EXHIBIT 4.2
BAY VIEW TRANSACTION CORPORATION
Transferor
BAY VIEW ACCEPTANCE CORPORATION
Servicer
DEUTSCHE BANK TRUST COMPANY AMERICAS
Indenture Trustee and Back-up Servicer
SYSTEMS & SERVICES TECHNOLOGIES, INC.
Standby Servicer
and
WILMINGTON TRUST COMPANY
Owner Trustee
TRUST AND SERVICING AGREEMENT
Dated as of August 1, 2003
Bay View 2003-LJ-1 Owner Trust
TABLE OF CONTENTS
PAGE
ARTICLE I Creation of Trust.......................................................................................1
SECTION 1.01 Name.....................................................................................1
SECTION 1.02 Office...................................................................................1
SECTION 1.03 Purposes and Powers......................................................................1
SECTION 1.04 Appointment of Owner Trustee.............................................................2
SECTION 1.05 Initial Capital Contribution of Trust Estate.............................................2
SECTION 1.06 Declaration of Trust.....................................................................2
SECTION 1.07 Title to Trust Property..................................................................3
SECTION 1.08 Situs of Trust...........................................................................3
ARTICLE II Definitions............................................................................................3
SECTION 2.01 Definitions..............................................................................3
SECTION 2.02 Usage of Terms..........................................................................22
SECTION 2.03 Cut-off Date and Record Date............................................................22
SECTION 2.04 Section References......................................................................22
SECTION 2.05 Compliance Certificates.................................................................22
SECTION 2.06 Directions..............................................................................23
SECTION 2.07 Calculations............................................................................23
SECTION 2.08 Action by or Consent of Noteholders.....................................................23
SECTION 2.09 Material Adverse Effect.................................................................23
ARTICLE III Conveyance of Receivables............................................................................23
SECTION 3.01 Conveyance of Receivables...............................................................23
ARTICLE IV Acceptance by Trustee.................................................................................25
SECTION 4.01 Acceptance by Trustee...................................................................25
ARTICLE V Information Delivered to the Rating Agencies...........................................................25
SECTION 5.01 Information Delivered to the Rating Agencies............................................25
ARTICLE VI Agent for Service.....................................................................................26
SECTION 6.01 Agent for Service.......................................................................26
ARTICLE VII The Receivables......................................................................................26
SECTION 7.01 Representations and Warranties of Transferor............................................26
SECTION 7.02 Repurchase Upon Breach..................................................................27
SECTION 7.03 Custody of Receivable Files.............................................................28
SECTION 7.04 Duties of Servicer as Custodian.........................................................28
SECTION 7.05 Instructions; Authority to Act..........................................................29
ARTICLE VIII Administration and Servicing of Receivables.........................................................29
SECTION 8.01 Duties of Servicer......................................................................29
TRUST AND SERVICING AGREEMENT
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SECTION 8.02 The Back-up Servicer....................................................................30
SECTION 8.03 The Standby Servicer....................................................................32
SECTION 8.04 Retention and Termination of Servicer...................................................34
SECTION 8.05 Collection of Receivable Payments.......................................................35
SECTION 8.06 Realization Upon Receivables............................................................36
SECTION 8.07 Physical Damage Insurance...............................................................37
SECTION 8.08 Maintenance of Security Interests in Financed Vehicles..................................38
SECTION 8.09 Covenants of Servicer...................................................................42
SECTION 8.10 Purchase of Receivables Upon Breach.....................................................42
SECTION 8.11 Servicing Fee...........................................................................43
SECTION 8.12 Servicer's Certificate..................................................................44
SECTION 8.13 Annual Statement as to Compliance; Notice of Default....................................45
SECTION 8.14 Annual Independent Certified Public Accountant's Report.................................45
SECTION 8.15 Access to Certain Documentation and Information Regarding Receivables...................46
SECTION 8.16 Servicer Expenses.......................................................................46
SECTION 8.17 Reports to Noteholders..................................................................47
SECTION 8.18 Fidelity Bond...........................................................................47
SECTION 8.19 Delegation of Duties....................................................................47
ARTICLE IX Collections; Distributions to Noteholders and Certificateholders......................................48
SECTION 9.01 Lock-Box Account........................................................................48
SECTION 9.02 Collection Account......................................................................49
SECTION 9.03 Collections.............................................................................51
SECTION 9.04 Additional Deposits.....................................................................52
SECTION 9.05 Application of Funds....................................................................53
SECTION 9.06 Spread Account..........................................................................53
SECTION 9.07 Advances................................................................................54
SECTION 9.08 No Segregation of Moneys; No Interest...................................................54
SECTION 9.09 Accounting and Reports to the Certificateholder, the Internal Revenue
Service and Others......................................................................54
SECTION 9.10 Payahead Account........................................................................55
SECTION 9.11 Certain Reimbursements to the Servicer..................................................55
SECTION 9.12 Securities Accounts.....................................................................56
ARTICLE X Voting Rights and Other Actions........................................................................56
SECTION 10.01 Prior Notice with Respect to Certain Matters............................................56
SECTION 10.02 Action with Respect to Certain Matters..................................................57
SECTION 10.03 Restrictions on Certificateholder's Power...............................................57
SECTION 10.04 Control.................................................................................58
SECTION 10.05 Rights of Insurer.......................................................................58
SECTION 10.06 Registration of Transfer and Exchange of the Certificate................................58
ARTICLE XI The Certificate.......................................................................................58
SECTION 11.01 Initial Ownership.......................................................................58
SECTION 11.02 The Certificates........................................................................59
SECTION 11.03 Authentication of Certificate...........................................................59
TRUST AND SERVICING AGREEMENT
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SECTION 11.04 Registration of Transfer and Exchange of Certificate....................................59
SECTION 11.05 Mutilated, Destroyed, Lost, or Stolen Certificates......................................60
SECTION 11.06 Persons Deemed Certificateholder........................................................60
SECTION 11.07 Covenants of the Certificateholder......................................................61
ARTICLE XII The Transferor.......................................................................................62
SECTION 12.01 Representations and Undertakings of Transferor..........................................62
SECTION 12.02 Liability of Transferor; Indemnities....................................................66
SECTION 12.03 Merger or Consolidation of, or Assumption of the Obligations of Transferor..............67
SECTION 12.04 Limitation on Liability of Transferor and Others........................................67
SECTION 12.05 Transferor May Own Notes................................................................68
ARTICLE XIII The Servicer; Back-Up Servicer; and Standby Servicer................................................68
SECTION 13.01 Representations and Warranties..........................................................68
SECTION 13.02 Indemnities of Servicer, Back-up Servicer and Standby Servicer..........................74
SECTION 13.03 Merger or Consolidation of, or Assumption of the Obligations of the
Servicer, Back-up Servicer and Standby Servicer.........................................76
SECTION 13.04 Limitation on Liability of Servicer and Others..........................................78
SECTION 13.05 Servicer, Back-up Servicer and Standby Servicer Not to Resign...........................78
SECTION 13.06 Delegation of Duties....................................................................79
ARTICLE XIV Servicer and Standby Servicer Defaults...............................................................79
SECTION 14.01 Events of Servicer Default..............................................................79
SECTION 14.02 Standby Servicer Default................................................................83
SECTION 14.03 Appointment of Successors...............................................................86
SECTION 14.04 Notice of Events of Servicer Default....................................................89
SECTION 14.05 Waiver of Past Defaults.................................................................89
ARTICLE XV The Owner Trustee.....................................................................................90
SECTION 15.01 Duties of Owner Trustee.................................................................90
SECTION 15.02 Action upon Instruction.................................................................91
SECTION 15.03 Accounting and Records to the Certificateholder, the Internal Revenue
Service and Others......................................................................93
SECTION 15.04 Signature on Returns; Tax Matters Partner...............................................94
SECTION 15.05 Owner Trustee's Certificate.............................................................94
SECTION 15.06 Trust's Assignment of Purchased Receivables.............................................94
SECTION 15.07 Certain Matters Affecting the Owner Trustee.............................................95
SECTION 15.08 Owner Trustee Not Liable for Certificate or Receivables.................................96
SECTION 15.09 Owner Trustee May Own Notes.............................................................97
SECTION 15.10 Owner Trustee's and Indenture Trustee's Fees and Expenses; Indemnification..............97
SECTION 15.11 Eligibility Requirements for Owner Trustee..............................................98
SECTION 15.12 Resignation or Removal of Owner Trustee.................................................98
SECTION 15.13 Successor Owner Trustee.................................................................99
SECTION 15.14 Merger or Consolidation of Owner Trustee...............................................100
SECTION 15.15 Appointment of Co-Trustee or Separate Owner Trustee....................................100
TRUST AND SERVICING AGREEMENT
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SECTION 15.16 Representations and Warranties of Owner Trustee........................................101
ARTICLE XVI Termination.........................................................................................102
SECTION 16.01 Termination of the Trust...............................................................102
SECTION 16.02 Optional Disposition of All Receivables................................................103
ARTICLE XVII Miscellaneous Provisions...........................................................................104
SECTION 17.01 Amendment..............................................................................104
SECTION 17.02 Protection of Title to Trust...........................................................106
SECTION 17.03 Limitation on Rights of Certificateholders.............................................108
SECTION 17.04 Governing Law..........................................................................109
SECTION 17.05 Notices................................................................................109
SECTION 17.06 Severability of Provisions.............................................................110
SECTION 17.07 Assignment.............................................................................111
SECTION 17.08 Insurer................................................................................111
SECTION 17.09 Nonpetition Covenants..................................................................111
SECTION 17.10 No Recourse............................................................................111
SECTION 17.11 No Legal Title to Trust Property in Certificateholder..................................111
SECTION 17.12 Further Assurances.....................................................................111
SECTION 17.13 No Waiver; Cumulative Remedies.........................................................112
SECTION 17.14 Third-Party Beneficiaries..............................................................112
SECTION 17.15 Actions by Noteholders or Certificateholders..........................................112
SECTION 17.16 Corporate Obligation...................................................................113
SECTION 17.17 Covenant Not File a Bankruptcy Petition................................................113
SECTION 17.18 Independence of the Servicer, Back-up Servicer and Standby Servicer....................113
SECTION 17.19 No Joint Venture.......................................................................113
SECTION 17.20 Headings...............................................................................113
SECTION 17.21 Entire Agreement.......................................................................114
SECTION 17.22 Limitation of Liability of Owner Trustee...............................................114
SECTION 17.23 Effect of Policy Expiration Date.......................................................114
SECTION 17.24 Counterparts...........................................................................114
SECTION 17.25 Consent to Jurisdiction................................................................114
SECTION 17.26 Trial by Jury Waived...................................................................115
SECTION 17.27 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certifications..........................................................116
A. Standby Servicing And Transfer Expenses..................................................................1
EXHIBIT 1 -- Owner Trustee's Certificate Pursuant to Section
15.05 (Assignment to BVAC)
EXHIBIT 2 -- Owner Trustee's Certificate Pursuant to Section
15.05 (Assignment to Servicer)
EXHIBIT 3 -- Servicer's Certificate
EXHIBIT A -- Form of Certificate of Trust
EXHIBIT B -- Form of Certificate
TRUST AND SERVICING AGREEMENT
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EXHIBIT C -- Confirmation of Computer Tape (Back-up Servicer)
EXHIBIT D -- Confirmation of Computer Tape (Standby Servicer)
EXHIBIT E -- Exception List Under Section 8.08(b)
EXHIBIT F -- Form of Certification of Indenture Trustee
Pursuant to Section 8.08(b)(iv)
EXHIBIT G -- Form of Instructional Letter of BVAC Pursuant to
Section 8.08(b)(v)
SCHEDULE A -- Schedule of Receivables
SCHEDULE B -- Location of Receivables
SCHEDULE C -- Standby Servicer Schedule
SCHEDULE D -- Delivery Requirements
TRUST AND SERVICING AGREEMENT
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TRUST AND SERVICING AGREEMENT 013558.0118:245055.08 This
TRUST AND
SERVICING AGREEMENT, dated as of August 1, 2003, is made with respect to the
formation of the Bay View 2003-LJ-1 Owner Trust, among
BAY VIEW TRANSACTION
CORPORATION, a
Delaware corporation, as transferor (the "Transferor"), BAY VIEW
ACCEPTANCE CORPORATION, a Nevada corporation, as servicer (the "Servicer"),
DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation (the
"Indenture Trustee" and the "Back-up Servicer"), SYSTEMS & SERVICES
TECHNOLOGIES, INC., a
Delaware corporation (the "Standby Servicer"), and
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as owner trustee (the
"Owner Trustee").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
CREATION OF TRUST
Upon the execution of this Agreement by the parties hereto and the
prompt filing thereafter of the Certificate of Trust in the State of
Delaware,
there is hereby created the Bay View 2003-LJ-1 Owner Trust.
SECTION 1.01 Name. The Trust created hereby shall be known as "Bay View
2003-LJ-1 Owner Trust", in which name the Owner Trustee may conduct the business
of the Trust, make and execute contracts and other instruments on behalf of the
Trust and ▇▇▇ and be sued on behalf of the Trust. The Trust shall constitute a
statutory trust within the meaning of Section 3801(a) of the
Delaware Statutory
Trust Act for which the Owner Trustee has filed a certificate of trust with the
Secretary of State of the State of
Delaware pursuant to Section 3810(a) of the
Delaware Statutory Trust Act.
SECTION 1.02 Office. The office of the Trust shall be in care of the
Owner Trustee at its Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholder, the
Noteholders, the Servicer, the Transferor, the Insurer, the Standby Servicer,
and the Indenture Trustee.
SECTION 1.03 Purposes and Powers. The purpose of the Trust is to engage
in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificate pursuant to this Agreement and to sell or transfer
the Notes and the Certificate in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the
Certificate, to fund the Spread Account pursuant to the terms
of the Spread Account Agreement and to purchase the
Receivables pursuant to this Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust estate pursuant to the Indenture and to hold, manage and
distribute to the Certificateholder pursuant to the terms of
this Agreement any portion of
TRUST AND SERVICING AGREEMENT
the Trust estate released from the Lien of, and remitted to
the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or
connected therewith; and
(vi) subject to compliance with the related documents, to engage in
such other activities as may be required in connection with
conservation of the Trust estate and the making of
distributions to the Certificateholder, the Noteholders, the
Insurer and the others specified in this Agreement and the
Indenture.
The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Basic Documents.
SECTION 1.04 Appointment of Owner Trustee. The Transferor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein and in the
Delaware Statutory Trust Act.
SECTION 1.05 Initial Capital Contribution of Trust Estate. The
Transferor hereby sells, assigns, transfers, conveys and sets over to the Trust,
as of the date hereof, the Trust estate. The Owner Trustee on behalf of the
Trust hereby acknowledges receipt in trust from the Transferor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
estate. The Transferor shall pay the organizational expenses of the Trust as
they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 1.06 Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Trust estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholder, subject to
the obligations of the Trust under the other related documents. It is the
intention of the parties hereto that the Trust constitute a statutory trust
under
Delaware law and that this Agreement constitute the governing instrument
of such trust. It is the intention of the parties hereto that solely for
federal, state and local income and franchise tax purposes (i) so long as there
is a sole Certificateholder, the Trust shall be disregarded as a separate
entity, with the assets of the Trust being treated as the assets of such sole
Certificateholder, and the Notes being non-recourse debt of the sole
Certificateholder, and (ii) if there is more than one Certificateholder, the
Trust shall be treated as a partnership, with the assets of the partnership
being the Trust estate, the partners of the partnership being the
Certificateholders and the Notes being non-recourse debt of the partnership. The
Trust shall not elect to be treated as an association under Treasury Regulations
Section 301.7701-3(a) for federal income tax purposes. The parties agree that
unless otherwise required by appropriate tax authorities, the sole
Certificateholder or the Administrator on behalf of the Trust will file or
TRUST AND SERVICING AGREEMENT
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cause to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as provided in the second
preceding sentence for such tax purposes. The Owner Trustee, the initial
Certificateholder and each successor Certificateholder (as a condition to
acquiring its Certificate) agree to disregard the Trust as a separate entity (if
there is one Certificateholder) or to treat it as a partnership (if there are
two or more Certificateholders) and to treat the Notes as indebtedness for
purposes of federal, state, and local income or franchise taxes.
SECTION 1.07 Title to Trust Property. Legal title to all of the Trust
estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 1.08 Situs of Trust. The Trust will be located and administered
in the State of
Delaware. Any bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware. The Trust shall
not have any employees in any state other than Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. Payments, if any, will be
received by the Trust only in Delaware, and payments, if any, will be made by
the Trust only from Delaware. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
ARTICLE II
DEFINITIONS
SECTION 2.01 Definitions. Capitalized terms which are used in this
Agreement but are not defined herein shall have the meanings provided in the
Indenture. Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Accrual Period" means, with respect to each Receivable and the related
due date, the immediately preceding calendar month. For purposes of making
calculations pursuant to this Agreement and the Indenture, interest shall be
computed on each Receivable on the basis of a 365-day year over the actual
number of days elapsed for purposes of this definition.
"Additional Funds Available" means, with respect to any Payment Date,
the sum of (i) the Deficiency Claim Amount, if any, received by the Indenture
Trustee with respect to that Payment Date plus (ii) the Insurer Optional
Deposit, if any, received by the Indenture Trustee with respect to that Payment
Date plus (iii) the payment of any amounts with respect to a Preference Claim
pursuant to the Policy.
"Accrued Interest" means all interest accrued on the Receivables prior
to the opening of business on the day following the Cut-off Date.
"Administration Agreement" means the Administration Agreement dated as
of August 1, 2003 between the Trust and the Administrator and acknowledged by
the Indenture Trustee.
TRUST AND SERVICING AGREEMENT
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"Administrator" means the Administrator under the Administration
Agreement, which is initially BVAC, and its successors and assigns thereunder.
"Advance" means, with respect to a Receivable and with respect to a
Collection Period, the amount that the Servicer is required to advance pursuant
to Section 9.07.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly controls, or is under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Trust and Servicing Agreement executed by the
Transferor, the Servicer, the Indenture Trustee, the Back-up Servicer, the
Standby Servicer and the Owner Trustee, and all amendments and supplements
hereto entered into from time to time in accordance with the terms hereof.
"Amount Available" means with respect to any Payment Date, the sum of
(x) Available Funds for such Payment Date and (y) Additional Funds Available, if
any, for such Payment Date.
"Amount Financed" means, with respect to a Receivable, the aggregate
amount originally advanced under the Receivable toward the purchase price of the
Financed Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the Receivable exclusive of prepaid finance
charges. If after the Closing Date, the annual rate with respect to such
Receivable as of the Closing Date, is reduced as a result of (i) an insolvency
proceeding involving the related Obligor or (ii) pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended, the Annual Percentage Rate or APR
shall refer to such reduced rate.
"Assignment" means the assignment dated as of August 1, 2003 by BVAC to
the Transferor substantially in the form of Annex A to the Purchase Agreement,
pursuant to which the Receivables are conveyed to the Transferor.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, the City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Available Funds" means with respect to any Payment Date, each of the
following then on deposit in any Trust Accounts with respect to the related
Collection Period, (i) Scheduled Receivable Payments (including Modified
Scheduled Receivable Payments) and prepayments on Receivables (other than
Payaheads) received by the Servicer; (ii) any net withdrawal from the Payahead
Account; (iii) interest earned on funds held in the Collection Account and the
Payahead Account; (iv) Liquidation Proceeds; (v) Advances; (vi) Purchase Amounts
and/or any indemnity payments made in lieu of or otherwise relating to such
Purchase Amounts in accordance with the terms of Sections 7.02, 8.08 and 8.10 of
this Agreement, (vii) proceeds from any insurance policies related to the
Receivables or Financed Vehicles, (viii) Recoveries with
TRUST AND SERVICING AGREEMENT
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respect to Charged-off Receivables and (ix) the Redemption Price if, the
Servicer exercise its rights pursuant to Section 16.02.
"Available Spread Amount" means, on any Payment Date, the amount on
deposit in the Spread Account, including any income or gain from any investment
of funds in the Spread Account, net of any losses from such investment before
giving effect to deposits into or withdrawals from the Spread Account pursuant
to the Indenture and the Spread Account Agreement on such Payment Date.
"Back-up Servicer" means Deutsche Bank Trust Company Americas, as the
back-up servicer of the Receivables, and each successor to Deutsche Bank Trust
Company Americas (in the same capacity) appointed hereunder.
"Bank" means Bay View Bank, N.A. and its successors and assigns.
"Back-up Servicer Fee" means, for any Collection Period, the fee
payable to the Back-up Servicer for services rendered during such Collection
Period. If the Back-up Servicer shall have taken on the role as Servicer
hereunder, it will be entitled to the Servicing Fee, and it shall not be
entitled to a Back-up Servicer Fee.
"Basic Documents" means this Agreement, the Indenture, the Purchase
Agreement, the Assignment, the Insurance Agreement, the Indemnification
Agreement, the Spread Account Depositor Trust Agreement, the Spread Account
Agreement, the Premium Letter, the Certificate Pledge Agreement, the Stock
Pledge Agreement, the Lock-Box Agreement, the Administration Agreement, the
Custodian Agreement, the Transfer and Contribution Agreement, the organizational
documents of the Transferor and other documents and certificates delivered in
connection therewith.
"Business Day" means, unless otherwise specified, any day other than a
Saturday, a Sunday or a day on which banking institutions in Wilmington,
Delaware, New York, New York, San Mateo, California or St. ▇▇▇▇▇▇, Missouri or
any other location of the Servicer, any successor Servicer, successor Standby
Servicer, successor Owner Trustee, or successor Indenture Trustee, shall be
authorized or obligated by law, executive order, or governmental decree to be
closed.
"BVAC" means Bay View Acceptance Corporation, a Nevada corporation, and
its successors and assigns, other than in its capacity as Servicer.
"BVTC" means
Bay View Transaction Corporation, a Delaware Corporation,
and its successors and assigns, other than in its capacity or Transferor.
"Casualty" means, with respect to any Financed Vehicle, the total loss
or destruction of such Financed Vehicle.
"Certificate" means a certificate executed on behalf of the Trust and
authenticated by the Owner Trustee substantially in the form attached hereto as
Exhibit B, which represents ownership of a 100% interest in the Trust.
TRUST AND SERVICING AGREEMENT
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"Certificate of Trust" means the Certificate of Trust of the Trust in
substantially the form of Exhibit A hereto.
"Certificate Pledge Agreement" means the Certificate Pledge and
Collateral Agency Agreement, dated as of September 1, 2002, among the
Transferor, the Spread Account Depositor, the Insurer and Deutsche Bank Trust
Company Americas, as collateral agent, as the same may be amended, supplemented,
or otherwise modified from time to time in accordance with the terms thereof.
"Certificate Register" means the register maintained by the Owner
Trustee pursuant to Section 11.03.
"Certificateholder" or "Holder" means the Person in whose name the
Certificate shall be registered in the Certificate Register.
"Charged-Off Receivable" means, for any Collection Period, a Receivable
as to which any of the following has occurred: (i) any payment, or part thereof,
is 120 days or more delinquent as of the last day of such Collection Period
(without giving effect to any Advances), (ii) the Financed Vehicle that secures
the Receivable has been repossessed for at least 90 days, or (iii) the Servicer
has determined that the Receivable is uncollectible in accordance with the
Servicer's customary practices on or before the last day of such Collection
Period; provided, however, that "Charged-Off Receivable" shall not include any
Receivable that is to be repurchased pursuant to Section 7.02 or purchased
pursuant to Section 8.10; provided further, that any Advances made with respect
to a Receivable shall not be considered in the determination of the delinquency
status of such Receivable.
"Closing Date" means August 14, 2003.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral Agent" shall mean Deutsche Bank Trust Company Americas, in
its capacity as collateral agent, including its successors in interest, until
and unless a successor Person shall become the Collateral Agent pursuant to the
Spread Account Agreement, and thereafter, "Collateral Agent" shall mean such
successor Person.
"Collected Interest" on a Receivable, as of the last day of a
Collection Period, means the portion of all payments received by the Servicer
allocable to interest relating to such Collection Period.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 9.02.
"Collection Period" means, with respect to a Payment Date or a
Redemption Date, the calendar month immediately preceding the calendar month in
which such Payment Date or Redemption Date occurs, until the Trust shall
terminate pursuant to Article XVI.
TRUST AND SERVICING AGREEMENT
6
"Computer Tape" means a computer tape or diskette (or other means of
electronic transmission acceptable to the Back-up Servicer, the Standby Servicer
and the Insurer) in a format acceptable to the Back-up Servicer, the Standby
Servicer and the Insurer.
"Controlling Party" means the Insurer, so long as no Insurer Default
shall have occurred and be continuing and so long as the Insurance Agreement has
not terminated, and the Indenture Trustee, at the direction of the Majority
Noteholders, for so long as an Insurer Default shall have occurred and is
continuing or if the Insurance Agreement has terminated.
"Corporate Trust Office" means the office of the Owner Trustee at which
its corporate trust business shall, at any particular time, be administered,
which office at the date of the execution of this Agreement is located at Plaza
Building, 1st Floor, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
Attention: Corporate Trust Department; Telecopy (▇▇▇) ▇▇▇-▇▇▇▇ or at such other
address as the Owner Trustee may designate from time to time by notice to the
Certificateholder, the Transferor, the Servicer, the Insurer, the Standby
Servicer, and the Indenture Trustee.
"Custodian" means initially BVAC or any successor Custodian, in each
case, in accordance with the terms of the Custodian Agreement.
"Custodian Agreement" means the Custodian Agreement, dated as of August
1, 2003, among BVAC, as custodian, the Trust, the Insurer and the Indenture
Trustee, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Cut-off Date" means July 31, 2003.
"Dealer" means the seller of a Financed Vehicle, who originated and
assigned the related Receivable to BVAC under an existing agreement with BVAC or
the Bank, as applicable, who arranged for a loan from BVAC or the Bank, as
applicable, to the purchaser of a Financed Vehicle under an existing agreement
with BVAC or the Bank, as applicable.
"Deemed Cured" has the meaning set forth in the Spread Account
Agreement.
"Deficiency Claim Amount" means, for any Payment Date, the amount,
after taking into account the application on such Payment Date of the Available
Funds on such Payment Date, equal to any shortfall in the full payment of
amounts described in clauses (i) through (vi) of Section 8.05(a) of the
Indenture, to the extent that such amount is available for the particular
purpose on such Payment Date in accordance with the provisions of the Spread
Account Agreement.
"Deficiency Claim Date" means, with respect to any Payment Date, a date
no later than the fourth Business Day immediately preceding such Payment Date.
"Deficiency Notice" has the meaning ascribed thereto in Section 9.05(b)
hereof.
"Delaware Statutory Trust Act" means the Delaware Statutory Trust Act,
12 Del. C. Sections .3801 et seq.
TRUST AND SERVICING AGREEMENT
7
"Delivery" means with respect to assets held in the Trust Accounts:
(1) (a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section
9-102(a)(47) of the UCC (other than certificated securities),
transfer thereof:
(i) by physical delivery to the Indenture Trustee,
indorsed by an effective indorsement to, or
registered in the name of, the Indenture Trustee or
its nominee or indorsed in blank by an effective
indorsement;
(ii) by the Indenture Trustee continuously maintaining
possession of such instrument; and
(iii) by the Indenture Trustee continuously indicating by
book-entry that such instrument is credited to the
related Trust Account;
(b) with respect to a "certificated security" (as defined in
Section 8-102(a)(4) of the UCC), transfer thereof:
(i) by physical delivery of such certificated security to
the Indenture Trustee, provided that if the
certificated security is in registered form, it shall
be indorsed by an effective indorsement to, or
registered in the name of, the Indenture Trustee or
indorsed in blank by an effective indorsement;
(ii) by the Indenture Trustee continuously maintaining
possession of such certificated security; and
(iii) by the Indenture Trustee continuously indicating by
book-entry that such certificated security is
credited to the related Trust Account;
(c) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation, the Government
National Mortgage Association or the Federal National Mortgage
Association that is a book-entry security held through the
Federal Reserve System pursuant to Federal book entry
regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and
Articles 8 and 9 of the UCC, transfer thereof:
(i) by (x) book-entry credit of such property to an
appropriate book-entry account maintained with a
Federal Reserve Bank by a securities intermediary
which is also a "participant" pursuant to applicable
federal regulations, the
TRUST AND SERVICING AGREEMENT
8
making by such securities intermediary of entries in
its books and records to a "securities account" (as
defined in Section 8-501(a) of the UCC) the Indenture
Trustee is the holder of the "security entitlement"
(as defined in Section 8-102(a)(17) of the UCC); and
(ii) by the Indenture Trustee continuously indicating by
book-entry that property is credited to the related
Trust Account;
(d) with respect to any asset in the Trust Accounts that is an
"uncertificated security" (as defined in Section 8-102(a)(18)
of the UCC) and that is not governed by clause (c) above or
clause (e) below:
(i) transfer thereof:
(A) by registration to the Indenture Trustee as
the registered owner thereof, on the books
and records of the issuer thereof; or
(B) by another Person (not a securities
intermediary) who either becomes the
registered owner of the uncertificated
security on behalf of the Indenture Trustee,
or having become the registered owner,
acknowledges that it holds for the Indenture
Trustee; or
(ii) the issuer thereof has agreed that it will comply
with instructions originated by the Indenture Trustee
with respect to such uncertificated security without
further consent of the registered owner thereof; or
(e) in the case of each security in the custody of or maintained
on the books of a clearing corporation (as defined in Section
8-102(a)(5)) or its nominee, by causing:
(i) the relevant clearing corporation to credit such
security to a securities account of the Indenture
Trustee at such clearing corporation; and
(ii) the Indenture Trustee to continuously indicate by
book-entry that such security is credited to the
related Trust Account;
(f) with respect to the security entitlement to be transferred to
or for the benefit of the Indenture Trustee and not governed
by clauses (c) or (e) above: if a securities intermediary (A)
indicates by book entry that the underlying "financial asset"
(as defined in Section
TRUST AND SERVICING AGREEMENT
9
8-102(a)(9) of the UCC) has been credited to be the Indenture
Trustee's securities account, (B) receives a financial asset
from the Indenture Trustee or acquires the underlying
financial asset for the Indenture Trustee, and in either case,
accepts it for credit to the Indenture Trustee's securities
account or (C) becomes obligated under other law, regulation
or rule to credit the underlying financial asset to the
Indenture Trustee's securities account, the making by the
securities intermediary of entries on its books and records
continuously identifying such security entitlement as
belonging to the Indenture Trustee; and continuously
indicating by book-entry that such security entitlement is
credited to the Indenture Trustee's securities account; and by
the Indenture Trustee continuously indicating by book-entry
that such security entitlement (or all rights and property of
the Indenture Trustee representing such securities
entitlement) is credited to the related Trust Account; and/or
(2) In the case of any such asset, such additional or alternative
procedures as are now or may hereafter become appropriate to
effect the complete transfer of ownership of, or control over any
such assets in the Trust Accounts to the Indenture Trustee free
and clear of any adverse claims, consistent with changes in
applicable law or regulations or the interpretation thereof.
In each case of delivery contemplated herein, the Indenture Trustee shall make
appropriate notations on its records, and shall cause the 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.
"Determination Date" means, for each Collection Period, the fifteenth
calendar day prior to the related Payment Date, or if the fifteenth day is not a
Business Day, the next following Business Day.
"Eligible Bank" means any depository institution with trust powers
(including the Owner Trustee and the Indenture Trustee), organized under the
laws of the United States or any State having a net worth in excess of
$50,000,000, the deposits of which are insured to the full extent permitted by
law by the Federal Deposit Insurance Corporation, which is subject to
supervision and examination by Federal or State authorities and which (i) has a
long-term unsecured debt rating of at least A2 from Moody's and A from Standard
& Poor's or (ii) is approved by the Insurer and each Rating Agency. The initial
Indenture Trustee is deemed an Eligible Bank.
"Eligible Account" shall mean a segregated non-interest bearing trust
account or accounts maintained with (A) an institution whose deposits are
insured by the FDIC, the unsecured and uncollateralized long term debt
obligations of which institution shall be rated AA- or higher by Standard &
Poor's and Aa3 or higher by Moody's and in the highest short term rating
category by each of the Rating Agencies, and which is (i) a federal savings and
loan association duly organized, validly existing and in good standing under the
federal banking laws, (ii) an institution duly organized, validly existing and
in good standing under the applicable banking
TRUST AND SERVICING AGREEMENT
10
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved by the Insurer and each of
the Rating Agencies by written notice to the Indenture Trustee and the
Collateral Agent, (B) a chartered depository institution acceptable to each
Rating Agency and the Insurer, having capital and surplus of not less than
$100,000,000, acting in its fiduciary capacity or (c) the initial Indenture
Trustee.
