
SECTION 4.14. Appointment of Subservicer.................................33
ARTICLE V
Distributions; Reserve Account; Statements to Certificateholders
and Noteholders
SECTION 5.1. Establishment of Trust Accounts............................33
SECTION 5.2. Collections................................................36
SECTION 5.3. Application of Collections.................................36
SECTION 5.4. Additional Deposits........................................37
SECTION 5.5. Distributions..............................................37
SECTION 5.6. Reserve Account............................................39
SECTION 5.7. Advance....................................................39
SECTION 5.8. Statements to Certificateholders and Noteholders...........39
SECTION 5.9. Net Deposits...............................................41
ARTICLE VI
The Depositor
SECTION 6.1 Representations of Depositor...............................41
SECTION 6.2 Corporate Existence........................................43
SECTION 6.3. Liability of Depositor; Indemnities........................43
SECTION 6.4. Merger or Consolidation of, or Assumption of
the Obligations of, Depositor..............................45
SECTION 6.5. Limitation on Liability of Depositor and Others............45
SECTION 6.6. Depositor May Own Certificates or Notes....................46
SECTION 6.7 Security Interest..........................................46
ARTICLE VII
The Servicer and the Seller
SECTION 7.1. Representations of the Bank................................46
SECTION 7.2. Indemnities of the Bank....................................48
SECTION 7.3. Merger or Consolidation of, or Assumption of
the Obligations of the Bank................................49
SECTION 7.4. Limitation on Liability of the Bank and Others.............50
SECTION 7.5. The Bank Not To Resign as Servicer.........................50
SECTION 7.6. Corporate Existence........................................50
ARTICLE VIII
Default
SECTION 8.1. Servicer Default...........................................51
SECTION 8.2. Appointment of Successor...................................52
SECTION 8.3. Payment of Servicing Fee; Repayment of Advances............53
SECTION 8.4. Notification to Noteholders and Certificateholders.........53
SECTION 8.5. Waiver of Past Defaults....................................53
ARTICLE IX
Termination
SECTION 9.1. Optional Purchase of All Receivables.......................54
SECTION 9.2. Mandatory Sale of all Contracts............................55
ARTICLE X.
Administrative Duties of the Servicer
SECTION 10.1. Administrative Duties......................................57
SECTION 10.2. Records....................................................59
SECTION 10.3. Additional Information To Be Furnished to the Issuer.......59
ARTICLE XI.
Miscellaneous Provisions
SECTION 11.1. Amendment...................................................59
SECTION 11.2. Protection of Title to Trust................................60
SECTION 11.3. Notices.....................................................62
SECTION 11.4. Assignment..................................................63
SECTION 11.5. Limitations on Rights of Others.............................63
SECTION 11.6. Severability................................................63
SECTION 11.7. Separate Counterparts.......................................63
SECTION 11.8. Headings....................................................63
SECTION 11.9. Governing Law...............................................63
SECTION 11.10. Assignment to Trustee.......................................64
SECTION 11.11. Nonpetition Covenant........................................64
SECTION 11.12. Limitation of Liability of Owner Trustee and Trustee........64
SECTION 11.13. Independence of the Servicer................................64
SECTION 11.14. No Joint Venture............................................65
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivables
EXHIBITS
Exhibit A - Form of Monthly Securityholder Statement
Exhibit B - Form of Servicer's Certificate
Exhibit C - Auction Procedures
SALE AND SERVICING AGREEMENT dated as of
__________ __, 199_, among MELLON AUTO TRUST
199_-_, a Delaware business trust, as issuer
(the "Issuer"), MELLON AUTO RECEIVABLES
CORPORATION, as depositor (the "Depositor")
and MELLON BANK, N.A. (the "Bank"), as
servicer (the "Servicer") and seller (the
"Seller").
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts and
other motor vehicle installment sale contracts generally purchased by the Seller
from motor vehicle dealers;
WHEREAS the Depositor as of the date hereof has formed the Issuer;
WHEREAS the Seller is willing to sell such receivables to the
Depositor and the Depositor is willing to sell such receivables to the Issuer;
and
WHEREAS the 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. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"ADVISER" has the meaning specified in Section 9.2.
"ACTUARIAL RECEIVABLE" means any Receivable under which the portion of
a payment allocable to principal and the portion of a payment allocable to
interest is determined in accordance with the Scheduled Payment.
"ADVANCE" means the amount, as of the close of business on the last
day of a Collection Period, which the Servicer is required to advance on the
related Actuarial Receivable pursuant to Section 5.7(a).
"AGGREGATE NET LOSSES" means, with respect to a Collection Period, the
aggregate principal balance of all Receivables newly designated during such
Collection Period as Liquidated Receivables minus Liquidation Proceeds collected
during such Collection Period with respect to all Liquidated Receivables.
"AGREEMENT" means this Sale and Servicing Agreement, as the same may
be amended and supplemented from time to time.
"AMOUNT FINANCED" with respect to a Receivable means the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and any related costs.
"ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the annual
rate of finance charges stated in the related Contract.
"AUCTION" has the meaning specified in Section 9.2.
"AUCTION PROCEDURES" has the meaning specified in Section 9.2.
"AUCTION PROPERTY" has the meaning specified in Section 9.2.
"AVAILABLE PRINCIPAL" means, with respect to any Distribution Date,
the sum of the following amounts without duplication: (a) that portion of all
collections on the Receivables allocable to principal in respect of the
preceding Collection Period using (x) in the case of a Simple Interest
Receivable, the Simple Interest Method and (y) in the case of an Actuarial
Receivable, the actuarial method (including, with respect to Actuarial
Receivables, amounts withdrawn from the Payahead Account and allocable to
principal and excluding amounts deposited into the Payahead Account and
allocable to principal, in each case, in respect of the preceding Collection
Period); (b) Liquidation Proceeds attributable to the principal amount of
Receivables which became Liquidated Receivables during the preceding Collection
Period in accordance with the Servicer's customary servicing procedures; (c) all
Advances made by the Servicer of principal due on the Actuarial Receivables in
respect of the preceding Collection Period; (d) to the extent attributable to
principal, the Purchase Amount of each Receivable repurchased by the Seller or
purchased by the Servicer as of the close of business on the last day of the
preceding Collection Period; and (e) partial prepayments on Receivables in
respect of the preceding Collection Period relating to refunds of extended
warranty contract costs or of credit life or disability insurance policy
premiums, but only if such costs or premiums were financed by the respective
Obligor and only to the extent not included in clause (a) above; provided,
however, that in calculating the Available Principal all payments and proceeds
(including Liquidation Proceeds) of any Receivables (i) repurchased by the
Seller or purchased by the Servicer the Purchase Amount of which has been
included in the Available Principal on a prior Distribution Date, and (ii)
distributed to the Servicer, with respect to such Distribution Date, as
reimbursement for Outstanding Advances in accordance with Section 5.7 shall all
be excluded.
"BALLOON LOAN" means a Receivable originated with a stated maturity of
less than the period of time of the corresponding amortization schedule.
"BALLOON PAYMENT" means the final payment required to be made under a
Balloon Loan.
"BANK" means Mellon Bank, N.A., a national banking association.
"BASIC DOCUMENTS" means the Certificate of Trust, the Trust Agreement,
the Indenture, the Depository Agreements and other documents and certificates
delivered in connection therewith.
"CERTIFICATE" means a Trust Certificate (as defined in the Trust
Agreement).
"CERTIFICATE BALANCE" equals, initially, $_________ and, thereafter,
equals the initial Certificate Balance, reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"CERTIFICATE DISTRIBUTION ACCOUNT" has the meaning assigned to such
term in the Trust Agreement.
"CERTIFICATE POOL FACTOR" as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the Certificate
Balance (after giving effect to distributions made on such date) divided by the
initial Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of
the Cutoff Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"CERTIFICATE RATE" means ___% per annum.
"CERTIFICATEHOLDER" has the meaning assigned to such term in the Trust
Agreement.
"CERTIFICATEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Certificateholders' Interest Distributable
Amount and the Certificateholders' Principal Distributable Amount.
"CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect
to any Distribution Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Certificateholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest at the Certificate Rate that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, plus interest on such excess, to the extent permitted by law,
at the Certificate Rate from and including such preceding Distribution Date to
but excluding the current Distribution Date.
"CERTIFICATEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Interest Distributable Amount for such Distribution Date and the
Certificateholders' Interest Carryover Shortfall for such Distribution Date.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months for purposes of this definition.
"CERTIFICATEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means,
with respect to any Distribution Date, the product of (i) one-twelfth of the
Certificate Rate (or, in the case of the first Distribution Date, the
Certificate Rate multiplied by a fraction, the numerator of which is the number
of days elapsed from and including the Closing Date to but excluding such
Distribution Date and the denominator of which is 360) and (ii) the Certificate
Balance on the immediately preceding Distribution Date, after giving effect to
all payments of principal to the Certificateholders on or prior to such
Distribution Date (or, in the case of the first Distribution Date, the
Certificate Balance on the Closing Date).
"CERTIFICATEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means,
with respect to any Distribution Date, the Certificateholders' Percentage of the
Principal Distribution Amount or, with respect to any Distribution Date on or
after the Distribution Date on which the outstanding principal balance of the
Notes is reduced to zero, 100% of the Principal Distribution Amount (less any
amount required on the first such Distribution Date to reduce the outstanding
principal balance of the Notes to zero, which shall be deposited into the Note
Distribution Account).
"CERTIFICATEHOLDERS' PERCENTAGE" means 100% minus the Noteholders'
Percentage.
"CERTIFICATEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of the
close of any Distribution Date, the excess of the Certificateholders' Monthly
Principal Distributable Amount and any outstanding Certificateholders' Principal
Carryover Shortfall from the preceding Distribution Date, over the amount in
respect of principal that is actually deposited in the Certificate Distribution
Account on such current Distribution Date.
"CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; PROVIDED, HOWEVER, that the Certificateholders'
Principal Distributable Amount shall not exceed the Certificate Balance. In
addition, on the Certificate Final Scheduled Distribution Date, the principal
required to be distributed to Certificateholders will include the lesser of (a)
any payments of principal due and remaining unpaid on each Receivable in the
Trust as of the last day of the Collection Period preceding the Certificate
Final Scheduled Distribution Date or (b) the portion of the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Distribution Date and allocable to
principal) to reduce the Certificate Balance to zero, in either case after
giving effect to any required distribution of the Noteholders' Principal
Distributable Amount to the Note Distribution Account. In addition, on any
Distribution Date on which, after giving effect to all distributions to the
Servicer, the Noteholders and the Certificateholders on such Distribution Date,
(i) the outstanding principal balance of the Notes is zero and (ii) the amount
on deposit in the Reserve Account is equal to or greater than the Certificate
Balance, Certificateholders' Principal Distributable Amount shall include an
amount equal to such Certificate Balance.
"CLOSING DATE" means _______, 199_.
"COLLECTION ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 5.1.
"COLLECTION PERIOD" means a calendar month, except with respect to the
first Collection Period, which shall be the period from the Cutoff Date to
_________ __, 199_. Any amount stated "as of the close of business on the last
day of a Collection Period" shall give effect to the following calculations as
determined as of the end of the day on such last day: (1) all applications of
collections, (2) all current and previous Payaheads, (3) all applications of
Payahead Balances, (4) all Advances and reductions of Outstanding Advances and
(5) all distributions to be made on the immediately following Distribution Date.
"COMPUTER TAPE" means the computer tapes furnished to the Trustee
describing certain characteristics of the Receivables as of the Cutoff Date.
"CONTRACT" means a motor vehicle retail installment sale contract.
"CRAM DOWN LOSS" means, with respect to a Receivable if a court of
appropriate jurisdiction in a bankruptcy or insolvency proceeding shall have
issued an order reducing the amount owed on such Receivable or otherwise
modifying or restructuring the scheduled payments to be made on such Receivable,
an amount equal to (i) the excess of the principal balance of such Receivable
immediately prior to such order over the principal balance of such Receivable as
so reduced and/or (ii) if such court shall have issued an order reducing the
effective rate of interest on such Receivable, the net present value (using as
the discount rate the higher of the APR on such Receivable or the rate of
interest, if any, specified by the court in such order) of the scheduled
payments as so modified or restructured. A "Cram Down Loss" shall be deemed to
have occurred on the date of issuance of such order.
"CUMULATIVE NET LOSS RATIO" means, with respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is an amount
equal to the excess of (i) the cumulative amount of Realized Losses and Cram
Down Losses from the Cutoff Date through the last day of the related Collection
Period over (ii) the cumulative amount of Recoveries from the Cutoff Date
through the last day of the related Collection Period and the denominator of
which is the Initial Pool Balance.
"CUTOFF DATE" means __________ __, 199_.
"DEALER" means a motor vehicle dealer who sold a Financed Vehicle and
who originated and assigned the respective Receivable to the Seller under an
existing agreement between such Dealer and the Seller.
"DEALER AGREEMENT" means any agreement between a Dealer and the Seller
relating to the acquisition of Receivables from a Dealer by the Seller.
"DELINQUENCY PERCENTAGE" means, with respect to a Collection Period,
the ratio of (a) the outstanding principal balance of all outstanding
Receivables 60 days or more delinquent (which amount shall include Receivables
in respect of Financed Vehicles that have been repossessed but not yet sold or
otherwise liquidated) as of the last day of such Collection Period, determined
in accordance with the Servicer's normal practices, divided by (b) the
outstanding principal balance of all Receivables on the last day of such
Collection Period.
"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 and
are susceptible of physical delivery ("Physical Property"):
(i) transfer of possession thereof to the Trustee, endorsed to,
or registered in the name of, the Trustee or its nominee or endorsed
in blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the Trustee or its nominee
or custodian; or
(ii) delivery thereof in registered form to the Trustee or its
nominee or custodian and
(A) the certificate is endorsed to the
Trustee or its nominee or custodian or in blank by
effective endorsement; or
(B) the certificate is registered in the
name of the Trustee or its nominee or custodian, upon original
issue or registration of transfer by the Issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the Trustee or
its nominee or custodian; or
(ii) the issuer has agreed that it will comply with instructions
originated by the Trustee or its nominee or custodian without further
consent by the registered owner;
(d) with respect to any security issued by the U.S. Treasury that is a
book-entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the
book-entry security to the securities account (as defined in
31 CFR Part 357) of a participant (as defined in 31 CFR Part
357) which is also a securities intermediary; and
(ii) the participant indicates by book entry that the
book-entry security has been credited to the Trustee or its
nominee or custodian securities account;
(e) with respect to a security entitlement:
(i) the Trustee or its nominee or custodian
becomes the entitlement holder; or
(ii) the securities intermediary has agreed that it
will comply with entitlement orders originated by the Trustee
or its nominee or custodian without further consent by the
entitlement holder;
(f) for the purpose of clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Trustee or its nominee or custodian
acquires possession thereof;
(B) another person (other than a securities
intermediary) either acquires possession thereof on behalf of
the Trustee or its nominee or custodian or, having previously
acquired possession thereof, acknowledges that it holds for
the Trustee or its nominee or custodian; or
(C) a securities intermediary acting on
behalf of the Trustee or its nominee or custodian acquires
possession of thereof, only if the certificate is in
registered form and has been specially endorsed to the Trustee
or its nominee or custodian by an effective endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Trustee or its
nominee or custodian as the registered owner, upon original
issue or registration of transfer; or
(B) another person (other than a securities
intermediary) either becomes the registered owner thereof on
behalf of the Trustee or its nominee or custodian or, having
previously become the registered owner, acknowledges that it
holds for the Trustee or its nominee or custodian;
(g) for purposes of this definition, except as otherwise indicated,
the following terms shall have the meaning assigned to each such term in the
UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Trustee or its
nominee or custodian shall make appropriate notations on its records, and shall
cause same to be made on the records of its nominees, indicating that securities
are held in trust pursuant to and as provided in this Agreement.
"DEPOSITOR" means Mellon Auto Receivables Corporation, as the
depositor of the Receivables, and each successor to Mellon Auto Receivables
Corporation (in the same capacity) to the extent permitted hereunder.
"DEPOSITORY AGREEMENTS" mean the Certificate Depository Agreement and
the Note Depository Agreement.