"Eligible Investment" means any of the following:
(a) (i) direct interest-bearing obligations of, and
interest-beating obligations guaranteed as to timely payment of
principal and interest by, the United States or any agency or
instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States and (ii)
direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest
by, the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation, but only if, at the time of investment, such
obligations are rated AAA by Standard & Poor's and Aaa by Moody's;
(b) demand or time deposits in, certificates of deposit of, or
bankers' acceptances issued by any depository institution or trust
company organized under the laws of the United States or any State and
subject to supervision and examination by federal and/or State banking
authorities (including, if applicable, the Indenture Trustee or any
agent of the Indenture Trustee acting in their respective commercial
capacities); provided that the commercial paper or other short-term
unsecured debt obligations of such depository institution or trust
company at the time of such investment, or contractual commitment
providing for such investment, are rated A-l+ by Standard & Poor's and
P-1 by Moody's;
(c) repurchase obligations pursuant to a written agreement (1)
with respect to any obligation described in clause (i) above, where the
Indenture Trustee has taken actual or constructive delivery of such
obligation, and (2) entered into with a depository institution or trust
company organized under the laws of the United States or any State
thereof, the deposits of which are insured by the Federal Deposit
Insurance Corporation and the short-term unsecured debt obligations of
which are rated A-l+ by Standard & Poor's and P-1 by Moody's
(including, if applicable, the Indenture Trustee or any agent of the
Indenture Trustee acting in its commercial capacity);
(d) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States or
any State whose long-term unsecured debt obligations are rated AAA by
Standard & Poor's and Aaa by Moody's at the time of such investment or
contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not
be Eligible Investments to the extent that an investment therein will
cause the then outstanding principal amount of securities issued by
such corporation and held as part of the related Trust Account to
exceed 10% of the Eligible Investments held in the related Trust
Account (with Eligible Investments in the related Trust Account valued
at par);
TRUST AND SERVICING AGREEMENT
11
(e) commercial paper that (1) is payable in United States
dollars and (2) is rated at least A-1+ by Standard & Poor's and P-1 by
Moody's;
(f) any money market fund (including those owned, operated or
managed by the Indenture Trustee) that has been rated Aaa by Moody's
and AAAm or AAAm-G (without an "r" script) by Standard & Poor's and
numerical gradations within such rating category (or the equivalent
long-term rating of such Rating Agency) for such money market funds;
and
(g) any other demand or time deposit, obligation, security or
investment as may be acceptable to the Rating Agencies and the Insurer
(so long as the Insurer is the Controlling Party) and has been rated
Aaa by Moody's and AAA by Standard & Poor's or rated P-1 by Moody's and
A-l+ by Standard & Poor's).
Any of the foregoing Eligible Investments may be purchased from, by or
through the Owner Trustee or the Indenture Trustee, or any of their respective
Affiliates.
"Eligible Servicer" means BVAC, Deutsche Bank Trust Company Americas,
Systems and Services Technologies, Inc. or another Person which at the time of
its appointment as Servicer, (i) is servicing a portfolio of motor vehicle
retail installment sale contracts and/or motor vehicle installment loans, (ii)
is legally qualified and has the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to service a portfolio
of motor vehicle retail installment sale contracts and/or motor vehicle
installment loans similar to the Receivables with reasonable skill and care, and
(iv) is qualified and entitled to use, pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the software which the
Servicer uses in connection with performing its duties and responsibilities
under the this Agreement or otherwise has available software which is adequate
to perform its duties and responsibilities under this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Servicer Default" means an event specified in Section 14.01.
"Financed Vehicle" means a new or used automobile, light-duty truck,
sport utility vehicle or van, together with all accessions thereto, securing an
Obligor's indebtedness under the respective Receivable.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements that are
described in Statement on Auditing Standards No. 69 "The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles in the
Independent Auditor's Report" that are applicable to the circumstances as of the
date of determination, applied on a consistent basis.
"Holder"--see "Certificateholder."
TRUST AND SERVICING AGREEMENT
12
"Indemnification Agreement" means the Indemnification Agreement, dated
as of August 14, 2003 among BVAC, the Underwriters and the Insurer, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Indenture" means the Indenture dated as of August 1, 2003 between the
Trust and the Indenture Trustee, which provides for the issuance of the Notes as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Indenture Trustee" means Deutsche Bank Trust Company Americas in its
role as Indenture Trustee under the Indenture and its permitted successors and
assigns.
"Indenture Trustee Fee" means the fees and expenses payable on each
Payment Date to the Indenture Trustee in consideration for the performance of
its duties as Indenture Trustee, Back-up Servicer and Collateral Agent as set
forth in the fee letter agreement dated August 14, 2003.
"Indenture Trustee Office" means the office of the Indenture Trustee at
which its business as Indenture Trustee under the Indenture shall be
administered, which office is presently located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ NYC
60-2606, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: Corporate Trust and Agency
Services, telecopy (▇▇▇) ▇▇▇-▇▇▇▇ or at such other address as the Indenture
Trustee may designate from time to time by notice to the Owner Trustee, the
Servicer and the Noteholders.
"Independent Accountants" means a firm of certified public accountants
that is Independent and is acceptable to the Insurer.
"Initial Reserve Account Deposit" means $0.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a petition against such Person or the entry 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, 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 petition, decree or order remaining 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.
"Insolvency Proceeding" means the commencement, after the date hereof,
of any bankruptcy, insolvency, readjustment of debt, reorganization, marshaling
of assets and liabilities or similar proceedings by or against BVAC, the
Transferor or the Issuer, the commencement,
TRUST AND SERVICING AGREEMENT
13
after the date hereof, of any proceedings by or against BVAC, the Transferor or
the Issuer for the winding up or liquidation of its affairs or the consent,
after the date hereof, to the appointment of a trustee, conservator, receiver,
or liquidator in any bankruptcy, insolvency, readjustment of debt,
reorganization, marshaling of assets and liabilities or similar proceedings of
or relating to BVAC, the Transferor or the Issuer.
"Insolvency Proceeds" means the proceeds, after all payments and
reserves from the sale of the assets of the Trust upon the dissolution of the
Trust because of an insolvency of the Transferor.
"Insurance Agreement" means the Insurance and Indemnity Agreement,
dated as of August 1, 2003, among the Insurer, the Transferor, the Issuer, BVAC
and the Spread Account Depositor as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Insurance Agreement Event of Default" means an Event of Default (as
such term is defined in the Insurance Agreement).
"Insurance Policies" means any physical damage, credit life and credit
accident and health insurance policies or certificates or any vendor's single
interest physical damage insurance policy relating to the Receivables, the
Financed Vehicles or the Obligors.
"Insurer" means Financial Security Assurance, Inc., a New York monoline
insurance company.
"Insurer Default" means the existence and continuance of any of the
following:
(a) the Insurer shall have failed to make a payment required
under the Policy in accordance with its terms; or
(b) the Insurer shall have (i) filed a petition or commenced
any case or proceeding under any provision or chapter of the United
States Bankruptcy Code or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) made a general assignment for the benefit of its
creditors, or (iii) had an order for relief entered against it under
the United States Bankruptcy Code or any other similar federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have entered
a final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for the Insurer or for all or any
material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent or receiver of the Insurer
(or the taking of possession of all or any material portion of the
property of the Insurer).
"Insurer Optional Deposit" has the meaning ascribed thereto in Section
5.18 of the Indenture.
TRUST AND SERVICING AGREEMENT
14
"Interest Advance Amount" with respect to a simple interest Receivable
as to which an Advance is required to be made on the last day of a Collection
Period, shall mean an amount equal to 30 days of interest upon the Principal
Balance of such Receivable as of such date; and, with respect to a Precomputed
Receivable as to which an Advance is required to be made on the last day of a
Collection Period, shall mean an amount equal to that portion of the earliest
delinquent Scheduled Payment allocable to interest (using the actuarial or
constant yield method).
"Interest Shortfall" means, as to any Simple Interest Receivable as of
the last day of any Collection Period, the amount, if any, by which (a) interest
due on such Receivable exceeds (b) the Collected Interest on such Receivable.
"Interest Shortfall" with respect to a Precomputed Receivable as of the last day
of any Collection Period means the amount, if any, by which the portion of the
Scheduled Payment due during such Collection Period allocable to interest (using
the actuarial or constant yield method) exceeds the Collected Interest on such
Receivable (computed using the same method except that the amount of Collected
Interest in respect of Precomputed Receivables shall be increased by giving
effect to the withdrawal for the related Payment Date of any previously received
Scheduled Payments in respect of such Receivable from the Payahead Account in
accordance with Sections 8.05(b) and 9.10 hereof).
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics' liens, and any liens
which attach to the respective Receivable or related Financed Vehicle by
operation of law.
"Liquidation Proceeds" means the monies collected from whatever source,
including, but not limited to, insurance proceeds and tax rebates/refunds,
during a Collection Period on a Charged-Off Receivable, net of the sum of (i)
any out-of-pocket expenses reasonably incurred by the Servicer in enforcing such
Charged-Off Receivable plus (ii) any amounts required by law to be remitted to
the related Obligor.
"Lock-Box" means the post-office box or boxes, to be established by
BVAC, as the initial Servicer, and maintained pursuant to this Agreement and the
Lock-Box Agreement, into which the Servicer shall direct each Obligor under each
Receivable to forward all payments in respect of such Receivable.
"Lock-Box Account" means the segregated account or accounts designated
as such, established and maintained by the Servicer in accordance with this
Agreement and the Lock-Box Agreement (or if the Standby Servicer is acting as
Servicer hereunder any such replacement Lock-Box Account approved by the
Insurer, in its sole and absolute discretion).
"Lock-Box Agreement" means the Lock-Box Agreement, dated as of November
13, 2002, among BVAC, Bay View Securitization Corporation, Bay View ▇▇▇▇-▇▇-▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ View 2003-LJ-1 Owner Trust, Deutsche Bank Trust Company
Americas and the Lock-Box Processor, as further amended, modified or
supplemented from time to time in accordance with the terms thereof, unless such
agreement shall be terminated in accordance with its terms or the terms hereof
or unless a replacement Lock-Box Agreement has been entered into in accordance
with the terms hereof, in which event "Lock-Box Agreement" shall mean such other
agreement,
TRUST AND SERVICING AGREEMENT
15
in form and substance acceptable to the Insurer, in its sole and absolute
discretion, among BVAC, the Trust, the Lock-Box Processor and the Indenture
Trustee.
"Lock-Box Bank" means, initially, Commerce Bank, N.A., or any
replacement or additional depository institution named by the Servicer (or if
SST is then acting as Servicer, named by SST) and acceptable to the Insurer, in
its sole discretion, at which a Lock-Box Account is established and maintained
in accordance with the terms of this Agreement and the Lock-Box Agreement.
"Lock-Box Collection Percentage" has the meaning ascribed thereto in
the Spread Account Agreement.
"Lock-Box Processor" means, initially, Commerce Bank, N.A., or any
replacement or subcontracted Lock-Box Processor named by the Servicer (or if SST
is then acting as Servicer, named by SST) and acceptable to the Insurer, in its
sole discretion, who acts as the processor of the payments received in respect
of the Receivables in the Lock-Box in accordance with the Lock-Box Agreement.
"Modified Scheduled Receivable" means any Receivable which is not a
Charged-Off Receivable and as to which the related Obligor shall have been
declared bankrupt with the result that such Obligor's periodic Scheduled
Receivable Payment amount has been reduced pursuant to an order of the
bankruptcy court.
"Modified Scheduled Receivable Payment" means, with respect to any
Modified Scheduled Receivable, the amount of such reduced periodic Scheduled
Receivable Payment.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successor and
assigns.
"Notes" mean the Notes issued by the Trust pursuant to the Indenture.
"Obligor" on a Receivable means the purchaser or the co-purchasers of
the Financed Vehicle or any other Person who owes payments under the Receivable.
The phrase "payment made on behalf of an Obligor" shall mean all payments made
with respect to a Receivable except payments made by BVAC, the Transferor or the
Servicer.
"Officers' Certificate" means a certificate signed by any two of the
chairman of the board, the president, any vice chairman of the board, any vice
president, the treasurer, or the controller of BVAC, the Transferor or the
Servicer, as the case may be; provided that no individual shall sign in a dual
capacity.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Transferor and/or Servicer, which counsel shall be acceptable to
the Owner Trustee.
"Original Pool Balance" means $193,287,508.30.
"Outstanding Advances" as of any date, with respect to a Receivable,
means the total amount of Advances made on such Receivable for which the
Servicer has not been reimbursed.
TRUST AND SERVICING AGREEMENT
16
"Owner Trustee" means Wilmington Trust Company, a banking corporation
organized under the laws of the State of Delaware and its successors or any
corporation resulting from or surviving any merger or consolidation to which it
or its successors may be a party or any successor trustee at the time serving as
successor trustee hereunder.
"Owner Trustee's Certificate" means a certificate completed and
executed by the Owner Trustee by a Responsible Officer pursuant to Section
15.05, substantially in the form of, in the case of an assignment to BVAC,
Exhibit 1, and in the case of an assignment to the Servicer, Exhibit 2.
"Owner Trustee Fee" means the fees and expenses payable on each Payment
Date to the Owner Trustee in consideration for the performance of its duties as
Owner Trustee as set forth in the fee letter agreement dated August 14, 2003.
"Payahead" on a Precomputed Receivable means the amount, as of the
close of business on the last day of a Collection Period, computed in accordance
with Section 8.05(b) with respect to such Receivable.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 9.10.
"Payahead Balance" on a Precomputed Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Precomputed Receivable, as
reduced by applications of previous Payaheads with respect to such Precomputed
Receivable, pursuant to Sections 8.05(b) and 8.07 of the Indenture.
"Payment Date" means, for each Collection Period, the twenty-fifth
calendar day of the month or, if such day is not a Business Day, the first
Business Day thereafter. The first Payment Date shall be September 25, 2003.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Policy" means the financial guaranty insurance policy No. 51441-N
issued by the Insurer to the Indenture Trustee for the benefit of the
Noteholders pursuant to the Insurance Agreement, including any endorsements
thereto.
"Policy Claim Amount" shall have the meaning set forth in Section
9.03(a) of the Indenture.
"Policy Expiration Date" means the date on which the Notes have been
paid in full and all outstanding Reimbursement Obligations and other amounts due
to the Insurer have been paid in full and the Term Of This Policy (as defined in
the Policy) has expired.
"Pool Balance" as of any date means the aggregate Principal Balance of
the Receivables as of such date; provided, however, that for purposes of
determining Monthly Principal, the
TRUST AND SERVICING AGREEMENT
17
Principal Balance of a Charged-Off Receivable or a Purchased Receivable (if
actually purchased by the Servicer or repurchased by BVAC) shall be deemed to be
zero on and after the close of business on the last day of the Collection Period
in which the Receivable becomes a Charged-Off Receivable or a Purchased
Receivable that is actually purchased or repurchased.
"Precomputed Receivable" means any Receivable under which the portion
of a payment allocable to earned interest (which may be referred to in the
related contract as an add-on finance charge) and the portion allocable to the
Amount Financed is determined according to the sum of periodic balances, the sum
of monthly balances, the rule of 78's or any equivalent method.
"Premium" has the meaning ascribed thereto in the Premium Letter.
"Premium Letter" means the premium letter, dated August 14, 2003 among
the Insurer, BVAC, the Transferor, the Trust and the Indenture Trustee.
"Prepayment Charges," means, with respect to a Precomputed Receivable
that is prepaid in full, the difference between the Principal Balance of such
Receivable (plus accrued interest to the date of prepayment) and the Principal
Balance of such Receivable computed in accordance with the actuarial or constant
yield method.
"Principal Balance" of a Simple Interest Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
that portion of all payments received on or before the close of business on such
last day allocable to principal of such Receivable. "Principal Balance" with
respect to a Precomputed Receivable, as of the close of business on the Cut-off
Date, means the gross principal balance of such Receivable on the records of the
Servicer, net of unearned or accrued interest reflected therein, and as of the
close of business on the last day of a Collection Period, means the Principal
Balance as of the Cut-off Date minus that portion of all Scheduled Payments
received with respect to such Receivable in respect of such Collection Period
and all prior Collection Periods allocable to principal of such Receivable using
the actuarial or constant yield method.
"Purchase Agreement" means the Purchase Agreement dated as of the date
hereof by and between the Transferor and BVAC, as amended, supplemented or
modified from time to time in accordance with the terms thereof.
"Purchase Amount" of any Receivable, as of the close of business on the
last day of any Collection Period, means the amount equal to the sum of the
Principal Balance of such Receivable plus any unpaid interest accrued and due
during or prior to such Collection Period on such Receivable.
"Purchased Receivable" means a Receivable purchased by the Servicer
pursuant to Section 8.10 or repurchased by BVAC pursuant to Section 7.02 or
Section 8.08 not later than the respective dates required thereby.
"Rating Agency" means each of Moody's and Standard & Poor's and their
successors and assigns.
TRUST AND SERVICING AGREEMENT
18
"Receivable" means any simple interest or pre-computed (add-on)
interest installment sales contract or installment loan and security agreement
which shall appear on Schedule A to this Agreement.
"Receivable Files" means the documents specified in the Custodian
Agreement.
"Receivables" means those Receivables conveyed to the Trust by the
Transferor listed as of the Cut-off Date in Schedule A hereto.
"Recoveries" means, with respect to a Charged-off Receivable and for
any Collection Period occurring after the Collection Period during which such
Receivable becomes a Charged-off Receivable, all payments, including insurance
proceeds, that the Servicer received from or on behalf of an Obligor regarding
such Charged-off Receivable, or from liquidation of the related Financed
Vehicle, net of any reasonably incurred out-of-pocket expenses incurred by the
Servicer in enforcing such Charged-off Receivable.
"Reimbursement Obligations" means, with respect to each Payment Date,
any amounts due to the Insurer under the terms hereof, the Indenture, the
Insurance Agreement or the Premium Letter and with respect to which the Insurer
has not been previously paid whether or not BVAC is obligated to pay such
amounts.
"Requisite Amount" has the meaning ascribed thereto in the Spread
Account Agreement.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 8.08.
"Responsible Officer" means, when used with respect to the Owner
Trustee, any officer within the Corporate Trust Office (or any successor group
of the Owner Trustee) including any managing director, director, vice president,
assistant vice president, assistant treasurer, assistant secretary or any other
officer of the Owner Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of
and familiarity with the particular subject.
"Scheduled Receivable Payment" on any Receivable (other than a Modified
Scheduled 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 over the term of the Receivable and to provide interest at the
APR based on a 365-day year over the actual number of days elapsed, and with
respect to a Modified Scheduled Receivable, the applicable Modified Scheduled
Receivable Payment; provided, however, that with respect to a Precomputed
Receivable such interest amount shall be determined on the basis of the
actuarial or constant yield method.
"Secured Parties" means each of the Indenture Trustee, the Noteholders
and the Insurer pursuant to the Indenture.
"Securities" means the Notes and the Certificate.
TRUST AND SERVICING AGREEMENT
19
"Servicer" means Bay View Acceptance Corporation, a Nevada corporation,
in its capacity as the servicer of the Receivables and each successor to Bay
View Acceptance Corporation (in the same capacity) pursuant to Section 13.03 or
14.03; provided that, if the Servicer has been removed pursuant to Section 8.04
or Section 14.03 hereof, "Servicer" shall mean the Standby Servicer or such
other Person appointed as the successor Servicer pursuant to Section 14.03
hereof. If the Standby Servicer has been removed as Servicer pursuant to Section
14.03 hereof, "Servicer" shall mean the Back-up Servicer, acting through an
agent, or such other Person appointed as the successor Servicer pursuant to
Section 14.03 hereof.
"Servicer Extension Notice" means the notice delivered pursuant to
Section 8.04 hereof.
"Servicer Fee" means the sum of the Servicing Fee and the Supplemental
Servicing Fee and all reasonable out-of-pocket expenses of the Servicer (which
expenses shall not exceed the sum of $50,000 per Servicer in the aggregate over
the term of the Notes).
"Servicer Fee Rate" shall be 1/12th of 1.0% payable monthly.
"Servicer's Certificate" means a certificate completed and executed by
the chairman of the board, the vice chairman, the president, any vice president,
the treasurer, any assistant treasurer, the chief financial officer, the
secretary, any assistant secretary, the controller, or any assistant controller
of the Servicer pursuant to Section 8.12 hereof.
"Servicing Fee" means, for any Collection Period, a fee payable to the
Servicer for services rendered during such Collection Period, which shall be the
product of (i) the Servicer Fee Rate and (ii) the aggregate Principal Balance of
the Receivables as of the first day of such Collection Period.
"Simple Interest Receivable" means any Receivable which provides for
equal monthly payments, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest on
such obligation multiplied by the period of time on the basis of a 365-day year
over the actual number of days elapsed.
"Spread Account" means the account designated as such, established and
maintained pursuant to Section 3.01 of the Spread Account Agreement.
"Spread Account Agreement" means the Master Spread Account Agreement,
dated as of September 1, 2002, among the Insurer, the Spread Account Depositor,
the Indenture Trustee and Collateral Agent, as supplemented by Series 2003-LJ-1
Supplement to Spread Account Agreement, dated as of August 1, 2003, as the same
may be further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Spread Account Depositor" means Bay View 2002-LJ-I Funding Trust, a
Delaware statutory trust, and its successors.
"Spread Account Depositor Owner Trustee" means Wilmington Trust
Company, a Delaware banking corporation, not in its individual capacity but
solely as owner trustee under the Spread Account Depositor Trust Agreement, its
successors in interest or any successor owner trustee thereunder.
TRUST AND SERVICING AGREEMENT
20
"Spread Account Depositor Trust Agreement" means the trust agreement
dated as of September 1, 2002, between Bay View Securitization Corporation, a
Delaware corporation, and the Spread Account Depositor Owner Trustee, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Spread Account Initial Deposit" is equal to $3,962,393.00.
"SST" means Systems & Services Technologies, Inc., and its successors
and assigns.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Company, Inc.
"Standby Servicer" means SST in its capacity as Standby Servicer or
such Person as shall have been appointed Standby Servicer pursuant to Section
8.03 hereof.
"Standby Servicer Default" has the meaning ascribed thereto in Section
14.02 hereof.
"Standby Servicer Fee" means, for any Collection Period, the fee
payable to the Standby Servicer for services rendered during such Collection
Period, which shall be equal to the amount determined in accordance with
Schedule C attached hereto. If the Standby Servicer shall have taken on the role
as Servicer hereunder, its compensation shall be equal to the amount determined
in accordance with Schedule C attached hereto as successor Servicer, and it
shall not be entitled to a Standby Servicer Fee.
"Standby Servicer Fee Rate" means, with respect to any Payment Date,
the amount, expressed as a percentage, determined by dividing (i) the Standby
Servicer Fee for such Payment Date and (ii) the outstanding Principal Balance of
the Receivables as of the first day of the immediately preceding Collection
Period.
"State" means (i) any state of the United States of America or (ii) the
District of Columbia.
"Stock Pledge Agreement" means the Stock Pledge and Collateral Agency
Agreement, dated as of August 1, 2003, among BVAC, as pledgor, the Insurer and
the Collateral Agent.
"Supplemental Servicing Fee" has the meaning set forth in Section
8.11(a) hereof.
"Transfer and Contribution Agreement" means the Transfer and
Contribution Agreement, dated as of August 1, 2003, between the Bank and BVAC
pursuant to which the Bank contributed and transferred all of its right, title
and interest, if any, in, to and under the Receivables and the related
Transferred Property.
"Transferor" means
Bay View Transaction Corporation, a Delaware
corporation, in its capacity as the transferor of the Receivables under this
Agreement, and each successor to
Bay View Transaction Corporation (in the same
capacity) pursuant to Section 12.03.
"Transition Costs" means reasonable costs and expenses (including
attorneys' fees and expenses) incurred by and payable by the predecessor
Servicer, or to the extent not so paid, by
TRUST AND SERVICING AGREEMENT
21
the Issuer, to the extent of Available Funds, pursuant to Section 8.05(a) of the
Indenture, to the successor Servicer in connection with the transfer of
servicing (whether due to termination, resignation or otherwise) from the
Servicer to such successor Servicer, including, without limitation, costs and
expenses incurred in connection with transferring the Receivable Files and
amending this Agreement to reflect the transfer of servicing, which shall be
approved in writing by the Insurer; provided, however, that in no event shall
the Transition Costs exceed $200,000 without the prior written consent of the
Controlling Party.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trigger Event" means any of the events identified as such in the
Spread Account Agreement.
"Trust" means the Delaware statutory trust created by this Agreement,
the estate of which shall generally comprise the Trust Property.
"Trust Accounts" means the Collection Account, the Lock-Box Account,
the Payahead Account and the Reserve Account.
"Trust Property" has the meaning set forth in Section 3.01 hereof.
"UCC" means the Uniform Commercial Code as in effect in the applicable
jurisdiction.
SECTION 2.02 Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 2.03 Cut-off Date and Record Date. All references to the Record
Date prior to the first Record Date in the life of the Trust shall be to the
Closing Date.
SECTION 2.04 Section References. All Section references in this
Agreement shall be to Sections in this Agreement unless otherwise specified.
SECTION 2.05 Compliance Certificates. Upon any application or request
by the Transferor, the Servicer, the Back-up Servicer or the Standby Servicer to
the Indenture Trustee to take any action under any provision herein, such
requesting party shall furnish to the Indenture Trustee and the Insurer (so long
as the Insurance Agreement has not terminated), an Officer's Certificate stating
that all conditions precedent, if any, provided for herein relating to the
proposed action have been complied with, except that in the case of any other
such application or request as to which the furnishing of such documents is
specifically required by any provision of
TRUST AND SERVICING AGREEMENT
22
this Agreement relating to such particular application or request, no additional
certificate need be furnished.
Every certificate with respect to compliance with a condition or
covenant provided herein shall include a statement that each individual signing
such certificate has read such covenant or condition and the definitions and
other provisions herein relating thereto.
SECTION 2.06 Directions. Any direction required to be given by the
Noteholders shall be given hereunder by the Insurer, unless an Insurer Default
shall have occurred and be continuing or the Policy shall have expired in
accordance with its terms, in which case the Indenture Trustee, acting at the
direction of the Majority Noteholders, shall be entitled to give such direction.
SECTION 2.07 Calculations. All calculations of the amount of the
Servicing Fee, the Standby Servicer Fee, the Indenture Trustee Fee and the Owner
Trustee Fee shall be made on the basis of a 360-day year consisting of twelve
thirty-day months. All references to the Principal Balance of a Receivable as of
the last day of a Collection Period shall refer to the close of business on such
day.
SECTION 2.08 Action by or Consent of Noteholders. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Noteholders, such provision shall be deemed to refer to Noteholders of record as
of the Record Date immediately preceding the date on which such action is to be
taken, or consent given, by Noteholders. Solely for the purposes of any action
to be taken or consented to by Noteholders, any Note registered in the name of
the Issuer, the Transferor, the Servicer or any Affiliate thereof shall be
deemed not to be outstanding and shall not be taken into account in determining
whether the requisite interest necessary to effect any such action or consent
has been obtained; provided, however, that, solely for the purpose of
determining whether the Indenture Trustee is entitled to rely upon any such
action or consent, only Notes which the Indenture Trustee actually knows to be
so owned shall be so disregarded.
SECTION 2.09 Material Adverse Effect. Whenever a determination is to be
made under this Agreement as to whether a given event, action, course of conduct
or set of facts or circumstances could or would have a material adverse effect
on the Issuer or Noteholders (or any similar or analogous determination), such
determination shall be made without taking into account the insurance provided
by the Policy. Whenever a determination is to be made under this Agreement
whether a breach of a representation, warranty or covenant has or could have a
material adverse effect on a Receivable or the interest therein of the Issuer,
the Noteholders or the Insurer (or any similar or analogous determination), such
determination shall be made by the Controlling Party in its sole discretion.
ARTICLE III
CONVEYANCE OF RECEIVABLES
SECTION 3.01 Conveyance of Receivables. In consideration of the Trust's
issuance of, and the Owner Trustee's delivery of, the Certificate to, or at the
direction of, the
TRUST AND SERVICING AGREEMENT
23
Transferor and the proceeds to be realized by the Trust from the issuance of the
Notes pursuant to the Indenture to the Transferor, the Transferor does hereby
sell, transfer, assign, and otherwise convey to the Trust, in trust without
recourse (subject to the obligations herein):
(i) all right, title, and interest of the Transferor in and to
the Receivables listed in Schedule A hereto;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables;
(iii) any proceeds from claims and other amounts relating to
Insurance Policies and other items financed under the
Receivables or otherwise covering an Obligor or a Financed
Vehicle;
(iv) any Liquidation Proceeds;
(v) all property (including the right to receive future
Liquidation Proceeds) that secures a Receivable and that
has been or may be acquired pursuant to the liquidation of
the Receivable;
(vi) the interest of the Transferor in any proceeds from
recourse to Dealers relating to the Receivables;
(vii) all documents contained in the Receivable Files;
(viii) all monies paid on the Receivables and all monies due
thereon, including Accrued Interest after the Cut-off Date;
(ix) all right, title and interest of the Transferor pursuant to
this Agreement and pursuant to the Purchase Agreement,
including, without limitation, a direct right to cause BVAC
to purchase Receivables from the Trust upon the occurrence
of a breach of any of the representations and warranties
contained in Section 3.02(b) of the Purchase Agreement or
the failure of BVAC to timely comply with its obligations
pursuant to Section 5.06 of the Purchase Agreement;
(x) all rights of the Transferor pursuant to the Transfer and
Contribution Agreement; and
(xi) all proceeds of the foregoing.
The Transferor does hereby further assign, convey, pledge and grant a
security interest in (i) any and all other right, title and interest, including
any beneficial interest the Transferor may have in the Trust Accounts and the
funds deposited therein, and (ii) any proceeds of any of the foregoing, to the
Owner Trustee and for the benefit of the Noteholders to secure amounts payable
to Noteholders as provided under this Agreement. The Transferor acknowledges
that all of the foregoing shall constitute the "Trust Property" and the
Transferor hereby consents to the pledge
TRUST AND SERVICING AGREEMENT
24
by the Trust of all of such assets to the Indenture Trustee for the benefit of
the Secured Parties pursuant to the Indenture.
ARTICLE IV
ACCEPTANCE BY TRUSTEE
SECTION 4.01 Acceptance by Trustee. The Owner Trustee does hereby
accept on behalf of the Trust all of the Trust Property conveyed by the
Transferor pursuant to Article III, and declares that the Owner Trustee shall
hold such Trust Property, upon the trusts herein set forth for the benefit of
all present and future Certificateholders, subject to the terms and provisions
of this Agreement.
ARTICLE V
INFORMATION DELIVERED TO THE RATING AGENCIES
SECTION 5.01 Information Delivered to the Rating Agencies.
(a) The Servicer hereby expresses its intention to deliver
promptly to each Rating Agency (i) a copy of each Servicer's
Certificate that it delivers to the Owner Trustee, the Indenture
Trustee and the Insurer pursuant to Section 8.12, (ii) a copy of each
annual Officers' Certificate as to compliance and any notice of default
that it delivers to the Indenture Trustee or the Owner Trustee pursuant
to Section 8.13, (iii) delinquency and loss information for the
Receivables, written notice of any merger, consolidation, or other
succession of the Servicer, pursuant to Section 13.03, or the
Transferor, pursuant to Section 12.03, (iv) a copy of each amendment to
this Agreement and (v) any Opinion of Counsel delivered to the Owner
Trustee pursuant to Section 17.02(i) hereof.
(b) The Owner Trustee hereby expresses its intention to
deliver promptly to each Rating Agency (i) a copy of each annual
certified public accountant's report received by the Owner Trustee
pursuant to Section 8.14, (ii) a copy of each amendment to this
Agreement and (iii) a copy of the notice of termination of the Trust
provided to the Owner Trustee pursuant to Section 16.01.
(c) For purposes of delivery pursuant to paragraphs (a) and
(b) of this Article V, the addresses for the Rating Agencies are:
Structured Finance/Asset Backed Surveillance Group
Standard & Poor's Rating Services, a Division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10041-0003
TRUST AND SERVICING AGREEMENT
25
▇▇▇▇▇'▇ Investors Services, Inc.
Attention: ABS Monitoring Department
4th Floor
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(d) The provisions of this Article V are included herein for
convenience of reference only and shall not be construed to be
contractual undertakings or obligations. The failure of the Servicer or
the Owner Trustee to comply with any or all of the provisions of this
Article V shall not constitute an Event of Servicer Default or a
default of any kind under this Agreement or make any remedy available
to any Person.
ARTICLE VI
AGENT FOR SERVICE
SECTION 6.01 Agent for Service. The agent for service for the
Transferor shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President of the Transferor. Any
and all service on the agent for service of the Transferor shall be sent to
Bay
View Transaction Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or
such other address as the Transferor shall provide notice thereof pursuant to
Sections 17.02(c) or 17.05.
The agent for service for BVAC shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice
President of the Servicer. Any and all service on the agent for service of the
Servicer shall be sent to Bay View Acceptance Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as BVAC shall provide notice
thereof pursuant to Section 17.02(c) or 17.05.
A copy of any service of process served on the Transferor or BVAC
hereunder shall also be sent to the Indenture Trustee, the Insurer and the
parties to receive notices on behalf of the Transferor or BVAC, as the case may
be, under Section 17.05 of this Agreement.
ARTICLE VII
THE RECEIVABLES
SECTION 7.01 Representations and Warranties of Transferor.
(a) Pursuant to Article III, the Transferor has assigned to
the Trust the benefit of, and its rights respecting, the
representations and warranties made to the Transferor in the Purchase
Agreement as to the Receivables on which the Trust relies in accepting
the Receivables in trust and executing and authenticating the Notes and
executing and delivering the Indenture and on which the Insurer will
rely in issuing the Policy. The Transferor agrees that the
representations shall also be for the benefit of the Secured Parties to
the same extent as if each of such representations and warranties were
fully set forth herein, including, without limitation, the
representations and warranties set forth in Sections 3.01 and 3.02 of
the Purchase Agreement. Such representations and warranties
TRUST AND SERVICING AGREEMENT
26
speak as of the execution and delivery of the Purchase Agreement but
shall survive the sale, transfer, and assignment of the Receivables to
the Trust and the pledge of the Receivables to the Indenture Trustee.
(b) The Transferor hereby represents and warrants to the Trust
that it has entered into the Purchase Agreement with BVAC, that BVAC
has made the representations and warranties set forth therein, that
such representations and warranties run to and are for the benefit of
the Transferor, and that pursuant to Article III of this Agreement the
Transferor has transferred and assigned to the Trust all rights of the
Transferor to cause BVAC under the Purchase Agreement to repurchase
Receivables in the event of a breach of such representations and
warranties.
(c) The foregoing provisions of this Section 7.01 are intended
to grant the Trust and its assignees a direct right against BVAC to
demand performance of its obligations under the Purchase Agreement.
(d) It is the intention of the Transferor that the transfer
and assignment herein contemplated, taken as a whole, constitute a sale
of the Receivables and the other Trust Property from the Transferor to
the Trust and that the Receivables and the other Trust Property not be
part of the bankruptcy estate in the event of the bankruptcy of the
Transferor. In the event that a court of competent jurisdiction were to
conclude that the transfer of Receivables or the other Trust Property
constitutes a grant of a security interest rather than a sale of the
Receivables, the other Trust Property and the proceeds thereof, this
Agreement and the transactions provided for herein shall be deemed to
constitute a grant by the Transferor to the Trust of a valid continuing
first priority security interest in the Receivables, the other Trust
Property and the proceeds thereof. No Receivable or other item of Trust
Property has been sold, transferred, assigned, or pledged by the
Transferor to any Person other than the Trust. Immediately prior to the
transfer and assignment herein contemplated, the Transferor had good
and marketable title to each Receivable and the other Trust Property,
free and clear of all Liens, and, immediately upon the transfer
thereof, the Trust (for the benefit of the Certificateholder and the
Secured Parties pursuant to the Indenture) shall have good and
marketable title to each Receivable and the other Trust Property, free
and clear of all Liens and rights of others, except for the rights of
the Certificateholder, the Noteholders and the Insurer; and the
transfer has been perfected under the UCC. On or prior to the Closing
Date, all filings (including, without limitation UCC filings) necessary
in any jurisdiction to give the Trust and its assignees a first
priority perfected ownership interest in the Receivables and the other
Trust Property shall have been made.
SECTION 7.02 Repurchase Upon Breach. Each party hereto shall inform the
other parties hereto and the Insurer promptly, in writing, upon the discovery of
any breach of the representations and warranties contained in Section 3.02 of
the Purchase Agreement and assigned to the Trust hereunder or upon the discovery
that any Receivable has been materially and adversely affected because a court
has determined that a Receivable is not perfected by a first priority perfected
security interest in the related Financed Vehicle in favor of the Indenture
Trustee. Unless the breach or failure to perfect shall have been cured by the
last day of the first full Collection Period, following the discovery, the
Transferor shall cause BVAC, pursuant to its
TRUST AND SERVICING AGREEMENT
27
obligations under the Purchase Agreement to repurchase any such Receivable if
such Receivable or the interest therein of the Issuer, the Noteholders, the
Certificateholder or the Insurer is materially and adversely affected by any
such breach or failure to perfect as of the last day of the first full
Collection Period. In consideration of the purchase of the Receivable, BVAC
shall remit the Purchase Amount, in the manner specified in Section 9.04. As
required under Section 3.03 of the Purchase Agreement, the Transferor shall
cause the Seller to indemnify the Owner Trustee, the Issuer, the Indenture
Trustee, the Insurer, the Back-up Servicer, the Collateral Agent, the Standby
Servicer, the Servicer, the Noteholders, the Certificateholder and their
respective officers, directors and employees against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them, as a
result of claims arising out of the events or facts giving rise to such
repurchase. Notwithstanding the foregoing, BVAC shall not be required to remit
the Purchase Amount in the manner specified in this Section 7.02 with respect to
any Receivable repurchased or subject to repurchase by BVAC pursuant to Section
8.08 for the reasons specified in Section 8.08. This repurchase obligation shall
not apply to the Standby Servicer or the Back-up Servicer acting as successor
Servicer.
SECTION 7.03 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trust, upon
the execution and delivery of this Agreement, hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, for the benefit of
the Trust and the Indenture Trustee, to act as the agent of the Trust as
custodian in accordance with the Custodian Agreement.
SECTION 7.04 Duties of Servicer as Custodian.
(a) Safekeeping. In accordance with the Custodian Agreement,
the Servicer, in its capacity as custodian, shall segregate and hold
the Receivable Files on behalf of the Trust for the use and benefit of
the Trust, and maintain such accurate and complete accounts, records,
and computer systems pertaining to each Receivable File as shall enable
the Trust to comply with this Agreement and the other Basic Documents
to which it is a party. 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 automobile receivables that the
Servicer services for itself. The Servicer shall conduct, or cause to
be conducted, periodic audits of the Receivable Files held by it under
this Agreement, and of the related accounts, records, and computer
systems, in such a manner as shall enable the Trust to verify the
accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Insurer, Owner Trustee and the Indenture Trustee any
failure on its part to hold the Receivable Files and maintain its
accounts, records, and computer systems as herein provided and promptly
take appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at its office specified in Schedule B to
this Agreement, or at such other office as shall be specified to the
Owner Trustee, the Insurer and the Indenture Trustee by prior written
notice. The Servicer shall make available to the Insurer, the Owner
Trustee and the Indenture Trustee and their duly authorized
representatives, attorneys, or auditors a list of locations of the
Receivables, the Receivable Files, and the related accounts,
TRUST AND SERVICING AGREEMENT
28
records, and computer systems maintained by the Servicer at such times
as the Insurer, the Owner Trustee or the Indenture Trustee, as
applicable, shall instruct.
(c) Custodian Agreement. To the extent that there is a
conflict between this Agreement and the Custodian Agreement with
respect to the duties and obligations of the Custodian, the terms of
the Custodian Agreement shall control.
(d) Standby Servicer as Custodian. The Standby Servicer shall
only act as Custodian if it is simultaneously acting as successor
Servicer pursuant to this Agreement. The Standby Servicer shall be
reimbursed for all reasonable out-of-pocket expenses incurred in
connection with its duties as Custodian pursuant to this Section 7.04.
in accordance with the provision of Section 8.05(a) of the Indenture.
SECTION 7.05 Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer of the
Owner Trustee on behalf of the Trust, the Indenture Trustee or the Insurer as
set forth in the Custodian Agreement.
ARTICLE VIII
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 8.01 Duties of Servicer.
(a) The Servicer (and any successor Servicer), for the benefit
of the Trust and the Secured Parties, shall manage, service,
administer, and make collections on the Receivables with reasonable
care, using that degree of skill and attention that servicers in the
retail automotive financing industry customarily exercise with respect
to all comparable receivables that they service for themselves or
others and, to the extent more exacting, that the Servicer (or
successor Servicer) exercises with respect to all comparable automobile
receivables that it services for itself or others. The Servicer's
duties shall include collection and posting of all payments, making
Advances in accordance with the terms hereof, responding to inquiries
of Obligors or of federal, state or local governmental authorities with
respect to the Receivables, investigating delinquencies, sending
monthly billing statements to Obligors, accounting for collections, and
furnishing monthly and annual statements to the Owner Trustee, the
Indenture Trustee and the Insurer with respect to distributions. The
Servicer shall follow its customary standards, policies, and procedures
in performing its duties as Servicer; provided, however, that the
Servicer shall not materially change its servicing standards and
procedures without the prior written consent of the Controlling Party.
Without limiting the generality of the foregoing, the Servicer is
authorized and empowered by the Trust to execute and deliver, on behalf
of itself, the Trust, the Owner Trustee, the Indenture Trustee or any
of them, any and all instruments of satisfaction or cancellation, or
partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed
Vehicles securing such Receivables; provided, however, that
notwithstanding the foregoing, the Servicer shall not release an
Obligor
TRUST AND SERVICING AGREEMENT
29
from payment of any unpaid amount under any Receivable or waive the
right to collect the unpaid balance of any Receivable from the Obligor,
except (i) pursuant to an order from a court of competent jurisdiction,
(ii) in accordance with its customary procedures or (iii) in accordance
with Section 8.05. If the Servicer shall commence a legal proceeding to
enforce a Receivable or a Charged-Off Receivable, the Trust and the
Indenture Trustee 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 the Receivable, the Indenture Trustee shall be deemed to have
automatically assigned, solely for the purpose of collection. The Owner
Trustee and the Indenture Trustee shall execute any documents prepared
by the Servicer and delivered to the Trust for execution that are
necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
(b) The Servicer, or a third party retained by Servicer (if
BVAC is acting as the Servicer, at its expense, otherwise at the
expense of the Trust), shall obtain on behalf of the Trust all
licenses, if any, required by the laws of any jurisdiction to be held
by the Trust in connection with ownership of the Receivables, and shall
make all filings and pay all fees as may be required in connection
therewith during the term hereof.
(c) The Servicer shall furnish to the Owner Trustee, the
Indenture Trustee, the Collateral Agent and the Insurer from time to
time such additional information regarding the Trust or the Basic
Documents as the Owner Trustee, the Indenture Trustee, the Collateral
Agent or the Insurer shall reasonably request.
SECTION 8.02 The Back-up Servicer.
(a) Prior to assuming any of the Servicer's rights and
obligations and acting as successor Servicer hereunder, the Back-up
Servicer shall only be responsible to perform those duties specifically
imposed upon it by the provisions hereof, and shall have no obligations
or duties under any agreement to which it is not a party, including but
not limited to the other Basic Documents.
(b) Subject to the Back-up Servicer's obligations pursuant to
this Section 8.02, prior to assuming any of the Servicer's rights and
obligations hereunder, the Back-up Servicer shall not be required to
expend or risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if the repayment of such funds or adequate
written indemnity against such risk or liability is not reasonably
assured to it in writing prior to the expenditure or risk of such funds
or incurrence of financial liability. Notwithstanding any provision to
the contrary, the Back-up Servicer, in its capacity as such, and not in
its capacity as successor Servicer, shall not be liable for any
obligation of the Servicer contained in this Agreement so long as the
Back-up Servicer performs in such capacity, and the parties shall look
only to the Servicer to perform such obligations. The Back-up Servicer,
in its capacity as such, and not in its capacity as successor Servicer,
shall have
TRUST AND SERVICING AGREEMENT
30
no responsibility or liability in connection with the perfection or
maintenance of a security interest in the Receivables.
(c) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Back-up Servicer may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(d) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Back-up Servicer may consult with counsel
and the advice or any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or omitted
by it hereunder in good faith and in accordance with any such written
counsel, a copy of which has been furnished to the Indenture Trustee
and the Insurer.
(e) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Back-up Servicer shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, entitlement order, approval or other paper or document.
(f) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Back-up Servicer may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, attorneys, custodians or nominees
appointed with due care, and shall not be responsible for any willful
misconduct or negligence on the part of any agent, attorney, custodian
or nominee so appointed.
(g) The Servicer shall have no liability, direct or indirect,
to any party, for the acts or omissions of the Back-up Servicer,
whenever such acts or omissions occur or whenever such liability is
imposed.
(h) Notwithstanding anything to the contrary herein, the
Controlling Party shall have the right in its sole and absolute
discretion to remove and replace the Back-up Servicer in accordance
with Section 14.03. In the event that the Controlling Party exercises
its right to remove and replace Deutsche Bank Trust Company Americas as
Back-up Servicer, Deutsche Bank Trust Company Americas shall have no
further obligation to perform the duties of the Back-up Servicer under
this Agreement except as set forth in Section 13.02.
(i) On or before the fifth Business Day of each month, the
Servicer will deliver to the Back-up Servicer a Computer Tape
containing such information with respect to the Receivables as of the
close of business on the last day of the immediately preceding
Collection Period as is necessary for preparation of the Servicer's
Certificate. In addition, the Servicer shall, if so requested by the
Insurer (unless an Insurer Default shall have occurred and be
continuing) deliver to the Back-up Servicer (i) within five (5)
Business Days of demand therefore a Computer Tape containing as of the
close of business on the date of demand all of the data maintained by
the Servicer in a format
TRUST AND SERVICING AGREEMENT
31
acceptable to the Back-up Servicer in connection with servicing the
Receivables and (ii) within fifteen (15) Business Days of demand
therefore a copy of such other information as is reasonably requested
by the Insurer for the purpose of reconciling such discrepancies.
(j) The Back-up Servicer shall load the initial Computer Tape
received from the Servicer pursuant to Section 8.02(e) hereof and
confirm that such Computer Tape is in a readable form, and deliver to
the Servicer and the Insurer a notice in substantially the form set
forth as Exhibit C attached hereto. All other Computer Tapes will be
stored by the Back-up Servicer in accordance with its customary
practices.
(k) To the extent the Back-up Servicer and the Indenture
Trustee are the same party, the Back-up Servicer may resign under this
Agreement upon 90 days' prior written notice to the Servicer, the
Insurer and the Standby Servicer, and only to the extent such party is
also resigning or being removed as Indenture Trustee hereunder or under
the Indenture.
SECTION 8.03 The Standby Servicer.
(a) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Standby Servicer shall only be responsible
to perform those duties specifically imposed upon it by the provisions
hereof, and shall have no obligations or duties under any agreement to
which it is not a party, including but not limited to any other Basic
Document to which it is not a party.
(b) Subject to the Standby Servicer's obligations pursuant to
this Section 8.03, prior to assuming any of the Servicer's rights and
obligations hereunder, the Standby Servicer shall not be required to
expend or risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if the repayment of such funds or adequate
written indemnity against such risk or liability is not reasonably
assured to it in writing prior to the expenditure or risk of such funds
or incurrence of financial liability. Notwithstanding any provision to
the contrary, the Standby Servicer, in its capacity as such, and not in
its capacity as successor Servicer, shall not be liable for any
obligation of the Back-up Servicer or the Servicer contained in this
Agreement so long as the Standby Servicer performs in such capacity,
and the parties shall look only to the Servicer and the Back-up
Servicer to perform such obligations.
(c) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Standby Servicer may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(d) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Standby Servicer may consult with counsel
and the advice or any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or
TRUST AND SERVICING AGREEMENT
32
omitted by it hereunder in good faith and in accordance with any such
written counsel, a copy of which has been furnished to the Indenture
Trustee and the Insurer.
(e) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Standby Servicer shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, entitlement order, approval or other paper or document.
(f) Prior to assuming any of the Servicer's rights and
obligations hereunder, the Standby Servicer may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, attorneys, custodians or nominees
appointed with due care, and shall not be responsible for any willful
misconduct or negligence on the part of any agent, attorney, custodian
or nominee so appointed.
(g) The Servicer shall have no liability, direct or indirect,
to any party, for the acts or omissions of the Standby Servicer,
whenever such acts or omissions occur or whenever such liability is
imposed.
(h) Notwithstanding anything to the contrary herein, the
Controlling Party shall have the right, with or without cause, to
remove the Standby Servicer in its sole discretion and replace the
Standby Servicer upon seven (7) days prior written notice. In the event
that the Controlling Party exercises its right to remove and replace
the Standby Servicer, such Person shall have no further obligation to
perform the duties of the Standby Servicer under this Agreement except
as set forth in Section 13.02.
(i) On or before the fifth Business Day of each month, the
Servicer will deliver to the Standby Servicer a Computer Tape
containing such information with respect to the Receivables as of the
close of business on the last day of the immediately preceding
Collection Period as is necessary for preparation of the Servicer's
Certificate. The Standby Servicer shall use the Computer Tape to verify
the information specified in Section 8.03(f)(ii) and (iii) contained in
the Servicer's Certificate delivered by the Servicer, and the Standby
Servicer shall certify to the Insurer that it has verified the
Servicer's Certificate in accordance with this Section 8.03 and shall
notify the Servicer, the Insurer and the Indenture Trustee of any
discrepancies, in each case, on or before the related Deficiency Claim
Date. Such notice shall be substantially in the form of Exhibit D
attached hereto. In the event that the Standby Servicer reports any
discrepancies, the Servicer and the Standby Servicer shall attempt to
reconcile such discrepancies prior to the related Payment Date, but in
the absence of a reconciliation, the Servicer's Certificate shall
control for the purpose of calculations and payments with respect to
the related Payment Date. In the event that the Standby Servicer and
the Servicer are unable to reconcile discrepancies with respect to a
Servicer's Certificate by the related Payment Date, (i) the Standby
Servicer will notify the Insurer and the Indenture Trustee, and (ii)
the Servicer shall cause a firm of independent certified public
accountants, at the Servicer's expense, to audit the Servicer's
Certificate and, prior to the fifth calendar day of the following
month, reconcile the discrepancies. The effect, if any, of such
reconciliation shall be reflected in the Servicer's Certificate for
such next succeeding
TRUST AND SERVICING AGREEMENT
33
Determination Date. In addition, the Servicer shall, if so requested by
the Insurer (unless an Insurer Default shall have occurred and be
continuing) deliver to the Standby Servicer (i) within five (5)
Business Days of demand therefore a Computer Tape containing as of the
close of business on the date of demand all of the data maintained by
the Servicer in a format acceptable to the Standby Servicer in
connection with servicing the Receivables and (ii) within fifteen (15)
Business Days of demand therefore a copy of such other information as
is reasonably requested by the Insurer for the purpose of reconciling
such discrepancies.
(j) The Standby Servicer shall review each Servicer's
Certificate delivered pursuant to Section 8.03(e) and shall, based upon
the information provided from the Servicer under Section 8.03(e):
(i) confirm that such Servicer's Certificate is
complete on its face;
(ii) load the Computer Tape received from the
Servicer pursuant to Section 8.03(e) hereof, confirm that such
Computer Tape is in a readable form, and calculate the
Principal Balance of the Receivables based on the aggregate
Principal Balance of the Receivables as of the preceding
Payment Date (as set forth in such Servicer's Certificate) and
the principal portion of the Scheduled Receivable Payment or
Modified Scheduled Receivable Payment for the Receivables (as
set forth in such Servicer's Certificate) and compare such
calculation to that set forth in the Servicer's Certificate
(and give notice of any discrepancy to the Insurer); and
(iii) recalculate the Available Funds, the Class A-1
Monthly Interest, the Class A-2 Monthly Interest, the Class
A-3 Monthly Interest, the Class A-4 Monthly Interest, the
Class I Monthly Interest, the Monthly Principal, the Servicing
Fee, the Standby Servicer Fee, the Indenture Trustee Fee, the
Owner Trustee Fee, the amounts on deposit in the Spread
Account, the Collection Account and the Payahead Account, the
Premium, the Lock-Box Collection Percentage, the Average
Delinquency Ratio, the Cumulative Default Rate and the
Cumulative Net Loss Rate (as such percentage, ratio and such
rates are defined in the Spread Account Agreement) in the
Servicer's Certificate for such Determination Date, based
solely on the balances and calculations specifically set forth
in the Servicer's Certificate, and compare such recalculations
to those set forth in the Servicer's Certificate. To the
extent of any discrepancy, the Standby Servicer shall give
notice thereof to the Insurer. The Standby Servicer's
obligation shall be limited to the mathematical recalculation
of the amounts set forth in this Section 8.03(f)(ii) and (iii)
based on the Servicer's Certificate and Computer Tape.
SECTION 8.04 Retention and Termination of Servicer. The Servicer hereby
covenants and agrees to act as such under this Agreement for an initial term,
commencing on the Closing Date and ending on December 31, 2003, which term may
be extended by written notice delivered by the Insurer, so long as the Insurer
is the Controlling Party, for successive three month periods ending on each
successive three month period (or, pursuant to revocable written
TRUST AND SERVICING AGREEMENT
34
standing instructions from time to time to the Servicer and the Indenture
Trustee, extended for any specified number of terms greater than one), until the
termination of the Issuer. If an Insurer Default shall have occurred and be
continuing, such term will automatically be renewed unless the Majority
Noteholders vote to remove the Servicer. Any such notice (including each notice
pursuant to standing instructions, which, if delivered, shall be deemed
delivered at the end of successive monthly terms for so long as such
instructions are in effect) (a "Servicer Extension Notice") shall be delivered
by the Insurer to the Indenture Trustee and the Servicer. The Servicer hereby
agrees that, as of the date hereof and upon its receipt of any such Servicer
Extension Notice, the Servicer shall become bound, for the initial term
beginning on the date hereof and for the duration of the term covered by such
Servicer Extension Notice, to continue as the Servicer subject to and in
accordance with the other provisions of this Agreement. The Servicer's terms
shall not be extended unless a Servicer Extension Notice is received on or
before the last day of such term. This Section shall not apply to the Back-up
Servicer or the Standby Servicer.
SECTION 8.05 Collection of Receivable Payments.
(a) Consistent with the standards, policies and procedures
required by this Agreement, 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
automobile receivables that it services for itself or others and, in
any event, with no less degree of skill and care than would be
exercised by a prudent servicer of similar motor vehicle retail
installment sales contracts and installment sale loan and security
agreements. Promptly after the Closing Date (but in any event within
twenty (20) days after the Closing Date), the Servicer will provide
each Obligor with a monthly statement in order to notify such Obligors
to make payments directly to the Lock-Box. If payments are modified or
adjusted on a Receivable (provided that no such modification or
adjustment may be made to the APR or the number or amounts of the
Scheduled Receivable Payments) or are extended in the ordinary course
of the Servicer's collection procedures (provided, that no extensions
may be granted by the Servicer until at least six Scheduled Receivable
Payments have been received by the Servicer under the related
Receivable and thereafter only one extension not to exceed one month
may be granted each twelve months; provided, further, that no more than
three extensions shall be permitted on any Receivable; and provided,
further, that not more than 1% (by Principal Balance of the Receivables
as a percentage of the Pool Balance) may be extended during any
Collection Period), and, as a result, any Receivable would be
outstanding after the month immediately preceding the Final Maturity
Date for the Class A-4 Notes or any such modification, adjustment or
extension is in violation of the foregoing prohibitions, then the
Servicer shall be obligated to purchase such Receivable pursuant to
Section 8.10 (unless such Receivable is otherwise being purchased
pursuant to Section 16.02). The Servicer may in its discretion waive
any late payment charge or any other fees that it is entitled to retain
under Section 8.11, or other fee (to the extent consistent with its
credit and collection policy) that may be collected in the ordinary
course of servicing a Receivable.
TRUST AND SERVICING AGREEMENT
35
(b) All allocations of payments with respect to a Simple
Interest Receivable to principal and interest and determinations of
periodic charges and the like shall be made using the simple interest
method, based on either the actual number of days elapsed and the
actual number of days in the calendar year or on a 365-day calendar
year, as specified in the related installment sales contract or
installment loan and security agreement. Each payment on a Simple
Interest Receivable shall be applied first, in connection with the
redemption of a Charged-off Receivable, to reimburse the Servicer for
reasonable and customary out-of-pocket expenses incurred by the
Servicer in connection with such Receivable, second, to late charges
and other fees, third, to the extent necessary to bring such Receivable
current, to interest in accordance with the simple interest method and
fourth, to principal in accordance with the simple interest method. All
allocations of payments with respect to a Precomputed Receivable to
principal or interest shall be made using the actuarial or constant
yield method. Payments made by or on behalf of an Obligor on a
Precomputed Receivable including any Payaheads previously made and
added to the Payahead Balance with respect to such Precomputed
Receivable shall be applied first, in connection with the redemption of
a Charged-off Receivable, to reimburse the Servicer for reasonable and
customary out-of-pocket expenses incurred by the Servicer in connection
with such Receivable, second, to late charges and other fees, third, to
overdue Scheduled Receivable Payments. Next, any excess shall be
applied to the Scheduled Receivable Payment and any remaining excess
shall be added to the Payahead Balance, and shall be applied to prepay
the Precomputed Receivable, but only if such Payahead Balance shall be
sufficient to prepay the Receivable in full. Otherwise, any such
remaining excess payments shall constitute a Payahead and shall
increase the Payahead Balance. Notwithstanding the foregoing, no
allocation pursuant to this Section 8.05(b) shall in any way alter or
modify the payment priorities and rights and restrictions on Servicer
reimbursement and compensation set forth in the Indenture.
SECTION 8.06 Realization Upon Receivables.
(a) On behalf of the Trust and the Secured Parties the
Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership
of the Financed Vehicle securing any Receivable as to which the
Servicer shall have determined that eventual payment in full is
unlikely. The Servicer shall follow such customary and usual practices
and procedures as it shall deem necessary or advisable in its servicing
of automobile receivables, which may include reasonable efforts to
realize upon any recourse to Dealers (provided, that if SST or the
Back-up Servicer is performing the duties of Servicer hereunder, BVAC
agrees to use commercially reasonable efforts to cooperate with SST in
realizing upon such Dealer recourse, it being understood and agreed
that neither the Back-up Servicer nor SST shall have any obligation to
pursue such remedies absent such BVAC cooperation) and selling the
Financed Vehicle at public or private sale. The foregoing shall be
subject to the provision that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair
and/or repossession will increase the Liquidation Proceeds of the
related Receivable by an amount equal to or greater than the amount of
such expenses. After appropriate disposition of the Financed Vehicle,
the Servicer shall also take such measures as it
TRUST AND SERVICING AGREEMENT
36
deems reasonable and appropriate to realize value in respect of any
deficiency balance of the Receivable including pursuit of action on
behalf of the Trust and/or the Secured Parties against the Obligor or
public or private sale of the remaining interest of the Trust and/or
the Secured Parties in such Receivable. If the Standby Servicer or the
Back-up Servicer is the successor Servicer, it shall be reimbursed for
all reasonable out-of-pocket expenses incurred in connection with this
Section 8.06(a) and shall not be responsible for expenses incurred in
connection with such powers of attorney necessary to satisfy its
administrative and servicing duties hereunder.
(b) BVAC, as initial Servicer, agrees that within 45 days from
the Closing Date, it shall make such filings and effect such notices as
are necessary under Sections 9-310, 9-324(b) and 9-324(c) of the New
York UCC (or comparable section of the UCC of any applicable state) to
preserve the Trust's ownership interest (or security interest, as the
case may be) and the security interest of the Indenture Trustee in any
repossessed Financed Vehicles delivered for sale to Dealers.
(c) The Servicer agrees that at any time after the Closing
Date there will be (i) no more than 10 repossessed Financed Vehicles in
the aggregate delivered for sale to any Dealer and (ii) no more than 35
repossessed Financed Vehicles in the aggregate delivered for the sale
to all Dealers with respect to which the actions referred to in
paragraph (b) above have not been effected. The Servicer agrees that
prior to delivering additional Financed Vehicles for sale to any such
Dealer in excess of the limits set forth in (i) and (ii) above, it
shall make such filings and effect such notices as are necessary under
Sections 9-310, 9-324(b) and 9-324(c) of the New York UCC (or
comparable section of the applicable UCC) to preserve its ownership
interest (or security interest, as the case may be) in any such
repossessed Financed Vehicle.
(d) Unless otherwise stated in this Agreement, the Servicer
shall either use its best efforts to liquidate or, at its sole option,
purchase each Financed Vehicle that has not previously been liquidated
and that secures, or previously secured, a Charged-Off Receivable
either (i) by the end of the Collection Period preceding the Final
Maturity Date for the Class A-4 Notes or (ii) if earlier, by the end of
the Collection Period following the Collection Period during which such
Receivable became a Charged-Off Receivable. Any purchase of a Financed
Vehicle by the Servicer shall be made at a price equal to the fair
market value of the Financed Vehicle as determined by the Servicer in
accordance with the Servicer's normal servicing standards. This
purchase obligation shall not apply to any successor Servicer.
SECTION 8.07 Physical Damage Insurance.
(a) The Servicer, in accordance with its customary servicing
procedures and underwriting standards, shall require that (i) each
Obligor shall have obtained insurance covering the Financed Vehicle as
of the date of execution of the Receivable insuring against loss and
damage due to fire, theft, transportation, collision and other risks
generally covered by comprehensive and collision coverage, (ii) 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 BVAC or the Bank as policyholder
TRUST AND SERVICING AGREEMENT
37
(creditor) or loss payee 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 such extended
service contract. The Servicer shall, in accordance with its customary
servicing procedures, monitor such insurance coverage.
(b) To the extent applicable, the Servicer shall not take any
action which would result in noncoverage under the insurance policy
referred to in Section 8.07(a) which, but for the actions of the
Servicer, would have been covered thereunder. The Servicer, on behalf
of the Indenture 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 9.03. The Servicer will endeavor to cause
the related Obligor to obtain and maintain an insurance policy that
complies with Section 8.07(a)(i). In no event shall the Servicer force
place insurance on a Financed Vehicle.
SECTION 8.08 Maintenance of Security Interests in Financed Vehicles.
(a) The Servicer shall, in accordance with its customary
servicing procedures, take such steps as are necessary to ensure that
perfection of the security interest created by each Receivable in the
related Financed Vehicle has been obtained, and to maintain such
security interest. The Trust hereby authorizes the Servicer to take
such steps as are necessary to re-perfect such security interest on
behalf of the Trust in the event of the relocation of a Financed
Vehicle or for any other reason. Any out-of-pocket expenses incurred by
any successor Servicer in connection with any such re-perfection shall
be reimbursable in accordance with the priorities set forth in Section
8.05(a) of the Indenture.
(b) (i) In accordance with the Custodian Agreement, by the
third Business Day following the date (the "180 day notice date") which
is 180 days following the Closing Date or, if such date is not a
Business Day, on the next succeeding Business Day, the Indenture
Trustee shall inform BVAC and the other parties to this Agreement and
the Insurer of any Receivable listed on the exception list attached as
Exhibit B to the Custodian Agreement provided to the Indenture Trustee
on the Closing Date for which the related Receivable File on the 180
day notice date does not include a Certificate of Title (or such
evidence of title as may be issued in any applicable jurisdiction as of
the close of business on the date which is 180 days after closing).
BVAC shall repurchase any such Receivable as of the last day of the
Collection Period in which the date, which is 180 days following the
Closing Date occurs, if the related Receivable File does not include a
Certificate of Title as of the close of business on such 180th day (or
such evidence of title as may be issued in any applicable jurisdiction)
to the extent any such Receivable was not otherwise released or
repurchased pursuant to Section 8.08(b)(v) below. In consideration of
the purchase of such Receivable, BVAC shall remit the Purchase Amount
in the manner specified in Section 8.10.
(ii) In accordance with the Custodian Agreement, by the third
Business Day following the date (the "30 day notice date") which is 30
days following the Closing Date or, if such date is not a Business Day,
on the next succeeding Business Day, the
TRUST AND SERVICING AGREEMENT
38
Indenture Trustee shall inform BVAC and the other parties to this
Agreement and the Insurer of any Receivable listed on the exception
list attached as Exhibit B to the Custodian Agreement provided to the
Indenture Trustee on the Closing Date due to a Receivable File which is
missing a fully executed original of the related retail installment
contract or retail installment loan contract, as applicable, which
remains uncured by the close of business on the date which is 30 days
following the Closing Date. BVAC shall repurchase any such Receivable
within two Business Days after the date on which the Indenture Trustee
delivers its report pursuant to this Section 8.08(b)(ii) to the extent
any such Receivable was not otherwise released or repurchased pursuant
to Section 8.08(b)(v) below. In consideration of the purchase of such
Receivable, BVAC shall remit the Purchase Amount in the manner
specified in Section 8.10.
(iii) On or before the Closing Date, the Indenture Trustee
shall establish the Reserve Account at the direction of BVAC as a
segregated non-interest bearing trust account in the name of the Trust
for the benefit of the Secured Parties with the Indenture Trustee (at
the Indenture Trustee Office) or another Eligible Bank. On the Closing
Date, BVAC shall deposit the Initial Reserve Account Deposit into the
Reserve Account. The Indenture Trustee shall, at the direction of BVAC,
invest the amounts in the Reserve Account in Eligible Investments that
mature not later than the Business Day prior to the next succeeding
Reserve Release Date (as defined below) and shall hold such Eligible
Investments to maturity; provided, however, it is understood and agreed
that the Indenture Trustee shall not be liable for any loss arising
from such investment in Eligible Investments unless the Eligible
Investment was a direct obligation of the Indenture Trustee or unless
such loss was caused by the Indenture Trustee's negligence or willful
misconduct (it being understood and acknowledged that no loss on any
such Eligible Investment which was made in conformity with this
Agreement and the instructions of the Transferor, shall be considered
"caused by the Indenture Trustee's negligence or willful misconduct").