"DETERMINATION DATE" means, with respect to any Distribution Date, the
earlier of the eighth Business Day of the month in which a Distribution Date
occurs and the fourth Business Day preceding such Distribution Date.
"DISTRIBUTION DATE" means, with respect to each Collection Period, the
fifteenth day of the following month, or if such day is not a Business Day, the
immediately following Business Day, commencing in _________.
"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 (other than the Depositor or any
affiliate of the Depositor) 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 any of the securities of
such depository institution have a credit rating from each Rating Agency in one
of its generic rating categories which signifies investment grade.
"ELIGIBLE INSTITUTION" means (a) the corporate trust department of the
Trustee or the Owner Trustee, or (b) a depository institution 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), which (i) has
either (A) a long-term senior unsecured debt rating of acceptable to the Rating
Agencies or (B) a short-term senior unsecured debt rating or certificate of
deposit rating acceptable to the Rating Agencies and (ii) whose deposits are
insured by the Federal Deposit Insurance Corporation.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(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 the Depositor or any Affiliate of the
Depositor) 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 portion of such
obligation for the benefit of the holders of such depository receipts);
PROVIDED, HOWEVER, 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 Distribution 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 the Depositor or
any Affiliate of the Depositor) 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 the
Depositor, the Trustee or the Owner Trustee or any of their respective
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;
(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 which would not cause either Rating Agency to
downgrade or withdraw its then current rating of the Notes or the Certificates.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended.
"FINAL SCHEDULED DISTRIBUTION DATE" means with respect to (i) the
Notes, the _____________ Distribution Date and (ii) the Certificates, the
______________ Distribution Date.
"FINAL SCHEDULED MATURITY DATE" means ________________.
"FINANCED VEHICLE" means a new or used automobile, (including
passenger car, minivan, sport/utility vehicle or light truck) together with all
accessions thereto, securing an Obligor's indebtedness under the respective
Receivable.
"GP INTEREST" means the 1% interest in the Trust held by [the
Depositor] pursuant to the Trust Agreement.
"INDENTURE" means the Indenture dated as of __________ __, 199_,
between the Issuer and the Trustee, as the same may be amended and supplemented
from time to time.
"INITIAL POOL BALANCE" means the Pool Balance as of the Cutoff Date,
which is $____________.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or 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.
"INTEREST DISTRIBUTION AMOUNT" means, with respect to any Distribution
Date, the sum of the following amounts without duplication: (a) that portion of
all collections on the Receivables allocable to interest in respect of the
preceding Collection Period using (x) in the case of a Simple Interest
Receivable, the Simple Interest Method and (y) in the case of an Actuarial
Receivable, the actuarial method (including, with respect to Actuarial
Receivables, amounts withdrawn from the Payahead Account and allocable to
interest, and excluding amounts deposited into the Payahead Account and
allocable to interest, in each case in respect of the preceding Collection
Period); (b) Liquidation Proceeds attributable to interest on the Receivables
which became Liquidated Receivables during the preceding Collection Period in
accordance with the Servicer's customary servicing procedures; (c) all Advances
made by the Servicer of interest due on the Actuarial Receivables; (d) the
Purchase Amount of each Receivable repurchased by the Seller or purchased by the
Servicer as of the close of business on the last day of the preceding Collection
Period to the extent attributable to accrued interest on such Receivable; (e)
Recoveries for such Collection Period and (f) Investment Earnings for such
Distribution Date; PROVIDED, HOWEVER, that in calculating the Interest
Distribution Amount (i) all payments and proceeds (including Liquidation
Proceeds) of any Receivables repurchased by the Seller or purchased by the
Servicer the Purchase Amount of which has been included in the Interest
Distribution Amount on a prior Distribution Date, and (ii) distributed to the
Servicer with respect to such Distribution Date, as reimbursement for
Outstanding Advances in accordance with Section 5.7 shall all be excluded.
"INVESTMENT EARNINGS" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts (except the Payahead Account) and the Certificate
Distribution Account to be deposited into the Collection Account on such
Distribution Date pursuant to Section 5.1(b).
"ISSUER" means Mellon Auto Trust 199_-_.
"LIEN" means a security interest, lien, charge, pledge or encumbrance
of any kind, other than tax liens, mechanics' liens and any liens which attach
to the respective Receivable by operation of law as a result of any act or
omission by the related Obligor.
"LIQUIDATED RECEIVABLES" means, Receivables (i) which have been
liquidated by the Servicer through the sale of the related Financed Vehicle,
(ii) as to which all or a portion representing 10% or more of a scheduled
payment due is 150 or more days delinquent or (iii) with respect to which
proceeds have been received which, in the Servicer's judgment, constitute the
final amounts recoverable in respect of such Receivable.
"LIQUIDATION DISTRIBUTION DATE" has the meaning specified in Section
9.2.
"LIQUIDATION PROCEEDS" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source (other
than any proceeds from any Dealer commission) on a Liquidated Receivable during
the Collection Period in which such Receivable became a Liquidated Receivable,
net of the sum of any amounts expended by the Servicer in connection with such
liquidation and any amounts required by law to be remitted to the Obligor on
such Liquidated Receivable.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"NET LOSSES" means the sum of Realized Losses and Cram Down Losses
minus Recoveries for any Collection Period.
"NOTE DISTRIBUTION ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.1.
"NOTE POOL FACTOR" for the Notes as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of Notes divided by the original outstanding principal balance
of the Notes. The Note Pool Factor for the Notes will be 1.0000000 as of the
Cutoff Date; thereafter, the Note Pool Factor for the Notes will decline to
reflect reductions in the outstanding principal balance of the Notes.
"NOTEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount.
"NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess of the Noteholders' Monthly Interest Distributable
Amount for the preceding Distribution Date and any outstanding Noteholders'
Interest Carryover Shortfall on such preceding Distribution Date, over the
amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the Interest Rate from such preceding
Distribution Date through the current Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date. Interest shall be computed on
the basis of a 360 day year of twelve 30-day months.
"NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the product of (i) one-twelfth of the Interest
Rate (or, in the case of the first Distribution Date, the Interest Rate
multiplied by a fraction, the numerator of which is the number of days elapsed
from and including the Closing Date to but excluding such Distribution Date and
the denominator of which is 360) and (ii) the outstanding principal balance of
the Notes on the immediately preceding Distribution Date, after giving effect to
all distributions of principal to Noteholders on such Distribution Date (or, in
the case of the first Distribution Date, on the Closing Date).
"NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the Noteholders' Percentage of the Principal
Distribution Amount.
"NOTEHOLDERS' PERCENTAGE" means 100% until the point in time at which
the Notes have been paid in full and zero thereafter.
"NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal that is actually deposited in the Note Distribution Account.
"NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date, the sum of the Noteholder's Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
PROVIDED, HOWEVER, that the Noteholders' Principal Distributable Amount shall
not exceed the outstanding principal balance of the Notes. In addition, on the
Final Scheduled Distribution Date of the Notes, the principal required to be
deposited in the Note Distribution Account will include the amount necessary
(after giving effect to the other amounts to be deposited in the Note
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Outstanding Amount of such Notes to zero.
"OBLIGOR" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"OFFICERS' CERTIFICATE" means a certificate signed by (a) the
president, any senior vice president or any vice president and (b) a secretary
or assistant secretary of the Depositor, the Seller or the Servicer, as
appropriate, provided that no one person may sign in a capacity fulfilling both
clause (a) and clause (b).
"OUTSTANDING ADVANCES" on the Actuarial Receivables means the sum, as
of the close of business on the last day of a Collection Period, of all Advances
as reduced as provided in Section 5.7(a).
"OWNER TRUST ESTATE" has the meaning assigned to such term in the
Trust Agreement.
"OWNER TRUSTEE" means ____________, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, its successors in interest or
any successor Owner Trustee under the Trust Agreement.
"PAYAHEAD" on an Actuarial Receivable means the amount, as of the
close of business on the last day of a Collection Period, computed in accordance
with Section 5.3 with respect to such Receivable.
"PAYAHEAD ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 5.1.
"PAYAHEAD BALANCE" on an Actuarial Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Actuarial Receivable, as
reduced by applications of previous Payaheads with respect to such Actuarial
Receivable, pursuant to Sections 5.3 and 5.7.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PHYSICAL PROPERTY" has the meaning assigned to such term in the
definition of "Delivery" above.
"POOL BALANCE" as of the close of business on the last day of a
Collection Period means the aggregate Principal Balance of the Receivables
(excluding Purchased Receivables and Liquidated Receivables).
"PRINCIPAL BALANCE" of a Receivable, as of the close of business on
the last day of a Collection Period, means the Amount Financed minus the sum of
(i)(a) with respect to a Simple Interest Receivable, that portion of all
payments made by or on behalf of the related Obligor on or prior to such day and
allocable to principal using the Simple Interest Method and (b) in the case of
an Actuarial Receivable, that portion of all Scheduled Payments due on or prior
to such day allocable to principal using the actuarial method, (ii) any refunded
portion of extended warranty protection plan costs or of physical damage, theft,
credit life, credit accident or health insurance premiums included in the Amount
Financed, (iii) any payment of the Purchase Amount with respect to the
Receivable allocable to principal, (iv) any prepayment in full or any partial
prepayments applied to reduce the Principal Balance of the Receivable and (v)
Cram Down Losses in respect of such Receivable.
"PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of (i) (a) with respect to Simple Interest
Receivables, that portion of all collections on the Receivable allocable to
principal in respect of the preceding Collection Period and (b) with respect to
Actuarial Receivables, the sum of (x) the amount of all Scheduled Payments
allocable to principal due during the preceding Collection Period and (y) the
portion of all prepayments in full allocable to principal received during the
preceding Collection Period, in the case of both (a) and (b), without regard to
any extensions or modifications thereof effected after the Cutoff Date, other
than with respect to any extensions or modifications required in connection with
Cram Down Losses during such Collection Period; (ii) the principal balance of
each Receivable that was repurchased by the Seller, or purchased by the
Servicer, in each case, as of the close of business on the last day of the
preceding Collection Period (except to the extent included in (i) above; (iii)
the principal balance of each Liquidated Receivable which became such during the
preceding Collection Period (except to the extent included in (i) above); (iv)
partial prepayments on Receivables in respect of the preceding Collection Period
relating to refunds of extended service contracts, or of physical damage, credit
life, credit accident or heath insurance premium, disability insurance policy
premiums, but only if such costs or premiums were financed by the respective
Obligor and only to the extent not included in clause (i) above; and (v) the
aggregate amount of Cram Down Losses during such Collection Period.
"PURCHASE AMOUNT" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full the respective
Receivable under the terms thereof including interest at the APR to the end of
the month of purchase (without giving effect to Outstanding Advances).
"PURCHASED RECEIVABLE" means a Receivable purchased as of the close of
business on the last day of a Collection Period by (i) the Servicer pursuant to
Section 4.7 or (ii) repurchased by the Seller pursuant to Section 3.2.
"RATING AGENCY" means _____________. If no such organization or
successor is any longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person designated
by the Depositor, notice of which designation shall be given to the Trustee, the
Owner Trustee and the Servicer.
"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 neither
of the Rating Agencies shall have notified the Depositor, the Servicer, the
Owner Trustee or the Trustee in writing that such action will, in and of itself,
result in a reduction or withdrawal of the then current rating of the Notes, or
the Certificates.
"REALIZED LOSSES" means the excess of the Principal Balance of any
Liquidated Receivable over Liquidation Proceeds to the extent allocable to
principal.
"RECEIVABLE" means any Contract listed on Schedule A (which Schedule
may be in the form of microfiche) but excluding Liquidated Receivables and
Purchased Receivables.
"RECEIVABLE FILES" means the documents specified in Section 3.3.
"RECOVERIES" means, with respect to any Liquidated Receivable, monies
collected in respect thereof, from whatever source (other than any proceeds from
any Dealer commission), during any Collection Period following the Collection
Period in which such Receivable became a Liquidated Receivable, net of the sum
of any amounts expended by the Servicer for the account of the Obligor and any
amounts required by law to be remitted to the Obligor.
"RELATED FINANCED VEHICLE" means a Financed Vehicle securing the
Obligor's indebtedness under a Receivable.
"RESERVE ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 5.1.
"RESERVE ACCOUNT INITIAL DEPOSIT" means an amount equal to $_________.
"RESERVE ACCOUNT TRANSFER AMOUNT" means an amount equal to the lesser
of (i) the amount of cash or other immediately available funds on deposit in the
Reserve Account on such Distribution Date (before giving effect to any
withdrawals therefrom relating to such Distribution Date) or (ii) the amount, if
any, by which (x) the sum of the Total Servicing Fee, the Noteholders' Interest
Distributable Amount, the Certificateholders' Interest Distributable Amount, the
Noteholders' Principal Distributable Amount and the Certificateholders'
Principal Distributable Amount for such Distribution Date exceeds (y) the sum of
the Interest Distribution Amount and the Available Principal for such
Distribution Date.
"SCHEDULED PAYMENT" on an Actuarial Receivable means that portion of
the payment required to be made by the Obligor during the respective Collection
Period sufficient to amortize the Principal Balance under the actuarial method
over the term of the Actuarial Receivable (except, in the case a Balloon Loan,
to the extent necessary to amortize the Principal Balance to the amount of the
Balloon Payment over the life of the Actuarial Receivable) and to provide
interest at the APR.
"SECURITIES" means the Notes and the Certificates.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" means the Bank, as the entity which contributes the
Receivables to the Depositor pursuant to this Agreement.
"SERVICER" means the Bank, the servicer of the Receivables, and each
successor to the Bank, (in the same capacity) pursuant to Section 7.3 or 8.2.
"SERVICER DEFAULT" means an event specified in Section 8.1.
"SERVICER'S CERTIFICATE" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.9, substantially in the form of Exhibit
B.
"SERVICING FEE" has the meaning specified in Section 4.8.
"SERVICING FEE RATE" means ____% per annum.
"SIMPLE INTEREST METHOD" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made 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 principal and the portion of a payment
allocable to interest is determined in accordance with the Simple Interest
Method.
"SPECIFIED RESERVE ACCOUNT BALANCE" means, with respect to any
Distribution Date the greater of (a) ____% of the sum of the aggregate
outstanding principal amount of Notes plus the outstanding Certificate Balance
on such Distribution Date (after giving effect to all payments on the Notes and
distributions with respect to the Certificates to be made on such Distribution
Date), except that, if on any Distribution Date (x) the Cumulative Net Loss
Ratio exceeds the Trigger Percentage for such Distribution Date or (y) the
average of the Delinquency Percentages for the three preceding Collection
Periods exceeds ____%, then the Specified Reserve Account Balance shall be an
amount equal to ____% of the sum of the aggregate outstanding principal amount
of the Notes and the aggregate outstanding Certificate Balance on such
Distribution Date (after giving effect to all payments on the Notes and
distributions with respect to the Certificates to be made on such Distribution
Date); or (b) ___% of the sum of the aggregate initial principal balance of the
Notes plus the initial Certificate Balance.
"STANDARD & POOR'S" means Standard & Poor's, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"TOTAL DISTRIBUTION AMOUNT" means, for each Distribution Date, the sum
of (i) the Interest Distribution Amount, (ii) the Available Principal and (iii)
the Reserve Account Transfer Amount, in each case in respect of such
Distribution Date.
"TOTAL SERVICING FEE" means with respect to each Distribution Date the
Servicing Fee for the related Collection Period and all accrued and unpaid
Servicing Fees for prior Collection Periods.
"TRANSFER DATE" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"TRIGGER PERCENTAGE" means (i) in the case of any Distribution Date
prior to ___ Distribution Date, ___%, (ii) in the case of any Distribution Date
on and after the ___ Distribution Date but prior to the ___ Distribution Date,
___%, (iii) in the case of any Distribution Date on and after the ___
Distribution Date but prior to the ___ Distribution Date, ___%, (iv) in the case
of any Distribution Date on and after the ___ Distribution Date but prior to the
___ Distribution Date, ___% and (v) in the case of any Distribution Date on and
after the ___ Distribution Date, ___%.
"TRUST" means the Issuer.
"TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
"TRUST ACCOUNTS" has the meaning assigned thereto in Section 5.1.
"TRUST AGREEMENT" means the Trust Agreement dated as of __________ __,
199_, between the Depositor and the Owner Trustee, as the same may be amended
and supplemented from time to time.
"TRUST OFFICER" means, (i) in the case of the Trustee, any Officer
within the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject and (ii)
in the case of the Owner Trustee, any officer in the corporate trust office of
the Owner Trustee with direct responsibility for the administration of this
Agreement or any of the Basic Documents on behalf of the Owner Trustee.
"TRUST PROPERTY" has the meaning assigned thereto in Section 2.1.
"TRUSTEE" means the Person acting as Trustee under the Indenture, its
successors in interest and any successor trustee under the Indenture.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized terms used
herein and not otherwise defined herein have the meanings assigned to them in
the Indenture, or, if not defined therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed hereby and
in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. CONVEYANCE OF RECEIVABLES. (a) The Seller, concurrently
with the execution and delivery hereof, does hereby sell, transfer, assign, set
over and otherwise convey to the Depositor at a purchase price previously agreed
to by the Seller and Depositor, without recourse (subject to the obligations
herein), whether now or hereafter acquired:
(i) all right, title and interest of the Seller in and to the
Receivables and all monies received thereon (other than any proceeds
from any Dealer commission) on or after the Cutoff Date and, with
respect to Receivables which are Actuarial Receivables, all monies
received thereon prior to the Cutoff Date that are due on or after the
Cutoff Date;
(ii) all right, title and interest of the Seller in and to its
security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables sold by it and any other interest of the
Seller in the Financed Vehicles;
(iii) all right, title and interest of the Seller in and to any
proceeds from claims on any physical damage, repossession, loss, skip,
credit life and credit accident, vendor's single interest and health
insurance policies or certificates relating to the Financed Vehicles
or the Obligors;
(iv) all right, title and interest of the Seller in and to
refunds for the costs of extended service contracts with respect to
Financed Vehicles, refunds of unearned premiums with respect to credit
life and credit accident and health insurance policies or certificates
covering an Obligor or Financed Vehicle or his or her obligations with
respect to a Financed Vehicle and any recourse to Dealers for any of
the foregoing;
(v) the interest of the Seller in any proceeds from 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 or a default by an Obligor resulting in the
repossession of the Financed Vehicle under such Dealer Agreement; and
(vi) the proceeds of any and all of the foregoing (the items
specified in clauses (i) through (v) is referred to herein as the
"Trust Property").
(b) In consideration of the Issuer's delivery to or upon the order of
the Depositor on the Closing Date of the net proceeds from the sale of the Notes
and the Certificates and the other amounts to be distributed from time to time
to the Depositor in accordance with the terms of this Agreement, the Depositor,
concurrently with the execution and delivery hereof, does hereby sell, transfer,
assign, set over and otherwise convey to the Issuer, without recourse (subject
to the obligations herein) all right, title and interest of the Depositor in and
to the Trust Property together with the Depositor's right to require the Seller
to cure any breach of a representation or warranty made herein by the Seller or
to repurchase or substitute for any affected Receivable in accordance herewith.
It is the intention of the parties hereto that the transfers and
assignments contemplated by this Agreement shall each constitute a sale of the
Receivables and other Trust Property from the Seller to the Depositor and from
the Depositor to the Trust and the beneficial interest in and title to the
Receivables and such other Trust Property shall not be part of the Seller's or
the Depositor's estate in the event of the filing of a bankruptcy petition by or
against the Seller or the Depositor, as applicable, under any bankruptcy law. In
the event that, notwithstanding the intent of the parties hereto, any transfer
and assignment contemplated hereby is held not to be a sale, this Agreement
shall constitute a grant of a security interest to the Owner Trustee in the
Trust Property for the benefit of the Securityholders.
ARTICLE III.
The Receivables
SECTION 3.1. A. Representations and Warranties of Seller. The Seller
makes the following representations and warranties as to the Receivables on
which each of the Depositor and the Issuer is deemed to have relied in acquiring
the Receivables. Such representations and warranties speak as of the execution
and delivery of the Agreement, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer and the pledge thereof to the
Trustee pursuant to the Indenture.
(a) TITLE. Immediately prior to the transfer and assignment to the
Depositor herein contemplated, the Seller had good and marketable title to each
Receivable conveyed by it to the Depositor, free and clear of all Liens and,
immediately upon the transfer thereof, the Depositor shall have good and
marketable title to each Receivable, free and clear of all Liens; and the
transfer of the Receivables to the Depositor has been perfected under the UCC.
It is the intention of the Seller that the transfer and assignment herein
contemplated constitute a sale of the Receivables from the Seller to the
Depositor and that the beneficial interest in and title to such Receivables not
be part of the debtor's estate in the event of the filing of a petition for
receivership by or against the Seller. No Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than the Depositor.
(b) ALL FILINGS MADE. All filings (including UCC filings) necessary in
any jurisdiction to give the Seller a first priority perfected security interest
in the Receivables, to give the Depositor a first priority perfected security
interest in the Receivables, to give the Issuer a first priority perfected
ownership interest in the Receivables, and to give the Trustee a first priority
perfected security interest therein, shall have been presented to the Trustee
for filing in the appropriate filing offices. Upon such filing by the Servicer,
the Trustee will have a first priority perfected security interest in the Trust
Property.
(c) CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) has been
either originated by a Dealer in the regular course of such Dealer's business
and purchased from such Dealer by the Seller in the ordinary course of the
Seller's business or otherwise originated by the Seller in the ordinary course
of the Seller's business, and each Obligor was approved in accordance with the
Seller's standard underwriting procedures in effect at the time such Receivable
was originated or purchased, (B) was conveyed by the Seller to the Depositor,
(C) has created or shall create a valid, subsisting and enforceable first
priority security interest in favor of the Seller in the Financed Vehicle, which
security interest has been assigned by the Seller to the Depositor, which is
assignable by the Depositor to the Issuer and by the Issuer to the Trustee, (D)
contains customary and enforceable provisions under the laws of the State
governing such Receivable such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the benefits of
the security; and (E) provides for level monthly payments that fully amortizes
the Amount Financed by maturity (except for the last payment, which may be
different from the level payment and except, with respect to a Balloon Loan, to
the extent of the Balloon Payment).
(d) SCHEDULE OF RECEIVABLES. The information set forth in Schedule A
to this Agreement is true and correct in all material respects as of the opening
of business on the Cutoff Date and no selection procedures believed by the
Seller to be adverse to the Noteholders or the Certificateholders were utilized
in selecting the Receivables. The Computer Tape regarding the Receivables is
true and correct in all material respects as of the Cutoff Date.
(e) COMPLIANCE WITH LAW. Each Receivable, the sale of the Financed
Vehicle and the sale of any physical damage and credit life and credit accident
and health insurance and any extended service contracts complied in all material
respects at the time it was originated or made and at the Closing Date (after
giving effect to the transactions contemplated by the Basic Documents) complies
in all material respects with all requirements of applicable federal, state and
local laws and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldier's and Sailor's Civil Relief Act of 1940, state
adaptations of the National Consumer Act and the Uniform Consumer Credit Code,
and other consumer credit laws and equal credit opportunity and disclosure laws.
(f) BINDING OBLIGATION. Each Receivable represents the legal, valid
and binding payment obligation in writing of the Obligor thereunder, enforceable
by the holder thereof in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect related
to or affecting creditors' rights generally and subject to general principles of
equity (whether applied in a proceeding at law or in equity) and all parties to
such Receivable had full legal capacity to execute and deliver such Receivable
and all other documents related thereto and to grant the security interest
purported to be granted thereby.
(g) NO GOVERNMENT OBLIGOR. None of the Receivables is due from the
United States of America or any state or from any agency, department or
instrumentality of the United States of America or any state.
(h) SECURITY INTEREST IN FINANCED VEHICLE. Immediately prior to the
sale, assignment, and transfer thereof under the Agreement, (i) each Receivable
shall be secured by a validly perfected first priority security interest in the
Financed Vehicle in favor of the Seller as secured party or (ii) application has
been made with the appropriate governmental authority for a valid perfected
first priority security interest in the Financed Vehicle in favor of the Seller,
and such security interest is or shall be prior to all other Liens upon and
security interests in such Financed Vehicle which now exist or may hereafter
arise or be created (except, as to priority, for any tax liens or mechanics'
liens which may arise after the Closing Date).
(i) RECEIVABLES IN FORCE. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from the
Lien granted by the related Receivable in whole or in part unless another
vehicle has been substituted as collateral securing the Receivable without any
other modification to such Receivable.
(j) NO WAIVER. No provision of a Receivable has been modified or
waived except as reflected in the Receivable File relating to such Receivable.
(k) NO AMENDMENTS. No Receivable has been amended, except as permitted
pursuant to Section 4.2.
(l) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Receivable. The
operation of the terms of any Receivable or the exercise of any right thereunder
will not render such Receivable unenforceable in whole or in part or subject to
any such right of rescission, setoff, counterclaim, or defense.
(m) NO LIENS. As of the Cutoff Date, there are no Liens or claims,
including Liens for work, labor, materials or unpaid state or federal taxes
relating to any Financed Vehicle securing the related Receivable, that are or
may be prior to or equal to the Lien granted by such Receivable.
(n) NO DEFAULT. Except for payment delinquencies continuing for a
period of not more than thirty days as of the Cutoff Date and, except as
permitted in this paragraph, no default, breach, violation or event (in any such
case) permitting acceleration under the terms of any Receivable has occurred;
and no continuing condition that with notice or the lapse of time would
constitute a default, breach, violation or event (in any such case) permitting
acceleration under the terms of any Receivable has arisen; and the Seller has
not waived and shall not waive any of the foregoing.
(o) MATURITY OF RECEIVABLES. Each Receivable has an original maturity
of not more than ___ months; the weighted average original maturity of the
Receivables is ___ months as of the Cutoff Date; the remaining term of each
Receivable is ___ months or less as of the Cutoff Date; the weighted average
remaining term of the Receivables is ___ months as of the Cutoff Date; and the
latest scheduled maturity of any Receivable shall be no later than the Final
Scheduled Maturity Date.
(p) 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 Cutoff Date.
(q) NO REPOSSESSIONS. As of the Cutoff Date, no Financed Vehicle
securing any Receivable is in repossession status.
(r) CHATTEL PAPER. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(s) APR. The weighted average Annual Percentage Rate of the
Receivables as of the Cutoff Date is approximately ___%.
(t) PRINCIPAL BALANCE. Each Receivable has an outstanding principal
balance as of the Cutoff Date of not less than ___ or more than $____. The
average principal balance of the Receivables as of the Cutoff Date is $___. The
aggregate principal balance of the Receivables as of the Cutoff Date is $___.
(u) FINANCING. Approximately ___% of the aggregate principal balance
of the Receivables, constituting approximately ___% of the number of
Receivables, as of the Cutoff Date, represents financing of new vehicles; the
remainder of the Receivables represents financing of used vehicles.
Approximately ___% of the aggregate principal balance of the Receivables,
constituting approximately ___% of the number of Receivables, as of the Cutoff
Date, represents financing of Balloon Loans. Approximately ___% of the aggregate
Principal Balance of the Receivables, constituting approximately ___% of the
number of Receivables, as of the Cutoff Date, represents financing of Simple
Interest Receivables; the remainder of the Receivables represents financing of
Actuarial Receivables.
(v) PAID-AHEAD. Approximately ___% of the aggregate Principal Balance
of the Receivables, constituting approximately ___% of the number of Receivables
are paid-ahead for a period of one to six months. No Receivable is paid-ahead
more than ___ months.
(w) INSURANCE; OTHER. The Servicer, in accordance with its customary
procedures, has confirmed (A) that each Obligor has obtained insurance covering
the Financed Vehicle as of the date of execution of the Related Receivable
insuring against loss and damage due to fire, theft, collision and other risks
generally covered by comprehensive and collision coverage and that each
Receivable requires the Obligor to maintain such insurance naming the Seller and
its successors and assigns as a loss payee, (B) each Receivable that finances
the cost of premiums for credit life and credit accident and health insurance is
covered by an insurance policy or certificate of insurance naming the Seller as
loss payee (lienholder) under each such insurance policy and certificate of
insurance and (C) as to each Receivable that finances the cost of an extended
service contract, the respective Financed Vehicle which secures the Receivable
is covered by an extended service contract.
(x) LAWFUL ASSIGNMENT. No Receivable has been originated in, or as of
the Closing Date is subject to the laws of, any jurisdiction under which the
sale, transfer and assignment of such Receivable under this Agreement or the
pledge of such Receivable to the Trustee under the Indenture (i) is unlawful,
void, voidable or unenforceable in accordance with its terms or (ii) would
render such Receivable void, voidable or unenforceable in accordance with its
terms. The Seller has not entered into any agreement with any account debtor
that prohibits, restricts or conditions the assignment of all or any portion of
the Receivable.
(y) NO INSURANCE PREMIUMS. As of the Cutoff Date, no portion of the
principal balance of any Receivable included amounts attributable to the payment
of any physical damage or theft insurance premium.
(z) ONE ORIGINAL. There is only one manually executed original copy of
each Receivable.
(aa) ORIGINATION OF RECEIVABLES. Based on the billing address of the
Obligors and the principal balance of Receivables as of the Cutoff Date,
approximately ___% of the Receivables were originated in ___, approximately ___%
of the Receivables were originated in ___ and approximately ___% of the
Receivables were originated in ___, each Obligor has been approved by the Seller
based on the Seller's standard underwriting procedures as in effect at the time
the related Receivable was entered into. Based on the billing address of the
Obligors and the principal balance of the Receivables as of the Cutoff Date, not
more than 10% of the Receivables were originated in any one state other than
___, ___ and ___.
(bb) RECEIVABLE FILES. The Receivable Files are kept at the locations
listed in Schedule B.
(cc) COMPUTER RECORDS. As of the Closing Date, the accounting and
computer records relating to the Receivables of the Seller have been marked to
indicate the Depositor's ownership interest therein.
SECTION 3.1. B. Representations and Warranties of Depositor. The
Depositor makes the following representations and warranties as to the
Receivables on which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations and warranties speak as of the execution and
delivery of the Agreement, but shall survive the sale, transfer and assignment
of the Receivables to the Issuer and the pledge thereof to the Trustee pursuant
to the Indenture.
(a) TITLE. It is the intention of the Depositor that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Depositor to the Issuer and that the beneficial interest in and title to such
Receivables not be part of the debtor's estate in the event of the filing of a
petition for receivership by or against the Depositor. No Receivable has been
sold, transferred, assigned or pledged by the Depositor to any Person other than
the Issuer. Immediately prior to the transfer and assignment herein
contemplated, the Depositor had good and marketable title to each Receivable,
free and clear of all Liens and, immediately upon the transfer thereof, the
Issuer shall have good and marketable title to each such Receivable, free and
clear of all Liens; and the transfer of the Receivables to the Issuer has been
perfected under the UCC.
(b) ALL FILINGS MADE. All filings (including UCC filings) necessary in
any jurisdictions to give the Issuer a first priority perfected ownership
interest in the Receivables, and to give the Trustee a first priority perfected
security interest therein, shall have been presented to the Trustee for filing
in the appropriate filing offices. Upon such filing by the Servicer, the Trustee
will have a first priority perfected security interest in the Trust Property.
(c) LAWFUL ASSIGNMENT. No Receivable has been originated in, or as of
the Closing Date is subject to the laws of, any jurisdiction under which the
sale, transfer and assignment of such Receivable or this Agreement or the pledge
of such Receivable to the Trustee under the Indenture (i) is unlawful, void,
voidable or unenforceable in accordance with its terms or (ii) would render such
Receivable void, voidable or unenforceable in accordance with its terms. The
Depositor has not entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of all or any portion of the
Receivable.
(d) COMPUTER RECORDS. As of the Closing Date, the accounting and
computer records relating to the Receivables of the Depositor have been marked
to show the absolute ownership by the Owner Trustee on behalf of the Trust of
the Receivables.