No investment may be sold prior to its maturity. All such Eligible
Investments shall be held by or on behalf of the Indenture Trustee for
the benefit of the Indenture Trustee on behalf of the Noteholders, the
Insurer and Certificateholder, as their interests may appear. The
Indenture Trustee (or its custodian) shall at all times (i) maintain
possession of any negotiable instruments or securities evidencing
Eligible Investments until the time of sale or maturity and each
certificated security or negotiable instrument evidencing an Eligible
Investment shall be endorsed in blank or to the Indenture Trustee (or
its custodian) or registered in the name of the Indenture Trustee and
(ii) cause any Eligible Investment represented by an uncertificated
security to be registered in the name of the Indenture Trustee (or its
custodian).
(iv) On or before the initial Reserve Release Date, the
Indenture Trustee shall review the Receivables listed on the exception
list attached as Exhibit E to this Agreement (the "Exception List") (in
the manner required under the terms of the Custodian Agreement, as
applicable) provided to the Indenture Trustee on the Closing Date and
prepare an updated list, under cover of a certificate in substantially
the form attached hereto as Exhibit F, as the same may be further
updated as described below, (the "Updated Exception List") deleting
those Receivable with respect to which the Indenture Trustee has
reviewed the fully executed original of the Receivable with the fully
executed assignment from the related Dealer and (a) a Certificate of
Title (or such evidence of title
TRUST AND SERVICING AGREEMENT
39
as may be issued in any applicable jurisdiction) as required under the
terms of the Custodian Agreement or (b) a copy of a duly completed
application of title with which has been filed in the appropriate
jurisdiction. Thereafter, the Indenture Trustee shall continue to
review the related Updated Exception List and prepare and certify a new
Updated Exception List on or prior to the immediately succeeding
Reserve Release Date. As used herein, the "Reserve Release Date" means,
initially, the fourth Business Day following the Closing Date, and
thereafter, each succeeding date occurring one week thereafter
(provided, if such date is not a Business Day, the related Reserve
Release Date shall be the Business Day immediately succeeding such
date), or such earlier date or dates on which the Indenture Trustee may
be prepared to release additional amounts from the Reserve Account (as
evidenced by the preparation and certification by the Indenture Trustee
of a new Updated Exception List with respect to such Reserve Release
Date(s) and the delivery by BVAC of an instructional letter,
acknowledged by the Insurer, with respect to such Reserve Release
Date(s) in substantially the form attached hereto as Exhibit G), ending
on and including the Final Reserve Date.
(v) On each Reserve Release Date, the Indenture Trustee shall
release to BVAC (by wire transfer in immediate available funds) from
the Reserve Account, the Reserve Release Amount relating to any
Receivable which has been deleted from the Updated Exception List (or
in the case of the first Reserve Release Date, the Exception List) with
respect to such Reserve Release Date, as specified in an instructional
letter from BVAC, acknowledged by the Insurer, in substantially the
form attached hereto as Exhibit G. With respect to any Reserve Release
Date and any Receivable, the "Reserve Release Amount" will be an amount
equal to the Principal Balance of such Receivable as of the Cut-off
Date as set forth on Exhibit E to this Agreement and the pro rata
portion (based on the Principal Balance of the Receivables included on
such list) of investment interest earned on the portion of the Reserve
Account relating to such Receivable. To the extent a Receivable becomes
a Charged-Off Receivable during a Collection Period while on the
Exception List or an Updated Exception List or otherwise must be
repurchased pursuant to Section 8.08(b)(i) or Section 8.08(b)(ii), the
Indenture Trustee shall withdraw the Purchase Amount related to such
Receivable from the Reserve Account on behalf of BVAC, in consideration
of the purchase of such Receivable, and deposit such amount in the
Collection Account not later than 11:00 a.m. (New York City time) on
the related Determination Date. With respect to any Receivable
described in the preceding sentence, neither the Transferor nor BVAC
shall otherwise be required to remit the Purchase Amount in the manner
specified in Section 7.02 or Section 8.10 with respect to any such
Receivable so repurchased or otherwise removed from the Exception List
or Updated Exception List.
(vi) Notwithstanding the foregoing, in the event that the
conditions for release of funds set forth in Section 8.08(b)(v) have
not been satisfied with respect to any Receivable on or before the date
which is 180 days following the Closing Date as determined by the
Indenture Trustee by the third Business Day following such 180th day
(the "Final Reserve Date") or, if such date is not a Business Day, on
the next succeeding Business Day, BVAC shall repurchase such Receivable
in the manner specified in Section 8.08(b)(v) at the Purchase Amount
related to such Receivable utilizing funds in the Reserve Account by
withdrawing the aggregate Purchase Amount then due and
TRUST AND SERVICING AGREEMENT
40
depositing such amount in the Collection Account. BVAC shall promptly
remit any deficiency in the aggregate Purchase Amount in the manner
specified in Section 8.10. Any amounts remaining in the Reserve Account
after the payment of the aggregate Purchase Amount for such Receivables
pursuant to this Section 8.08(b)(vi) shall be distributed to BVAC (by
wire transfer in immediate available funds).
(vii) Notwithstanding any other provision in the Purchase
Agreement or Trust Agreement, until the Final Reserve Date, the
provisions of this Section 8.08(b) shall be the sole remedy with
respect to Receivables set forth on Exhibit E to this Agreement and
neither the Transferor nor BVAC shall otherwise be required to remit
the Purchase Amount in the manner specified in Section 7.02 or Section
8.10 with respect to such Receivables, solely due to any such
Receivable having a deficiency in its Receivable File.
(c) Upon the occurrence of an Insurance Agreement Event of
Default, the Servicer, at the written direction of the Insurer (if no
Insurer Default shall have occurred and be continuing and the Insurance
Agreement has not terminated), shall take or cause to be taken such
reasonable action as may, in the opinion of counsel to the Insurer
(which opinion shall not be an expense of the Insurer), be necessary or
desirable to perfect or re-perfect the security interests in the
Financed Vehicles securing the Receivables in the name of the Indenture
Trustee on behalf of the Issuer, the Noteholders and the Insurer by
amending the title documents of such Financed Vehicles or by such other
reasonable means as may, in the opinion of counsel to the Insurer,
which opinion shall not be an expense of the Insurer, be necessary or
prudent and shall deliver to the Indenture Trustee any Receivable File
or portion thereof that has been released by the Indenture Trustee to
the Servicer and is then in the possession of the Servicer, including
any original certificates of title. The Servicer (so long as the
Servicer is BVAC) shall, and if the Servicer has been removed, BVAC
shall pay all costs and expenses related to such perfection or
re-perfection (the "Reliening Expenses"). In addition, prior to the
occurrence of an Insurance Agreement Event of Default, the Insurer may
(so long as it is the Controlling Party) instruct the Indenture Trustee
and the Servicer to take or cause to be taken such action as may, in
the opinion of counsel to the Insurer, be necessary to perfect or
reperfect the security interest in the Financed Vehicles securing the
Receivables in the name of the Indenture Trustee on behalf of the
Issuer, including by amending the title documents of such Financed
Vehicles to reflect the security interest of the Indenture Trustee in
the related Financed Vehicle or by such other reasonable means as may,
in the opinion of counsel to the Insurer, be necessary or prudent;
provided, however, that if the Insurer requests (so long as it is the
Controlling Party) that the title documents be amended prior to the
occurrence of an Insurance Agreement Event of Default, the
out-of-pocket expenses of the Servicer or the Indenture Trustee in
connection with such action shall be reimbursed to the Servicer or the
Indenture Trustee, as applicable, by the Insurer.
(d) Notwithstanding anything to the contrary set forth in this
Agreement or any of the other Basic Documents, if as a result of the
dissolution of the Bank, the Indenture Trustee does not have a first
priority perfected security interest in any Financed Vehicle securing a
Receivable in which the related title documents list the Bank (or any
variation of the Bank's name) as lienholder, BVAC shall promptly notify
the Indenture
TRUST AND SERVICING AGREEMENT
41
Trustee and the Insurer and shall be required, at the direction of the
Insurer (or if the Insurer is no longer the Controlling Party, the
Indenture Trustee), to take all actions (at BVAC's expense) necessary
or desirable to perfect or re-perfect the security interest in any such
Financed Vehicle in the name of the Indenture Trustee on behalf of the
Issuer, the Noteholders and the Insurer, including, without limitation,
amending the title documents of such Financed Vehicle; provided, that
with respect to any certificate of title of a Financed Vehicle that is
titled in the name of the Bank (or any variation of the Bank's name) in
North Carolina, BVAC shall cause such certificate of title to be marked
to reflect the security interest of the Indenture Trustee in such
Financed Vehicle, at the expense of BVAC, on or prior to February 14,
2006.
The Servicer hereby makes, constitutes and appoints the Indenture
Trustee acting through its duly appointed officers or any of them, its true and
lawful attorney, for it and in its name and on its behalf, for the sole and
exclusive purpose of authorizing said attorney to execute and deliver 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 show
the Indenture Trustee as lienholder or secured party on the certificate of title
relating to a Financed Vehicle. BVAC, as initial Servicer, shall cause the Bank
to deliver a power of attorney to the Indenture Trustee in accordance with the
foregoing with respect to the Bank.
SECTION 8.09 Covenants of Servicer. The Servicer hereby makes the
following covenants to the other parties hereto and the Insurer on which the
Indenture Trustee shall rely in accepting the Receivables in trust and on which
the Insurer shall rely in issuing the Policy, except for a release to an insurer
in exchange for insurance proceeds paid by such insurer resulting from a claim
for the total insured value of a vehicle, the Servicer shall not (i) release the
Financed Vehicle securing each such Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by or on behalf of the Obligor thereunder or repossession, (ii) impair the
rights of the Noteholders or the Insurer in the Receivables, (iii) change the
Annual Percentage Rate with respect to any Receivable, except as may be required
by applicable law and (iv) otherwise modify any contract except as permitted by
this Agreement. In addition, the Servicer shall service the Receivables as
required by the terms of this Agreement and in material compliance with its
current servicing procedures for servicing all of its comparable motor vehicle
contracts. No successor Servicer shall incur any liability for the
representations, warranties or covenants of any predecessor Servicer hereunder.
SECTION 8.10 Purchase of Receivables Upon Breach. The Servicer, the
Transferor, the Indenture Trustee or the Owner Trustee shall inform the other
party and the Indenture Trustee and the Insurer promptly, in writing, upon the
discovery of (i) any breach by the Servicer of its obligations under Sections
8.01, 8.05, 8.06, 8.07, 8.08 or 8.09 or (ii) the existence of the Servicer's
obligation to purchase a Receivable pursuant to Section 8.05(a); provided,
however, that the failure to give such notice shall not affect any obligation of
the Servicer hereunder. Unless such breach shall have been cured by the last day
of the first full Collection Period following the discovery or notice of such
breach, the Servicer shall on such day purchase any Receivable materially and
adversely affected by such breach or which materially and adversely affects the
interests of the Insurer or the Noteholders (which shall include any Receivable
as to which a breach of Section 8.06 has occurred); provided, that with respect
to any breach of Section 8.07(b), the Servicer may at its option, instead of
repurchasing
TRUST AND SERVICING AGREEMENT
42
the related Receivable, deposit in the Collection Account the amount of the loss
resulting from the lapse or lack of insurance. In consideration of the purchase
of such Receivable, the Servicer shall remit the Purchase Amount with respect to
such Receivable in the manner specified in Section 9.04. Notwithstanding the
foregoing, if SST shall have become the Servicer, it will not be so obligated to
purchase such nonconforming Receivables. SST's only obligation to the Trust
shall be to make the indemnity in Section 13.02 hereof. The Indenture Trustee
and Owner Trustee shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section. The sole remedy of the Owner Trustee, the Trust, or
the Secured Parties with respect to the aforementioned breaches shall be to
require the Servicer to purchase Receivables pursuant to this Section 8.10;
provided, however, that the Servicer shall indemnify the Insurer, the Issuer and
the Noteholders and each of their respective officers, employees, directors,
agents and representatives against all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third-party claims
arising out of the events or facts giving rise to such breach. No predecessor
nor successor Servicer shall be responsible for the acts or omissions of any
other Servicer. Upon receipt of the Purchase Amount and any related indemnity
payments, the Indenture Trustee shall release to the Servicer or its designee
the related Receivable File and shall execute and deliver all instruments of
transferor assignment, without recourse, as are prepared by the Servicer and
delivered to the Indenture Trustee and are necessary to vest in the Servicer or
such designee the Issuer's right, title and interest in the Receivable.
Notwithstanding the foregoing, BVAC shall not be required to remit the Purchase
Amount in the manner specified in this Section 8.10 with respect to any
Receivable repurchased or subject to repurchase by BVAC pursuant to Section 8.08
for the reasons specified in Section 8.08.
SECTION 8.11 Servicing Fee
(a) The Servicer shall be entitled to a Servicing Fee as
defined herein. The Servicer shall also be entitled to retain, and need
not deposit in the Collection Account, all late fees, prepayment
charges and other administrative fees and expenses or similar charges
allowed by applicable law with respect to the Receivables, collected
(from whatever source) on the Receivables during such Collection Period
(the Supplemental Servicing Fee").
(b) So long as it has not become the Servicer, the Back-up
Servicer shall be entitled to the Back-up Servicing Fee. If it becomes
the Servicer, the Back-up Servicer will be entitled to the Servicing
Fee.
(c) So long as it has not become the Servicer, the Standby
Servicer will be entitled to the Standby Servicer Fee. If it becomes
the Servicer, the Standby Servicer will be entitled to the fee set
forth in Schedule C in its capacity as successor Servicer.
(d) Neither the Indenture Trustee, Back-up Servicer or Standby
Servicer shall be liable for any differential between the Servicing Fee
and the amount necessary to induce a successor Servicer to accept its
appointment as such pursuant to this Agreement.
TRUST AND SERVICING AGREEMENT
43
(e) Each of the Servicer, the Back-up Servicer and the Standby
Servicer acknowledge and agree that any fees, expenses, costs,
indemnities and other amounts, including without limitation, Transition
Costs, payable to the Servicer, the Back-up Servicer and the Standby
Servicer shall not be payable from amounts owed or paid under the
Policy.
SECTION 8.12 Servicer's Certificate. On or before the Determination
Date following each Collection Period, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee, the Standby Servicer, the Back-up Servicer, the
Collateral Agent and the Insurer (until the Insurance Agreement is terminated) a
Servicer's Certificate in substantially the form of Exhibit 3 attached hereto
containing all information necessary to make the distributions pursuant to
Section 8.05 of the Indenture (so long as the Notes remain outstanding) for the
Collection Period preceding the date of such Servicer's Certificate and all
information necessary for the Indenture Trustee to send statements to the
Noteholders and the Owner Trustee to send statements to the Certificateholder,
including (A) the amount of aggregate collections on the Receivables, (B) the
aggregate Purchase Amount of the Receivables repurchased by BVAC and purchased
by the Servicer, (C) with respect to Precomputed Receivables the net deposit
from the Collection Account to the Payahead Account or the net withdrawal from
the Payahead Account to the Collection Account required for the Collection
Period in accordance with Section 9.10, and in the case of a net withdrawal, the
Monthly Interest and Monthly Principal reported on such Servicer's Certificate
shall reflect the portions of such withdrawal allocable to interest and
principal, respectively, in accordance with this Agreement, (D) the amount, if
any, to be withdrawn from the Spread Account and the amount, if any, to be drawn
on the Policy, (E) information respecting (i) delinquent Receivables that are
30, 60 and 90 days past due, (ii) the number of repossessions of Financed
Vehicles during the preceding Collection Period, number of unliquidated
repossessed Financed Vehicles, gross and net losses on the Receivables, and
Recoveries; and Recoveries on Charged-Off Receivables, and (iii) adjusted,
modified or extended Receivables as necessary or requested by the Indenture
Trustee or the Insurer to confirm compliance with Section 8.05(a); (F) (for so
long as BVAC is the Servicer) calculations of the financial covenants required
to be maintained pursuant to Section 5.1 of the Insurance Agreement and whether
BVAC is in compliance therewith; and (G) each other item listed in Section 8.05
of the Indenture reasonably requested by a Rating Agency, the Indenture Trustee
or the Insurer (so long as the Insurer is the Controlling Party) in order to
monitor the performance of the Receivables. Receivables purchased by BVAC as of
the last day of such Collection Period shall be identified by the BVAC account
number with respect to such Receivable (as specified in Schedule A to this
Agreement). In addition to the information set forth in the preceding sentence,
the Servicer's Certificate shall also contain the following information: (a) the
Average Delinquency Ratio, Cumulative Default Rate, Cumulative Net Loss Rate and
Lock-Box Collection Percentage (as such terms are defined in the Spread Account
Agreement) for such Determination Date; (b) whether any Trigger Event has
occurred as of such Determination Date; (c) whether any Trigger Event that may
have occurred as of a prior Determination Date is Deemed Cured as of such
Determination Date; and (d) whether to the knowledge of the Servicer an
Insurance Agreement Event of Default has occurred.
TRUST AND SERVICING AGREEMENT
44
SECTION 8.13 Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Indenture Trustee
(without duplication), the Owner Trustee, the Standby Servicer, the
Back-up Servicer, the Rating Agencies, the Insurer and the Noteholders,
on or before March 15 of each year, beginning on March 15, 2004, an
Officers' Certificate, dated as of December 31 of the preceding year,
stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or in the case of the initial Officer's
Certificate, the period from the Closing Date to and including the date
of such Officer's Certificate) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to such officer and the nature and status thereof.
(b) The Servicer shall deliver to, without duplication, the
Owner Trustee, the Indenture Trustee, the Back-up Servicer, the Standby
Servicer, the Rating Agencies and the Insurer, promptly after having
obtained actual knowledge thereof, but in no event later than 2
Business Days thereafter, written notice in an Officer's Certificate of
any event which with the giving of notice or lapse of time, or both,
would become an Event of Servicer Default (if BVAC is the Servicer)
under Section 14.01 or Standby Servicer Default (if the Standby
Servicer is the Servicer) under Section 14.02. The Transferor shall
deliver to the Owner Trustee, the Indenture Trustee, the Standby
Servicer, the Back-up Servicer, the Rating Agencies, and the Insurer,
promptly after having obtained knowledge thereof, but in no event later
than 2 Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or lapse of
time, or both, would become an Event of Servicer Default under clause
(ii) of Section 14.01. The Indenture Trustee shall forward a copy of
each Officer's Certificate so received to each Noteholder.
SECTION 8.14 Annual Independent Certified Public Accountant's Report.
(a) The Servicer will deliver to, without duplication, the
Indenture Trustee, the Owner Trustee, the Insurer, the Standby
Servicer, the Back-up Servicer and the Rating Agencies, on or before
March 15 of each year beginning March 15, 2004, a report prepared by
Independent Accountants, who may also render other services to the
Servicer or any of its Affiliates or to the Transferor addressed to the
Board of Directors of the Servicer or any of its Affiliates, the
Indenture Trustee and the Insurer and dated during the current year, to
the effect that such firm has audited the financial statements of the
Servicer and issued its report therefor and that such audit (a) was
made in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and such
other auditing procedures as such firm considered necessary in the
circumstances; (b) included tests relating to automotive loans serviced
for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program"), to the extent
the procedures in the Program are applicable to the servicing
obligations set forth in this Agreement; (c) included an examination of
the delinquency and loss statistics relating to the Servicer's
portfolio of
TRUST AND SERVICING AGREEMENT
45
automobile, sport utility vehicle, light duty truck and van sale
contracts and loan and security agreements; and (d) except as described
in the report, disclosed no exceptions or errors in the records
relating to automobile, sport utility vehicle, light duty truck and van
loans serviced for others that, in the firm's opinion, the Program
requires such firm to report. The accountant's report shall further
state that (1) a review in accordance with agreed upon procedures was
made of three randomly selected Servicer's Certificates; (2) except as
disclosed in the report, no exceptions or errors in the Servicer's
Certificates were found; and (3) the delinquency and loss information
relating to the Receivables contained in the Servicer's Certificates
were found to be accurate.
(b) Such report shall also indicate that the firm is
independent of the Servicer and its Affiliates within the meaning of
the Code of Professional Ethics of the American Institute of Certified
Public Accountants.
(c) In the event such firm requires the Indenture Trustee to
agree to the procedures performed by such firm, the Servicer shall
direct each such Person in writing to so agree, it being understood and
agreed that each such Person will deliver such letter of agreement in
conclusive reliance upon the direction of the of the Servicer, and
neither such Person shall make any independent inquiry or investigation
as to, and shall have no obligation or liability in respect of, the
sufficiency, validity or correctness of such procedures. Delivery of
such reports, information and documents to the Indenture Trustee is for
informational purposes only, and the Indenture Trustee's receipt of
such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Servicer's compliance with any of its covenants
hereunder.
(d) Notwithstanding this Section 8.14, if the Standby Servicer
is then acting as the successor Servicer, it shall only be required to
provide a copy of its annual SAS 70 report and its audited financial
statements.
SECTION 8.15 Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Owner Trustee, the Indenture
Trustee, the Back-up Servicer, the Standby Servicer, and the Insurer access to
the Receivables Files in such cases where such parties shall be required by
applicable statutes or regulations to review such documentation. Access shall be
afforded without charge, but only upon reasonable request and during the normal
business hours at the respective offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 8.15.
SECTION 8.16 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 Noteholders, the Indenture Trustee and the Insurer; provided, however, that
any successor Servicer shall be entitled to be reimbursed for any Transition
Costs, and with respect to SST, such costs as set forth on Schedule C attached
hereto.
TRUST AND SERVICING AGREEMENT
46
SECTION 8.17 Reports to Noteholders. The Indenture Trustee shall
provide to any Noteholder who so requests in writing (addressed to the Corporate
Trust Office of the Indenture Trustee) a copy of any certificate described in
Section 8.12, the annual statement described in Section 8.13, or the annual
report described in Section 8.14. The Indenture Trustee may require the
requesting party to pay a reasonable sum to cover the cost of the Indenture
Trustee's complying with such request.
SECTION 8.18 Fidelity Bond. Each of the Servicer, the Stand by Servicer
and any successor Servicer (other than Deutsche Bank Trust Company Americas)
hereby represent and covenant that it has obtained, and shall continue to
maintain in full force and effect, a fidelity bond and errors and omissions
policy covering it of a type and in such amount as is customary for prudent
servicers engaged in the business of servicing motor vehicle retail installment
sales contracts similar to the Receivables.
SECTION 8.19 Delegation of Duties. The Servicer may at any time
delegate duties under this Agreement to sub-contractors who are in the business
of servicing motor vehicle contracts with the prior written consent of the
Controlling Party; provided, however, that no such delegation or sub-contracting
of duties by the Servicer shall relieve the Servicer of its responsibility with
respect to such duties. In the event the Servicer shall for any reason no longer
be the servicer of the Receivables (including by reason of an Event of Servicer
Default), the successor Servicer shall assume all of the rights and obligations
of the predecessor Servicer under one or more subservicing agreements that may
have been entered into by the predecessor Servicer by giving notice of such
assumption to the related Servicer or Servicers within ten (10) Business Days of
the termination of such Servicer as servicer of the Receivables; provided,
however, that a successor Servicer may elect to terminate a subservicing
agreement with the prior written consent of the Insurer, so long as no Insurer
Default is then continuing and the Insurance Agreement has not terminated. If
the successor Servicer does not elect to assume any subservicing agreement, any
and all costs of termination shall be at the predecessor Servicer's expense.
Upon the giving of such notice, the successor Servicer shall be deemed to have
assumed all of the predecessor Servicer's interest therein and to have replaced
the predecessor Servicer as a party to the subservicing agreement to the same
extent as if the subservicing agreement had been assigned to the assuming party
except that the predecessor Servicer and the Servicer, if any, shall not thereby
be relieved of any liability or obligations accrued up to the date of the
replacement of the Servicer under the subservicing agreement and the Servicer,
if any, shall not be relieved of any liability or obligation to the predecessor
Servicer that survives the assignment or termination of the subservicing
agreement. The successor Servicer shall notify each Rating Agency and, the
Insurer (so long as the Insurer is the Controlling Party) if any subservicing
agreement is assumed by such successor Servicer. The predecessor Servicer shall,
upon request of the Indenture Trustee or any successor Servicer, but at the
expense of the predecessor Servicer, deliver to the assuming party all documents
and records relating to the subservicing agreement and the Receivables then
being serviced and an accounting of amounts collected and held by it and
otherwise use its reasonable best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
TRUST AND SERVICING AGREEMENT
47
ARTICLE IX
COLLECTIONS; DISTRIBUTIONS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 9.01 Lock-Box Account.
(a) On or prior to the Closing Date, BVAC, as initial
Servicer, shall establish the Lock-Box Account as an Eligible Account
with the Lock-Box Bank, all in accordance with the terms of the
Lock-Box Agreement; provided that the Servicer, with the prior written
consent of the Insurer (so long as it is the Controlling Party), may
from time to time (a) establish additional or substitute Lock-Box
Accounts, each of which shall be an Eligible Account, and (b) close or
terminate the use of such account or any subsequently established
accounts, each of which accounts, at such time, shall no longer be
deemed to be a Lock-Box Account; provided, further, that pursuant to
the Lock-Box Agreement, the Lock-Box Processor and no other person,
other than the Indenture Trustee or the Servicer, shall have authority
to direct disposition of funds related to the Receivables on deposit in
the Lock-Box Account consistent with the provisions of this Agreement
and the Lock-Box Agreement. The Indenture Trustee shall have no
liability or responsibility with respect to the Lock-Box Processors or
the Servicer's directions or activities as set forth in the preceding
sentence. The Lock-Box Account shall be established pursuant to and
maintained in accordance with the Lock-Box Agreement and shall at all
times be an Eligible Account. In conjunction with the establishment of
the Lock-Box Account, BVAC, as initial Servicer, shall establish and
maintain the Lock-Box at a United States Post Office Branch.
Notwithstanding the Lock-Box Agreement or any of the provisions of this
Agreement relating to the Lock-Box and the Lock-Box Agreement, the
Servicer shall remain obligated and liable to the Indenture Trustee and
the Noteholders for servicing and administering the Receivables and the
other Trust Property in accordance with provisions of this Agreement
without diminution of such obligation or liability by virtue thereof.
(b) In the event the Servicer shall for any reason no longer
be acting as such, the Lock-Box Agreement shall terminate in accordance
with its terms and funds on deposit in the Lock-Box Account shall be
distributed by the Lock-Box Bank, as agent for the beneficial owners of
funds in the Lock-Box Account at such time (including the Issuer), and
the Lock-Box Bank shall deposit any such funds relating to the
Receivables to such other account as shall be identified by the
successor Servicer for deposit therein; provided, however, that the
outgoing Servicer shall not thereby be relieved of any liability or
obligations on the part of the outgoing Servicer to the Lock-Box Bank
under such Lock-Box Agreement. The outgoing Servicer shall, upon
request of the Indenture Trustee, but at the expense of the outgoing
Servicer, deliver to the successor Servicer all documents and records
relating to the Lock-Box Agreement and an accounting of amounts
collected and held in the Lock-Box Account or held by the Lock-Box
Processor in respect of the Receivables and otherwise use its best
efforts to effect the orderly and efficient transfer of any Lock-Box
Agreement to the successor Servicer. In the event that the Lock-Box
Account fails at any time to qualify as an Eligible Account, the
Servicer, at its expense, shall cause the Lock-Box Bank to deliver, at
the direction of the Controlling Party to the Indenture Trustee or a
successor Lock-Box Bank, all documents and records
TRUST AND SERVICING AGREEMENT
48
relating to the Receivables and all amounts held (or thereafter
received) on deposit in the Lock-Box Account or held by the Lock-Box
Processor in respect of the Receivables (together with an accounting of
such amounts) and shall otherwise use its best efforts to effect the
orderly and efficient transfer of the Lock-Box arrangements, and the
Servicer shall promptly notify the Obligors to make payments to any new
Lock-Box.
(c) Upon establishment of the Lock-Box Account in accordance
with Section 9.01(a) hereof, the Servicer shall use reasonable efforts
to cause the Lock-Box Processor to transfer any payments in respect of
the Receivables from or on behalf of Obligors received in the Lock-Box
to the Lock-Box Account on the Business Day on which such payments are
received, pursuant to the Lock-Box Agreement. Within two Business Days
of receipt of such funds into the Lock-Box Account, the Servicer shall
cause the Lock-Box Bank to transfer available funds related to the
Receivables from the Lock-Box Account to the Collection Account, and if
such funds are not available funds, as soon thereafter as they clear
(i.e., become available for withdrawal from the Lock-Box Account). In
addition, the Servicer shall remit all payments by or on behalf of the
Obligors received by the Servicer with respect to the Receivables
(other than Purchased Receivables), and all Liquidation Proceeds,
insurance proceeds and other collections from whatever source, no later
than the second Business Day following receipt into the Lock-Box
Account or the Collection Account, as applicable.
(d) Until such time as the Lock-Box Collection Percentage with
respect to any Determination Date equals or exceeds 85%, the Servicer
(i) shall on or prior to the Closing Date, obtain and maintain an
employee dishonesty bond in the amount of $3,000,000 covering each
employee of the Servicer responsible for opening, processing and
depositing Scheduled Receivable Payments received directly by the
Servicer, and (ii) shall cause Deloitte & Touche LLP or another firm of
accountants acceptable to the Insurer, in its sole and absolute
discretion, to prepare a weekly reconciliation of Scheduled Receivable
Payments which have been received by the Servicer during the prior
calendar week and confirming that such payments have been deposited to
the Look-Box Account or the Collection Account (the "Reconciliation
Report"), which Reconciliation Report shall be delivered to the Insurer
(so long as the Insurance Agreement has not terminated) and the
Indenture Trustee on Tuesday of each week (or if such day is not a
Business Day, the next succeeding Business Day), with respect to
collections received during the immediately preceding calendar week. In
addition, following satisfaction of such Lock-Box Collection
Percentage, upon the request of the Insurer (so long as it is the
Controlling Party), the Servicer shall provide the Insurer and the
Indenture Trustee with the Reconciliation Report on a monthly or less
frequent basis, as so requested. The provisions of this Section 9.01(d)
shall not apply to the Back-up Servicer or the Standby Servicer.
SECTION 9.02 Collection Account.
(a) BVAC, as initial Servicer, shall establish the Collection
Account as a segregated non-interest bearing trust account in the name
of the Trust for the benefit of the Secured Parties with the Indenture
Trustee (at the Indenture Trustee Office) or another Eligible Bank. The
Servicer shall direct the Indenture Trustee to invest the
TRUST AND SERVICING AGREEMENT
49
amounts in the Collection Account in Eligible Investments that mature
not later than the Business Day prior to the next succeeding Payment
Date and to hold such Eligible Investments to maturity (provided that,
if the Standby Servicer or the Back-up Servicer is then acting as
Servicer, such direction shall be made by the Transferor). The
Indenture Trustee (or its custodian) shall at all times (i) maintain
possession of any negotiable instruments or securities evidencing
Eligible Investments until the time of sale or maturity and each
certificated security or negotiable instrument evidencing an Eligible
Investment shall be endorsed in blank or to the Indenture Trustee (or
its custodian) or registered in the name of the Indenture Trustee and
(ii) cause any Eligible Investment represented by an uncertificated
security to be registered in the name of the Indenture Trustee (or its
custodian).
(b) Funds on deposit in the Collection Account and the
Payahead Account shall each be invested by the Indenture Trustee (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 or otherwise) (provided that, if the Standby
Servicer or the Back-up Servicer is then acting as Servicer, such
selection shall be made by the Transferor), bearing interest or sold at
a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the next Payment Date if a
Person other than the Indenture Trustee is the Obligor thereon, and
(ii) no later than the next Payment Date, if the Indenture Trustee is
the Obligor thereon; provided, however, it is understood and agreed
that the Indenture Trustee shall not be liable for any loss arising
from such investment in Eligible Investments unless the Eligible
Investment was a direct obligation of the Indenture Trustee or unless
such loss was caused by the Indenture Trustee's negligence or willful
misconduct (it being understood and acknowledged that no loss on any
such Eligible Investment which was made in conformity with this
Agreement and the instructions of the Servicer, or Transferor, shall be
considered "caused by the Indenture Trustee's negligence or willful
misconduct"). No investment may be sold prior to its maturity. All such
Eligible Investments shall be held by or on behalf of the Indenture
Trustee for the benefit of the Indenture Trustee on behalf of the
Noteholders, the Insurer and Certificateholders as their interests may
appear. Funds deposited in the Collection Account or the Payahead
Account on the day immediately preceding a Payment Date upon the
maturity of any Eligible Investments are not required to be invested
overnight. On each Payment Date, all interest income (net of investment
losses and expenses) on funds on deposit in the Collection Account and
the Payahead Account, as of the end of the Collection Period shall be
included in Available Funds. For purposes of this paragraph, the
Indenture Trustee will take delivery of the Eligible Investments in
accordance with Schedule D.
(c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Collection Account or the
Payahead Account to the Indenture Trustee by 2:00 p.m. Eastern Time (or
such other time as may be agreed by the Issuer and Indenture Trustee)
on any Business Day; or (ii) an Event of Default shall have occurred
and be continuing with respect to the Notes but the Notes shall not
have been declared due and payable, or, if such Notes shall have been
declared due and payable following an Event of Default under the
Indenture, amounts collected or receivable from the Trust Property are
being applied as if there had not been such a declaration; then the
TRUST AND SERVICING AGREEMENT
50
Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Collection Account and the Payahead Account in
one or more investments within the categories of Eligible Investments
as specified in an investment instruction letter delivered by the
Servicer (provided that, if the Standby Servicer or the Back-up
Servicer is then acting as Servicer, such direction shall be made by
the Transferor).