SECTION 3.2. REPURCHASE UPON BREACH. The Seller, the Depositor, the
Servicer or the Owner Trustee, as the case may be, shall inform the other
parties to this Agreement and the Trustee promptly, in writing, upon its
discovery of any breach of the Sellers's or the Depositor's representations and
warranties made pursuant to Section 3.1. Unless any such breach shall have been
cured by the last day of the first Collection Period following the discovery
thereof by the Owner Trustee or receipt by the Owner Trustee of written notice
from the Seller, the Depositor or the Servicer of such breach, the Seller shall
be obligated to repurchase any Receivable in which the interests of the
Noteholders or Certificateholders are materially and adversely affected by any
such breach as of the last day of such Collection Period. In consideration of
and simultaneously with the repurchase of the Receivable, the Seller shall remit
to the Collection Account the Purchase Amount in the manner specified in Section
5.4 and the Issuer shall execute such assignments and other documents reasonably
requested by the Seller in order to effect such repurchase. The sole remedy of
the Issuer, the Owner Trustee, the Trustee, the Noteholders or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 3.1 and the agreement contained in this Section shall be to
require the Seller to repurchase Receivables pursuant to this Section, subject
to the conditions contained herein. Neither the Owner Trustee nor the Trustee
shall have a duty to conduct any affirmative investigation as to the occurrence
of any conditions requiring the repurchase of any Receivable pursuant to this
Section.
SECTION 3.3. CUSTODY OF RECEIVABLE FILES. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer and the
Trustee hereby revocably appoints the Servicer, and the Servicer hereby accepts
such appointment, to act as the agent of the Issuer and the Trustee as custodian
of the following documents or instruments which are hereby constructively
delivered to the Trustee, as pledgee of the Issuer with respect to each
Receivable:
(a) the original of the Receivable;
(b) a record of the information supplied by the Obligor in the
original credit application;
(c) the original certificate of title or such documents that the
Servicer shall keep on file, in accordance with its customary procedures,
evidencing the security interest of the Depositor in the Financed Vehicle (it
being understood that the original certificates of title generally are not
delivered to the Servicer for 90 days but that promptly upon delivery they shall
be delivered to the Servicer as custodian hereunder); and
(d) any and all other documents that the Servicer shall keep on file,
in accordance with its customary procedures, relating to a Receivable, an
Obligor or a Financed Vehicle.
SECTION 3.4. DUTIES OF SERVICER AS CUSTODIAN. (a) SAFEKEEPING. The
Servicer shall hold the Receivable Files on behalf of the Issuer and the Trustee
and maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Issuer to comply with
this Agreement. In performing its duties as custodian the Servicer shall act
with reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the receivable files relating to all comparable
automotive receivables that the Servicer services for itself or others. The
Servicer shall conduct, or cause to be conducted, periodic audits of the
Receivable Files held by it under this Agreement and of the related accounts,
records and computer systems, in such a manner as shall enable the Issuer or the
Trustee to verify the accuracy of the Servicer's record keeping. The Servicer
shall promptly report to the Issuer and the Trustee any failure on its part to
hold the Receivable Files and maintain its accounts, records and computer
systems as herein provided and promptly take appropriate action to remedy any
such failure.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B to this
Agreement or at such other office as shall be specified to the Issuer and the
Trustee by written notice not later than 90 days after any change in location.
Upon reasonable prior notice, the Servicer shall make available to the Issuer
and the Trustee or their respective duly authorized representatives, attorneys
or auditors a list of locations of the Receivable Files and records and computer
systems maintained by the Servicer at such times during normal business hours as
the Issuer or the Trustee shall instruct.
(c) RELEASE OF DOCUMENTS. Upon written instruction from the Trustee,
the Servicer shall release any Receivable File to the Trustee, the Trustee's
agent, or the Trustee's designee, as the case may be, at such place or places as
the Trustee may designate, as soon as practicable and upon the release and
delivery of any such document in accordance with the instructions of the
Trustee, the Servicer shall be released from any further liability and
responsibilities under this Section 3.4 with respect to such documents unless
and until such time as such document may be returned to the Servicer.
SECTION 3.5. INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trust Officer of the
Trustee.
SECTION 3.6. CUSTODIAN'S INDEMNIFICATION. The Servicer as custodian
shall indemnify and hold harmless the Trust, the Owner Trustee and the Trustee
and each of their officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses (including reasonable attorneys' fees and expenses) that may be imposed
on, incurred by or asserted against the Trust, the Owner Trustee or the Trustee
or any of their officers, directors, employees and agents as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer as custodian of the Receivable Files where the final determination
that any such improper act or omission by the Servicer resulted in such
liability, obligation, loss, damage, payment, cost or expense is established by
a court of law, by an arbitrator or by way of settlement agreed to by the
Servicer; PROVIDED, HOWEVER, that the Servicer shall not be liable to the Trust
or the Owner Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Owner Trustee and the
Servicer shall not be liable to the Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of the Trustee.
This provision shall not be considered to limit the 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.
SECTION 3.7. EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
the Bank shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.1, the appointment of such Servicer as custodian
shall be terminated by the Trustee or by the Holders of Notes evidencing not
less than 25% of the Outstanding Amount of the Notes or, with the consent of
Holders of the Notes evidencing not less than 25% of the Outstanding Amount of
the Notes, by the Owner Trustee or by Certificateholders evidencing not less
than 25% of the Certificate Balance, in the same manner as the Trustee or such
Holders may terminate the rights and obligations of the Servicer under Section
8.1. The Trustee or, with the consent of the Trustee, the Owner Trustee, may
terminate the Servicer's appointment as custodian, with cause, at any time upon
written notification to the Servicer, and without cause upon 30 days' prior
written notification to the Servicer and the Rating Agencies. As soon as
practicable after any termination of such appointment, the Servicer shall
deliver the Receivable Files to the Trustee or the Trustee's agent at such place
or places as the Trustee may reasonably designate in writing. If the Servicer
shall be terminated as custodian hereunder for any reason but shall continue to
serve as Servicer, the Trustee shall, or shall cause its agent to, make the
Receivable Files available to the Servicer during normal business hours upon
reasonable notice so as to permit the Servicer to perform its obligations as
Servicer hereunder.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. DUTIES OF SERVICER. The Servicer, as agent for the Issuer
(to the extent provided herein), shall manage, service, administer and make
collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons or periodic statements or
invoices to Obligors, reporting any tax information to Obligors, accounting for
collections and furnishing monthly and annual statements to the Owner Trustee
and the Trustee with respect to distributions and making Advances pursuant to
Section 5.7. Subject to the provisions of Section 4.2, the Servicer shall follow
its customary standards, policies and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Trustee, the Certificateholders and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Issuer (in the case of a Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce such Receivable the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Trustee, the Certificateholders or the Noteholders. The Owner Trustee shall upon
the written request of the Servicer furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate (as certified
to the Owner Trustee by the Servicer) to enable the Servicer to carry out its
servicing and administrative duties hereunder.
SECTION 4.2. COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS. (a) The
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 shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others. The
Servicer shall allocate collections between principal and interest in accordance
with the customary servicing procedures it follows with respect to all
comparable automotive receivables that it services for itself or others.
(b) The Servicer may not grant extensions or modify the original due
dates of a Receivable; PROVIDED, HOWEVER, that the Servicer may (i) grant one
extension with respect to a Receivable of one month in any rolling twelve month
period and may change the original due date once during the term of a Receivable
to a new due date within 20 days of the original scheduled due date of such
Receivable and (ii) grant extensions or modify the original due dates of a
Receivable with respect to a Receivable for which a court of appropriate
jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the scheduled payments or other terms on such Receivable;
provided, however, that the Servicer may not extend the date for final payment
by the Obligor of any Receivable beyond the last day of the Collection Period
preceding the Certificate Final Scheduled Distribution Date. The Servicer may in
its discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing a Receivable. The Servicer shall
not voluntarily agree to any reduction of (i) the original interest rate, (ii)
the amount of any Scheduled Payment on an Actuarial Receivable or the original
regular scheduled payment on a Simple Interest Receivable, or (iii) the
Principal Balance of any Receivable.
SECTION 4.3. REALIZATION UPON RECEIVABLES. On behalf of the Issuer,
the Servicer shall use all reasonable efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. From time to time, as
appropriate for servicing or foreclosing upon any Receivable, the Owner Trustee
shall, upon written request of the Servicer, execute such documents as shall be
necessary to prosecute any such proceedings. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize proceeds from Receivables repurchased by a Dealer,
pursuant to a Dealer Agreement, as a result of a breach of representation or
warranty in the related Dealer Agreement or a default by an Obligor resulting in
the repossession of the Financed Vehicle under such Dealer Agreement. The
foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its reasonable discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.
SECTION 4.4. PHYSICAL DAMAGE INSURANCE; OTHER INSURANCE. (a) The
Servicer shall, in accordance with its customary servicing procedures, verify
(i) that each Obligor shall have obtained insurance covering the Financed
Vehicle, as of the date of the execution of the Receivable, insuring against
loss and damage due to fire, theft, collision and other risks generally covered
by comprehensive and collision coverage and that each Receivable requires the
Obligor to maintain such physical loss and damage insurance naming the Seller
and its successors and assigns as a loss payee, (ii) that each Receivable that
finances the cost of premiums for credit life and credit accident and health
insurance is covered by an insurance policy or certificate naming the Seller as
policyholder (creditor) and (iii) as to each Receivable that finances the cost
of an extended service contract, the respective Financed Vehicle which secures
the Receivable is covered by an extended service contract.
(b) To the extent applicable, the Servicer shall not take any action
which would result in noncoverage under any of the insurance policies referred
to in Section 4.4(a) which, but for the actions of the Servicer, would have been
covered thereunder. The Servicer, on behalf of the Trustee shall take such
reasonable action as shall be necessary to permit recovery under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any of
the foregoing insurance policies, shall be deposited in the Collection Account
pursuant to Section 5.2. The parties hereto acknowledge that the Servicer shall
not be required to force place any insurance coverage referred to in Section
4.4(a)(i) above, or any other insurance coverage.
SECTION 4.5. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of (i) the security interest
created by each Receivable in the related Financed Vehicle and (ii) the interest
of the Trust in the Receivables created by this Agreement, including but not
limited to obtaining the execution by the Obligors and the recording,
registering, filing, re-recording, re-registering and refiling of all security
agreements, financing statements and continuation statements or instruments as
are necessary to maintain the security interest granted by Obligors under the
respective Receivables, each of the Seller and the Depositor hereunder and the
Issuer under the Indenture. The Servicer is hereby authorized to take such steps
as are necessary to re-perfect such security interest on behalf of the Issuer
and the Trustee in the event of the relocation of a Financed Vehicle or for any
other reason.
SECTION 4.6. COVENANTS OF SERVICER. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession or except as may be required by an
insurer in order to receive proceeds from insurance covering such Financed
Vehicle, nor shall the Servicer impair the rights of the Issuer, the Trustee,
the Certificateholders or the Noteholders in such Receivables (it being
understood that no action of the Servicer taken in compliance with the terms of
this Agreement shall be deemed to impair such rights), nor shall the Servicer
increase the number of scheduled payments due under a Receivable.
Notwithstanding the foregoing, the Servicer may, as described in Section 4.2(b),
grant extensions or modify the original due dates of a Receivable or make such
other changes with respect to a Receivable for which a court of appropriate
jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the scheduled payments on such Receivable; provided, however, that
the Servicer may not extend the date for final payment by the Obligor of any
Receivable beyond the last day of the Collection Period preceding the
Certificate Final Scheduled Distribution Date.
SECTION 4.7. PURCHASE OF RECEIVABLES UPON BREACH. The Servicer or the
Owner Trustee shall inform the other party and the Trustee and the Depositor
promptly, in writing, upon the discovery of any breach pursuant to Section
4.2(b), 4.5 or 4.6. Unless the breach shall have been cured by the last day of
the second Collection Period following such discovery thereof by the Owner
Trustee or the receipt by the Owner Trustee of notice of such breach, the
Servicer shall be obligated to purchase any Receivable in which the interests of
the Noteholders or the Certificateholders are materially and adversely affected
by such breach as of the last day of such second Collection Period (or, at the
Servicer's option, the last day of the first Collection Period following the
discovery). In consideration of the purchase of any such Receivable pursuant to
the preceding sentence, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.4. The sole remedy of the Issuer, the Owner
Trustee, the Trustee, the Certificateholders or the Noteholders with respect to
a breach of Section 4.2(b), 4.5 or 4.6 shall be to require the Servicer to
purchase Receivables pursuant to this Section. Neither the Trustee nor the Owner
Trustee shall have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the purchase of any Receivable pursuant to
this Section.
SECTION 4.8. SERVICING FEE. The servicing fee for (a) the
___Distribution Date shall equal $___ and (b) for each Distribution Date
thereafter shall equal the product of (i) one-twelfth, (ii) the Servicing Fee
Rate and (iii) the Pool Balance as of the first day of the related Collection
Period (the "Servicing Fee"). In addition, the "Servicing Fee" described in (a)
and (b) above shall include late fees, prepayment charges and other similar
charges allowed by applicable law with respect to Receivables collected (from
whatever source) on the Receivables.
SECTION 4.9. SERVICER'S CERTIFICATE. Not later than 11:00 a.m. (New
York time) on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Trustee and the Depositor, with a copy to the Rating Agencies, a
Servicer's Certificate containing all information necessary to make the
distributions pursuant to Sections 5.5 and 5.6 (including, if required,
withdrawals from or deposits to the Payahead Account and Advances by the
Servicer pursuant to Section 5.7) for the Collection Period preceding the date
of such Servicer's Certificate. Receivables to be purchased by the Servicer or
to be repurchased by the Seller shall be identified by the Servicer by account
number with respect to such Receivable (as specified in Schedule A).
SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) The Servicer shall deliver to the Owner Trustee and the Trustee, on or
before October 31 of each year beginning October 31, 199_, an Officers'
Certificate, dated as of June 30 of the preceding year, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
(or, in the case of the first such report, during the period from the Closing
Date to June 30, 199_) and of its performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement throughout such year (or, in the case of the first such
certificate, such longer period) or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The Trustee shall send a copy of
such certificate and the report referred to in Section 4.11 to the Rating
Agencies. A copy of such certificate and the report referred to in Section 4.11
may be obtained by any Certificateholder by a request in writing to the Owner
Trustee addressed to the Corporate Trust Office (as defined in the Trust
Agreement) or by any Noteholder by a request in writing to the Trustee addressed
to the Corporate Trust Office. Upon the telephone request of the Owner Trustee,
the Trustee will promptly furnish the Owner Trustee a list of Noteholders as of
the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the 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
Officers' Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Default under Section 8.1(a) or (b).
SECTION 4.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer or the Depositor, to
deliver to the Depositor, the Owner Trustee and the Trustee on or before October
31 of each year as of June 30 of the preceding fiscal year, beginning October
31, 199_, (1) a report addressed to the Board of Directors of the Servicer, to
the effect that such firm has examined the financial statements of the Servicer
and issued its report and that such examination was made in accordance with
generally accepted auditing standards (except as otherwise noted therein), and
accordingly included such tests of the accounting records and such other
auditing procedures as such firm considered necessary in the circumstances; and
(2) a report on description of lease and loan servicing operations and tests of
operating effectiveness in form and substance as is currently prepared on an
annual basis with respect to Servicer. The Servicer shall also concurrently
cause the accountants to deliver a report addressed to the Servicer, the Trustee
and the Owner Trustee to the effect that (1) a review in accordance with agreed
upon procedures was made of three randomly selected Servicer Certificates; (2)
except as disclosed in the report, no exceptions or errors in the Servicer
Certificates were found; and (3) the delinquencies and loss information,
relating to the Receivables contained in the Servicer Certificates were found to
be accurate.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING RECEIVABLES. The Servicer shall provide to the Certificateholders and
Noteholders access to the Receivable Files in such cases where the
Certificateholders or the Noteholders shall be required by applicable statutes
or regulations to review such documentation as demonstrated by evidence
satisfactory to the Servicer in its reasonable judgment. Access shall be
afforded without charge, but only upon reasonable request (not less than
seventy-two hours) and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section shall affect the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section.
SECTION 4.13. SERVICER EXPENSES. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
SECTION 4.14. APPOINTMENT OF SUBSERVICER. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; PROVIDED, HOWEVER, that the Rating Agency Condition shall
have been satisfied in connection therewith; PROVIDED FURTHER that the Servicer
shall remain obligated and be liable to the Issuer, the Owner Trustee, the
Trustee, the Certificateholders and the Noteholders for the servicing and
administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the subservicer shall be as agreed between
the Servicer and its subservicer from time to time and none of the Issuer, the
Owner Trustee, the Trustee, the Certificateholders or the Noteholders shall have
any responsibility therefor.
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS
AND NOTEHOLDERS
SECTION 5.1. ESTABLISHMENT OF TRUST ACCOUNTS. (a)(i) The Servicer, for
the benefit of the Noteholders and the Certificateholders, shall establish and
maintain in the name of the 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.
The Collection Account shall be established and maintained with the Trustee.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the 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. The Note Distribution Account shall be
established and maintained with the Trustee.
(iii) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the
Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders and the Certificateholders.
The Reserve Account shall be maintained with the Trustee as long as
the Trustee is an Eligible Institution.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account, the Payahead Account and the Reserve Account (collectively, the "Trust
Accounts") and the Certificate Distribution Account shall be invested by the
Trustee with respect to Trust Accounts and by the 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 the
Servicer (pursuant to standing instructions delivered to a Trust Officer of the
Trustee and a Trust Officer of the Owner Trustee or other written notice so
delivered); PROVIDED, HOWEVER, it is understood and agreed that neither the
Trustee nor the 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 the Trustee or the Owner Trustee, as applicable, for the
benefit of the Noteholders or the Certificateholders, as applicable; on each
Distribution Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Interest
Distribution Amount. Other than as permitted by the Rating Agencies, funds on
deposit in the Collection Account, the Note Distribution Account, the
Certificate Distribution Account, the Payahead Account and the Reserve Account
shall be invested in Eligible Investments that will mature so that such funds
will be available at the close of business on the Transfer Date preceding the
following Distribution Date. Funds deposited in a Trust Account or the
Certificate Distribution Account on a Transfer Date which immediately precedes a
Distribution Date upon the maturity of any Eligible Investments are not required
to be invested overnight.
(c) (i) The 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 (including all income thereon) and all such
funds, investments, proceeds and income 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 the Trustee for the
benefit of the Noteholders and the Certificateholders, or the
Noteholders, as the case may be. If, at any time, any of the Trust
Accounts or the Certificate Distribution Account ceases to be an
Eligible Deposit Account, the Trustee (or the Servicer on its behalf)
or the 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 new 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 a new
Certificate Distribution Account, as applicable. In connection with
the foregoing, the Servicer agrees that, in the event that (A) any of
the Trust Accounts (other than the Certificate Distribution Account)
are not accounts with the Trustee or (B) the Certificate Distribution
Account is not an account with the Owner Trustee, the Servicer shall
notify the Trustee or the Owner Trustee, as applicable, in writing
promptly upon any of such Trust Accounts ceasing to be an Eligible
Deposit Account.
(ii) With respect to the Trust Account Property, the Trustee, and
with respect to the Certificate Distribution Account, the Owner
Trustee, agrees, by its respective acceptance hereof, that:
(A) any Trust Account Property or any property in the
Certificate Distribution Account that is held in deposit accounts
shall be held solely in Eligible Deposit Accounts subject to the
penultimate sentence of Section 5.1(c)(i); and, except as
otherwise provided herein, each such Eligible Deposit Account
shall be subject to the exclusive custody and control of the
Trustee with respect to the Trust Accounts and the Owner Trustee
with respect to the Certificate Distribution Account, and the
Trustee or the Owner Trustee, as applicable, shall have sole
signature authority with respect thereto;
(B) any Trust Account Property shall be Delivered to the
Trustee in accordance with the definition of "Delivery" and shall
be held, pending maturity or disposition, solely by the Trustee
or such other Person acting solely for the Trustee as required
for Delivery; and
(C) In the event that the Trustee, in its capacity as
securities intermediary has or subsequently obtains by agreement,
operation of law or otherwise a security interest in the Trust
Accounts or any security entitlement credited thereto, the
Trustee, in its capacity as securities intermediary hereby agrees
that such security interest shall be subordinate to the security
interest of the Trustee. The financial assets and other items
deposited to the Trust Accounts will not be subject to deduction,
set-off, banker's lien, or any other right in favor of any person
(except that the Trustee, in its capacity as securities
intermediary may set off the face amount of any checks which have
been credited to the Trust Accounts but are subsequently returned
unpaid because of uncollected or insufficient funds).
(iii) The Servicer shall have the power, revocable by the Trustee
or by the Owner Trustee with the consent of the Trustee, to instruct
the Trustee to make withdrawals and payments from the Trust Accounts
for the purpose of permitting the Servicer or the Owner Trustee to
carry out its respective duties hereunder or permitting the Trustee to
carry out its duties under the Indenture.
(d) (i) The Servicer shall establish and maintain with the
Trustee an Eligible Deposit Account (the "Payahead Account"). On the
Closing Date, the Depositor shall cause to be deposited $___in the
Payahead Account representing all collected funds received in
connection with the Actuarial Receivables prior to the Cutoff Date
that are due on or after the Cutoff Date, consisting of all or a
portion of the Scheduled Payments due on the Actuarial Receivables in
any Collection Period following the first Collection Period.
(ii) The Servicer shall on or prior to each Distribution Date
(and prior to deposits to the Note Distribution Account or the
Certificate Distribution Account) transfer from the Collection Account
to the Payahead Account all Payaheads as described in Section 5.3
received by the Servicer during the Collection Period. Notwithstanding
the foregoing and the first sentence of Section 5.2, for so long as
the Servicer is permitted to make monthly remittances to the
Collection Account pursuant to Section 5.2, Payaheads need not be
remitted to and deposited in the Payahead Account but instead may be
remitted to and held by the Servicer. So long as such condition is
met, the Servicer shall not be required to segregate or otherwise hold
separate any Payaheads remitted to the Servicer as aforesaid but shall
be required to remit Payaheads to the Collection Account in accordance
with Section 5.5(a).
SECTION 5.2. COLLECTIONS. On the Closing Date, the Depositor shall
cause to be deposited $___in the Collection Account representing all collected
funds received on the Receivables after the Cutoff Date and prior to the Closing
Date. The Servicer shall remit within two Business Days of receipt thereof to
the Collection Account all collected funds received from payments by or on
behalf of the Obligors with respect to the Receivables, and all Liquidation
Proceeds, both as collected during the Collection Period. Notwithstanding the
foregoing, for so long as (i) the Servicer is the Bank, (ii) no Servicer Default
shall have occurred and be continuing, (iii) if the Servicer does not have a
short term debt rating or deposit rating as applicable, of at least A-1 from
Standard & Poor's and P-1 from Moody's, a guaranty, letter of credit, surety
bond or other similar instrument is issued covering collections, any amounts
referred to in clause (e) of the definition of Available Principal and
Liquidation Proceeds held by the Bank, which is acceptable to the Rating
Agencies and issued by an entity, which has a short-term debt or deposit
rating, as applicable, of at least A-1 from Standard & Poor's and P-1 from
Moody's; and (iv) the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection therewith
are complied with), the Servicer shall remit such collections to the Collection
Account on the related Transfer Date. 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 the Servicer, the Seller or the Depositor.
The Rating Agency Condition with respect to this Section 5.4 and the Closing
Date shall be deemed to be satisfied upon the issuance to the Depositor of the
rating letters on the Closing Date.
SECTION 5.3. APPLICATION OF COLLECTIONS. (a) All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Actuarial Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied first to
reduce Outstanding Advances as described in Section 5.7(a). Next, any excess
shall be applied, in the case of Actuarial Receivables, to the Scheduled Payment
and, shall be applied in the case of Simple Interest Receivables, to interest
and principal in accordance with the Simple Interest Method. With respect to
Actuarial Receivables, any remaining excess shall be added to the Payahead
Balance, and shall be applied to prepay the Actuarial Receivable, but only if
the sum of such excess and the previous Payahead Balance shall be sufficient to
prepay the Actuarial Receivable in full. Otherwise, any such remaining excess
payments shall constitute a Payahead and shall increase the Payahead Balance.
(b) All Liquidation Proceeds shall be applied to the related
Receivable in accordance with the Servicer's customary servicing procedures.
SECTION 5.4. ADDITIONAL DEPOSITS. The Servicer shall deposit in the
Collection Account the aggregate Advances pursuant to Section 5.7. The Servicer
and the Seller shall deposit or cause to be deposited in the Collection Account
the aggregate Purchase Amount with respect to any Purchased Receivables and the
Servicer shall deposit therein any amounts to be paid under Section 9.1. The
Servicer will deposit or cause to be deposited the aggregate Purchase Amount
with respect to Purchased Receivables within two Business Days after such
obligations become due, unless the Servicer shall not be required to make
deposits within two Business Days of receipt pursuant to Section 5.2 (in which
case such deposit will be made by the related Transfer Date). All such other
deposits shall be made on the Transfer Date following the end of the related
Collection Period.
SECTION 5.5. DISTRIBUTIONS. (a) On each Distribution Date, the Trustee
shall cause to be transferred from the Payahead Account, or from the Servicer in
the event the provisions of Section 5.1(d)(ii) are applicable, (i) to the
Collection Account, in immediately available funds, the aggregate previous
Payaheads to be applied to Scheduled Payments on Actuarial Receivables for the
related Collection Period or prepayments for the related Collection Period,
pursuant to Sections 5.3 and 5.7, in the amounts set forth in the Servicer's
Certificate for such Distribution Date and (ii) to the Depositor, in immediately
available funds, the investment earnings, net of losses on the Payaheads for the
related Collection Period. A single, net transfer may be made.
(b) On each Determination Date, the Servicer shall calculate all
amounts required to determine the amounts to be deposited from the Reserve
Account into the Collection Account and from the Collection Account into the
Note Distribution Account and the Certificate Distribution Account.
(c) On or before each Distribution Date, the Servicer shall instruct
the Trustee (based on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 4.9) to withdraw
from the Reserve Account and deposit in the Collection Account and the Trustee
shall so withdraw and deposit the Reserve Account Transfer Amount for such
Distribution Date.
(d) The Servicer shall instruct the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 4.9) to make, and the Trustee shall make, a
distribution from the Collection Account to the Servicer by 11:00 a.m. (New York
time), amounts in respect of Outstanding Advances to the extent that the
Servicer is entitled to reimbursement in respect thereof in accordance with
Section 5.7. Subject to the last paragraph of this Section 5.5(d), no later than
each Distribution Date, the Servicer shall instruct the Trustee (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 4.9) to make, and the Trustee shall make,
the following deposits and distributions from the Collection Account for deposit
in the applicable Account by 10:00 a.m. (New York time), to the extent of the
Total Distribution Amount, in the following order of priority:
(i) to the Servicer, from the Total Distribution Amount, the
Total Servicing Fee;
(ii) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i), the
Noteholders' Interest Distributable Amount;
(iii) to the Owner Trustee for deposit in the Certificate
Distribution Account, from the Total Distribution Amount remaining
after the application of clause (i) and clause (ii), the
Certificateholders' Interest Distributable Amount;
(iv) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (i)
through (iii), the Noteholders' Principal Distributable Amount;
(v) to the Owner Trustee for deposit in the Certificate
Distribution Account, from the Total Distribution Amount remaining
after the application of clauses (i) through (iv), the
Certificateholders' Principal Distributable Amount; and
(vi) to the Trustee for deposit in the Reserve Account, from the
Total Distribution Amount, the amounts remaining after the application
of clauses (i) through (v) above PROVIDED, HOWEVER, that following the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii),
5.1(iv) or 5.1(v) of the Indenture, an acceleration of the Notes
pursuant to Section 5.2 of the Indenture or an Insolvency Event with
respect to the holder of the GP Interest, amounts on deposit in the
Collection Account will be deposited in the Note Distribution Account
to the extent necessary to pay accrued and unpaid interest on the
Notes and then, to the extent funds are available therefore, principal
on the Notes until the principal balance of the Notes has been reduced
to zero, before any amounts are deposited in the Certificate
Distribution Account. Following the payment in full of the Notes,
amounts on deposit in the Collection Account will be deposited in the
Certificate Distribution Account to the extent necessary to pay
accrued and unpaid interest on the Certificates and then, to the
extent funds are available therefore, principal on the Certificates
until the principal balance thereof has been reduced to zero.
In the event that the Collection Account is maintained with an
institution other than the Trustee, the Servicer shall instruct and cause such
institution to make all deposits and distributions pursuant to this Section
5.5(d) on the related Transfer Date.
SECTION 5.6. RESERVE ACCOUNT (a) On the Closing Date, the Depositor
shall deposit the Reserve Account Initial Deposit into the Reserve Account. In
no circumstances will the Depositor be required to deposit from its own funds
any amounts in the Reserve Account other than the Reserve Account Initial
Deposit to be made on the Closing Date.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to any and all deposits and withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve
Account Balance for such Distribution Date, the Servicer shall instruct the
Trustee to distribute, and the Trustee shall distribute, the amount of the
excess to the Depositor. Amounts properly distributed to the Depositor pursuant
to Section 5.6(b) shall be deemed released from the Trust and the security
interest therein granted to the Trustee and the Depositor shall in no event
thereafter be required to refund any such distributed amounts.
SECTION 5.7. ADVANCE. (a) As of the close of business on the last day
of each Collection Period, if the payments by or on behalf of the Obligor on an
Actuarial Receivable (other than a Purchased Receivable) shall be less than the
Scheduled Payment, the Payahead Balance shall be applied by the Servicer to the
extent of the shortfall and such Payahead Balance shall be reduced accordingly.
Next, the Servicer shall advance any remaining shortfall (such amount an
"Advance"), to the extent that the Servicer, at its sole discretion, shall
determine that the Advance shall be recoverable from the Obligor, the Purchase
Amount, Liquidation Proceeds or proceeds of any other Actuarial Receivables.
With respect to each Actuarial Receivable, the Advance shall increase
Outstanding Advances. Outstanding Advances shall be reduced by subsequent
payments by or on behalf of the Obligor, collections of Liquidation Proceeds in
respect of the related Receivable or payments of the Purchase Amount of the
related Receivable.
If the Servicer shall determine that an Outstanding Advance with
respect to any Actuarial Receivable shall not be recoverable as aforesaid, the
Servicer shall be reimbursed from any collections (including Liquidation
Proceeds) on other Actuarial Receivables in the Trust and Outstanding Advances
with respect to such Actuarial Receivables shall be reduced accordingly.
(b) The Servicer shall not make any advance with respect to interest
on or principal of Simple Interest Receivables.
SECTION 5.8. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. On each
Determination Date, the Servicer shall provide to the Trustee (with a copy to
the Rating Agencies) for the Trustee to forward to each Noteholder of record, to
each Paying Agent, if any, and to the Owner Trustee for the Owner Trustee to
forward to each Certificateholder of record, a statement substantially in the
form of Exhibit A, setting forth at least the following information as to the
Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal of the
Notes and to the Certificate Balance of the Certificates;
(ii) the amount of such distribution allocable to interest on or
with respect to the Notes and to the Certificates;
(iii) the Pool Balance as of the close of business on the last
day of the preceding Collection Period, after giving effect to
payments allocated to principal reported under (i) above;
(iv) the aggregate outstanding principal balance of the Notes,
the Note Pool Factor for the Notes, the Certificate Balance and the
Certificate Pool Factor after giving effect to payments allocated to
principal reported under (i) above;
(v) the amount of the Total Servicing Fee paid to the Servicer
with respect to the related Collection Period;
(vi) the amount of the aggregate Realized Losses, net of
Recoveries, if any, for such Collection Period;
(vii) the Reserve Account Transfer Amount, if any, for such
Distribution Date, the average of the Charge-off Rates and the
Delinquency Percentages for the three preceding Collection Periods,
the Specified Reserve Account Balance for such Distribution Date, the
amount distributed to the Depositor from the Reserve Account on such
Distribution Date, and the balance of the Reserve Account (if any) on
such Distribution Date, after giving effect to changes therein on such
Distribution Date;
(viii) the Noteholders' Interest Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall, the Noteholders'
Principal Carryover Shortfall, and the Certificateholders' Principal
Carryover Shortfall;
(ix) the aggregate Purchase Amount paid by the Seller or the
Servicer with respect to the related Collection Period;
(x) the aggregate Payahead Balance;
(xi) the amounts collected by the Servicer;
(xii) the amounts received by the Trust from the Servicer; and
(xiii) delinquency information relating to the Receivables which
are 30, 60 and 90 days delinquent.