(d) (1) The Trust shall possess all right, title and interest
in all funds from time to time on deposit in, and assets credited to,
the Trust Accounts and in all proceeds thereof and all such funds,
assets, investments, proceeds and income shall be part of the Trust
Property. Except as otherwise provided herein, the Trust Accounts shall
be under the sole dominion and control of the Indenture Trustee for the
benefit of the Noteholders, to the extent expressly set forth herein or
in the other Basic Documents, the Insurer and the Certificateholders as
their interests may appear.
(2) With respect to any Eligible Investments held from
time to time in any Trust Account, the Indenture Trustee agrees that:
(A) any Eligible Investment that is held in deposit
accounts shall be, except as otherwise provided herein,
subject to the exclusive custody and control of the Indenture
Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto; and
(B) any other Eligible Investment shall be held,
pending maturity or disposition by the Indenture Trustee in
accordance with the terms of the definition of "Delivery."
(e) No Trust Account shall be maintained with an institution
other than the Indenture Trustee unless such institution agrees in
writing to the provisions of Section 9.02(d)(2) and Section 9.12 hereof
as if such institution were the Indenture Trustee, except that pursuant
to the first sentence of Section 8.11 of the Indenture, the Indenture
Trustee shall continue to be the "entitlement holder" of the related
Trust Account.
In no event shall the Indenture Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Indenture Trustee
shall have no liability in respect of losses incurred as a result of the
liquidation of any investment prior to its stated maturity or the failure of the
Servicer to provide timely written investment direction. Subject to the
provisions of 9.01 and the Indenture Trustee's standard of care set forth in
Section 6.01 of the Indenture, in no event shall the Indenture Trustee be liable
for special, indirect, or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Indenture Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action.
SECTION 9.03 Collections.
(a) Upon establishment of the Lock-Box Account in accordance
with Section 9.01(a), the Servicer shall use reasonable efforts to
cause the Lock-Box Processor to transfer any payments in respect of the
Receivables from or on behalf of Obligors received in the Lock-Box to
the Lock-Box Account on the Business Day on which such
TRUST AND SERVICING AGREEMENT
51
payments are received, pursuant to the Lock-Box Agreement. Within two
Business Days of receipt of such funds into the Lock-Box Account, the
Servicer shall cause the Lock-Box Bank to transfer available funds
related to the Receivables from the Lock-Box Account to the Collection
Account, and if such funds are not available funds, as soon thereafter
as they clear (i.e., become available for withdrawal from the Lock-Box
Account). In addition, the Servicer shall remit all payments by or on
behalf of the Obligors received by the Servicer with respect to the
Receivables (other than Purchased Receivables), and all Liquidation
Proceeds, insurance proceeds and other collections from whatever
source, no later than the second Business Day following receipt into
the Lock-Box Account or the Collection Account, as applicable. On the
Closing Date, the Servicer shall deposit in the Collection Account the
foregoing amounts received with respect to the Receivables during the
first Collection Period.
(b) The Indenture Trustee shall deposit in the Collection
Account any funds received from the Collateral Agent, from the Spread
Account or in respect of funds drawn under the Policy from the Insurer,
provided that such funds may only be applied to cover Deficiency Claim
Amounts and Scheduled Payments (as defined in the Policy) on the
related Payment Date.
(c) At any time, SST as successor Servicer may direct the
Indenture Trustee to withdraw from the Collection Account and pay to
SST amounts necessary to reimburse it for any unreimbursed
out-of-pocket expenses incurred in connection with a liquidation of
Receivables (provided that SST shall be entitled to recoup such
expenses only upon liquidation of the related Receivable); such
payments to be made prior to any distributions under Section 8.05 of
the Indenture; provided that no amounts may be withdrawn from the
Collection Account pursuant to this Section 9.03(c) to the extent such
withdrawal, when added to all previous withdrawals pursuant to this
Section 9.03(c), would exceed the aggregate amount of Liquidation
Proceeds related to all Receivables that have been deposited into the
Collection Account.
SECTION 9.04 Additional Deposits
(a) (i) Not later than the Determination Date, the Servicer or
BVAC shall remit to the Collection Account the aggregate Purchase
Amount for such Collection Period pursuant to Sections 7.02, 8.08 and
8.10; and (ii) not later than 11:00 a.m. (New York City time) on the
related Payment Date, the Servicer shall remit to the Collection
Account the Redemption Price for Receivables on such Payment Date
pursuant to Section 16.02.
(b) Following the acceleration of the Notes pursuant to
Section 5.02 of the Indenture, any proceeds of the Trust Property shall
be deposited in the Collection Account to be distributed by the
Indenture Trustee in accordance with Section 8.05(g) of the Indenture.
(c) On or before each Payment Date, the Indenture Trustee
shall transfer to the Collection Account any amounts transferred to the
Indenture Trustee by the Collateral Agent from the Spread Account in
accordance with the Spread Account Agreement.
TRUST AND SERVICING AGREEMENT
52
(d) On or before the Redemption Date, the Indenture Trustee
shall deposit in the Collection Account the Redemption Price paid by or
on behalf of the Issuer pursuant to Article XI of the Indenture.
SECTION 9.05 Application of Funds.
(a) On each Determination Date, the Servicer shall determine
the amount of Available Funds and the amount of funds necessary to make
the distributions required pursuant to Section 8.05(a) of the Indenture
on the next Payment Date. The Servicer shall by a Servicer's
Certificate on or before the Determination Date notify the Owner
Trustee, the Indenture Trustee and the Insurer of such amounts by
telecopy to the Corporate Trust Office, the Indenture Trustee Office
and the address of the Insurer set forth in Section 17.05 or to such
numbers as the Owner Trustee, Indenture Trustee or the Insurer may from
time to time provide, followed promptly by mailing such notice to the
Owner Trustee, the Indenture Trustee and the Insurer.
(b) For any Payment Date on which there will not be sufficient
Available Funds to make the distributions required pursuant to Section
8.05(a)(i) through (vi) of the Indenture, the Indenture Trustee shall
deliver to the Collateral Agent, the Insurer, the Fiscal Agent (as such
term is defined in the Insurance Agreement) and the Servicer, by hand
delivery or facsimile transmission, a written notice (a "Deficiency
Notice") specifying the Deficiency Claim Amount for such Payment Date.
Any Deficiency Notice shall be delivered on the Determination Date and
in no event later than 10:00 a.m., Eastern time, on the fourth Business
Day preceding such Payment Date. Such Deficiency Notice shall direct
the Collateral Agent to remit such Deficiency Notice shall direct the
Collateral Agent to remit such Deficiency Claim Amount (to the extent
of the funds available to be distributed pursuant to the Spread Account
Agreement) to the Indenture Trustee for deposit of such amount in the
Collection Account. If such deficiency exceeds the Available Spread
Amount, the Indenture Trustee on the Determination Date shall submit a
claim under the Policy to the Insurer pursuant to Section 9.03 of the
Indenture. All amounts paid under the Policy shall be applied by the
Indenture Trustee pursuant to Section 8.05 of the Indenture.
(c) On each Payment Date, the Owner Trustee shall send to the
Certificateholder the Servicer's Certificate provided to the Owner
Trustee by the Servicer for such Payment Date.
SECTION 9.06 Spread Account. The Transferor agrees, simultaneously with
the execution and delivery of this Agreement, to cause the Spread Account
Depositor to execute and deliver the Series 2003-LJ-1 Supplement to Spread
Account Agreement, dated as of August 1, 2003, among Financial Security
Assurance Inc., Bay View 2002-LJ-1 Funding Trust and the Indenture Trustee, and,
pursuant to the terms thereof, to deposit the Spread Account Initial Deposit in
the Spread Account on the Closing Date. Although the Spread Account Depositor,
as Certificateholder, has pledged the Spread Account to the Collateral Agent and
the Insurer pursuant to the Spread Account Agreement, the Spread Account shall
not under any circumstances be deemed to be a part of or otherwise includible in
the Issuer or the Trust Property.
TRUST AND SERVICING AGREEMENT
53
SECTION 9.07 Advances
(a) (i) As of the last day of the initial Collection Period,
the Servicer shall advance funds equal to the excess, if any, of
Monthly Interest due in respect of the initial Collection Period, over
the Collected Interest for such Collection Period; and (ii) as of the
last day of each subsequent Collection Period, the Servicer shall
advance funds in the amount of the Interest Advance Amount (or such
other amount as the Servicer shall reasonably determine to cover an
Interest Shortfall) with respect to each Receivable that is delinquent
for more than 30 days, in each such case, to the extent that the
Servicer, in its sole discretion, determines that the Advance will be
recoverable from payments by or on behalf of the Obligor, the Purchase
Amount, or Liquidation Proceeds. With respect to each Receivable, the
Advance paid pursuant to this Section 9.07 shall increase Outstanding
Advances. Outstanding Advances shall be reduced by subsequent payments
by or on behalf of the Obligor, collections of Liquidation Proceeds, or
payments of the Purchase Amount in accordance with the priorities set
forth in Section 8.05 of the Indenture. The Servicer shall remit any
Advances with respect to a Collection Period to the Collection Account
by the related Determination Date.
(b) If the Servicer shall determine that an Outstanding
Advance with respect to any Receivable shall not be recoverable, the
Servicer shall be reimbursed from any collections made on other
Receivables in the Trust in accordance with the priorities set forth in
Section 8.05 of the Indenture, and Outstanding Advances with respect to
such Receivable shall be reduced accordingly.
(c) No successor Servicer shall be obligated to make Advances
under this Agreement and shall not be liable for Advances incurred by
the Servicer before the commencement of performance by such successor
Servicer.
SECTION 9.08 No Segregation of Moneys; No Interest. Subject to Section
9.05, moneys received by the Owner Trustee hereunder need not be segregated in
any manner except to the extent required by law or this Agreement and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 9.09 Accounting and Reports to the Certificateholder, the
Internal Revenue Service and Others. The Owner Trustee shall deliver to the
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, or as may be requested by such Certificateholder, such information,
reports or statements as may be reasonably necessary to enable the
Certificateholder to prepare its federal and state income tax returns.
Consistent with the Trust's characterization for tax purposes as a disregarded
entity so long as the Transferor or any other Person is the sole beneficial
owner of the Trust, no federal income tax return shall be filed on behalf of the
Trust unless either (i) the Owner Trustee shall receive an Opinion of Counsel
that, based on a change in applicable law occurring after the date hereof, or as
a result of a transfer by a selling Certificateholder permitted by Section
11.04, the Code requires such a filing or (ii) the Internal Revenue Service
shall determine that the Trust is required to file such a return. In the event
that there shall be two or more beneficial owners of the Trust (including the
treatment of any class of Notes as a beneficial ownership in the Trust pursuant
to a final
TRUST AND SERVICING AGREEMENT
54
determination of the Internal Revenue Service or a court), the Owner Trustee
shall inform the Indenture Trustee in writing of such event, (x) the
Administrator, on behalf of the Trust, shall prepare or shall cause to be
prepared federal and, if applicable, state or local partnership tax returns
required to be filed by the Trust (using the calendar year or its fiscal year,
or such other taxable year as may be required by the Code) and shall remit such
returns to the Transferor for signature (or if the Transferor no longer owns the
Certificate, to the Transferor to the extent its tax liability is affected
thereby and otherwise to the successor Certificateholder owning the largest
percentage interest in the Certificates) at least (5) days before such returns
are due to be filed, and (y) capital accounts shall be maintained for each
beneficial owner in accordance with the Treasury Regulations under Section
704(b) of the Code reflecting each such beneficial owner's share of the income,
gains, deductions, and losses of the Trust and/or guaranteed payments made by
the Trust and contributions to, and distributions from, the Trust. The
Transferor (or such successor Certificateholder, as applicable) shall promptly
sign such returns and deliver such returns after signature to the Administrator,
on behalf of the Trust and such returns shall be filed by the Administrator, on
behalf of the Trust, with the appropriate tax authorities. In the event that a
"tax matters partner" (within the meaning of Code Section 6231(a)(7)) is
required to be appointed with respect to the Trust, the Transferor is hereby
designated as tax matters partner or, if the Transferor is not the
Certificateholder, the Transferor to the extent its tax liability is affected
thereby and otherwise the successor Certificateholder owning the largest
percentage interest in the Certificates, shall be designated as tax matters
partner. In no event shall the Owner Trustee, the Administrator or the
Transferor (or such designee Certificateholder, as applicable) be liable for any
liabilities, costs or expenses of the Trust or the Noteholders arising out of
the application of any tax law, including federal, state, foreign or local
income or excise taxes or any other tax imposed on or measured by income (or any
interest, penalty or addition with respect thereto or arising from a failure to
comply therewith) except for any such liability, cost or expense attributable to
any act or omission by the Owner Trustee, the Administrator or the Transferor
(or such designee Certificateholder as applicable), as the case may be, in
breach of its obligations under this Agreement. Unless otherwise instructed by a
majority in interest of the Certificateholders, none of the Owner Trustee, the
Administrator, or the Transferor shall elect, or shall cause an election to be
made on behalf of the Trust, under (i) Section 1278 of the Code to accrue its
market discount income currently or (ii) Section 754 of the Code.
SECTION 9.10 Payahead Account. The Servicer shall establish the
Payahead Account in the name of the Trust on behalf of the Obligors, the
Noteholders and the Insurer as their interests may appear. The Servicer shall
maintain the Payahead Account pursuant to Section 8.07 of the Indenture.
SECTION 9.11 Certain Reimbursements to the Servicer. The Servicer will
be entitled to be reimbursed from amounts on deposit in the Collection Account
with respect to a Collection Period for amounts previously deposited in the
Collection Account but later determined by the Servicer to have resulted from
mistaken deposits or postings or checks returned for insufficient funds;
provided, however, that such reimbursement must be requested by the Servicer
within six months of the related mistaken deposit into the Collection Account,
otherwise such right to reimbursement shall be forfeited. The amount to be
reimbursed hereunder shall be paid to the Servicer on the related Payment Date
pursuant to Section 8.05(a) of the Indenture upon certification by the Servicer
of such amounts and the provision of such
TRUST AND SERVICING AGREEMENT
55
information to the Indenture Trustee and the Insurer as may be reasonably
necessary in the opinion of the Insurer to verify the accuracy of such
certification. In the event that the Insurer has not received evidence
reasonably satisfactory to it of the Servicer's entitlement to reimbursement
pursuant to this Section, the Insurer shall (unless an Insurer Default shall
have occurred and be continuing) give the Indenture Trustee notice to such
effect, following receipt of which the Indenture Trustee shall not make a
distribution to the Servicer in respect of such amount pursuant to Section
8.05(a) of the Indenture, or if the Servicer prior thereto has been reimbursed
pursuant to Section 8.05(a) of the Indenture, the Indenture Trustee shall
withhold such amounts from amounts otherwise distributable to the Servicer
pursuant to Section 8.05(a) of the Indenture on the next succeeding Payment
Date.
SECTION 9.12 Securities Accounts. The Indenture Trustee agrees that any
Trust Account held by it hereunder shall be maintained a "securities account" as
defined in the Uniform Commercial Code as in effect in New York (the "New York
UCC"), and that it shall be acting as a "securities intermediary" for the
Indenture Trustee itself as the "entitlement holder" (as defined in Section
8-102(a)(7) of the New York UCC) with respect to each such Trust Account. The
parties hereto agree that each Trust Account shall be governed by the laws of
the State of New York, and regardless of any provision in any other agreement,
the "securities intermediary's jurisdiction" (within the meaning of Section
8-110 of the New York UCC) shall be the State of New York. The Indenture Trustee
acknowledges and agrees that (a) each item of property (whether investment
property, financial asset, security, instrument or cash) credited to the
Accounts shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the New York UCC and (b) notwithstanding anything to the
contrary, if at any time the Indenture Trustee shall receive any order from the
Indenture Trustee directing transfer or redemption of any financial asset
relating to the Trust Accounts, the Indenture Trustee shall comply with such
entitlement order without further consent by the Transferor or any other person.
In the event of any conflict of any provision of this Section 9.12 with any
other provision of this Agreement or any other agreement or document, the
provisions of this Section 9.12 shall prevail.
ARTICLE X
VOTING RIGHTS AND OTHER ACTIONS
SECTION 10.01 Prior Notice with Respect to Certain Matters. The Owner
Trustee shall not take any of the actions set forth below unless the Owner
Trustee shall have notified the Certificateholder and the Insurer (so long as
the Insurance Agreement has not terminated) of the proposed action and the
Certificateholder, with the prior written consent of the Insurer (so long as it
is the Controlling Party), has approved such action in writing, which approval
has been received by the Owner Trustee by, the 30th day after such notice has
been given:
(i) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Delaware Statutory Trust Statute);
(ii) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder or the
Insurer is required;
TRUST AND SERVICING AGREEMENT
56
(iii) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interest
of the Certificateholders;
(iv) except pursuant to Section 17.01 of this Agreement, the
amendment, change or modification of this Agreement;
(v) except as provided in Article XVI hereof, dissolve,
terminate or liquidate the Trust in whole or in part;
(vi) do any act which would make it impossible to carry on the
ordinary business of the Trust;
(vii) confess a judgment against the Trust;
(viii) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose;
(ix) cause the Trust to lend any funds to any entity;
(x) change the Trust's purpose and powers from those set forth
in this Agreement; or
(xi) cause the Trust to incur, assume or guaranty any
indebtedness except as set forth in this Agreement.
SECTION 10.02 Action with Respect to Certain Matters. The Owner Trustee
shall not have the power, except upon the written direction of the Controlling
Party, or after the Notes have been paid in full and the expiration of the
Policy in accordance with its terms and written notice thereof has been
delivered by the Indenture Trustee to the Owner Trustee, the Certificateholder
(such directing party, the "Instructing Party"), and in accordance with the
Basic Documents, to (a) remove the Standby Servicer, the Servicer, or the
Back-up Servicer hereunder or (b) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Instructing Party and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholder.
Notwithstanding anything to the contrary set forth in this Agreement, any
instruction, direction or consent to be given by the Controlling Party or
Instructing Party under this Agreement or any other Basic Document to the Owner
Trustee shall include a certification by such Controlling Party or Instructing
Party that such Person is the Controlling Party or Instructing Party in
accordance with the provisions of the Basic Documents, and the Owner Trustee
shall have no liability to the extent it relies in good faith thereon.
SECTION 10.03 Restrictions on Certificateholder's Power.
(a) The Certificateholder shall not direct the Owner Trustee
to take or refrain from taking any action if such action or inaction
would be contrary to any obligation of the Trust or the Owner Trustee
under this Agreement or any of the Basic Documents or
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57
would be contrary to Section 1.03 nor shall the Owner Trustee follow
any direction to the extent the Owner Trustee has actual knowledge that
such direction is in violation hereof.
(b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any
suit, action, or proceeding in equity or at law upon or under or with
respect to this Agreement or any Basic Document, unless the
Certificateholder is the Instructing Party pursuant to Section 10.02
and unless the Certificateholder previously shall have given to the
Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless the
Certificateholder shall have made written request upon the Owner
Trustee to institute such action, suit or proceeding in its own name as
Owner Trustee under this Agreement and shall have offered to the Owner
Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the
Owner Trustee, for 30 days after its receipt of such notice, request,
and offer of indemnity, shall have neglected or refused to institute
any such action, suit, or proceeding, and during such 30-day period no
request or waiver inconsistent with such written request has been given
to the Owner Trustee pursuant to and in compliance with this Section or
Section 10.02. For the protection and enforcement of the provisions of
this Section, the Owner Trustee shall be entitled to such relief as can
be given either at law or in equity.
SECTION 10.04 Control. No Certificateholder shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust except as expressly provided in this Agreement.
SECTION 10.05 Rights of Insurer. Notwithstanding anything to the
contrary in the Basic Documents, without the prior written consent of the
Insurer (so long as the Insurer is the Controlling Party), the Owner Trustee
shall not (i) remove the Servicer, the Standby Servicer or the Back-up Servicer,
(ii) initiate any claim, suit or proceeding by the Trust or compromise any
claim, suit or proceeding brought by or against the Trust, other than with
respect to the enforcement of any Receivable or any rights of the Trust
thereunder, (iii) authorize the merger or consolidation of the Trust with or
into any other statutory trust or other entity (other than in accordance with
Section 3.10 of the Indenture) or (iv) amend the Certificate of Trust (except as
may be required by the Delaware Statutory Trust Statute).
SECTION 10.06 Registration of Transfer and Exchange of the Certificate.
Upon the formation of the Trust by the contribution by the Transferor pursuant
to Article III and until the issuance of the Certificate to the initial
Certificateholder, the Transferor shall be the sole beneficiary of the Trust.
ARTICLE XI
The Certificate
SECTION 11.01 Initial Ownership. Upon the formation of the Trust by the
contribution by the Transferor pursuant to Article III and until the issuance of
the Certificate to the initial Certificateholder, the Transferor shall be the
sole beneficiary of the Trust.
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SECTION 11.02 The Certificates. The Certificate shall be issued in the
form of one or more certificates and shall initially be issued to the
Transferor. The Certificate shall be executed on behalf of the Trust by manual
or facsimile signature of a Responsible Officer of the Owner Trustee. A
Certificate bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be valid and binding obligations of the Trust,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Certificate or did
not hold such offices at the date of such Certificate.
SECTION 11.03 Authentication of Certificate. The Owner Trustee shall
cause one Certificate to be executed on behalf of the Trust, authenticated, and
delivered to or upon the written order of the Transferor, signed by its chairman
of the board, its president, or any vice president, without further corporate
action by the Transferor, in authorized denominations, pursuant to this
Agreement. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication, substantially as set forth in the
form of Certificate attached as Exhibit B to this Agreement, executed by a
Responsible Officer of the Indenture Trustee by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. Each Certificate shall be
dated the date of their authentication.
SECTION 11.04 Registration of Transfer and Exchange of Certificate.
(a) Upon formation of the Trust by the contribution by the
Transferor pursuant to Section 1.05, the Transferor shall be issued a
Certificate, duly executed and delivered in exchange therefor,
evidencing ownership of 100% of the beneficial ownership of the assets
of the Trust.
(b) Neither the registered nor the beneficial interest in any
Certificate may be transferred, assigned, hypothecated or pledged
(other than in accordance with the Spread Account Depositor Trust
Agreement) in any manner by any direct or indirect owner thereof
(including any transferee thereof subsequent to the date hereof)
without the prior written notice by such owner to each of the Insurer
and the Owner Trustee. Any purported transfer, assignment,
hypothecation or pledge in any manner of any such registered or
beneficial interest in any Certificate in the Trust in violation of
this Section 11.04(b) shall be null and void and shall not cause any
rights to inure to the benefit of the purported transferee.
(c) (i) The Owner Trustee shall keep or cause to be kept, at
the Corporate Trust Office, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Owner Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates subject to the restrictions provided herein.
(ii) The Certificate Registrar shall provide the Indenture
Trustee and the Insurer with the name and address of the
Certificateholder on the Closing Date, to the extent such information
has been provided to the Certificate Registrar and in the form provided
to the Certificate Registrar on such date. Upon any transfers of the
Certificate,
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the Certificate Registrar shall notify the Indenture Trustee and the
Insurer of the name and address of the transferee in writing, by
facsimile, on the day of such transfer, or promptly thereafter.
(d) Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Owner Trustee shall
execute, authenticate, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee, provided, however, that
registration of transfer of the Certificate may not be effected unless
(A) the Owner Trustee receives an Opinion of Counsel, satisfactory to
it, to the effect that (i) such transfer may be made in reliance upon
an exemption from the registration requirements of the Securities Act
of 1933, as amended, and (ii) such transfer will not adversely affect
the tax treatment of the Trust or the Notes; (B) the Insurer has
consented to such transfer and (C) the Rating Agency Condition shall
have been satisfied with respect to such transfer.
(e) Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee duly
executed by the Holder or his attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer and exchange shall
be canceled and subsequently destroyed by the Owner Trustee.
(f) No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Owner Trustee may
require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange
of a Certificate.
SECTION 11.05 Mutilated, Destroyed, Lost, or Stolen Certificates. If
(a) any mutilated Certificate shall be surrendered to the Owner Trustee, or if
the Owner Trustee shall receive evidence to its satisfaction of the destruction,
loss, or theft of any Certificate and (b) there shall be delivered to the Owner
Trustee such security or indemnity as may be required by it to save it harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate
of like tenor and denomination. In connection with the issuance of any new
Certificate under this Section 11.05, the Owner Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 11.05 shall constitute conclusive evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen, or destroyed
Certificate shall be found at any time.
SECTION 11.06 Persons Deemed Certificateholder. Every Person by virtue
of becoming a Certificateholder in accordance with this Agreement shall be
deemed to be bound by the terms of this Agreement. Prior to due presentation of
a Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar, the Insurer and any agent of the Owner Trustee, the Insurer and the
Certificate Registrar, may treat the Person in whose name any Certificate shall
be registered in the Certificate Register as the owner of such Certificate for
the purpose of receiving
TRUST AND SERVICING AGREEMENT
60
distributions pursuant to this Agreement and the Spread Account Agreement and
for all other purposes whatsoever, and none of the Owner Trustee, the Insurer or
the Certificate Registrar nor any agent of the Owner Trustee, the Insurer or the
Certificate Registrar shall be bound by any notice to the contrary.
SECTION 11.07 Covenants of the Certificateholder. The Certificateholder
by becoming a beneficial owner of a Certificate or by its acceptance of a
Certificate agrees:
(a) to be bound by the terms and conditions of the
Certificates of which such Certificateholder is the beneficial owner
and of this Agreement and the other Basic Documents, including any
supplements or amendments hereto and thereto and to perform the
obligations of a Certificateholder as set forth therein or herein, in
all respects as if it were a signatory hereto. This undertaking is made
for the benefit of the Trust, the Owner Trustee, the Insurer, the
Indenture Trustee, the Collateral Agent, the Transferor, the
Noteholders and any other Certificateholder, present and future;
(b) to the appointment of the Owner Trustee as such
Certificateholder's agent and attorney-in-fact to sign any federal
income tax information return filed on behalf of the Trust and, if
requested by the Trust, to sign such federal income tax information
return in its capacity as holder of an interest in the Trust;
(c) not to take any position in such Certificateholder's tax
returns inconsistent with those taken in any tax returns filed by the
Trust;
(d) if such Certificateholder is other than an individual or
other entity holding its Certificate through a broker who reports
securities sales on Form 1099-B, to notify the Owner Trustee in writing
of any transfer by it of a Certificate in a taxable sale or exchange,
within 30 days of the date of the transfer; and
(e) until one year and one day after the completion of the
events specified in Section 16.0l(a), not, for any reason, to institute
proceedings for the Trust or the Transferor to be adjudicated bankrupt
or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Trust or the Transferor, or file a petition
seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Trust or the Transferor or a
substantial part of its property, or cause or permit the Trust or the
Transferor to make any assignment for the benefit of its creditors or
to admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium on its debt or take any
action in furtherance of any such action.
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61
ARTICLE XII
THE TRANSFEROR
SECTION 12.01 Representations and Undertakings of Transferor.
(a) The Transferor makes the following representations on
which the Trust relies in accepting the Receivables in trust and
executing and authenticating the Certificate and undertaking its
obligations under the Indenture and on which the Insurer will rely in
issuing the Policy. The Transferor agrees that the representations
shall also be for the benefit of the Secured Parties. The
representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to the Trust
and the subsequent pledge of the Receivables to the Indenture Trustee.
(i) Organization and Good Standing. The Transferor 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 corporate power, authority, and
legal right to acquire and own the Receivables and
the other Transferred Property transferred to it
under the Purchase Agreement and to convey the
Receivables and the other Trust Property to the Trust
pursuant to this Agreement, and to perform its other
obligations under this Agreement and any other Basic
Documents to which it is a party. The Transferor is,
and for the preceding one year has been, organized
exclusively under the laws of the State of Delaware.
(ii) Due Qualification. The Transferor is duly qualified
to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business
(including, without limitation, the purchase of the
Receivables from BVAC under the Purchase Agreement,
the conveyance of the Receivables by the Transferor
pursuant to this Agreement, and the performance of
its other obligations under this Agreement and the
other Basic Documents to which it is a party) shall
require such qualifications, licenses and/or
approvals, other than where the failure to obtain
such qualification, license or approval would not
have a material adverse effect on the ability of the
Transferor to perform its obligations under this
Agreement or any other Basic Document to which it is
a party, on any Receivable or on the interest therein
of the Issuer, the Noteholders or the Insurer.
(iii) Power and Authority. The Transferor has the power and
authority to execute and deliver this Agreement and
the other Basic Documents to which it is a party and
to carry out their respective terms and the
execution, delivery and performance of this Agreement
and the other
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62
Basic Documents to which it is a party have been duly
authorized by the Transferor by all necessary
corporate action.
(iv) Binding Obligation. Each of this Agreement and each
other Basic Document to which the Transferor is a
party shall constitute a legal, valid, and binding
obligation of the Transferor enforceable in
accordance with its terms except only as such
enforcement may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of
creditors' rights generally.
(v) No Violation. The execution, delivery and performance
by the Transferor of this Agreement and the other
Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby
and thereby and the fulfillment of the terms hereof
and thereof do not conflict with, result in a breach
of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default
under, the certificate of incorporation or by-laws of
the Transferor, or any indenture, agreement,
mortgage, deed of trust, or other instrument to which
the Transferor is a party or by which it is bound or
to which any of its properties are subject; nor
result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any
indenture, agreement, mortgage, deed of trust, or
other instrument (other than the Basic Documents);
nor violate any law, order, rule or regulation
applicable to the Transferor of any court or of any
federal or state regulatory body, administrative
agency or other governmental instrumentality having
jurisdiction over the Transferor or its properties.
(vi) No Proceedings. There are no proceedings or
investigations pending, or to the Transferor's best
knowledge, threatened, before any court, regulatory
body, administrative agency or other governmental
instrumentality having jurisdiction over the
Transferor or its properties: (A) asserting the
invalidity of this Agreement, the Notes, the
Certificate, or any other Basic Document; (B) seeking
to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated
by this Agreement or any other Basic Document to
which it is a party; (C) seeking any determination or
ruling that might materially and adversely affect the
performance by the Transferor of its obligations
under, or the validity or enforceability of, the
Notes or any other Basic Document to which it is a
party; or (D) relating to the Transferor and which
might adversely affect the federal or state income,
excise, franchise or similar tax attributes of the
Notes.
(vii) No Consents. No consent, approval, authorization or
order of or declaration or filing with any
governmental authority is required to be obtained by
the Transferor for the issuance or sale of the Notes
or the consummation of the other transactions
contemplated by this Agreement or any other Basic
Document to which it is a party, except such as have
TRUST AND SERVICING AGREEMENT
63
been duly made or obtained or where the failure to
obtain such consent, approval, authorization, order
or declaration, or to make such filing, would not
have a material adverse effect on the ability of the
Transferor to perform its obligations under this
Agreement or any other Basic Document to which it is
a party or on any Receivable or the interest therein
of the Issuer, the Noteholders or the Insurer.
(viii) Valid Assignment. Each Receivable has been validly
assigned by the Transferor to the Issuer on the
Closing Date pursuant to this Agreement and no
Receivable has been sold, transferred, assigned or
pledged by the Transferor to any Person other than
the Issuer.
(ix) Legal Name. The Transferor's exact legal name is, and
has always been,
Bay View Transaction Corporation.
(x) Executive Office. The Transferor's chief executive
office is located in San Mateo, California.
(b) The Transferor further covenants that, prior to
termination of the Trust:
(i) It will not engage at any time in any business or
business activity other than such activities
expressly set forth in its Certificate of
Incorporation delivered to the Insurer on or prior to
the Closing Date, and will not amend its Certificate
of Incorporation without the prior written consent of
the Insurer (so long as the Insurance Agreement has
not been terminated).
(ii) It will not, without the consent of the Insurer (so
long as the Insurance Agreement has not been
terminated), sell, assign, pledge or otherwise
transfer, in whole, or in part or in any series of
related or unrelated transactions any of its right,
title or interest in or to the Spread Account
Depositor Certificate except as permitted by the
Insurance Agreement.