Each amount set forth pursuant to paragraph (i), (ii), (v) or (viii)
above shall be expressed as a dollar amount per $1,000 of the initial principal
balance of the Notes or the initial Certificate Balance, as applicable.
SECTION 5.9. NET DEPOSITS. As an administrative convenience, if the
Servicer is not required to remit collected funds within two Business Days of
receipt thereof, the Servicer will be permitted to make the deposit of such
funds, aggregate Advances and Purchase Amounts for or with respect to the
Collection Period net of distributions to be made to the Servicer with respect
to the Collection Period. Similarly, the Servicer may cause to be made a single,
net transfer, from the Collection Account to the Payahead Account, or vice
versa. The Servicer, however, will account to the Owner Trustee, the Trustee,
the Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
ARTICLE VI
THE DEPOSITOR
SECTION 6.1 REPRESENTATIONS OF DEPOSITOR. The Depositor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and shall survive the sale of the Receivables to the
Issuer and the pledge thereof to the Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly organized
and validly existing as a corporation in good standing under the laws of the
State of Delaware with the corporate power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has, the
power, authority and legal right to acquire and own the Receivables.
(b) DUE QUALIFICATION. The Depositor is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications.
(c) POWER AND AUTHORITY OF THE DEPOSITOR. The Depositor has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under each of the Basic Documents to which the Depositor
is a party; the Depositor has full corporate power and authority to sell and
assign the property to be sold and assigned to and deposited with the Issuer;
the Depositor has duly authorized such sale and assignment to the Issuer by all
necessary corporate action; and the execution, delivery and performance of each
of the Basic Documents to which the Depositor is a party has been duly
authorized by the Depositor by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement and each of the Basic Documents
to which the Depositor is a party constitute legal, valid and binding
obligations of the Depositor, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect relating
to creditors' rights generally and subject to general principles of equity
(whether applied in a proceeding at law or in equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not result in any
breach of any of the terms and provisions of, nor constitute (with or without
notice or lapse of time or both) a default under, the certificate of
incorporation or by-laws of the Depositor, or any material indenture, agreement
or other instrument to which the Depositor is a party or by which it shall be
bound; nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or,
to the best of its knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Depositor or, to its best knowledge, threatened against the
Depositor, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Depositor of its obligations under, or
the validity or enforceability of the Basic Documents, the Notes or the
Certificates or (iv) seeking to affect adversely the Federal or state income tax
or ERISA attributes of the Issuer, the Notes or the Certificates.
(g) ALL CONSENTS. All authorizations, licenses, consents, orders or
approvals of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Depositor in connection with the execution
and delivery by the Depositor of this Agreement or any of the Basic Documents to
which it is a party and the performance by the Depositor of the transactions
contemplated by this Agreement or any of the Basic Documents to which it is a
party, have been duly obtained, effected or given and are in full force and
effect, except where failure to obtain the same would not have a material
adverse effect upon the rights of the Issuer, the Noteholders or the
Certificateholders.
SECTION 6.2 CORPORATE EXISTENCE. (a) During the term of this
Agreement, subject to Section 6.4, the Depositor will keep in full force and
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement, the Basic Documents and each other instrument or agreement necessary
or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) During the term of this Agreement, the Depositor shall observe the
applicable legal requirements for the recognition of the Depositor as a legal
entity separate and apart from its affiliates, including as follows:
(i) the Depositor shall maintain corporate records and books of
account separate from those of its affiliates;
(ii) except as otherwise provided in this Agreement, the
Depositor shall not commingle its assets and funds with those of its
affiliates;
(iii) the Depositor shall hold such appropriate meetings of its
Board of Directors as are necessary to authorize all the Depositor's
corporate actions required by law to be authorized by the Board of
Directors, shall keep minutes of such meetings and of meetings of its
stockholder(s) and observe all other customary corporate formalities
(and any successor Depositor not a corporation shall observe similar
procedures in accordance with its governing documents and applicable
law);
(iv) the Depositor shall at all times hold itself out to the
public under the Depositor's own name as a legal entity separate and
distinct from its affiliates; and
(v) all transactions and dealings between the Depositor and its
affiliates will be conducted on an arm's-length basis
SECTION 6.3. LIABILITY OF DEPOSITOR; INDEMNITIES. The Depositor shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement and the
representations made by the Depositor in this Agreement.
(a) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the 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 and any of the Basic Documents (except any income
taxes arising out of fees paid to the Owner Trustee or the Trustee and except
any taxes to which the Owner Trustee or the Trustee may otherwise be subject
to), including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, and as of the date of, the sale of
the Receivables to the Issuer or the issuance and original sale of the
Certificates and the Notes, or asserted with respect to ownership of the
Receivables or Federal or other income taxes arising out of distributions on the
Certificates and the Notes) and reasonable costs and expenses in defending
against the same or in connection with any application relating to the Notes or
Certificates under any state securities laws.
(b) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Trustee, the Certificateholders and the
Noteholders and the officers, directors, employees and agents of the Issuer, the
Owner Trustee and the 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 (i) the Depositor's willful misfeasance, bad faith or
gross negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this Agreement
and (ii) the Depositor's or the Issuer'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.
(c) The Depositor shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Owner Trustee and its officers,
directors, employees and agents from and against any and all losses, claims,
damages and liabilities and reasonable costs and expenses arising out of, or
incurred in connection with, this Agreement or any of the Basic Documents, the
Owner Trust Estate, the acceptance or performance of the trusts and duties set
forth herein and in the Trust Agreement or the action or the inaction of the
Owner Trustee hereunder and under the Trust Agreement, except to the extent that
such cost, expense, loss, claim, damage or liability: (i) shall be due to the
failure of the Owner Trustee to perform in accordance with the Trust Agreement
or the willful misfeasance, bad faith or negligence of the Owner Trustee, or
(ii) shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in Section 7.3 of the Trust Agreement.
Such liability and indemnification shall survive the termination of the Trust.
In the event of any claim, action or proceeding for which indemnity will be
sought pursuant to this paragraph, the Owner Trustee's choice of legal counsel
shall be subject to the approval of the Depositor, which approval shall not be
unreasonably withheld.
(d) The Depositor shall pay any and all taxes levied or assessed upon
all or any part of the Trust Estate (other than those taxes expressly excluded
from the Depositor's responsibilities pursuant to the parentheticals in
paragraph (a) above).
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Trustee and the termination of this
Agreement or the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and other reasonable expenses of
litigation. If the Depositor shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Depositor, without interest.
SECTION 6.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, DEPOSITOR. Any Person (a) into which the Depositor may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Depositor shall be a party or (c) which may succeed to the properties and
assets of the Depositor substantially as a whole, shall be the successor to the
Depositor without the execution or filing of any document or any further act by
any of the parties to this Agreement; PROVIDED, HOWEVER, that the Depositor
hereby covenants that it will not consummate any of the foregoing transactions
except upon satisfaction of the following: (i) the surviving Depositor if other
than Mellon Auto Receivables Corporation executes an agreement of assumption to
perform every obligation of the Depositor 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 and no Event of Default,
and no event that, after notice or lapse of time, or both, would become an Event
of Default shall have happened and be continuing, (iii) the Depositor shall have
delivered to the Owner Trustee and the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 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
Depositor shall have a consolidated net worth at least equal to that of the
predecessor Depositor, (v) such transaction will not result in a material
adverse federal or state tax consequence to the Issuer, the Noteholders or the
Certificateholders and (vi) unless Mellon Auto Receivables Corporation, is the
surviving entity, the Depositor shall have delivered to the Owner Trustee and
the Trustee an Opinion of Counsel either (A) stating that, in the opinion of
such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and 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 DEPOSITOR AND OTHERS. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document (provided that such reliance shall not limit in
any way the Depositor's obligations under Section 3.2). Except as provided in
this Agreement, the Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 6.6. DEPOSITOR MAY OWN CERTIFICATES OR Notes. The Depositor
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 the Depositor or an Affiliate thereof, except as expressly
provided herein or in any Basic Document.
SECTION 6.7 SECURITY INTEREST. During the term of this Agreement, the
Depositor will not take any action to assign the security interest in any
Financed Vehicles other than pursuant to the Basic Documents.
ARTICLE VII
THE SERVICER AND THE SELLER
SECTION 7.1. REPRESENTATIONS OF THE BANK. The Bank makes the following
representations on which each of the Depositor and the Issuer is deemed to have
relied in acquiring the Receivables. The representations speak as of the
execution and delivery of the Agreement and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Bank is duly organized and
validly existing as a national banking association in good standing under the
laws of the United States of America with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire, own and service the
Receivables.
(b) DUE QUALIFICATION. The Bank is duly qualified to do business 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 OF THE BANK. The Bank has the power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; the Bank has full power and authority to sell and assign the property
to be sold and assigned to and deposited with the Depositor; the Bank has duly
authorized such sale and assignment to the Depositor by all necessary action;
and the execution, delivery and performance of this Agreement have been duly
authorized by the Bank by all necessary action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Bank, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally, and the rights of creditors of national banking
associations and depository institutions, the accounts of which are insured by
the FDIC, and subject to general principles of equity (whether applied in a
proceeding of law or in equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not result in any
breach of any of the terms and provisions of, nor constitute (with or without
notice or lapse of time or both) a default under the articles of association or
by-laws of the Bank, or any material indenture, agreement or other instrument to
which the Bank is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than pursuant
to the Basic Documents); nor violate any law or, to the best of its knowledge,
any order, rule or regulation applicable to the Bank of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Bank or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Bank, or, to its best knowledge, threatened against the Bank, before
any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Bank or its properties: (i)
asserting the invalidity of this Agreement or any of the Basic Documents, the
Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes or
the Certificates or the consummation of any of the transactions contemplated by
this Agreement or any of the Basic Documents, (iii) seeking any determination or
ruling that could reasonably be expected to have a material and adverse effect
on the performance by the Bank of its obligations under, or the validity or
enforceability of this Agreement or any of the Basic Documents, the Notes or the
Certificates or (iv) seeking to affect adversely the federal or state income tax
or ERISA attributes of the Issuer, the Notes or the Certificates.
(g) NO AMENDMENT OR WAIVER. No provision of any Receivable has been
waived, altered or modified in any respect, except pursuant to a document,
instrument or writing included in the relevant Receivable File, and no such
amendment, waiver, alteration or modification causes such Receivable not to
conform to the other warranties contained in this Section or those of the Seller
contained in Section 3.1.
(h) APPROVALS. All approvals, licenses, authorizations, consents,
orders or other actions of any person, corporation or other organization, or of
any court, governmental agency or body or official, required in connection with
the execution and delivery of this Agreement have been or will be taken or
obtained on or prior to the Closing Date.
(i) LOCATION OF RECEIVABLE FILES. The Receivable Files are kept in the
offices of the Servicer, specified in Schedule B, or at such other office
specified in accordance with Section 3.4(b).
(j) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Bank in connection with the execution and delivery by the Bank of
this Agreement or any of the Basic Documents to which it is a party and the
performance by the Bank of the transactions contemplated by this Agreement or
any of the Basic Documents to which it is a party, have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material adverse effect upon the rights of the
Issuer, the Noteholders or the Certificateholders.
SECTION 7.2. INDEMNITIES OF THE BANK. The Bank shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Bank, in its capacities as Seller or Servicer under this
Agreement.
The Bank shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Trustee, the Depositor, the Certificateholders and the
Noteholders and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee, the Trustee or the Depositor from any and all losses,
claims, damages, liabilities and reasonable costs and expenses (including
reasonable attorneys' fees and expenses) to the extent arising out of, or
imposed upon any such Person through, the gross negligence, willful misfeasance
or bad faith of the Bank in the performance of its obligations and duties under
this Agreement or in the performance of the obligations and duties of any
subservicer under any subservicing agreement or by reason of the reckless
disregard of its obligations and duties under this Agreement or by reason of the
reckless disregard of the obligations of any subservicer under any subservicing
agreement, where the final determination that any such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, any such gross negligence, willful misfeasance, bad faith or
recklessness on the part of the Bank or any subservicer, is established by a
court of law, by an arbitrator or by way of settlement agreed to by the Bank.
Notwithstanding the foregoing, if the Bank 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, the Bank 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 the Bank
remains unable to perform such obligation as a result of such event. This
provision shall not be construed to limit the Bank'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.
The Bank shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Trustee, the Depositor, the Certificateholders and the
Noteholders or any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee, the Trustee or the Depositor from any and all losses,
claims, damages, liabilities and reasonable costs and expenses (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 (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.
The Bank shall indemnify, defend and hold harmless the Trustee, the
Owner Trustee, the Trust, the Depositor, the Certificateholders and the
Noteholders from and against any taxes that may at any time be asserted against
the Trustee, the Trust, the Owner Trustee, the Certificateholders, the
Noteholders or the Depositor (other than any taxes based upon the income of any
such person), with respect to the transactions contemplated herein including,
without limitation, any sales, gross receipts, general corporation, tangible
personal property, privilege, or license taxes and costs and expenses in
defending against the same.
The Bank shall indemnify, defend, and hold harmless the Owner Trustee
and Trustee and each of their agents, officers, employees and other Persons
employed by each of them in connection with the Basic Documents from and against
all reasonable costs and expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or performance of
the trusts and duties herein contained or contained in the Basic Documents, if
any, except to the extent that such reasonable cost or expense, reasonable loss,
claim, damage or liability: (a) shall be due to the willful misfeasance, bad
faith, or negligence (except for errors in judgment) of the Owner Trustee or
Trustee; (b) relates to any tax other than the taxes with respect to which the
Servicer shall be required to indemnify the Owner Trustee or Trustee; or (c)
shall arise from the Owner Trustee's or Trustee's breach of any of its
representations or warranties set forth in the Trust Agreement or the Indenture,
as applicable.
Indemnification under this Section shall survive the resignation and
removal of the Trustee and the Owner Trustee or the termination of this
Agreement.
SECTION 7.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF THE BANK. Any Person (a) into which the Bank may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Bank shall be a party or (c) which may succeed to the properties and assets of
the Bank, substantially as a whole, shall be the successor to the Bank without
the execution or filing of any document or any further act by any of the parties
to this Agreement; PROVIDED, HOWEVER, that the Bank 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 the Bank, executes an
agreement of assumption to perform every obligation of the 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 Default, and no event that, after notice or lapse of time, or
both, would become a Servicer Default shall have occurred and be continuing,
(iii) the Bank shall have delivered to the Owner Trustee and the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 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 the Issuer,
the Noteholders or the Certificateholders.
SECTION 7.4. LIMITATION ON LIABILITY OF THE BANK AND OTHERS. Neither
the Bank nor any of its directors, officers, employees or agents shall be under
any liability to the Issuer, the Noteholders or the Certificateholders, except
as provided under this Agreement, for any action taken or for refraining from
the taking of any action by the Bank or any subservicer pursuant to this
Agreement or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Bank or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Bank 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 the Bank shall not be under any
obligation to appear in, prosecute or defend any legal action that shall 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, HOWEVER, that the Bank, 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.
SECTION 7.5. THE BANK NOT TO RESIGN AS SERVICER. Subject to the
provisions of Section 7.3, the 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 the Bank, as Servicer shall be communicated to the Owner Trustee
and the 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 the Owner Trustee and the Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until the
earlier of the 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. CORPORATE EXISTENCE. (a) During the term of this
Agreement, subject to Section 6.4, the Bank will keep in full force and effect
its existence, rights and franchises as a national banking association under the
laws of the United States of America 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.
(a) During the term of this Agreement, the Bank shall observe the
applicable legal requirements for the recognition of the Bank as a legal entity
separate and apart from its Affiliates, including as follows:
(i) the Bank shall maintain corporate records and books of
account separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement, the Bank
shall not commingle its assets and funds with those of its Affiliates;
(iii) the Bank shall hold such appropriate meetings of its Board
of Directors as are necessary to authorize all the Bank's corporate
actions required by law to be authorized by the Board of Directors,
shall keep minutes of such meetings and of meetings of its
stockholder(s) and observe all other customary corporate formalities
(and any successor Servicer not a corporation shall observe similar
procedures in accordance with its governing documents and applicable
law);
(iv) the Bank shall at all times hold itself out to the public
under the Bank's own name as a legal entity separate and distinct from
its Affiliates; and
(v) all transactions and dealings between the Bank and its
Affiliates will be conducted on an arm's-length basis.
ARTICLE VIII
DEFAULT
SECTION 8.1. SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Trustee for deposit
in any of the Trust Accounts or the Certificate Distribution Account any
required payment or to direct the Trustee to make any required distributions
therefrom that shall continue unremedied for a period of three Business Days
after written notice of such failure is received by the Servicer from the Owner
Trustee or the Trustee or after discovery of such failure by an Authorized
Officer of the Servicer; or
(b) failure on the part of the Servicer duly to observe or to perform
in any material respect any other covenants or agreements of the Servicer set
forth in this Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of either the Certificateholders or
Noteholders and (ii) continue unremedied for a period of 30 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given (A) to the Servicer by the Owner Trustee or the Trustee or
(B) to the Servicer and to the Owner Trustee and the Trustee by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount of the Notes or
Holders of Certificates evidencing not less than 25% of the outstanding
Certificate Balance, as applicable (or for such longer period, not in excess of
120 days, as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 120 days and the Servicer delivers an
Officers' Certificate to the Owner Trustee and the Trustee to such effect and to
the effect that the Servicer has commenced or will promptly commence, and will
diligently pursue, all reasonable efforts to remedy such default); or
(c) an Insolvency Event occurs with respect to the Servicer or any
successor; then, and in each and every case, so long as the Servicer Default
shall not have been remedied, either the Trustee, or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer and the Owner Trustee (and to the Trustee
if given by the Noteholders) may terminate all the rights and obligations (other
than the obligations set forth in Section 7.2) of the Servicer under this
Agreement. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Notes, the Certificates or the Receivables or otherwise, shall, without
further action, pass to and be vested in the Trustee or such successor Servicer
as may be appointed under Section 8.2; and, without limitation, the Trustee and
the Owner Trustee 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 the successor Servicer, the Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer 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. All reasonable costs and expenses (including reasonable
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 shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Owner Trustee
shall give notice thereof to the Rating Agencies.
SECTION 8.2. APPOINTMENT OF SUCCESSOR. (a) Upon the Servicer's receipt
of notice of termination, pursuant to Section 8.1 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the earlier of (x) the date 45
days from the delivery to the Owner Trustee and the Trustee of written notice of
such resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Servicer's
termination hereunder, the Trustee shall appoint a successor Servicer, and the
successor Servicer shall accept its appointment by a written assumption in form
acceptable to the Owner Trustee and the Trustee. In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section, the Trustee without
further action shall automatically be appointed the successor Servicer and the
Trustee shall be entitled to the Servicing Fee. Notwithstanding the above, the
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 $50,000,000 and whose regular business shall
include the servicing of automotive receivables, as the successor to the
Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the 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.
SECTION 8.3. PAYMENT OF SERVICING FEE; REPAYMENT OF ADVANCES. If the
Servicer shall change, the predecessor Servicer shall be entitled to (i) receive
any accrued and unpaid Servicing Fees through the date of the successor
Servicer's acceptance hereunder in accordance with Section 4.8. and (ii)
reimbursement for Outstanding Advances pursuant to Sections 5.3 and 5.7 with
respect to all Advances made by the predecessor Servicer.
SECTION 8.4. NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon
the receipt by a Trust Officer of the Owner Trustee of written notice of any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article VIII, the Owner Trustee shall give prompt written notice thereof to
Certificateholders and the Trustee shall give prompt written notice thereof to
Noteholders subject to the Rating Agency Condition.
SECTION 8.5. WAIVER OF PAST DEFAULTS. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes (or the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the outstanding Certificate Balance, as applicable, in the case of
any default which does not adversely affect the Trustee or the Noteholders) may,
on behalf of all Noteholders and Certificateholders, waive in writing any
default by the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from any of the Trust Accounts or the Certificate Distribution Account in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE IX
TERMINATION
SECTION 9.1. OPTIONAL PURCHASE OF ALL RECEIVABLES. (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 Initial Pool Balance, the
Servicer shall have the option to purchase the Owner Trust Estate, other than
the Trust Accounts and the Certificate Distribution Account. To exercise such
option, the 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 Distribution Date, equals the sum of (a) the unpaid principal
amount of the then outstanding Notes, plus accrued and unpaid interest thereon,
plus (b) the Certificate Balance plus accrued and unpaid interest thereon. The
Notes and the Certificates will be redeemed concurrently therewith.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.2
of the Trust Agreement, the Servicer shall instruct the Trustee to deposit the
proceeds from such sale after all payments and reserves therefrom (including the
expenses of such sale) have been made (the "Insolvency Proceeds") in the
Collection Account. On the Distribution Date on which the Insolvency Proceeds
are deposited in the Collection Account (or, if such proceeds are not so
deposited on a Distribution Date, on the Distribution Date immediately following
such deposit), the Servicer shall instruct the Trustee to make, and the Trustee
shall make, the following deposits and distributions (after the application on
such Distribution Date of the Total Distribution Amount pursuant to Section 5.5)
from the Insolvency Proceeds and any funds remaining on deposit in the Reserve
Account (including the proceeds of any sale of investments therein):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding principal
balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits
made in the Note Distribution Account on such Distribution Date);
(iii) to the Owner Trustee for deposit in the Certificate
Distribution Account, any portion of the Certificateholders' Interest
Distributable Amount not otherwise deposited into the Certificate
Distribution Account on such Distribution Date; and
(iv) to the Owner Trustee for deposit in the Certificate
Distribution Account, the Certificate Balance and any
Certificateholders' Principal Carryover Shortfall Amount (after giving
effect to the reduction in the Certificate Balance to result from the
deposits made in the Certificate Distribution Account on such
Distribution Date).
Any Insolvency Proceeds remaining after the deposits described above
shall be paid to the holder of the GP Interest.
(c) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Trustee and the Rating Agencies as soon as
practicable after the Servicer has knowledge thereof.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Trustee pursuant to this Agreement.
SECTION 9.2. MANDATORY SALE OF ALL CONTRACTS. In accordance with the
procedures and schedule set forth in Exhibit C hereto (the "Auction
Procedures"), the Trustee (or, if the Notes have been paid in full and the
Indenture shall have been discharged in accordance with its terms, the Owner
Trustee) shall conduct or shall cause to be conducted an auction (the "Auction")
of the Receivables remaining in the Trust (such Receivables hereinafter referred
to as the "Auction Property") in order to effect a termination of the Trust
pursuant to Section 9.1 of the Trust Agreement on the second Distribution Date
succeeding the Record Date on which the Pool Balance is 5% or less of the
Initial Pool Balance and at such time as the Depositor shall have not exercised
its option contained in Section 9.1. Such Auction shall be conducted within 10
days following the Distribution Date following the Record Date on which the Pool
Balance is 5% or less of the Initial Pool Balance. The Depositor, the Seller, or
the Servicer may, but shall not be required to, bid at the Auction. Such Trustee
shall sell or shall cause the sale and transfer of the Auction Property to the
highest bidder therefor at the Auction provided that;
(i) the Auction has been conducted in accordance with the Auction
Procedures;
(ii) such Trustee has received good faith bids for the Auction
Property from two prospective purchasers that are considered by such
Trustee, in its sole discretion, to be competitive participants in the
market for motor vehicle retail installment sale contracts and other
motor vehicle installment sale contracts;
(iii) a financial advisor, as advisor to such Trustee (in such
capacity, the "Advisor"), shall have advised such Trustee in writing
that at least two of such bidders (including the winning bidder) are
participants in the market for motor vehicle retail installment sale
contracts and other motor vehicle installment sale contracts willing
and able to purchase the Auction Property;
(iv) the highest bid in respect of the Auction Property is not
less than the aggregate fair market value of the Auction Property (as
determined by such Trustee in its sole discretion);
(v) any bid submitted by the Depositor, the Seller, the Servicer
or any Affiliate of any of them shall reasonably represent the fair
market value of the Auction Property, as independently verified and
represented in writing by a qualified independent third party
evaluator (which may include the Advisor or an investment bank firm)
selected by such Trustee; and
(vi) the highest bid would result in proceeds from the sale of
the Auction Property which will be at least equal to the sum of (A)
the greater of (1) the aggregate Purchase Price for the Receivables
(including defaulted Receivables), plus the appraised value of any
other property held by the Trust (less liquidation expenses) or (2) an
amount that, when added to amounts on deposit in the Collection
Account and available for distribution to Securityholders on the
second Distribution Date following the consummation of such sale (the
"Liquidation Distribution Date"), would result in proceeds sufficient
to distribute to Securityholders the amounts of interest due to the
Securityholders for such Distribution Date and any unpaid interest
payable to the Securityholders with respect to one or more prior
Distribution Dates and the outstanding principal amount of the Notes
and the Certificate Balance, and (B) the Total Servicing Fee payable
on such second Distribution Date.
Provided that all of the conditions set forth in clauses (i) through
(vi) have been met, such Trustee shall sell and transfer the Auction Property,
without representation, warranty or recourse, to such highest bidder in
accordance with and upon completion of the Auction Procedures. Such Trustee
shall deposit the purchase price for the Auction Property in the Collection
Account at least one Business Day prior to such second succeeding Distribution
Date. In addition, the Auction must stipulate that the Servicer be retained to
service the Receivables on terms substantially similar to those in the
Agreement. In the event that any of such conditions are not met or such highest
bidder fails or refuses to comply with any of the Auction Procedures, such
Trustee shall decline to consummate such sale and transfer. In the event such
sale and transfer is not consummated in accordance with the foregoing, however,
such Trustee may from time to time in the future, but shall not be under any
further obligation to, solicit bids for sale of the assets of the Trust upon the
same terms and conditions as set forth above. If any of the foregoing conditions
are not met, such Trustee shall decline to consummate such sale and shall not be
under any obligation to solicit any further bids or otherwise negotiate any
further sale of Receivables remaining in the Trust. In such event, however, such
Trustee may from time to time solicit bids in the future for the purchase of
such Receivables pursuant to this Section 9.2. If applicable, the Trustee shall
provide notice to the Owner Trustee of the termination of the Trust pursuant to
this Section 9.2 as soon as practicable upon the consummation of the mandatory
sale of the Receivables pursuant to this Section 9.2. Each of the Servicer, the
Trustee, the Seller and the Depositor acknowledge that the duties and
responsibilities of the Issuer under the Basic Documents shall be performed by
the Servicer, and not by the Owner Trustee.
ARTICLE X.
ADMINISTRATIVE DUTIES OF THE SERVICER
SECTION 10.1. ADMINISTRATIVE DUTIES. (a) DUTIES WITH RESPECT TO THE
INDENTURE AND DEPOSITORY AGREEMENTS. The Servicer shall perform all its duties
and the duties of the Issuer under the Depository Agreements. In addition, the
Servicer shall consult with the Owner Trustee as the Servicer deems appropriate
regarding the duties of the Issuer under the Indenture and the Depository
Agreements. The Servicer shall monitor the performance of the Issuer and shall
provide notice to the Owner Trustee when action is necessary to comply with the
Issuer's duties under the Indenture and the Depository Agreements. The Servicer
shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Indenture and the Depository Agreements. In
furtherance of the foregoing, the Servicer shall take all appropriate action
that is the duty of the Issuer to take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Servicer set forth in this
Agreement or any of the Basic Documents, the Servicer shall perform
such calculations and shall prepare for execution by the Issuer or the
Owner Trustee or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer or the
Owner Trustee to prepare, file or deliver pursuant to this Agreement
or any of the Basic Documents, and at the request of the Owner Trustee
shall take all appropriate action that it is the duty of the Issuer to
take pursuant to this Agreement or any of the Basic Documents. The
Servicer shall administer, perform or supervise the performance of
such other activities in connection with the Collateral (including the
Basic Documents) as are not covered by any of the foregoing provisions
and as are expressly requested by the Owner Trustee and are reasonably
within the capability of the Servicer.
(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Servicer shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding
tax is imposed on the Issuer's payments (or allocations of income) to
an Owner (as defined in the Trust Agreement) as contemplated in
Section 5.2(c) of the Trust Agreement. Any such notice shall specify
the amount of any withholding tax required to be withheld by the Owner
Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Servicer shall be responsible for
performance of the duties of the Owner Trustee and the holder of the
GP Interest set forth in Section 5.6(a), (b), (c) and (d) of the Trust
Agreement with respect to, among other things, accounting and reports
to Owners (as defined in the Trust Agreement); PROVIDED, HOWEVER, that
the Owner Trustee shall retain responsibility for the distribution to
Certificateholders of the Schedule K-1s furnished to the Owner Trustee
by the Servicer which are necessary to enable each Certificateholder
to prepare its federal and state income tax returns.
(iv) The Servicer shall perform the duties of the Servicer
specified in Section 10.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by
the Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
PROVIDED, HOWEVER, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer
and shall be, in the Servicer's opinion, no less favorable to the
Issuer in any material respect.
(c) TAX MATTERS. The Servicer shall prepare and file, on behalf of the
holder of the GP Interest, all tax returns, tax elections, financial statements
and such annual or other reports of the Issuer as are necessary for preparation
of tax reports as provided in Article V of the Trust Agreement, including
without limitation forms 1099 and 1066. All tax returns will be signed by the
holder of the GP Interest.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Servicer are non-ministerial, the Servicer shall not
take any action pursuant to this Article X unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Trustee of the proposed action and the Owner Trustee and, with
respect to items (A), (B), (C) and (D) below, the Trustee shall not have
withheld consent or provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Receivables);
(C) the amendment, change or modification of
this Agreement or any of the Basic Documents;
(D) the appointment of successor Note Registrars,
successor Paying Agents and successor Trustees pursuant to the
Indenture or the appointment of Successor Servicers or the
consent to the assignment by the Note Registrar, Paying Agent
or Trustee of its obligations under the Indenture; and
(E) the removal of the Trustee.
(e) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Servicer, in its capacity hereunder, shall not be obligated to, and shall
not, (1) make any payments to the Noteholders or Certificateholders under the
Basic Documents, (2) sell the Indenture Trust Estate pursuant to Section 5.4 of
the Indenture, (3) take any other action that the Issuer directs the Servicer
not to take on its behalf or (4) in connection with its duties hereunder assume
any indemnification obligation of any other Person.
SECTION 10.2. RECORDS. The Servicer shall maintain appropriate books
of account and records relating to services performed under this Agreement,
which books of account and records shall be accessible for inspection by the
Issuer at any time during normal business hours.
SECTION 10.3. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER.
The Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
SECTION 11.1. AMENDMENT. This Agreement may be amended by all of the
Seller, the Depositor, the Servicer and the Owner Trustee, with the consent of
the Trustee (which consent may not be unreasonably withheld), but without the
consent of any of the Noteholders or the Certificateholders, 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,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Trustee, adversely affect in any material
respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by all of the
Seller, the Depositor, the Servicer and the Owner Trustee, with the consent of
the Trustee, 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
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the Certificate Balance for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that no such amendment shall (a) 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 (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance, 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 (as defined in the Trust Agreement) of all the outstanding
Certificates affected thereby.
Prior to its execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to the Rating Agencies. Promptly after its execution of any such
amendment or consent, the Owner Trustee shall furnish written notification of
the substance of such amendment or consent to each Rating Agency, each
Certificateholder and the Trustee.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent to the execution and
delivery of such amendment have been satisfied and the Opinion of Counsel
referred to in Section 11.2(i)(1) has been delivered. The Owner Trustee and the
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's or the Trustee's, as applicable, own rights, duties
or immunities under this Agreement or otherwise.
SECTION 11.2. PROTECTION OF TITLE TO TRUST. (a) The Depositor shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Trustee in the Receivables and in the proceeds
thereof. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) None of the Depositor, the Seller, or the Servicer shall change
its name, identity or corporate structure in any manner that would, could or
might make any financing statement or continuation statement filed in accordance
with paragraph (a) above seriously misleading within the meaning of ss. 9-402(7)
of the UCC, unless it shall have given the Owner Trustee and the Trustee at
least five days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Depositor, the Seller and the Servicer shall have an
obligation to give the Owner Trustee and the Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment. The Servicer shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
and Payahead Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, the Servicer's
master computer records (including any backup archives) that refer to a
Receivable shall indicate clearly the interest of the Issuer and the Trustee in
such Receivable and that such Receivable is owned by the Issuer and has been
pledged to the Trustee. Indication of the Issuer's and the Trustee's interest in
a Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the related Receivable shall have been paid in full
or repurchased by the Seller or purchased by the Servicer.