(iii) It will not:
(A) Fail to do all things necessary to maintain
its corporate existence separate and apart
from the Bank, BVAC, BVCC, the Trust and any
other Person, including, without limitation,
holding regular meetings of its stockholders
and board of directors and maintaining
appropriate corporate books and records
(including a current minute book);
(B) Suffer any limitation on the authority of
its own directors and officers to conduct
its business and affairs in accordance with
their independent business judgment or
authorize or suffer any Person (other than
its own officers and directors or others
customarily delegated under powers of
attorney) to take any action for which a
corporation's own Officers and directors
would customarily be responsible;
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64
(C) Fail to (i) maintain or cause to be
maintained by an agent of the Transferor
under the Transferor's control physical
possession of all its books and records,
(ii) maintain capitalization adequate for
the conduct of its business, (iii) account
for and manage all its liabilities
separately from those of any other Person,
including payment by it of all payroll,
administrative expenses and taxes, if any,
from its own assets, (iv) segregate and
identify separately all of its assets from
those of any other Person, (v) to the extent
any such payments are made, pay its
employees, officers and agents for services
performed for the Transferor or (vi)
maintain a separate office address with a
separate telephone number from those of the
Bank, BVAC, BVCC, the Trust or any other
affiliate thereof; or
(D) Except as may be provided in this Agreement,
or a similar agreement relating to other
securitizations in which the Transferor has
similar rights and/or obligations, commingle
its funds with those of BVAC or any
affiliate thereof or use its funds for other
than the Transferor's uses.
(c) It shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as
permitted by its certificate of incorporation, bylaws and the Basic
Documents;
(d) It shall not, for any reason, substitute proceedings for
the Trust to be adjudicated bankrupt or insolvent, or consent to or
join in the institution of bankruptcy or insolvency proceedings against
the Trust, or file a petition seeking or consenting to reorganization
or relief under any applicable federal or state law relating to the
bankruptcy of the Trust, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Trust or a substantial part of the property of the Trust or
cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its
debts generally as they become due, or declare or effect a moratorium
on the debt of the Trust or take any action in furtherance of any such
action;
(e) It shall obtain from each counterparty to each Basic
Document to which it or the Trust is a party and each other agreement
entered into on or after the date hereof to which it or the Trust is a
party, an agreement by each such counterparty that prior to one year
and one day after the completion of the event specified in Section
16.01(a) such counterparty shall not institute against, or join any
other Person in instituting against, it or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or
other similar proceedings under the laws of the United States or any
state of the United States; and
(f) It shall not, for any reason, withdraw or attempt to
withdraw from this Agreement or any other Basic Document to which it is
a party, dissolve, institute proceedings for it to be adjudicated
bankrupt or insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against it, or file a petition seeking or
consenting
TRUST AND SERVICING AGREEMENT
65
to reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of it or a substantial part of its property, or make any assignment for
the benefit of creditors, or admit in writing its inability to pay its
debts generally as they become due, or declare or effect a moratorium
on its debt or take any action in furtherance of any such action.
SECTION 12.02 Liability of Transferor; Indemnities. The Transferor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor under this Agreement.
(i) The Transferor shall indemnify, defend, and hold
harmless the Owner Trustee, the Indenture Trustee,
the Insurer, the Standby Servicer, the Back-up
Servicer, their respective officers, directors,
employees and agents, the Trust and the Noteholders
from and against any taxes that may at any time be
asserted against such parties with respect to, and as
of the date of, the sale of the Receivables to the
Trust or the issuance and original sale of the
Certificate and the Notes, including any sales, gross
receipts, general corporation, tangible or intangible
personal property, privilege, or license taxes (but,
in the case of the Trust, not including any taxes
asserted with respect to ownership of the Receivables
or federal or other income taxes arising out of
distributions on the Certificate or the Notes) and
costs and expenses in defending against the same.
(ii) The Transferor shall indemnify, defend, and hold
harmless the Owner Trustee, the Indenture Trustee,
the Insurer, the Servicer, the Back-up Servicer, the
Standby Servicer, their officers, directors,
employees and agents and the Trust from and against
any loss, liability, or expense incurred by reason of
(a) the Transferor's willful misfeasance, bad faith,
or negligence in the performance of its duties under
this Agreement, or by reason of reckless disregard of
its obligations and duties under this Agreement and
(b) the Transferor's violation of federal or State
securities laws in connection with the registration
of the sale of the Certificates.
(iii) The Transferor shall indemnify, defend, and hold
harmless the Standby Servicer, the Back-up Servicer,
the Indenture Trustee and their respective officers,
directors, employees and agents, from and against any
loss, liability, or expense incurred as a result of
third party claims arising out of the events or facts
giving rise to a breach of the covenants or
representations and warranties of the Transferor set
forth in Section 7.01 and Section 12.01.
Indemnification under this Section 12.02 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Transferor shall have made any indemnity payments to the Owner Trustee or
the Trust pursuant to this Section and the Owner Trustee or the Trust thereafter
shall collect any of such amounts from others, the Owner Trustee or the Trust,
as the case may be, shall repay such amounts to the Transferor, without
interest.
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This indemnification shall survive the termination of this Agreement and the
resignation or removal of the Owner Trustee or the Indenture Trustee.
Notwithstanding the foregoing, any amounts Transferor shall pay pursuant to this
Section 12.02 shall be paid solely from funds available for distribution to the
Certificateholder in accordance with the terms of the Basic Documents and shall
in any case be nonrecourse to the Transferor and to the Transferor's assets and,
to the extent funds are not so available to pay any amounts when due and owing,
the claims relating thereto shall not constitute a claim (as defined in Section
101 of Title 11 of the United States Bankruptcy Code) against the Transferor but
shall continue to accrue. Each party hereto agrees that the payment of any claim
of any such party pursuant to this Section 12.02 shall be subordinated to the
payment in full of all outstanding interest and principal due to the
Noteholders. The payment of any claim pursuant to this Section 12.02 shall in no
event be construed as a "fee" of the Indenture Trustee or the Owner Trustee as
such term is used in Section 8.05(a)(i) or Section 8.05(a)(iii) of the
Indenture. The Transferor's obligation to provide indemnity under this Section
12.02 shall survive the termination of this Agreement or the earlier resignation
or removal of either of the indemnified parties.
SECTION 12.03 Merger or Consolidation of, or Assumption of the
Obligations of Transferor. Any Person (a) into which the Transferor may be
merged or consolidated, (b) which may result from any merger or consolidation to
which the Transferor shall be a party, or (c) which may succeed to all or
substantially all of the properties and assets of the Transferor's business,
which Person in any of the foregoing cases executes an agreement of assumption
to perform every obligation of the Transferor under this Agreement, shall be the
successor to the Transferor hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 7.01 shall have been
breached and no Event of Servicer Default, and no event that, after notice or
lapse of time, or both, would become an Event of Servicer Default shall have
happened and be continuing, (ii) the Transferor shall have delivered to the
Owner Trustee and the Indenture Trustee an Officers' Certificate and an Opinion
of Counsel each stating that such consolidation, merger, or succession and such
agreement of assumption comply with this Section 12.03 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with and (iii) the Transferor shall have delivered an Opinion
of Counsel to the Insurer, the Owner Trustee and the Indenture Trustee either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed or duly
authorized and filed that are necessary fully to preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables, and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest. Notwithstanding the foregoing, the Transferor shall not engage in any
merger or consolidation with any Person, or a disposition of all or
substantially all of its assets without providing advance written notice thereof
to the Owner Trustee, the Indenture Trustee and the Rating Agencies and without
obtaining the prior written consent of the Insurer, so long as the Insurer is
the Controlling Party.
SECTION 12.04 Limitation on Liability of Transferor and Others. The
Transferor and any director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Transferor shall not be under any
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obligation to appear in, prosecute, or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.
SECTION 12.05 Transferor May Own Notes. The Transferor and any Person
controlling, controlled by, or under common control with the Transferor may in
its individual or any other capacity become the owner or pledgee of Notes with
the same rights as it would have if it were not the Transferor or an affiliate
thereof, except as otherwise provided in the definition of "Noteholder," "Class
A Noteholder" and "Class I Noteholder." Certificates so owned by or pledged to
the Transferor or such controlling or commonly controlled Person shall have an
equal and proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Notes.
ARTICLE XIII
THE SERVICER; BACK-UP SERVICER; AND STANDBY SERVICER
SECTION 13.01 Representations and Warranties
(a) The Servicer. BVAC makes the following representations and
warranties on which the Trust, the Owner Trustee, the Indenture Trustee
and the Back-up Servicer rely in accepting the Receivables in trust and
in connection with the performance by each of the Indenture Trustee,
the Back-up Servicer and the Standby Servicer of its obligations
hereunder and the Insurer relies in issuing the Policy. The
representations and warranties speak as of the execution and delivery
of this Agreement, on the Closing Date, but shall survive each sale of
the Receivables to the Trust and the subsequent pledge thereof to the
Indenture Trustee pursuant to the Indenture:
(i) Organization, Good Standing and Due Qualification.
The Servicer is duly organized and validly existing
in good standing as a corporation under the laws of
the State of Nevada, with power and authority to own
its properties and to conduct its business as such
properties shall be currently owned and such business
is presently conducted, and had at all relevant
times, and has, the corporate power, authority, and
legal right to acquire, own, sell, and service the
Receivables, and is duly qualified and has all
necessary licenses in all such jurisdictions as are
required by it to conduct its business (including the
servicing of the Receivables as required by this
Agreement and the performance of its other
obligations under this Agreement) except when the
failure to so qualify would not materially and
adequately affect the performance by the Servicer of
its obligations under, or the validity or
enforceability of this Agreement or the Notes.
(ii) Power and Authority; Binding Obligations. The
Servicer has the power and authority to execute and
deliver this Agreement and to carry out the terms
hereof. This Agreement and all other instruments or
documents to be delivered hereunder or pursuant
hereto, and the transactions
TRUST AND SERVICING AGREEMENT
68
contemplated hereby, have been duly authorized by all
necessary corporate proceedings of the Servicer. This
Agreement has been duly and validly executed and
delivered by the Servicer and, assuming due
authorization, execution and delivery by each other
party hereto, this Agreement is a valid and legally
binding agreement of the Servicer enforceable in
accordance with its terms, subject to the effects of
bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors'
rights generally and to general principles of equity.
(iii) No Violation. The execution and delivery of this
Agreement and performance under this Agreement by the
Servicer and the compliance by the Servicer with all
provisions of this Agreement do not conflict with or
violate any applicable law, regulation or order of
any court or of any federal or state regulatory body,
administrative agency or other governmental
instrumentality and do not conflict with or result in
a breach of or (with or without notice or lapse of
time) default under any of the terms or provisions of
any contract or agreement to which the Servicer is
subject or by which it or its property is bound, or
result in the creation or imposition of a Lien upon
any of its properties pursuant to the terms of any
such contract or agreement, nor does such execution,
delivery or compliance violate the Certificate of
Incorporation or By-Laws of the Servicer except when
the failure to so qualify would not materially and
adequately affect the performance by the Servicer of
its obligations under, or the validity or
enforceability of, this Agreement or the Notes.
(iv) No Proceedings. There are no proceedings or
investigations pending, or, to the Servicer's
knowledge, threatened against the Servicer, before
any court, regulatory body, administrative agency, or
other tribunal governmental instrumentality having
jurisdiction over the Servicer or its properties: (A)
asserting the invalidity of this Agreement, the other
Basic Documents to which the Servicer is a party, the
Notes or the Certificate, (B) seeking to prevent the
issuance of the Notes or the Certificate or the
consummation of any of the transactions contemplated
by this Agreement the Notes or the Certificate, (C)
seeking any determination or ruling that might
materially and adversely affect the performance by
the Servicer of its obligations under, or the
validity or enforceability of, this Agreement, the
Notes or the Certificate, (D) relating to the
Servicer and which might adversely affect the federal
or state income, excise, franchise or similar tax
attributes of the Securities, or (E) that could have
a material adverse effect on the Receivables.
(v) No consent, approval, authorization or order of or
declaration or filing with any governmental authority
is required for the issuance or sale of the Notes or
the consummation of the transactions contemplated by
this Agreement except such as have been duly made or
obtained.
TRUST AND SERVICING AGREEMENT
69
(vi) The Servicer has filed on a timely basis all tax
returns required to be filed by it and paid all taxes
to the extent that such taxes have become due.
(vii) The Servicer hereby represents and warrants that the
Servicer's principal place of business and chief
executive office is, and for the four months
preceding the date of this Agreement has been,
located at: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
(viii) The practices used or to be used by the Servicer to
monitor collections with respect to the Receivables
and repossess and dispose of the Financed Vehicles
related to the Receivables will be, in all material
respects, legal, proper and in conformity with the
requirements of all applicable federal and state
laws, rules and regulations, and this Agreement. The
Servicer is in possession of all state and local
licenses (including all debt collection licenses)
required for it to perform its services hereunder,
and none of such licenses has been suspended, revoked
or terminated.
(ix) There are no existing injunctions, writs, restraining
orders or other similar orders which might adversely
affect the performance by the Servicer or its
obligations under, or the validity and enforceability
of, this Agreement.
(x) The Servicer is in compliance with all requirements
of federal and state laws, rules, regulations and
orders, except where the failure so to comply would
not have a material adverse effect on the Servicer,
its business or its properties, or the ability of the
Servicer to perform its obligations under this
Agreement.
The representations and warranties contained in this Section 13.01(a)
shall survive the execution and delivery of this Agreement, the transfer of the
Receivables on the Closing Date and the pledge of the Receivables to the
Indenture Trustee pursuant to the Indenture.
(b) The Back-up Servicer makes the following representations
and warranties on which the Trust, the Owner Trustee and the Indenture
Trustee rely in accepting the Receivables in trust and in connection
with the performance by the Standby Servicer of its obligations
hereunder and the Insurer relies in issuing the Policy. The
representations and warranties speak as of the execution and delivery
of this Agreement, on the Closing Date, and the subsequent pledge
thereof to the Indenture Trustee pursuant to the Indenture:
(i) Organization and Good Standing. The Back-up Servicer
is duly organized and is validly existing as a
banking corporation under the laws of the State of
New York, with power and authority and legal right to
own its properties and to conduct its business as
such properties are currently owned and such business
is presently conducted, and has and had at all
relevant times, full power, authority, and legal
right to service the Receivables;
TRUST AND SERVICING AGREEMENT
70
(ii) Due Qualification. The Back-up Servicer is duly
qualified to do business as a foreign corporation in
good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which
the ownership or lease of property or the conduct of
its business (including the servicing of the
Receivables as required by this Agreement and the
performance of its other obligations under this
Agreement and the other Basic Documents to which it
is a party) requires such qualifications except where
such failure will not have a material adverse effect
on the Back-up Servicer, its business or its
properties, or the ability of the Back-up Servicer to
perform its obligations under this Agreement or any
other Basic Document to which it is a party;
(iii) Power and Authority. The Back-up Servicer has the
power and authority to execute and deliver this
Agreement and the other Basic Documents to which it
is a party and to carry out their respective terms;
and the execution, delivery, and performance of this
Agreement and the other Basic Documents to which it
is a party have been duly authorized by the Back-up
Servicer by all necessary corporate action;
(iv) Binding Obligations. This Agreement and the other
Basic Documents to which it is a party constitute
legal, valid, and binding obligations of the Back-up
Servicer enforceable in accordance with their
respective terms, subject to the effects of
bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors'
rights generally and to general principles of equity;
(v) No Violation. The execution, delivery and performance
by the Back-up Servicer of this Agreement and the
other Basic Documents to which the Back-up Servicer
is a party, and to the best of its knowledge the
consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which it
is a party and the fulfillment of the terms hereof
and thereof do not conflict with, result in any
breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time)
a default under, the charter documents of the Back-up
Servicer.
The representations and warranties contained in this Section 13.01(b)
shall survive the execution and delivery of this Agreement, the transfer of the
Receivables on the Closing Date and the pledge of the Receivables to the
Indenture Trustee pursuant to the Indenture.
(c) The Standby Servicer makes the following representations
and warranties on which the Trust, the Owner Trustee and the Indenture
Trustee rely in accepting the Receivables in trust and the Insurer
relies in issuing the Policy. The representations and warranties speak
as of the execution and delivery of this Agreement, on the Closing
Date, and the subsequent pledge thereof to the Indenture Trustee
pursuant to the Indenture:
TRUST AND SERVICING AGREEMENT
71
(i) Organization and Good Standing. The Standby Servicer
is duly organized and is validly existing as a
corporation in good standing under the laws of the
State of Delaware, with power and authority and legal
right to own its properties and to conduct its
business as such properties are currently owned and
such business is presently conducted, and has and had
at all relevant times, full power, authority, and
legal right to acquire, own, sell, and service the
Receivables;
(ii) Due Qualification. The Standby Servicer is duly
qualified to do business as a foreign corporation in
good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which
the ownership or lease of property or the conduct of
its business (including the servicing of the
Receivables as required by this Agreement and the
performance of its other obligations under this
Agreement and the other Basic Documents to which it
is a party) requires such qualifications except where
such failure will not have a material adverse effect
on the Standby Servicer, its business or its
properties, or the ability of the Standby Servicer to
perform its obligations under this Agreement or any
other Basic Document to which it is a party;
(iii) Power and Authority. The Standby Servicer has the
power and authority to execute and deliver this
Agreement and the other Basic Documents to which it
is a party and to carry out their respective terms;
and the execution, delivery, and performance of this
Agreement and the other Basic Documents to which it
is a party have been duly authorized by the Standby
Servicer by all necessary corporate action;
(iv) Binding Obligations. This Agreement and the other
Basic Documents to which it is a party constitute
legal, valid, and binding obligations of the Standby
Servicer enforceable in accordance with their
respective terms, subject to the effects of
bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors'
rights generally and to general principles of equity;
(v) No Violation. The execution, delivery and performance
by the Standby Servicer of this Agreement and the
other Basic Documents to which the Standby Servicer
is a party, and the consummation of the transactions
contemplated by this Agreement and the other Basic
Documents to which it is a party and the fulfillment
of the terms hereof and thereof do not conflict with,
result in any breach of any of the terms and
provisions of, nor constitute (with or without notice
or lapse of time) a default under, the charter
documents of the Standby Servicer, or any indenture,
agreement, or other instrument to which the Standby
Servicer is a party or by which it may be bound; nor
result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any
such indenture, agreement, or other instrument (other
than this Agreement); nor, to the best of the Standby
Servicer's knowledge, violate any law applicable to
TRUST AND SERVICING AGREEMENT
72
the Standby Servicer or any order, rule, or
regulation applicable to the Standby Servicer of any
court or of any federal or state regulatory body,
administrative agency, or other governmental
instrumentality having jurisdiction over the Standby
Servicer or its properties;
(vi) No Proceedings. There are no proceedings or
investigations pending, or, to the Standby Servicer's
best knowledge, threatened, before any court,
regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over
the Standby Servicer or its properties: A) asserting
the invalidity of this Agreement, any of the Basic
Documents, the Notes or the Certificate, B) seeking
to prevent the issuance of the Notes or the
Certificate or the consummation of any of the
transactions contemplated by this Agreement or any of
the Basic Documents, C) seeking any determination or
ruling that might materially and adversely affect the
performance by the Standby Servicer of its
obligations under, or the validity or enforceability
of, this Agreement, any of the Basic Documents to
which it is a party, the Notes or the Certificate,
(D) relating to the Standby Servicer and which might
adversely affect the federal income tax attributes of
the Notes or the Certificate or (E) that could have a
material adverse effect on the Receivables;
(vii) No Consents. No consent, license, approval,
authorization or order of, or registration
declaration or filing with, any governmental
authority or other Person is required to be made in
connection with the issuance or sale of the Notes and
the Certificate or the execution, delivery or
performance of the Basic Documents to which Standby
Servicer is a party or the consummation of the
transactions contemplated thereby, except such as
have been duly made, effected or obtained;
(viii) Taxes. The Standby Servicer has filed on a timely
basis all tax returns required to be filed by it and
paid all taxes, to the extent that such taxes have
become due;
(ix) Chief Executive Office. The principal place of
business and chief executive office of the Standby
Servicer is, and for the four months preceding the
date of this Agreement has been, located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
(x) No Injunctions. There are no existing injunctions,
writs, restraining orders or other similar orders
which might adversely affect the performance by the
Standby Servicer or its obligations under, or the
validity and enforceability of, this Agreement;
(xi) Compliance with Law. The Standby Servicer is in
compliance with all requirements of federal and state
laws, rules, regulations and orders, except where the
failure so to comply would not have a material
adverse effect on the Standby Servicer, its business
or its properties, or the ability
TRUST AND SERVICING AGREEMENT
73
of the Standby Servicer to perform its obligations
under this Agreement; and
(xii) Practices. The practices used or to be used by the
Standby Servicer, to monitor collections with respect
to the Receivables and repossess and dispose of the
Financed Vehicles related to the Receivables will be,
in all material respects, legal, proper and in
conformity with the requirements of all applicable
federal and state laws, rules and regulations, and
this Agreement. The Standby Servicer is in possession
of all state and local licenses (including all debt
collection licenses) required for it to perform its
services hereunder (including as successor Servicer),
and none of such licenses has been suspended, revoked
or terminated.
The representations and warranties contained in this Section 13.0l(c)
shall survive the execution and delivery of this Agreement, the transfer of the
Receivables on the Closing Date and the pledge of the Receivables to the
Indenture Trustee pursuant to the Indenture.
SECTION 13.02 Indemnities of Servicer, Back-up Servicer and Standby
Servicer.
(a) The Servicer shall be liable in accordance herewith only
to the extent of the obligations specifically undertaken by the
Servicer under this Agreement and no implied duties or obligations
shall be read into this Agreement against the Servicer.
(i) The Servicer shall defend, indemnify, and hold
harmless the Owner Trustee, the Indenture Trustee,
the Collateral Agent, the Insurer, the Standby
Servicer, the Back-up Servicer, and their officers,
directors, employees and agents, the Trust, the
Certificateholders and the Noteholders from and
against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting
from the use, ownership, or operation by the Servicer
or any affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend and hold
harmless the Owner Trustee, the Indenture Trustee,
the Collateral Agent, the Insurer, the Standby
Servicer, the Back-up Servicer, and the Trust from
and against any taxes that may at any time be
asserted against such parties with respect to the
transactions contemplated herein, including, without
limitation, any sales, gross receipts, general
corporation, tangible or intangible personal
property, privilege, or license taxes (but, in the
case of the Trust, not including any taxes asserted
with respect to, and as of the date of, the sale of
the Receivables to the Trust or the issuance and
original sale of the Certificates, the Notes, or
asserted with respect to ownership of the
Receivables, or federal or other income taxes arising
out of distributions on the Certificates or the
Notes) and costs and expenses in defending against
the same.
(iii) The Servicer shall indemnify, defend, and hold
harmless the Owner Trustee, the Indenture Trustee,
the Collateral Agent, the Insurer, the
TRUST AND SERVICING AGREEMENT
74
Standby Servicer, the Back-up Servicer, the Trust,
the Certificateholder and the Noteholders from and
against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such
cost, expense, loss, claim, damage, or liability
arose out of, or was imposed upon such parties
through, the negligence, willful misfeasance, or bad
faith of the Servicer in the performance of its
duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this
Agreement; provided, however, that the Servicer shall
not be liable to the Owner Trustee or Indenture
Trustee for any portion of any such amount resulting
from the willful misconduct, bad faith, or negligence
of the Owner Trustee or the Indenture Trustee, as
applicable. This indemnity shall survive the
termination of this Agreement or the Trust and the
resignation or removal of the Owner Trustee, the
Indenture Trustee and the Back-up Servicer.
(iv) The Servicer shall indemnify, defend, and hold
harmless the Owner Trustee, the Indenture Trustee,
the Collateral Agent, the Insurer, the Standby
Servicer, the Back-up Servicer, their respective
officers, directors, employees and agents and the
Trust from and against all costs, expenses, losses,
claims, damages, and liabilities arising out of or
incurred in connection with the acceptance or
performance of the trusts and duties herein contained
or any of the provisions contained in any of the
Basic Documents, or any of the transactions
contemplated thereby, except to the extent that such
cost, expense, loss, claim, damage or liability: (a)
shall be due to the willful misfeasance, bad faith,
or negligence of such indemnified party; (b) relates
to any tax other than the taxes with respect to which
either the Transferor or Servicer shall be required
to indemnify the Owner Trustee or the Indenture
Trustee; (c) shall arise from the breach of any of
representations or warranties of such indemnified
party; (d) shall be one as to which the Transferor is
required to indemnify the Owner Trustee or the
Indenture Trustee under this Agreement and the
Transferor has paid such indemnity claim; (e) shall
arise out of or be incurred in connection with the
acceptance or performance by the Indenture Trustee of
the duties of successor Servicer or (f) with respect
to the Insurer, shall arise out of its obligations to
perform under the Policy and is not an otherwise
indemnifiable obligation pursuant to the Insurance
Agreement.
Notwithstanding the foregoing, clauses (ii) and (iv) above
shall not apply to the Standby Servicer or the Back-up Servicer in the
event the Standby Servicer or the Back-up Servicer becomes the
successor Servicer.
Indemnification by each of the Servicer, the Standby Servicer
or the Back-up Servicer (or any other successor Servicer), as Servicer,
shall be made only with respect to the period that it acts as Servicer
and its acts and omissions while acting as such. Indemnification under
this Section by the Servicer, with respect to the period such Person
was (or was deemed to be) the Servicer, shall survive the termination
of such Person as Servicer or a resignation by such Person as Servicer
as well as the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of
TRUST AND SERVICING AGREEMENT
75
litigation. If the Servicer shall have made any indemnity payments
pursuant to this Section and the recipient thereafter collects any of
such amounts from others, the recipient shall promptly repay such
amounts to the Servicer, without interest.
(b) The Back-up Servicer and the Standby Servicer shall each
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Back-up Servicer in its capacity as
Back-up Servicer under this Agreement and the Standby Servicer in its
capacity as Standby Servicer under this Agreement, and no implied
duties or obligations shall be read into this Agreement against the
Back-up Servicer or the Standby Servicer. The Back-up Servicer may
fulfill its obligations hereunder as Back-up Servicer through its
agents, nominees and custodians and shall not be liable for the acts or
omissions of such agents, nominees and custodians to the extent they
are appointed with due care by the Back-up Servicer. Neither the
Back-up Servicer nor its employees, directors, agents or officers shall
be liable for any action taken in good faith pursuant to this Agreement
or for errors of judgment not involving willful misconduct or
negligence. The Standby Servicer shall indemnify, defend, and hold
harmless the Trust, the Indenture Trustee, the Insurer, the Servicer
and the Noteholders from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed
upon the Trust, the Indenture Trustee, the Servicer, the Insurer or the
Noteholders through the negligence, willful misconduct or bad faith of
the Standby Servicer, in the performance of its duties as Standby
Servicer under this Agreement. In the event that the Standby Servicer
becomes the successor Servicer, the Standby Servicer in its capacity as
successor Servicer, shall be liable in accordance with, and to the
extent set forth in, Section 13.02(a).
(c) Indemnification under this Section 13.02 shall include
reasonable fees and expenses of counsel and expenses of litigation. If
the Servicer shall have made any indemnity payments pursuant to this
Section and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts to the
Servicer, without interest. This indemnification under Section 13.02
shall survive the termination of this Agreement and/or the Spread
Account Depositor Trust Agreement and the removal of the Servicer, the
Standby Servicer, the Back-up Servicer and/or the Indenture Trustee.
SECTION 13.03 Merger or Consolidation of, or Assumption of the
Obligations of the Servicer, Back-up Servicer and Standby Servicer.
(a) The Servicer shall not merge or consolidate with any other
Person, convey, transfer or lease substantially all its assets as an
entirety to another Person, or permit any other Person to become the
successor to the Servicer's business unless, after the merger,
consolidation, conveyance, transfer, lease or succession, the successor
or surviving entity shall be an Eligible Servicer and shall be capable
of fulfilling the duties of the Servicer contained in this Agreement
and the other Basic Documents to which the Servicer is a party. Any
Person (i) into which the Servicer may be merged or consolidated, (ii)
resulting from any merger, conversion, or consolidation to which the
Servicer shall be a party which may succeed to the properties and
assets of the Servicer
TRUST AND SERVICING AGREEMENT
76
substantially as a whole or (iii) succeeding to the business of the
Servicer (or to substantially all of the Servicer's business insofar as
it relates to the servicing of the Receivables), which Person in any of
the foregoing cases executes an agreement of assumption reasonably
acceptable to the Insurer in its sole and absolute discretion to
perform every obligation of the Servicer under this Agreement and the
other Basic Documents to which it is a party, will be the successor to
the Servicer under this Agreement and the other Basic Documents to
which it is a party without the execution or filing of any paper or any
further act on the part of any of the parties to this Agreement;
provided, however, that (w) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section
13.01 hereof or made by BVAC in the Purchase Agreement shall have been
breached (for purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such transaction), no
Event of Servicer Default or Insurance Agreement Event of Default, and
no event which, after notice or lapse of time, or both, would become an
Event of Servicer Default or Insurance Agreement Event of Default shall
have occurred and be continuing, (x) the Servicer shall have delivered
to the Insurer (so long as the Insurance Agreement has not terminated)
and the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, conversion, merger or
succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in this Agreement and
the other Basic Documents to which it is a party relating to such
transaction have been complied with, and (y) the Servicer shall have
delivered to the Insurer (so long as the Insurance Agreement has not
terminated) and the Indenture 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 Trust and the Indenture Trustee in the Receivables, and reciting
the details of such filings, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect
such interest and (z) the Rating Agencies shall have confirmed the
"shadow ratings" of the Notes without regard to the Policy. The
Servicer shall provide notice of any merger, conversion, consolidation
or succession pursuant to this Section to the Insurer and the Rating
Agencies then providing a rating for the Securities. The Indenture
Trustee shall forward a copy of each such notice to each Noteholder.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (w), (x),
(y) and (z) above shall be conditions to the consummation of the
transactions referred to in clauses (i), (ii) or (iii) above. The
Opinion of Counsel required by this Section shall not be an expense of
the Indenture Trustee or the Insurer.
(b) Any Person (i) into which the Back-up Servicer may be
merged or consolidated, (ii) which may result from any merger or
consolidation to which the Back-up Servicer shall be a party, (iii)
which may succeed to the properties and assets of the Back-up Servicer
substantially as a whole or (iv) succeeding to the business of the
Back-up Servicer, shall execute an agreement of assumption to perform
every obligation of the Back-up Servicer hereunder, and whether or not
such assumption agreement is executed, shall be the successor to the
Back-up Servicer under this Agreement without further act on the part
of any of the parties to this Agreement; provided, however, that
nothing herein shall be deemed to release the Back-up Servicer from any
obligation. In
TRUST AND SERVICING AGREEMENT
77
connection with any transaction described above, the Back-up Servicer
must comply with the provisions of this Section 13.03 as if it were
then acting as Servicer.
(c) Any Person (i) into which the Standby Servicer may be
merged or consolidated, (ii) which may result from any merger or
consolidation to which the Standby Servicer shall be a party, (ii)
which may succeed to the properties and assets of the Standby Servicer
substantially as a whole or (iv) succeeding to the business of the
Standby Servicer, shall execute an agreement of assumption to perform
every obligation of the Standby Servicer hereunder, and whether or not
such assumption agreement is executed, shall be the successor to the
Standby Servicer under this Agreement without further act on the part
of any of the parties to this Agreement; provided, however, that
nothing herein shall be deemed to release the Standby Servicer from any
obligation. In connection with any transaction described above, the
Standby Servicer must comply with the provisions of this Section 13.03
as if it were then acting as Servicer.
SECTION 13.04 Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust, the Indenture Trustee, the
Certificateholder or the Noteholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement; provided, however, that this provision shall not protect the
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misconduct, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute, or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement (collection actions with respect to Charged-Off Receivables are
understood to be incidental to the Servicer's duties to service the
Receivables), and that in its opinion may involve it in any expense or
liability.
SECTION 13.05 Servicer, Back-up Servicer and Standby Servicer Not to
Resign. Subject to the provisions of Sections 8.02(g), 14.01 and 14.02, as
applicable, none of the Servicer, Back-up Servicer, or the Standby Servicer
shall resign from the obligations and duties imposed on it by this Agreement as
Servicer, Back-up Servicer, or Standby Servicer, respectively, except upon a
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would result in a material adverse effect
on the Servicer, Back-up Servicer, or the Standby Servicer, as the case may be,
and the Insurer (so long as an Insurer Default shall not have occurred and be
continuing) does not or the Majority Noteholders (if an Insurer Default shall
have occurred and be continuing) do not (i) elect in its or their absolute
discretion to waive the obligations of the Servicer, Back-up Servicer, or the
Standby Servicer, as the case may be, to perform the duties that render it
legally unable to act or (ii) allow in its or their absolute discretion the
Servicer, Back-up Servicer, or the Standby Servicer, as the case may be, to
delegate those duties to another Person; provided, however, that notwithstanding
the
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78
foregoing, the Back-up Servicer may resign upon 90 days prior written notice
to the Servicer and the Insurer if it resigns as Indenture Trustee. Any such
determination permitting the resignation of the Servicer, Back-up Servicer, or
the Standby Servicer shall be evidenced by an Opinion of Counsel as to the legal
requirements that would be violated, delivered to the Owner Trustee, the
Indenture Trustee and the Insurer. No resignation of the Servicer shall become
effective, so long as the Insurer is the Controlling Party, until the Back-up
Servicer or an entity acceptable to the Insurer shall have assumed the
responsibilities and obligations of the Servicer or, if an Insurer Default shall
have occurred and be continuing, until the Back-up Servicer, the Standby
Servicer or a successor Servicer that is an Eligible Servicer shall have assumed
the responsibilities and obligations of the Servicer. No resignation of the
Servicer shall become effective, so long as no Insurer Default shall have
occurred and be continuing, until the Back-up Servicer, the Standby Servicer or
an entity acceptable to the Insurer shall have assumed the responsibilities and
obligations of the Servicer. No resignation of the Servicer, Back-up Servicer,
or the Standby Servicer shall relieve the Servicer, Back-up Servicer, or the
Standby Servicer, as the case may be, of any liability to which it has
previously become subject under this Agreement or any Basic Document.
SECTION 13.06 Delegation of Duties. Except as provided in Section 13.03
hereof, it is understood and agreed by the parties hereto that the Servicer or
the Transferor may at any time delegate any duties including duties as custodian
to any Person willing to accept such delegation and acceptable to the
Controlling Party and to perform such duties (including any affiliate of the
Servicer) in accordance with the customary procedures of the Servicer. In
connection with such delegation, the Servicer or the Transferor may assign
rights to the delegee or direct the payment to the delegee of benefits or
amounts otherwise inuring to the benefit of, or payable to, the Transferor or
the Servicer hereunder. Any such delegation shall not relieve the Servicer or
the Transferor of their respective liability and responsibility with respect to
such duties, and shall not constitute a resignation within Section 13.05 hereof.
The Servicer shall give written notice to the Rating Agencies, the Owner
Trustee, the Indenture Trustee and the Insurer of any such delegation.
ARTICLE XIV
SERVICER AND STANDBY SERVICER DEFAULTS
SECTION 14.01 Events of Servicer Default. While the Servicer, the
Back-up Servicer or any successor Servicer (other than the Standby Servicer) is
acting as the Servicer hereunder, any one of the following events shall
constitute an "Event of Servicer Default":
(i) Any failure by the Servicer (x) to deposit, or to
deliver to the Indenture Trustee for deposit, to any
Trust Account any amount required to be so delivered
or deposited therein by the Servicer that shall
continue unremedied for a period of one (1) Business
Day or (y) to deliver to the Indenture Trustee, the
Back-up Servicer, the Standby Servicer or the Insurer
the Servicer's Certificate on the related
Determination Date that shall continue unremedied for
a period of two (2) Business Days or the statement
required by Section 8.13 or the report required by
Section 8.14
TRUST AND SERVICING AGREEMENT
79
shall not have been delivered within five (5) days
after the date such statement or report, as the case
may be, is required to be delivered after, in either
case, (A) after written notice from either the Owner
Trustee, the Indenture Trustee or the Insurer (so
long as the Insurer is not in default of its
obligations under the Policy) or by the holders of
Notes evidencing not less than 25% of the aggregate
outstanding balance of the Notes is received by the
Servicer as specified in this Agreement or (B) after
discovery by an officer of the Servicer;
(ii) Failure on the part of the Servicer, and for so long
as the Servicer is obligated to perform as the
Servicer, failure on the part of the Transferor or
BVAC, as the case may be, to repurchase a Receivable
in accordance with Section 7.02, Section 8.08 or
Section 8.10 hereof and, in the case of BVAC pursuant
to Section 7.02 and Section 3.03 of the Purchase
Agreement, as the case may be, which failure shall
continue unremedied for a period of two (2) Business
Days after the same is required to be delivered in
accordance with such Sections after, in either case,
(A) after written notice from either the Owner
Trustee, the Indenture Trustee or the Insurer (so
long as the Insurer is not in default of its
obligations under the Policy) or by the holders of
Notes evidencing not less than 25% of the aggregate
outstanding balance of the Notes is received by the
Servicer or BVAC as specified in this Agreement or
(B) after discovery by an officer of the Servicer;
(iii) Failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 8.09
or, for so long as the Servicer is obligated to
perform as the Servicer, failure on the part of the
Transferor to observe its covenants and agreements in
Article V of the Purchase Agreement;
(iv) Failure on the part of the Servicer, and for so long
as the Servicer is obligated to perform as the
Servicer, failure on the part of the Transferor or
BVAC duly to observe or to perform any other
covenants or agreements of the Servicer, the
Transferor or BVAC (as the case may be) set forth in
this Agreement or any other Basic Document, which
failure shall (a) materially and adversely affect the
rights of Noteholders or the Insurer and (b) 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 (1) to the
Servicer, the Transferor or BVAC (as the case may be)
by the Insurer or the Indenture Trustee, or (2) to
the Servicer, the Transferor or BVAC (as the case may
be), and to the Indenture Trustee and the Insurer by
the Noteholders evidencing not less than 25% of the
Class A Note Balance;
(v) The entry of a decree or order for relief by a court
or regulatory authority having jurisdiction in
respect of the Servicer (or, so long as the Servicer
is obligated to perform as the Servicer, the
Transferor or any of the Servicer's other Affiliates,
if the Servicer's ability to service the
TRUST AND SERVICING AGREEMENT
80
Receivables is adversely affected in a material
respect thereby) in an involuntary case under the
federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal or
state, bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of
BVAC, the Servicer (or the Transferor or any other
Affiliate of BVAC, if applicable) or of any
substantial part of their respective properties or
ordering the winding up or liquidation of the affairs
of BVAC or the Servicer (or the Transferor or any
other Affiliate of BVAC, if applicable) or the
commencement of an involuntary case under the federal
or state bankruptcy, insolvency or similar laws, as
now or hereafter in effect, or another present or
future, federal or state bankruptcy, insolvency or
similar law with respect to BVAC or the Servicer (or
the Transferor or any other Affiliate of BVAC, if
applicable) and such case is not dismissed within 60
days;
(vi) The commencement by BVAC or the Servicer (or, so long
as the Servicer is obligated to perform as the
Servicer, the Transferor or any of the Servicer's
other Affiliates, if the Servicer's ability to
service the Receivables is adversely affected
thereby) of a voluntary case under the federal
bankruptcy laws, as now or hereafter in effect, or
any other present or future, federal or state,
bankruptcy, insolvency or similar law, or the consent
by BVAC or the Servicer (or the Transferor or any
other Affiliate of BVAC, if applicable) to the
appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian,
sequestrator or other similar official of BVAC or the
Servicer (or the Transferor or any other Affiliate of
BVAC, if applicable) or of any substantial part of
its property or the making by BVAC or the Servicer
(or the Transferor or any other Affiliate of BVAC, if
applicable) of an assignment for the benefit of
creditors or the failure by BVAC or the Servicer (or
the Transferor or any other Affiliate of BVAC, if
applicable) generally to pay its debts as such debts
become due or the taking of corporate action by BVAC
or the Servicer (or the Transferor or any other
Affiliate of BVAC, if applicable) in furtherance of
any of the foregoing;
(vii) Any representation, warranty or statement of the
Servicer or, for so long as the Servicer is obligated
to perform as the Servicer, BVAC or the Transferor
made in this Agreement and, with respect to BVAC and
the Transferor, the Purchase Agreement, or in each
case any certificate, report or other writing
delivered pursuant hereto or thereto shall prove to
be incorrect as of the time when the same shall have
been made (excluding, however, any representation or
warranty set forth in Section 3.02 of the Purchase
Agreement), and the incorrectness of such
representation, warranty or statement has a material
adverse effect on the Issuer, the Insurer or the
Noteholders and, within 60 days after written notice
thereof, shall have been given (1) to BVAC, the
Servicer or the Transferor (as the case may be) by
the Indenture Trustee or the Insurer or (2) to BVAC,
the Servicer or the Transferor (as the case may be),
and to the Indenture
TRUST AND SERVICING AGREEMENT
81
Trustee and the Insurer by the Noteholders evidencing
not less than 25% of the Class A Note Balance, the
circumstances or condition in respect of which such
representation, warranty or statement was incorrect
shall not have been eliminated or otherwise cured;
(viii) An Insurance Agreement Event of Default has occurred;
(ix) A claim is made under the Policy;
(x) So long as an Insurer Default shall not have occurred
and be continuing, the Insurer shall not have
delivered a Servicer Extension Notice pursuant to
Section 8.04 hereof; or
(xi) The occurrence of a "Servicer Default" under and as
defined in any sale and servicing agreement, pooling
and servicing agreement or any similar agreement with
respect to which (x) BVAC or any of its Affiliates is
designated as servicer, sub-servicer, back up
servicer or any similar capacity (irrespective of
whether it is then acting in such capacity) and (y)
the Insurer has issued a financial guaranty insurance
policy relating to one or more classes of securities
issued under or otherwise relating to such agreement.
If a Servicer Default shall occur and be continuing then, and in each
and every case, the Indenture Trustee shall, (x) at the direction of the Insurer
in its sole and absolute discretion, so long as the Insurer is the Controlling
Party, or (y) at the direction of the Majority Noteholders, if an Insurer
Default has occurred and is continuing or the Insurance Agreement has
terminated, by notice then given in writing to the Servicer (and to the
Indenture Trustee if given by the Noteholders or the Insurer) or (z) upon the
Insurer's failure to deliver a Servicer Extension Notice pursuant to Section
8.04 hereof (so long as the Insurance Agreement has not terminated), terminate
all of the rights and obligations of the Servicer under this Agreement. Upon
sending or receiving any such notice, the Indenture Trustee shall promptly send
a copy thereof to the Owner Trustee, the Rating Agencies, the Insurer (so long
as the Insurer is the Controlling Party), the Back-up Servicer, the Standby
Servicer and to each Noteholder. On or after the receipt by the Servicer of such
written notice (unless otherwise directed by the Insurer and subject to Section
14.03(a)), all authority and power of the Servicer as the Servicer under this
Agreement, whether with respect to the Securities or the Receivables or
otherwise, shall, without further action, pass to and be vested in the Standby
Servicer or any such successor Servicer as may be appointed under Section 14.03;
and, without limitation, the Standby Servicer, any such successor Servicer and
the Indenture 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 provided, however, that the
Standby Servicer or the Back-up Servicer shall have no obligation to assume the
responsibilities of the Servicer with fewer than thirty (30) days prior written
notice other than, during an Insurer Default, to use its reasonable best efforts
to process payments received in respect of the Receivables in accordance with
the terms of this Agreement. The predecessor Servicer shall
TRUST AND SERVICING AGREEMENT
82
cooperate with the successor Servicer and the Indenture 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 or
should have been held by the predecessor Servicer for deposit, or shall
thereafter be received with respect to a Receivable and the delivery to the
successor Servicer of all files and records concerning the Receivables and a
Computer Tape in readable form containing all information necessary to enable
the successor Servicer to service the Receivables and the other property of the
Issuer. All Transition Costs shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses and, if not
so paid, shall be reimbursable to the successor Servicer, to the extent of
Available Funds on each Payment Date, pursuant to the priorities set forth in
Section 8.05(a) of the Indenture; provided, that such payment shall not relieve
the predecessor Servicer from the responsibility for making such payment and the
Issuer shall be subrogated to the rights of the successor Servicer with respect
to such Transition Costs and shall have a direct right to institute proceedings
against the predecessor Servicer for such payment. The predecessor Servicer
shall grant the Transferor, the Indenture Trustee, the Standby Servicer, the
Back-up Servicer and the Insurer reasonable access to the predecessor Servicer's
premises, computer files, personnel, records and equipment at the predecessor
Servicer's expense. If requested by the Insurer (so long as it is the
Controlling Party), the Standby Servicer or any other successor Servicer shall
terminate any arrangements relating to (i) the Lock-Box Account with the
Lock-Box Bank, (ii) the Lock-Box or (iii) the Lock-Box Agreement, and direct the
Obligors to make all payments under the Receivables directly to the Servicer at
the predecessor Servicer's expense (in which event the successor Servicer shall
process such payments directly, or, through a Lock-Box Account with a Lock-Box
Bank at the direction of the Insurer). The Indenture Trustee shall send copies
of all notices given pursuant to this Section 14.01 to the Insurer so long as no
Insurer Default shall have occurred and be continuing, and to the Noteholders if
an Insurer Default shall have occurred and be continuing.
When the Standby Servicer or the Back-up Servicer incurs expenses after
the occurrence of an Event of Servicer Default specified in this Section 14.01,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or State
bankruptcy, insolvency or similar law.
SECTION 14.02 Standby Servicer Default.
(a) Any one of the following events shall constitute a
"Standby Servicer Default" with respect to the Standby Servicer acting
in its capacity as Standby Servicer hereunder and in its capacity as
successor Servicer hereunder (unless specifically stated otherwise):
(i) Any failure by the Standby Servicer (so long as the
Standby Servicer is obligated to perform as the
Servicer) (x) to deposit, or to deliver to the
Indenture Trustee for deposit, to any Trust Account
or the Spread Account any amount required to be so
delivered or deposited therein by the Servicer that
shall continue unremedied for a period of one (1)
Business Day or (y) to deliver to the Indenture
Trustee, the Back-up Servicer or the Insurer the
Servicer's Certificate on the related Determination
Date that
TRUST AND SERVICING AGREEMENT
83
shall continue unremedied for a period of two (2)
Business Days or the statement required by Section
8.13 or the report required by Section 8.14 shall not
have been delivered within five (5) days after the
date such statement or report, as the case may be, is
required to be delivered;
(ii) Failure on the part of the Standby Servicer to
observe its covenants and agreements set forth in
Section 8.09;
(iii) Failure on the part of the Standby Servicer duly to
observe or to perform any other covenants or
agreements of the Standby Servicer set forth in the
Securities or in this Agreement (except as otherwise
specifically referred to in this Section 14.02(a)),
which failure shall (a) materially and adversely
affect the rights of Noteholders or the Insurer and
(b) 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 (1) to the Standby Servicer by the Insurer or
the Indenture Trustee, or (2) to the Standby Servicer
and to the Indenture Trustee and the Insurer by the
Noteholders evidencing not less than 25% of the Class
A Note Balance;
(iv) The entry of a decree or order for relief by a court
or regulatory authority having jurisdiction in
respect of the Standby Servicer or any of the Standby
Servicer's Affiliates, if the Standby Servicer's
ability to service the Receivables is adversely
affected thereby, in an involuntary case under the
federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal or
state, bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of
the Standby Servicer or any such Affiliate or of any
substantial part of their respective properties or
ordering the winding up or liquidation of the affairs
of Standby Servicer or any such Affiliate or the
commencement of an involuntary case under the federal
or state bankruptcy, insolvency or similar laws, as
now or hereafter in effect, or another present or
future, federal or state bankruptcy, insolvency or
similar law with respect to the Standby Servicer or
any such Affiliate and such case is not dismissed
within 60 days;
(v) The commencement by the Standby Servicer or any of
the Standby Servicer's Affiliates, if the Standby
Servicer's ability to service the Receivables is
adversely affected thereby, of a voluntary case under
the federal bankruptcy laws, as now or hereafter in
effect, or any other present or future, federal or
state, bankruptcy, insolvency or similar law, or the
consent by Standby Servicer or any such Affiliate to
the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Standby
Servicer or any such Affiliate or of any substantial
part of its property or the making by the Standby
Servicer or any such Affiliate of an assignment for
the benefit of creditors or the failure by the
Standby Servicer or any such Affiliate generally to
pay its debts as such debts become due or the taking
of
TRUST AND SERVICING AGREEMENT
84
corporate action by the Standby Servicer or any such
Affiliate in furtherance of any of the foregoing;
(vi) Any representation, warranty or statement of the
Standby Servicer made in this Agreement or in any
certificate, report or other writing delivered
pursuant hereto shall prove to be incorrect as of the
time when the same shall have been made, and the
incorrectness of such representation, warranty or
statement has a material adverse effect on the
Issuer, the Insurer or the Noteholders and, within 30
days after written notice thereof shall have been
given (1) to the Standby Servicer by the Indenture
Trustee or the Insurer or (2) to the Standby
Servicer, and to the Indenture Trustee and the
Insurer by the Noteholders evidencing not less than
25% of the Class A Note Balance, the circumstances or
condition in respect of which such representation,
warranty or statement was incorrect shall not have
been eliminated or otherwise cured;
(vii) For so long as the Standby Servicer is acting as
Standby Servicer hereunder, the failure of the
Standby Servicer to comply with the duties and
services set forth in Schedule C attached hereto,
which failure continues unremedied for a period of
five (5) Business Days; or
(viii) For so long as the Standby Servicer is obligated to
perform as the Servicer, the occurrence and
continuance of a Trigger Event (as such Trigger
Events shall have been modified by the Standby
Servicer and the Insurer prior to the Standby
Servicer assuming the duties of Servicer hereunder);
then, and in each and every case, subject to the notice and
cure provisions of paragraph (b) below, the Indenture Trustee shall, at
the direction of the Controlling Party, by notice then given in writing
to the Standby Servicer as the Servicer or as the Standby Servicer (and
to the Indenture Trustee if given by the Noteholders) shall terminate
all of the rights and obligations of the Standby Servicer as the
Servicer or as the Standby Servicer under this Agreement. Upon sending
or receiving any such notice, the Indenture Trustee shall promptly send
a copy thereof to the Indenture Trustee, the Owner Trustee, the Rating
Agencies, the Insurer, the Servicer, the Standby Servicer and to each
Noteholder. On or after the receipt by the Standby Servicer of such
written notice (unless otherwise directed by the Insurer and subject to
Section 14.03(a)), all authority and power of the Standby Servicer as
the Servicer and as the Standby Servicer under this Agreement, whether
with respect to the Securities or the Receivables or otherwise, shall,
without further action, pass to and be vested in any such successor
Standby Servicer or successor Servicer, as applicable, as may be
appointed under Section 14.03; and, without limitation, any such
successor Standby Servicer or successor Servicer, is hereby authorized
and empowered to execute and deliver, on behalf of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and related documents, or otherwise.
TRUST AND SERVICING AGREEMENT
85
The Standby Servicer shall cooperate with the successor Standby
Servicer or successor Servicer, as applicable, in effecting the termination of
its responsibilities and rights under this Agreement, including the transfer to
the successor Standby Servicer or successor Servicer, as applicable, for
administration by it of all cash amounts that shall at the time be held by it
for deposit, or shall thereafter be received by it with respect to any
Receivable, and the related accounts and records maintained by the Standby
Servicer.
(b) The Insurer (so long as it is the Controlling Party), the
Majority Noteholders or the Indenture Trustee shall provide the Standby
Servicer with written notice of any Standby Servicer Default, which
notice must grant the Standby Servicer an opportunity to cure any such
event of termination as follows: (i) in the case of any failure of the
Standby Servicer to properly administer or deliver any monies as
required pursuant to this Agreement, for a period of three (3) Business
Days after receipt of the notice by the Standby Servicer; or (ii) in
the case of any failure pursuant to this Agreement that is non-monetary
in nature, for a period of thirty (30) days after receipt of the notice
by the Standby Servicer. Such notice must explicitly provide that if
any such failure by the Standby Servicer giving rise to the event of
termination is not cured within the applicable cure period, then the
Controlling Party shall have the right to terminate the appointment of
the Standby Servicer effective as of a date no sooner than the end of
the applicable cure period.
(c) The Standby Servicer may be released from its obligations
under this Agreement if it does not receive payment of its Standby
Servicer Fee or Successor Servicer Fee required to be made under the
terms of this Agreement, which failure continues unremedied for a
period of thirty (30) days after receipt by the Insurer of written
notice of such failure and that the Standby Servicer intends to
terminate its appointment as Standby Servicer if such failure to pay is
not remedied within such thirty (30) day period, which written notice
shall explicitly state that failure to pay any Standby Servicer Fee or
successor Servicer Fee owing to the Standby Servicer, if not cured
within thirty (30) days of the date of receipt of notice thereof, will
give the Standby Servicer the right to terminate its appointment as
Standby Servicer.
SECTION 14.03 Appointment of Successors.
(a) Upon the Servicer's receipt of notice of termination
pursuant to Section 14.01 or the Servicer's resignation in accordance
with the terms of this Agreement, the 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
(which date shall be at least 30 days after the date of such notice),
or, if no such date is specified in a notice of termination, until
receipt of such notice and, in the case of resignation, until the later
of (x) the date thirty (30) days from the delivery to the Back-up
Servicer, the Standby Servicer, the Indenture Trustee and the Insurer
of written notice of such resignation (or the date of written
confirmation of such notice prior to the expiration of the thirty (30)
days) in accordance with the terms of this Agreement and (y) the date
upon which the predecessor Servicer shall become unable to act as
Servicer, as specified in the notice of resignation and accompanying
Opinion of Counsel. In the event of the Servicer's resignation or
termination hereunder, and unless the Controlling Party directs
TRUST AND SERVICING AGREEMENT
86
otherwise, the Standby Servicer shall automatically be the successor
Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Standby Servicer
as Servicer by the terms and provisions hereof; provided, however, that
neither the Standby Servicer, the Back-up Servicer nor any other
successor Servicer shall be liable for any actions of the Servicer or
any other predecessor Servicer prior to such succession or for any
breach by the Servicer or any other predecessor Servicer of any of its
representations, warranties or covenants contained in this Agreement or
in any related document or agreement.
(b) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer and shall be
subject to all the responsibilities, duties, and liabilities arising
thereafter relating thereto placed on the predecessor Servicer (subject
to the modified duties of SST set forth in Schedule C attached hereto),
and shall be entitled to the Servicing Fee (or with respect to SST, the
successor Servicer Fee set forth in Schedule C attached hereto) and all
of the rights granted to the predecessor Servicer, by the terms and
provisions of this Agreement. The predecessor Servicer shall be
entitled to be reimbursed for Outstanding Advances.
(c) In connection with such appointment, the Indenture Trustee
may make such arrangements for the successor Servicer out of payments
on Receivables it and such successor Servicer shall agree; provided,
however, that no such compensation shall be in excess of that permitted
the original Servicer under this Agreement. The Owner Trustee and such
successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(d) To the extent that the Standby Servicer or the Back-up
Servicer shall be entitled to any indemnity payment from the Servicer
pursuant to Sections 13.02 or 14.03(i) and such indemnity payment has
not been made within 30 calendar days of demand thereof, the Standby
Servicer or the Back-up Servicer, as applicable, shall be entitled to
reimbursement for such unpaid amounts, to the extent of available
funds, under priority (iii) or (i), respectively, of Section 8.05(a) of
the Indenture.
(e) If the Standby Servicer becomes aware of any error or
continuing error, which in the opinion of the Standby Servicer impairs
its ability to perform its services hereunder, the Standby Servicer may
undertake such data or records reconstruction as it deems appropriate
to correct any such error or continued error and to prevent future
continuing error. To the extent it is not otherwise reimbursed under
this Agreement, the Standby Servicer shall be entitled to recover its
costs incurred in correcting any such error or continuing error.
(f) Upon the Standby Servicer's receipt of notice of
termination following a Standby Servicer Default or the Standby
Servicer's resignation in accordance with the terms of this Agreement,
the Back-up Servicer shall continue to perform its functions as Standby
Servicer or Servicer, as applicable, 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
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87
resignation, until the later of (x) the date 30 days from the delivery
to the Standby Servicer, the Indenture Trustee, and the Insurer of
written notice of such resignation (or the date of written confirmation
of such notice prior to the expiration of the 30 days) in accordance
with the terms of this Agreement and (y) the date upon which the
Standby 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 Standby Servicer's resignation or termination
hereunder, and if the Controlling Party so directs, the Back-up
Servicer shall be the successor in all respects to the Standby Servicer
in its capacity as Standby Servicer and, if applicable, Servicer under
this Agreement and the transactions set forth or provided for herein
and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Standby Servicer and, if
applicable, the Servicer by the terms and provisions hereof; provided,
however, that the Back-up Servicer shall not be liable for any actions
of the Standby Servicer prior to such succession or for any breach by
the predecessor Standby Servicer of any of its representations,
warranties and covenants contained in this Agreement or in any related
document or agreement.
(g) Upon receipt by any successor Servicer (other than the
Standby Servicer in accordance with Section 14.03(f) above) of notice
of termination or such successor Servicer's resignation in accordance
with the terms of this Agreement, such successor Servicer shall
continue to perform its functions as Servicer under this Agreement, in
the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the date 30 days from the delivery
to the Back-up Servicer, if any, the Indenture Trustee and the Insurer
of written notice of such resignation (or the date of written
confirmation of such notice prior to the expiration of the 30 days) in
accordance with the terms of this Agreement and (y) the date upon which
such successor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of
Counsel. In the event of such successor Servicer's resignation or
termination hereunder, and if the Controlling Party so directs, the
Back-up Servicer, if any, shall be the successor in all respects to the
Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the
terms and provisions hereof; provided, however, that the Back-up
Servicer shall not be liable for any actions of the predecessor
Servicer prior to such succession or for any breach by the predecessor
Servicer of any of its representations, warranties and covenants
contained in this Agreement or in any related document or agreement.
(h) Notwithstanding the above, if the Back-up Servicer is
legally unable to so act or the Controlling Party otherwise directs in
accordance with Section 8.02(d), the Controlling Party shall appoint a
successor Servicer, successor Back-up Servicer or successor Standby
Servicer. Otherwise, the Indenture Trustee shall appoint (after
soliciting bids from potential servicers), or petition a court of
competent jurisdiction to appoint, a Servicer (as successor Servicer),
Back-up Servicer (as successor Back-up Servicer) or Standby Servicer
(as successor Standby Servicer) hereunder, in each case acceptable to
the Controlling Party, in the assumption of all or any part of the
responsibilities, duties or liabilities of the outgoing Servicer,
Back-up Servicer or
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Standby Servicer, as applicable, hereunder. The outgoing Servicer,
Back-up Servicer or Standby Servicer shall continue to act as such
hereunder until a successor acceptable to the Controlling Party is
appointed and assumes the obligations as successor Servicer, Back-up
Servicer or Standby Servicer, as applicable.
(i) Any successor Servicer may accept and reasonably rely on
all accounting and servicing records and other documentation provided
to such successor Servicer in connection with succession to Servicer
duties, including documents prepared or maintained by BVAC, the
Transferor, or the Servicer, or any party providing services related to
the Receivables (each, a "Third Party"). The Servicer shall indemnify
and hold harmless the successor Servicer and its officers, employees
and agents, the Issuer, the Noteholders and the Insurer against any and
all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that
the successor Servicer, the Issuer, the Noteholders and the Insurer may
sustain in any way (i) solely related to the negligence or misconduct
of the Servicer or any such Third Party based upon any matter related
to or arising out of this Agreement except for any claims, losses,
penalties, fines, forfeitures, legal fees, and related costs and
judgments arising from such successor Servicer's own negligence or
willful misconduct; or (ii) solely related to the conduct of such
successor Servicer undertaken at the direction of any party hereto or
which relate to the transfer of servicing to the successor Servicer.
The successor Servicer shall have no duty, responsibility, obligation
or liability (collectively "liability") for the acts or omissions of
any Third Party. In the event that the Servicer fails to make any such
indemnity payment, the successor Servicer shall be entitled to receive
such payment from the Issuer, to the extent of Available Funds on each
Payment Date, in the priorities set forth in Section 8.05(a) of the
Indenture; provided, that such Issuer payment shall not relieve the
Servicer from the responsibility for making such payment and the Issuer
shall be subrogated to the rights of the successor Servicer with
respect to such indemnity claim and shall have a direct right to
institute proceedings against the Servicer for such payment. If any
error, inaccuracy or omission (collectively "error") exists in any
information provided to a successor Servicer and such error causes or
materially contributes to such successor Servicer making or continuing
any error (a "continuing error"), such successor Servicer shall have no
liability for such continuing error; provided, however, that this
provision shall not protect such successor Servicer against any
liability arising from its willful misconduct, bad faith or gross
negligence in discovering or correcting or failing to discover or
correct any error or in the performance of its other duties
contemplated herein.
SECTION 14.04 Notice of Events of Servicer Default. Upon any notice of
an Event of Servicer Default or upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article XIV, the Owner Trustee shall
give prompt written notice thereof to Certificateholder at the address appearing
in the Certificate Register, to each of the Rating Agencies then rating the
Notes, to the Insurer and to the Indenture Trustee for further notice thereof to
the Noteholders.
SECTION 14.05 Waiver of Past Defaults. The Insurer (so long as the
Insurer is the Controlling Party) or the Indenture Trustee (if an Insurer
Default has occurred and is continuing or the Insurance Agreement has
terminated) upon direction from holders of Notes evidencing not less than 51% of
the outstanding principal balance of the Notes may waive any default by the
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89
Servicer in the performance of its obligations hereunder and/or its
consequences, except a default in making any required deposits to or payments
from the Collection Account in accordance with this Agreement; provided, that no
waiver of any default or provision of this Agreement shall become effective
without the consent of the Insurer (so long as the Insurer is the Controlling
Party). Upon any such waiver of a past default, such default shall cease to
exist, and any Event of 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
thereon.
ARTICLE XV
The Owner Trustee
SECTION 15.01 Duties of Owner Trustee. The Owner Trustee, both prior to
and after the occurrence of an Event of Servicer Default, shall undertake to
perform such duties as are specifically set forth in this Agreement. If an Event
of Servicer Default shall have occurred and shall not have been cured and the
Owner Trustee has received notice of such Event of Servicer Default, the Owner
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and shall use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
The Owner Trustee shall execute and deliver, on behalf of the Trust,
each Basic Document to which the Trust is a party and all certificates,
instruments and agreements contemplated thereby. The Owner Trustee shall execute
and authenticate the Certificate in accordance with this Agreement and shall
execute the Notes in accordance with the Indenture.
It shall be the duty of the Owner Trustee to discharge (or cause to be
discharged) all its responsibilities pursuant to the terms of this Agreement and
the other documents to which the Trust is a party and to administer the Trust in
the interest of the Certificateholder, subject to and in accordance with the
provisions of this Agreement and the other documents to which the Trust is a
party. Without limiting the foregoing, the Owner Trustee shall, upon written
direction of the Certificateholder and on behalf of the Trust, file and prove
any claim or claims that may exist on behalf of the Trust against the Transferor
in connection with any claims paying procedure as part of an insolvency or a
receivership proceeding involving the Transferor. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the other documents to which the Trust is a
party to the extent the Administrator has agreed in the Administration Agreement
to perform any act or to discharge any duty of the Owner Trustee hereunder or
under any other document to which the Trust is a party, and the Owner Trustee
shall not be held liable for the default or failure of the Administrator to
carry out its obligations under the Administration Agreement. Except as
expressly provided in the documents to which the Trust is a party, the Owner
Trustee shall have no obligation to administer, service or collect the
Receivables or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Receivables.
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SECTION 15.02 Action upon Instruction.
(a) Subject to Article X and the terms of the Spread Account
Agreement, the Instructing Party shall have the exclusive right to
direct the actions of the Owner Trustee in the management of the Trust,
so long as such instructions are not in violation of the express terms
set forth herein or in any Basic Document. The Instructing Party shall
not instruct the Owner Trustee in a manner inconsistent with this
Agreement or the Basic Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such
action is likely to result in liability or unreimbursed expenses on the
part of the Owner Trustee or is contrary to the terms hereof or of any
Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of
this Agreement or any Basic Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the
circumstances) to the Instructing Party requesting instruction from it
as to the course of action to be adopted, and to the extent the Owner
Trustee acts in good faith in accordance with any written instruction
of the Instructing Party received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee
shall not have received appropriate instruction within ten (10) days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances)
it may, but shall be under no duty to, take or refrain from taking such
action, not inconsistent with this Agreement or the Basic Documents, as
it shall deem to be in the best interests of the Certificateholder and
shall have no liability to any Person for such action or inaction
except as otherwise expressly provided in this Agreement.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or
any such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or in
the event that this Agreement permits any determination by the Owner
Trustee or is silent or is incomplete as to the course of action that
the Owner Trustee is required to take with respect to a particular set
of facts, the Owner Trustee may give notice (in such form as shall be
appropriate under the circumstances) to the Instructing Party
requesting instruction from it and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with
any such instruction received, the Owner Trustee shall not be liable,
on account of such action or inaction, to any Person. If the Owner
Trustee shall not have received appropriate instruction within ten (10)
days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under
the circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this Agreement
or the Basic Documents, as it shall deem to be in the best interests of
the Certificateholder and shall have no liability to any Person for
such action or inaction except as otherwise expressly provided in this
Agreement.
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(e) The Owner Trustee shall not take any action (a) that
violates the purposes of the Trust set forth in Section 1.03 or (b)
that, to the actual knowledge of the Owner Trustee, would result in the
Trust becoming taxable as a corporation for federal income tax
purposes. The Instructing Party shall not direct the Owner Trustee to
take action that would violate the provisions of this Section.
(f) The Owner Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Owner Trustee that shall be specifically
required to be furnished pursuant to any provision of this Agreement,
shall examine them to determine whether they conform to the
requirements of this Agreement. The Owner Trustee shall furnish to the
Certificateholder, the Insurer and the Rating Agencies promptly upon
receipt of a written request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements
and any other instruments furnished to the Owner Trustee under the
Basic Documents.
(g) The Owner Trustee shall furnish to the Certificateholder,
the Insurer and the Rating Agencies promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and any other
instruments furnished to the Owner Trustee under the Basic Documents.