(f) If at any time the Seller, the Depositor or the Servicer shall
propose to sell, grant a security interest in or otherwise transfer any interest
in automotive receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Trustee.
(g) The Servicer shall permit the Trustee and its agents at any time
during normal business hours to inspect, audit and make copies of and abstracts
from the Servicer's records regarding any Receivable.
(h) Upon request at any time the Owner Trustee or the 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, the Servicer shall furnish to the Owner Trustee or to the Trustee,
within five Business Days, a list of all Receivables (by contract number and
name of Obligor) then held as part of the Trust, together with a reconciliation
of such list to the Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment thereto, an Opinion of
Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation
statements have been executed and filed that are
necessary fully to preserve and protect the interest of
the Owner Trustee and the Trustee in the Receivables,
and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve
and protect such interest; and
(2) within 120 days after the beginning of each calendar
year beginning with the first calendar year beginning
more than three months after the Cutoff Date, an
Opinion of Counsel, dated as of a date during such
120-day period, either (A) stating that, in the opinion
of such counsel, all financing statements and
continuation statements have been executed and filed
that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Trustee in the
Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such
details are given, or (B) stating that, in the opinion
of such counsel, no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (l) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(ii) The Depositor shall, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the
Securities and Exchange Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in
such sections.
SECTION 11.3. NOTICES. All demands, notices and communications upon or
to the Depositor, the Seller, the Servicer, the Owner Trustee, the Trustee or
the Rating Agencies under this Agreement shall 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 the Depositor, to Mellon Auto Receivables Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
(b) in the case of the Seller or the Servicer, to Mellon Bank, N.A., One Mellon
Bank Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇, (c) in the case of the Issuer or the Owner Trustee, at the
Corporate Trust Office (as defined in the Trust Agreement), (d) in the case of
the Trustee, at the Corporate Trust Office, (e) in the case of _______, to
_________ ________ _______, Attention: _________ _______________ and (f) in the
case of ________ ________, to _______________________, Attention of
____________________________________.
SECTION 11.4. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.4 and 7.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Depositor or the Servicer.
SECTION 11.5. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Depositor, the Seller, the Servicer,
the Issuer, the Owner Trustee and for the benefit of the Certificateholders
(including the holder of the GP Interest), the Trustee and the Noteholders, as
third-party beneficiaries, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.6. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.7. 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 11.8. 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 11.9. 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 11.10. ASSIGNMENT TO TRUSTEE. The Depositor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Trustee pursuant to the Indenture for the
benefit of the Noteholders of all right, title and interest of the Issuer in, to
and under the Receivables and/or the assignment of any or all of the Issuer's
rights and obligations hereunder to the Trustee.
SECTION 11.11. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, the Servicer, the Seller and the Depositor shall
not, prior to the date which is one year and one day after the termination of
this Agreement with respect to the Issuer, acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
under any Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
SECTION 11.12. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND TRUSTEE.
(a) Notwithstanding anything contained herein to the contrary, this Agreement
has been countersigned by ____________, not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall
_______________, in its individual capacity or, except as expressly provided in
the Trust Agreement, as Owner Trustee have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or under any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer. For all purposes of this Agreement, in the performance
of its duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by ____________ not in its individual capacity but
solely as Trustee and in no event shall ____________ have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
SECTION 11.13. INDEPENDENCE OF THE SERVICER. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Servicer shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 11.14. NO JOINT VENTURE. Nothing contained in this Agreement
(i) shall constitute the Servicer and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
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.
MELLON AUTO TRUST 199_-_
By:_________________________________
not in its individual capacity but
solely as Owner Trustee on behalf of
the Trust,
By:____________________________________
Name:
Title:
MELLON BANK, N.A.,
Servicer and Seller,
By:____________________________________
Name:
Title:
MELLON AUTO RECEIVABLES
CORPORATION,
Depositor,
By:____________________________________
Name:
Title:
Acknowledged and Accepted:
______________________________,
not in its individual capacity
but solely as Trustee,
By:___________________________
Name:
Title:
Acknowledged and Accepted:
______________________________,
not in its individual capacity
but solely as Owner Trustee,
By:___________________________
Name:
Title:
SCHEDULE A
SCHEDULE OF RECEIVABLES
Delivered to the Owner Trustee and the Trustee at Closing
SCHEDULE B
LOCATION OF RECEIVABLES
EXHIBIT A
FORM OF MONTHLY SECURITYHOLDER STATEMENT
MELLON AUTO TRUST 199_-_
___% Asset Backed Notes
___% Asset Backed Certificates
Distribution Date:
Collection Period:
Under the Sale and Servicing Agreement dated as of __________ __, 199_
among Mellon Bank, N.A., as servicer (the "Servicer") and seller (the "Seller"),
Mellon Auto Receivables Corporation, as depositor (the "Depositor"), and Mellon
Auto Trust 199_-_, as issuer (the "Trust"), the Servicer is required to prepare
certain information each month regarding current distributions to Noteholders
and Certificateholders and the performance of the Trust during the previous
month. The information that is required to be prepared with respect to the
Distribution Date and Collection Period listed above is set forth below. Certain
of the information is presented on the basis of an original principal amount of
$1,000 per Note or Certificate, and certain other information is presented based
upon the aggregate amounts for the Trust as a whole. A. Information Regarding
the Current Monthly Distribution.
1. Notes.
(a) The aggregate amount of the
distribution with respect to the
Notes...............................................$________
(b) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of interest on the Notes....................$________
(c) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of principal of the Notes...................$________
(d) The amount of the distributions set
forth in paragraph A.1(a) payable
out of amounts withdrawn from the Reserve
Account with respect to the Notes...................$________
(e) The amount of the distribution set
forth in paragraph A.1.(a) above
per $1,000 interest in the Notes....................$________
(f) The amount of the distribution set
forth in paragraph A.1.(b) above
per $1,000 interest in the Notes....................$________
(g) The amount of the distribution set
forth in paragraph A.1.(c) above
per $1,000 interest in the Notes....................$________
(h) The amount of the distribution set
forth in paragraph A.1.(d) above
per $1,000 interest in the Notes....................$________
2. Certificates.
(a) The aggregate amount of the
distribution with respect to the
Certificates.........................................$________
(b) The amount of the distribution set
forth in paragraph A.2.(a) above in
respect of interest on the Certificates..............$________
(c) The amount of the distribution set
forth in paragraph A.2.(a) above in
respect of principal of the Certificates.............$________
(d) The amount of the distributions set
forth in paragraph A.2(a) payable
out of amounts withdrawn from the Reserve
Account with respect to the Certificates.............$________
(e) The amount of the distribution set
forth in paragraph A.2.(a) above
per $1,000 interest in the Certificates..............$________
(f) The amount of the distribution set
forth in paragraph A.2.(b) above
per $1,000 interest in the Certificates..............$________
(g) The amount of the distribution set
forth in paragraph A.2.(c) above
per $1,000 interest in the Certificates..............$________
(h) The amount of the distribution set
forth in paragraph A.2.(d) above
per $1,000 interest in the Certificates..............$________
B. Information Regarding the Performance of the Trust.
1. Pool Balance, Note Principal Balance and Certificate Principal Balance.
(a) The Pool Balance at the close of business on
the last day of the Collection Period..............$________
(b) The Note Balance after
giving effect to payments allocated to
principal as set forth in Paragraph A.1(c).........$________
(c) The Note Pool Factor after
giving affect to the payments set
forth in paragraph A.1(c)..........................$________
(d) The Certificate Balance after giving effect to payments
allocated to principal as set forth in Paragraph
A.2(c).............................................$________
(e) The Certificate Pool Factor after
giving affect to the payments set
forth in paragraph A.2(c)..........................$________
(f) The aggregate Purchase Amount for
all Receivables that were repurchased
in the preceding Collection Period.................$________
(g) The aggregate Payahead Balance on
such Distribution Date.............................$________
(h) The change in the Payahead Balance
from the preceding Distribution Date...............$________
(i) The amount of Outstanding Advances on such
Distribution Date..................................$________
(j) The change in Outstanding Advances
from the preceding Distribution Date...............$________
(k) Total Collections by the Servicer..................$________
(l) All amounts received by the Trust from
the Servicer.......................................$________
2. Servicing Fee.
The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Collection Period $________
3. Payment Shortfalls.
(a) The amount of the Noteholders'
Interest Carryover Shortfall after
giving effect to the payments set forth
in paragraph A.1(b) above..........................$________
(b) The amount of the Noteholders'
Interest Carryover Shortfall set forth in paragraph B.3.(a)
above per $1,000 interest with respect to the
Notes:.............................................$_________
(c) The amount of the Certificateholders'
Interest Carryover Shortfall after
giving effect to the payments set forth
in paragraph A.2(b) above............................$________
(d) The amount of the Certificateholders'
Interest Carryover Shortfall set
forth in paragraph B.3.(c) above per
$1,000 interest with respect to
the Certificates:....................................$________
4. Losses and Delinquencies
(a) The change in the aggregate amount
of Cumulative Net Losses from the preceding
Distribution Date....................................$________
(b) The aggregate amount of Cumulative Net Losses
on the Distribution Date set forth above for
the related Collection Period........................$________
(c) The Cumulative Net Loss Ratio on the
Distribution Date set forth above....................$________
(d) The aggregate amount scheduled to
be paid, including unearned finance
and other charges, for which Obligors
are delinquent 60 days or more.......................$________
(e) The Delinquency Percentage on the
Distribution Date set forth above....................$________
5. Reserve Account
(a) The Reserve Account balance as of
the last day of the preceding
Collection Period, including earnings................$________
(b) Earnings included in above balance...................$________
(c) Transfer to Reserve Account from
Collection Account on Distribution
Date.................................................$________
(d) The Reserve Account balance as of
the Distribution Date set forth above
after giving effect to the Collection
Account on such Distribution Date....................$________
6. Delinquency
(a) Percentage of principal balance of
Receivables delinquent 1 to 30 days................ ________%
(b) Percentage of principal balance of
Receivables delinquent 31 to 60 days............... ________%
(c) Percentage of principal balance of
Receivables delinquent 61 to 90 days................________%
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
MELLON BANK, N.A.
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is the [title], of Mellon
Bank, N.A., a national banking association organized under the laws of the
United States of America (the "Bank") and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Bank pursuant to Section
4.9 of the Sale and Servicing Agreement, dated as of __________ __, 199_ (the
"Agreement") by and among the Bank,as servicer (the "Servicer") and seller (the
"Seller"), Mellon Auto Receivables Corporation, as depositor (the "Depositor")
and Mellon Auto Trust 199_-_, as issuer (the "Issuer"), (all capitalized terms
used herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. The Monthly Securityholder Statement for the period from
_______________________________________________________________________________
_______________________________________________________________________________
2. As of the date hereof, no Servicer Default or
event that with notice or lapse of time or both would become a Servicer Default
has occurred. [If a Servicer Default has occurred, such Servicer Default shall
be specified and its current status reported.]
IN WITNESS WHEREOF, we have affixed hereunto our signatures this day
of, .
MELLON BANK, N.A.
as Servicer
By:_________________________________
Name:
Title:
EXHIBIT C
TERMINATION - AUCTION PROCEDURES
The following sets forth the auction procedures to be followed in
connection with a sale effected pursuant to Section 9.2 of the Sale and
Servicing Agreement (the "Agreement"), dated as of __________ __, 199_ by and
among Mellon Auto Trust 199_-_ (the "Trust"), Mellon Bank, N.A., as servicer
(the "Servicer") and seller (the "Seller") and Mellon Auto Receivables
Corporation, as depositor (the "Depositor"). Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in the
Agreement. All references herein to "Trustee" shall be references to
____________, as Indenture Trustee, pursuant to an Indenture, dated as of
__________ __, 199_, between the Trust and the Indenture Trustee. However, if
the Notes have been paid in full, and the Indenture has been discharged in
accordance with its terms, all references herein to "Trustee" shall be
references to the Owner Trustee.
PRE-AUCTION PROCESS
(a) Upon receiving notice of the Auction, the Advisor will initiate its
general Auction procedures consisting of the following: (i) with the
assistance of the Servicer, prepare a general solicitation package
along with a confidentiality agreement; (ii) derive a list of
qualified bidders, in a commercially reasonable manner; (iii) initiate
contact with all qualified bidders; (iv) send a confidentiality
agreement to all qualified bidders; (v) upon receipt of a signed
confidentiality agreement, send solicitation packages to all
interested bidders on behalf of the applicable Trustee; and (vi)
notify the Servicer of all potential bidders and anticipated
timetable.
(b) The general solicitation package will include: (i) the prospectus from
the public offering of the Notes and Certificates; (ii) a copy of all
monthly servicing reports or a copy of all annual servicing reports
and the prior year's monthly servicing reports; (iii) a form of a
Purchase Agreement and Sale and Servicing Agreement; (iv) a
description of the minimum purchase price required to cause the
Trustee to sell the Auction Property as set forth in Section 9.2 of
the Agreement; (v) a formal bidsheet; (vi) a detailed timetable; and
(vii) a preliminary data tape of the Pool Balance as of the related
Distribution Date reflecting the same data attributes used to create
the Cutoff Date tables for the Prospectus Supplement dated ________
__, 199_ relating to the offering of the Notes and Certificates.
(c) The applicable Trustee, with the assistance of the Servicer and the
Advisor, will maintain an auction package beginning at the time of
closing of the transaction, which will contain terms (i)-(iii) listed
in the preceding paragraph. If the Advisor is unable to perform its
role as advisor to the applicable Trustee, the Servicer acting in its
capacity under the Agreement will select a successor Advisor and
inform the applicable Trustee of its actions.
(d) The Advisor will send solicitation packages to all bidders at least 15
business days before the date of the Auction. Bidders will be required
to submit any due diligence questions in writing to the Advisor for
determination of their relevancy, no later than 10 business days
before the date of the Auction. The Servicer and the Advisor will be
required to satisfy all relevant questions at least five Business Days
prior to the date of the Auction and distribute the questions and
answers to all bidders.
AUCTION PROCESS
(a) _______________________, in its role as Advisor to the applicable
Trustee, will be allowed to bid in the Auction, but will not be
required to do so.
(b) The Servicer will also be allowed to bid in the Auction if it deems
appropriate, but will not be required to do so.
(c) On the date of the Auction, all bids will be due by facsimile to the
offices of the applicable Trustee by 1:00 p.m. New York City time,
with the winning bidder to be notified by 2:00 p.m. New York City
time. All acceptable bids (as described in Section 9.2 of the
Agreement) will be due on a conforming basis on the bid sheet
contained in the solicitation package.
(d) If the applicable Trustee receives fewer than two market value bids
from participants in the market for motor vehicle retail installment
sale contracts and other motor vehicle installment sale contracts
willing and able to purchase the Auction Property, the applicable
Trustee shall decline to consummate the sale.
(e) Upon notification to the winning bidder, a good faith deposit equal to
one percent (1%) of the Pool Balance will be required to be wired to
the applicable Trustee upon acceptance of the bid. This deposit, along
with any interest income attributable to it, will be credited to the
purchase price but will not be refundable. The applicable Trustee will
establish a separate account for the acceptance of the good faith
deposit, until such time as the account is fully funded and all monies
are transferred into the Collection Account, such time not to exceed
one Business Day before the related Distribution Date (as described
above).
(f) The winning bidder will receive on the date of the Auction a copy of
the draft Purchase Agreement, Sale and Servicing Agreement and
Servicer's Representations and Warranties (which shall be
substantially identical to the representations and warranties set
forth in Section ______ of the Agreement).
(g) ______________, in its capacity as Advisor to the applicable Trustee,
will provide to the applicable Trustee a letter concluding whether or
not the winning bid is a fair market value bid. __________________
will also provide such letter if it is the winning bidder. In the case
where _____________ or the Servicer is the winning bidder it will in
its letter provide for market comparable valuations.
(h) The Auction will stipulate that the Servicer be retained to service
the Receivables sold pursuant to the terms of the Purchase and Sale
Agreement and Servicing Agreement.