(h) No provision of this Agreement shall be construed to
relieve the Owner Trustee from liability for its own negligent action,
its own negligent failure to act, or its own bad faith; provided,
however, that:
(i) Prior to the occurrence of an Event of Servicer
Default, and after the curing of all such Events of
Servicer Default that may have occurred, the duties
and obligations of the Owner Trustee shall be
determined solely by the express provisions of this
Agreement, the Owner Trustee shall not be liable
except for the performance of such duties and
obligations as shall be specifically set forth in
this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Owner
Trustee and, in the absence of bad faith on the part
of the Owner Trustee, or manifest error, the Owner
Trustee may conclusively rely on the truth of the
statements and the correctness of the opinions
expressed in any certificates or opinions furnished
to the Owner Trustee and conforming to the
requirements of this Agreement;
(ii) The Owner Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Owner Trustee
shall have been grossly negligent in ascertaining the
pertinent facts;
(iii) The Owner Trustee shall not be liable with respect to
any action taken, suffered, or omitted to be taken in
good faith in accordance with this Agreement or at
the direction of the Certificate relating to the
time, method, and place of conducting any proceeding
for any remedy available
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92
to the Owner Trustee, or exercising any trust or
power conferred upon the Owner Trustee, under this
Agreement;
(iv) The Owner Trustee shall not be charged with knowledge
of any failure by the Servicer to comply with the
obligations of the Servicer referred to in clauses
(i) or (ii) of Section 14.01, or of any failure by
the Transferor to comply with the obligations of the
Transferor referred to in clause (ii) of Section
14.01, unless a Responsible Officer of the Owner
Trustee receives written notice of such failure (it
being understood that knowledge of the Servicer or
the Servicer as custodian, in its capacity as agent
for the Owner Trustee, is not attributable to the
Owner Trustee) from the Servicer or the Transferor,
as the case may be; and
(v) Without limiting the generality of this Section or
Section 15.07, the Owner Trustee shall have no duty
(A) to see to any recording, filing, or depositing of
this Agreement or any agreement referred to therein
or any financing statement (or continuation
statement) evidencing a security interest in the
Receivables or the Financed Vehicles, or to see to
the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any
insurance of the Financed Vehicles or Obligors or to
effect or maintain any such insurance, (C) to see to
the payment or discharge of any tax, assessment, or
other governmental charge or any Lien or encumbrance
of any kind owing with respect to, assessed, or
levied against, any part of the Trust, (D) to confirm
or verify the contents of any reports or certificates
of the Servicer delivered to the Trust pursuant to
this Agreement believed by the Owner Trustee to be
genuine and to have been signed or presented by the
proper party or parties, or (E) to inspect the
Financed Vehicles at any time or ascertain or inquire
as to the performance or observance of any of the
Transferor's or the Servicer's representations,
warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the
Receivable Files under this Agreement.
The Owner Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Owner Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Owner Trustee shall be the successor to,
and be vested with the rights, duties, powers, and privileges of, the Servicer
in accordance with the terms of this Agreement. Except for actions expressly
authorized by this Agreement, the Owner Trustee shall take no action reasonably
likely to impair the security interests created or existing under any Receivable
or to impair the value of any Receivable.
SECTION 15.03 Accounting and Records to the Certificateholder, the
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
cause to be maintained)
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93
the books of the Trust on a calendar year basis with respect to amounts actually
received or disbursed by the Owner Trustee, (b) deliver (or cause to be
delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be requested to enable
each Certificateholder to prepare its federal and state income tax returns, and
(c) file or cause to be filed such tax returns relating to the Trust provided to
it in execution form, and pursuant to direction of BVAC make such elections,
except Form 8832, as may from time to time be requested in connection with any
applicable state or federal statute or rule or regulation thereunder. The Owner
Trustee shall make all elections pursuant to this Section as directed in writing
by BVAC. The Owner Trustee shall sign all tax information returns provided to it
in execution form pursuant to this Section and any other returns as may be
requested by BVAC, and in doing so shall rely entirely upon, and shall have no
liability for information provided by, or calculations provided by, BVAC. The
Trust shall comply with the provisions to Section 9.09 related to elections
under Section 1278 of the Code.
SECTION 15.04 Signature on Returns; Tax Matters Partner.
(a) The Owner Trustee shall sign on behalf of the Trust the
tax returns of the Trust, if any, unless applicable law requires a
Certificateholder to sign such documents, in which case, as provided in
Section 9.09 such documents shall be signed by BVAC as "tax matter
partner."
(b) The Certificateholder hereby elects BVAC as the "tax
matters partner" of the Trust pursuant to Section 6231 of the Code and
the Treasury Regulations promulgated thereunder.
SECTION 15.05 Owner Trustee's Certificate. On or as soon as practicable
after each Payment Date on which Receivables shall be (i) assigned to BVAC
pursuant to Section 7.02 or deemed to be assigned to the Transferor as a result
of the application of Available Funds in respect of Charged-Off Receivables
pursuant to Sections 9.05 or (ii) assigned to the Servicer pursuant to Section
8.10 or to the Servicer or any other Person designated by the Servicer pursuant
to Section 16.02, the Owner Trustee shall, at the written request of the
Servicer, execute an Owner Trustee's Certificate, substantially in the form of,
in the case of an assignment to BVAC, Exhibit 1, or, in the case of an
assignment to the Servicer, Exhibit 2, based on the information contained in the
Servicer's Certificate for the related Collection Period, amounts deposited to
the Collection Account, and notices received pursuant to this Agreement,
identifying the Receivables repurchased or deemed to be repurchased by BVAC
pursuant to Sections 7.02 or 8.08 or purchased by the Servicer pursuant to
Section 8.10 or the Servicer or any other Person designated by the Servicer
pursuant to Section 16.02 during such Collection Period, and shall deliver such
Owner Trustee's Certificate, accompanied by a copy of the Servicer's Certificate
for such Collection Period to BVAC or the Servicer, as the case may be, with a
copy to the Indenture Trustee. The Owner Trustee's Certificate shall be an
assignment pursuant to Section 15.06.
SECTION 15.06 Trust's Assignment of Purchased Receivables. With respect
to each Receivable repurchased by BVAC pursuant to Section 7.02, or deemed to be
so repurchased pursuant to Section 8.08, purchased by the Servicer pursuant to
Section 8.10 or the Servicer or any other Person designated by the Servicer
pursuant to Section 16.02, the Trust shall assign, as
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94
of the last day of the Collection Period during which such Receivable became a
Charged-Off Receivable or became subject to repurchase by BVAC or purchase by
the Servicer or such other Person, without recourse, representation, or
warranty, to BVAC, the Servicer or such other Person (as the case may be) all
the Trust's right, title, and interest in and to such Receivables, and all
security and documents relating thereto, such assignment being an assignment
outright and not for security. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Receivable on the ground that
it shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Owner Trustee shall, at BVAC's expense, take such steps as the
Owner Trustee deems necessary to enforce the Receivable, including bringing suit
in its name and/or the name of the Indenture Trustee.
SECTION 15.07 Certain Matters Affecting the Owner Trustee. Except as
otherwise provided in Section 15.01:
(i) The Owner Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
Officers' Certificate, Servicer's Certificate,
certificate of auditors, or any other certificate,
statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond, or other
paper or document believed by it to be genuine and to
have been signed or presented by the proper party or
parties.
(ii) The Owner Trustee may consult with counsel and any
written advice or Opinion of Counsel shall be full
and complete authorization and protection in respect
of any action taken or suffered or omitted by it
under this Agreement in good faith and in accordance
with such written advice or Opinion of Counsel.
(iii) The Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Agreement, or to institute, conduct, or defend
any litigation under this Agreement or in relation to
this Agreement, at the request, order, or direction
of any of the Certificateholders pursuant to the
provisions of this Agreement, unless such
Certificateholder shall have offered to the Owner
Trustee reasonable security or indemnity reasonably
satisfactory to the Owner Trustee against the costs,
expenses, and liabilities that may be incurred
therein or thereby. Nothing contained in this
Agreement, however, shall relieve the Owner Trustee
of the obligations, upon the occurrence of an Event
of Servicer Default (that shall not have been cured),
to exercise such of the rights and powers vested in
it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent man
would exercise or use under the circumstances in the
conduct of his own affairs.
(iv) The Owner Trustee shall not be liable for any action
taken, suffered, or omitted by it in good faith and
believed by it to be authorized or within the
discretion or rights or powers conferred upon it by
this Agreement.
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95
(v) Prior to the occurrence of an Event of Servicer
Default and after the curing of all Events of
Servicer Default that may have occurred, the Owner
Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, or
other paper or document, unless requested in writing
to do so by the Insurer or the Indenture Trustee or
holders of Notes evidencing not less than 25% of the
outstanding principal balance of the Notes; provided,
however, that if the payment within a reasonable time
to the Owner Trustee of the costs, expenses, or
liabilities likely to be incurred by it in the making
of such investigation shall be, in the opinion of the
Owner Trustee, not reasonably assured to the Owner
Trustee by the security afforded to it by the terms
of this Agreement, the Owner Trustee may require
reasonable indemnity against such cost, expense, or
liability as a condition to so proceeding. The
reasonable expense of every such examination shall be
paid by BVAC, as initial Servicer, or, if paid by the
Owner Trustee, shall be reimbursed by BVAC, as
initial Servicer, upon demand. Nothing in this clause
(v) shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of
information regarding the Obligors.
(vi) The Owner Trustee may execute any of the trusts or
powers hereunder or perform any duties under this
Agreement either directly or by or through agents or
attorneys or a custodian. The Owner Trustee shall not
be responsible for any misconduct or negligence
solely attributable to the acts or omissions of the
Servicer in its capacity as Servicer or custodian or
the Administrator.
(vii) The Owner Trustee shall have no duty of independent
inquiry, except as may be required by Section 15.01,
and the Owner Trustee may rely upon the
representations and warranties and covenants of the
Transferor and the Servicer contained in this
Agreement with respect to the Receivables and the
Receivable Files.
SECTION 15.08 Owner Trustee Not Liable for Certificate or Receivables.
The recitals contained herein and in the Certificate (other than the certificate
of authentication on the Certificate) shall be taken as the statements of the
Transferor or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee shall make no
representations as to the validity or sufficiency of this Agreement or of the
Certificate (other than the certificate of authentication on the Certificate),
or of any Receivable or related document. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity, and enforceability of any security interest in any Financed Vehicle or
any Receivable, or the perfection and priority of such a security interest or
the maintenance of any such perfection and priority, or for or with respect to
the efficacy of the Trust or its ability to generate the payments to be
distributed to the Certificateholder or the Noteholders under this Agreement or
the Indenture, including, without limitation: the existence, condition,
location, and ownership of any Financed Vehicle; the existence and
enforceability of
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any physical damage insurance, lender's single interest insurance, or credit
life or disability and hospitalization insurance with respect to any Receivable;
the existence and contents of any Receivable or any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of any
intervening assignment; the completeness of any Receivable; the performance or
enforcement of any Receivable; the compliance by the Transferor or the Servicer
with any warranty or representation made under this Agreement or in any related
document and the accuracy of any such warranty or representation prior to the
Owner Trustee's receipt of notice or other discovery of any noncompliance
therewith or any breach thereof; any investment of monies by the Servicer or any
loss resulting therefrom (it being understood that the Owner Trustee shall
remain responsible for any Trust Property that it may hold); the acts or
omissions of the Transferor, the Servicer, or any Obligor; an action of the
Servicer taken in the name of the Owner Trustee; or any action by the Owner
Trustee taken at the instruction of the Servicer; provided, however, that the
foregoing shall not relieve the Owner Trustee of its obligation to perform its
duties under this Agreement. Except with respect to a claim based on the failure
of the Owner Trustee to perform its duties under this Agreement or based on the
Owner Trustee's negligence or willful misconduct, no recourse shall be had for
any claim based on any provision of this Agreement, the Certificateholder or the
Noteholders, or any Receivable or assignment thereof against the Owner Trustee
in its individual capacity, the Owner Trustee shall not have any personal
obligation, liability, or duty whatsoever to any Certificateholder or the
Noteholders or any other Person with respect to any such claim, and any such
claim shall be asserted solely against the Trust or any indemnitor who shall
furnish indemnity as provided in this Agreement. The Owner Trustee shall not be
accountable for the use or application by the Transferor of any Certificate or
Notes or of the proceeds thereof, or for the use or application of any funds
paid to the Transferor or the Servicer in respect of the Receivables.
SECTION 15.09 Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes with
the same rights as it would have if it were not Owner Trustee.
SECTION 15.10 Owner Trustee's and Indenture Trustee's Fees and
Expenses; Indemnification.
(a) In accordance with the priorities set forth in Section
8.05(a) of the Indenture, the Owner Trustee shall receive as
compensation for its services hereunder the Owner Trustee Fee, and the
Owner Trustee shall be entitled to be reimbursed in accordance with
such priorities for its other reasonable expenses incurred hereunder,
including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee
may employ in connection with the exercise and performance of its
rights and its duties hereunder and under the Basic Documents, and the
Servicer shall pay or reimburse the Owner Trustee upon its request for
all reasonable expenses, disbursements, and advances (including the
reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) incurred or
made by the Owner Trustee in accordance with any provisions of this
Agreement and the Indenture, except any such expense, disbursement, or
advance as may be attributable to its willful misfeasance, negligence,
or bad faith. Any amounts paid to the Owner Trustee pursuant to this
Section 15.10 shall be deemed not to be a part of the Trust Property
immediately after such
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97
payment. The Servicer shall indemnify the Owner Trustee (which, for
purposes of this section, shall include its directors, officers,
employees, and agents) for and hold it harmless against any loss,
liability, or expense incurred without willful misfeasance, negligence,
or bad faith on its part, arising out of or in connection with the
acceptance or administration of the Trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties under this Agreement and the Indenture. The Servicer shall pay
the fees and expenses of the Administrator under the Administration
Agreement; provided, however, that the Servicer shall only be required
to pay the reasonable fees and expenses of any successor Administrator
or such other fees agreed to in writing by the Servicer and BVAC.
Additionally, the Transferor, pursuant to Section 12.02 and subject to
the limitations set forth therein, and the Servicer, pursuant to
Section 13.02, respectively, shall indemnify the Owner Trustee with
respect to certain matters. This indemnity shall survive the
termination of this Agreement and the Indenture or the termination of
the Trust and the resignation or removal of the Owner Trustee.
(b) The Servicer hereby agrees to pay or reimburse the fees
and expenses of the Indenture Trustee as provided in Section 6.07 of
the Indenture. No successor Servicer shall be obligated to make any
payments required by this Section 15.10 and instead the Owner Trustee
and the Indenture Trustee shall receive such amounts, to the extent of
Available Funds on each Payment Date, in the priorities set forth in
Section 8.05(a) of the Indenture provided, however, the Owner Trustee
agrees that no amount owed or paid under the Policy shall be paid to
the Owner Trustee for amounts payable to the Owner Trustee.
SECTION 15.11 Eligibility Requirements for Owner Trustee. The Owner
Trustee under this Agreement shall at all times be a corporation (i) having an
office in the same State as the location of the Corporate Trust Office as
specified in this Agreement; (ii) organized and doing business under the laws of
such State or the United States of America; (iii) authorized under such laws to
exercise corporate trust powers; (iv) having a net worth of at least
$50,000,000; (v) subject to supervision or examination by federal or State
authorities; and (vi) the long-term unsecured debt of which is rated at least A2
by Moody's and A by Standard & Poor's or which is approved by the Insurer and
each Rating Agency. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 15.11,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section 15.11, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 15.12.
SECTION 15.12 Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer (or if SST is then acting as Servicer, the Indenture
Trustee), with the prior written consent of the Insurer (so long as it is the
Controlling Party), shall promptly appoint a successor Owner Trustee, by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner
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98
Trustee and one copy to the successor Owner Trustee. If no successor Owner
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Owner Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 15.11 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation, or
liquidation, then the Servicer may remove the Owner Trustee. If it shall remove
the Owner Trustee under the authority of the immediately preceding sentence, the
Servicer shall promptly appoint a successor Owner Trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the Owner
Trustee so removed and one copy to the successor Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 15.12
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 15.13.
SECTION 15.13 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 15.12 shall execute, acknowledge, and deliver to
the Servicer and to the predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed, or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. Any
successor Owner Trustee appointed hereunder shall file an amendment to the
Certificate of Trust with the Delaware Secretary of State reflecting the name
and principal place of business of such successor Owner Trustee in the State of
Delaware. The predecessor Owner Trustee shall deliver to the successor Owner
Trustee all documents and statements held by it under this Agreement; and the
Servicer and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 15.13 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 15.11.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 15.13, the Servicer shall mail notice of the successor of such
Owner Trustee under this Agreement to the Indenture Trustee and to the Holder of
the Certificate at its address as shown in the Certificate Register. If the
Servicer shall fail to mail such notice within 10 days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer (or if BVAC is no
longer the Servicer, the Owner Trustee shall be reimbursed for such expenses in
accordance with the priorities set forth in Section 8.05(a) of the Indenture).
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SECTION 15.14 Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion, or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 15.11, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
SECTION 15.15 Appointment of Co-Trustee or Separate Owner Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
(or if SST is then acting as Servicer, the Back-up Servicer) and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Owner Trustee to act
as co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholder, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 15.15,
such powers, duties, obligations, rights, and trusts as the Servicer and the
Owner Trustee may consider necessary or desirable. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, or in the case an Event of Servicer Default shall have
occurred and be continuing, the Owner Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee under this Agreement shall
be required to meet the terms of eligibility as a successor Owner Trustee
pursuant to Section 15.11 and no notice to Certificateholder of the appointment
of any co-trustee or separate trustee shall be required pursuant to Section
15.13.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations conferred
or imposed upon the Owner Trustee shall be conferred
upon and exercised or performed by the Owner Trustee
and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or
co-trustee is not authorized to act separately
without the Owner Trustee joining in such act),
except to the extent that under any law of any
jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the
Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at
the direction of the Owner Trustee;
(ii) No trustee under this Agreement shall be personally
liable by reason of any act or omission of any other
trustee under this Agreement; and
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(iii) The Servicer and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request, or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XV. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign, or be removed, all of its
estates, properties, rights, remedies, and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor Owner Trustee.
SECTION 15.16 Representations and Warranties of Owner Trustee. The
Owner Trustee makes the following representations and warranties on which the
Transferor, the Certificateholder and the Secured Parties may rely:
(a) Organization and Existence. The Owner Trustee is a
national banking corporation duly organized and validly existing under
the laws of the State of Delaware and authorized to engage in a banking
and trust business under such laws.
(b) Power and Authority. The Owner Trustee has full power,
authority, and legal right to execute, deliver, and perform this
Agreement, and shall have taken all necessary action to authorize the
execution, delivery, and performance by it of this Agreement.
(c) Duly Executed. This Agreement has been duly executed and
delivered by the Owner Trustee and constitutes the legal, valid, and
binding agreement of the Owner Trustee, enforceable in accordance with
its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, reorganization, moratorium,
conservatorship, receivership or other similar laws now or hereinafter
in effect relating to the enforcement of creditors' rights in general,
as such laws would apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership
or similar occurrence affecting the Owner Trustee, and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) as well as concepts of
reasonableness, good faith and fair dealing.
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101
ARTICLE XVI
TERMINATION
SECTION 16.01 Termination of the Trust.
(a) The respective obligations and responsibilities of the
Transferor, the Servicer, the Standby Servicer, the Indenture Trustee,
the Back-up Servicer and the Owner Trustee created hereby shall
terminate and the Trust created by this Agreement shall dissolve upon
(i) written notice to the Owner Trustee from the Servicer (or if SST is
then acting Servicer, the Transferor) at any time after the disposition
of the Trust corpus as of the last day of any Collection Period at the
direction of the Servicer, at its option, pursuant to Section 16.02, or
(ii) the payment to all Noteholders and the Insurer of all amounts
required to be paid to them pursuant to this Agreement, the Indenture
and the Insurance Agreement (as set forth in writing by the Insurer)
and the disposition of all property held as part of the Trust;
provided, however, that in no event shall the trust created by this
Agreement continue beyond the expiration of 21 years from the date as
of which this Agreement is executed. The Servicer shall promptly notify
the Owner Trustee, the Indenture Trustee and the Insurer in writing of
any prospective termination pursuant to this Section 16.01.
Notwithstanding the foregoing, the Trust shall continue and the
Indenture Trustee shall pursue recovery of any Preference Amounts under
the Policy and the distribution of the same to Noteholders until the
Policy terminates by its own terms.
(b) Neither the Transferor nor any Certificateholder shall be
entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Payment Date upon which the Certificateholder shall surrender its
Certificate to the Indenture Trustee, as paying agent who shall then
surrender such Certificate to the Owner Trustee for cancellation, shall
be given by the Owner Trustee by letter to the Certificateholder mailed
within five (5) Business Days of receipt of notice of such termination
from the Transferor or Servicer, as the case may be, given pursuant to
this Section 16.01 stating (i) the Payment Date upon or with respect to
which final payment of the Certificate shall be made upon presentation
and surrender of the Certificate at the office of the Indenture Trustee
therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of
the Certificate at the office of the Owner Trustee therein specified.
The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee), the Insurer and the Indenture
Trustee at the time such notice is given to the Certificateholder. Upon
presentation and surrender of the Certificate to the Owner Trustee, the
Indenture Trustee shall cause to be distributed to the
Certificateholder amounts distributable on such Payment Date pursuant
to Section 16.02.
In the event that the Certificateholder shall not surrender
its Certificate for cancellation within six (6) months after the date
specified in the above-mentioned written
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notice, the Owner Trustee shall give a second written notice to the
Certificateholder to surrender its Certificate for cancellation and
receive the final distribution with respect thereto. If within one year
after the second notice, the Certificate shall not have been
surrendered for cancellation, any funds remaining in the Trust after
exhaustion of such remedies shall be distributed, subject to applicably
escheat laws, by the Indenture Trustee to the Transferor and the
Certificateholder shall look solely to the Transferor for payment.
(d) Any funds remaining in the Trust, after funds for final
distribution have been distributed or set aside for distribution and
reasonable provision has been made for known claims and obligations of
the Trust, shall be distributed to the Certificateholder.
(e) Upon dissolution and the winding up of the Trust pursuant
to Section 16.01(a), the Owner Trustee shall cause the Certificate of
Trust to be canceled by filing a certificate of cancellation with the
Secretary of State in accordance with the provisions of Section 3810 of
the Delaware Statutory Trust Act.
SECTION 16.02 Optional Disposition of All Receivables. On any Payment
Date (after giving effect to any payments to be made on such Payment Date) on
which (i) the Notional Principal Amount has been reduced to zero and (ii) the
aggregate Principal Balance of the Receivables will be equal to or less than 10%
of the Original Pool Balance, the Servicer shall have the option to cause the
Owner Trustee to sell (to the Servicer or any other person designated by the
Servicer) the corpus of the Trust at the Redemption Price. Any such purchase
will be effective as of the end of the Collection Period which relates to the
Payment Date on which the repurchase occurs. The proceeds of such sale will be
deposited into the Collection Account for distribution to the Indenture Trustee
(and, to the extent applicable, the Insurer) on the next succeeding Payment
Date. The Servicer shall notify the Owner Trustee and the Indenture Trustee on
or before the Determination Date if the aggregate Principal Balance as of the
related Payment Date (after giving effect to any payments to be made on such
Payment Date) will be less than or equal to 10% of the Original Pool Balance.
The Servicer shall notify the Owner Trustee and the Indenture Trustee in writing
on or before the Determination Date if the Servicer intends to exercise its
option to purchase the corpus of the Trust pursuant to this Section 16.02. Such
Redemption Price shall be deposited to the Collection Account in immediately
available funds by 11:00 a.m., New York City time, on the Payment Date and, upon
notice to the Owner Trustee and the Indenture Trustee of such deposit, whereupon
the Notes and the Certificate shall no longer evidence any right or interest in
the Receivables or any proceeds thereof. The fair market value of the
outstanding Receivables for purposes of this Section 16.02 shall be an amount
equal to the average of the bid prices for such assets taken as a whole,
provided to the Servicer by two independent, nationally recognized dealers in
automobile loans substantially similar to the Receivables.
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ARTICLE XVII
MISCELLANEOUS PROVISIONS
SECTION 17.01 Amendment.
(a) This Agreement may be amended from time to time by the
Issuer, the Transferor, the Servicer, the Back-up Servicer, the Standby
Servicer, the Owner Trustee and the Indenture Trustee and, (i) so long
as the Insurer is the Controlling Party, with the prior written consent
of the Insurer and, (ii) if an Insurer Default has occurred and is
continuing or the Insurance Agreement has terminated with the consent
of the Majority Noteholders (which consent given pursuant to this
Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holders and on all future Holders of
such Notes and of any Notes issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such
consent is made upon the Notes) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights
of the Holders of Notes; provided, however, that, in the case of either
clause (i) or (ii) above, no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing
of, or change the allocation or priority of, collections of payments on
Receivables or payments that shall be required to be made on any Note
or Certificate or change the applicable interest rate payable on any
Note without the consent of each Noteholder and Certificateholder
affected thereby and the satisfaction of the Rating Agency Condition,
(b) reduce the aforesaid percentage of the Note Balance required to
consent to any such amendment, without the consent of the Holders of
all Notes then outstanding or eliminate the right of the Noteholder or
the Certificateholder to consent to any change described in clause (a)
affecting the Noteholder or the Certificateholder without the consent
of the Noteholder or the Certificateholder, as applicable, or (c)
result in a downgrade or withdrawal of the then current rating of the
Notes by either of the Rating Agencies without the consent of all the
Noteholders and the satisfaction of the Rating Agency Condition;
provided, further that in the case of clause (ii) above, this Agreement
may be amended from time to time by the Issuer, the Transferor, the
Servicer, the Back-up Servicer, the Standby Servicer, the Owner Trustee
and the Indenture Trustee, with the prior written consent of the
Insurer, so long as it is the Controlling Party, for any of the
following purposes:
(x) to correct or amplify the description of any property
at any time conveyed to the Issuer hereunder, or better to assure,
convey and confirm unto the property conveyed pursuant hereto;
(y) to add to the covenants of the Transferor, BVAC, the
Servicer, the Back-up Servicer or the Standby Servicer for the benefit
of the Holders of the Notes and the Insurer, or
(z) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or to make any other provisions with respect to matters or
questions arising under this Agreement; provided
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that such action pursuant to this subclause (z) shall not adversely
affect in any material respect the interests of the Holders of the
Notes, as evidenced by written confirmation that such amendment would
not result in a downgrade or withdrawal of the then current rating of
the Notes by either of the Rating Agencies.
(b) The Owner Trustee shall furnish prior notice of any such
proposed amendment to each Rating Agency and promptly after the
execution of any such amendment or consent, the Indenture Trustee shall
furnish a copy of such amendment and/or consent, if applicable, to each
Noteholder, the Insurer and each of the Rating Agencies.
(c) Prior to the execution of any amendment to this Agreement,
the Owner Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement and the Opinion of Counsel referred to
in Section 17.02(i)(l). The Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Indenture
Trustee's own rights, duties or immunities under this Agreement or
otherwise.
(d) So long as it is the Controlling Party, the Insurer shall
have the right to exercise all rights, including voting rights, which
the Noteholders are entitled to exercise pursuant to this Agreement,
without any consent of such Noteholders; provided, however, that
without the consent of each Noteholder affected thereby, the Insurer
shall not exercise such rights to amend this Agreement in any manner
that would (i) reduce the amount of, or delay the timing of,
collections of payments on the Receivables or distributions which are
required to be made on any Note, (ii) adversely affect in any material
respect the interests of the Holders of any Notes, or (iii) alter the
rights of any such Holder to consent to such amendment.
(e) Notwithstanding any provision in this Agreement to the
contrary, in the event an Insurer Default shall have occurred and be
continuing or the Insurance Agreement has terminated, the Insurer shall
not have the right to take any action under this Agreement, consent to
or to control or direct the actions of the Trust, the Transferor, the
Servicer, the Back-up Servicer, the Standby Servicer, the Indenture
Trustee or the Owner Trustee pursuant to the terms of this Agreement,
nor shall the consent of the Insurer be required with respect to any
action (or waiver of a right to take action) to be taken by the Trust,
the Transferor, the Servicer, the Back-up Servicer, the Standby
Servicer, the Indenture Trustee, the Owner Trustee or the Noteholders
or the Certificateholder.
(f) It shall not be necessary for the consent of the
Certificateholder or the Noteholders pursuant to this Section 17.01 to
approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by the Certificateholder shall
be subject to such reasonable requirements as the Owner Trustee may
prescribe.
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(g) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State of the State of Delaware.
SECTION 17.02 Protection of Title to Trust.
(a) Each of the Transferor and BVAC, as to itself, shall file
such financing statements and cause to be 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
Noteholders, to the extent expressly set forth herein or the other
Basic Documents, the Insurer and the Indenture Trustee in the
Receivables and in the proceeds thereof and the sale of accounts and
chattel paper. Each of the Transferor and BVAC, as to itself, shall
deliver (or cause to be delivered) to the Indenture Trustee and the
Insurer file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither BVAC nor the Transferor shall change its name,
identity, or corporate structure in any manner that would, could, or
might make any financing statement or continuation statement filed by
the Transferor or BVAC in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-507 of the UCC, unless it
shall have given the Indenture Trustee and the Insurer at least 60
days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements and shall have delivered an Opinion of Counsel
(A) stating that, in the opinion of such counsel, all amendments to all
previously filed financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Indenture Trustee in the Receivables and
the other Trust Property, and reciting the details of such filings or
(B) stating that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest.
(c) Each of the Transferor and BVAC shall give the Indenture
Trustee and the Insurer at least 60 days' prior written notice of any
relocation of its principal executive office, or state of
incorporation, 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 and
shall have delivered an Opinion of Counsel (A) stating that, in the
opinion of such counsel, all amendments to all previously filed
financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of
the Indenture Trustee in the Receivables and the other Trust Property,
and reciting the details of such filings or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve
and protect such interest. 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
106
(and the nature of each) and (ii) reconciliation between payments or
Recoveries on (or with respect to) each Receivable and the amounts from
time to time deposited in the Collection Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables
to the Trust, the Servicer's master computer records (including any
back-up archives) that refer to a Receivable shall indicate clearly
(including by means of tagging) the interest of the Trust in such
Receivable and that such Receivable is owned by the Trust. Indication
of the Trust's ownership of a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased.
(f) If at any time BVAC or the Transferor or the Servicer
shall propose to sell, grant a security interest in, or otherwise
transfer any interest in automotive receivables to any prospective
purchaser, lender, or other transferee, the Servicer shall give to such
prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from back-up archives)
that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly (including by means of tagging) that such
Receivable has been sold and is owned by the Trust and pledged to the
Indenture Trustee.
(g) Upon reasonable prior notice, the Servicer shall permit
the Indenture Trustee, the Insurer (so long as the Insurer is the
Controlling Party) and their respective 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
provided, that such inspection and audit shall not unreasonably
interfere with the Servicer's daily business operations.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee, the Indenture Trustee and the Insurer (so long as it is the
Controlling Party), within five Business Days, a list of all
Receivables (by account number and name of Obligor) then held as part
of the Trust, together with a reconciliation of such list to the
Schedule of Receivables attached hereto as Exhibit A and to each of the
Servicer's Certificates furnished before such request indicating
removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee and the Insurer (so long as the Insurer is the
Controlling Party):
(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 releases of financing statements)
and continuation statements have been executed (or otherwise
authorized) and filed that are necessary fully to preserve and
protect the interest of the Indenture Trustee in the
Receivables and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details
are given, or (B) stating that, in the opinion of such
TRUST AND SERVICING AGREEMENT
107
counsel, no such action shall be necessary to preserve and
protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than
three months after the Cut-off Date, an Opinion of Counsel,
dated as of a date during such 90-day period, either (A)
stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the
interest of the Indenture Trustee in the Receivables, and
reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B)
stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest. Such
Opinion of Counsel shall also describe the execution and
filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to
preserve and protect the interest of the Indenture Trustee in
the Receivables, until January 30 in the following calendar
year.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(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.
(j) If the Back-up Servicer or the Standby Servicer is acting
as the successor Servicer, it shall be reimbursed for any costs
incurred by it in performing its duties pursuant to this Section.
SECTION 17.03 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Noteholder or
Certificateholder shall not operate to terminate this Agreement or the
Trust, nor entitle such Noteholder's or such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action
or commence any proceeding in any court for a partition or winding up
of the Trust, nor otherwise affect the rights, obligations, and
liabilities of the parties to this Agreement or any of them.
(b) No Noteholder shall have any right to vote (except as
provided in this Agreement) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the
parties to this Agreement except as expressly set forth herein, nor
shall anything in this Agreement set forth, or contained in the terms
of the Notes, be construed so as to constitute the Noteholders from
time to time as partners or members of an association; nor shall any
Noteholders be under any liability to any third person by reason of any
action taken pursuant to any provision of this Agreement. No Noteholder
shall have any right by virtue or by availing itself of any provisions
of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement,
unless the Insurer (so long as the Insurer is the Controlling Party)
has given its prior written consent and such Holder previously shall
TRUST AND SERVICING AGREEMENT
108
have given to the Indenture Trustee a written notice of default and of
the continuance thereof, and unless also (i) the default arises from
the Transferor's or the Servicer's failure to remit payments when due
hereunder, or (ii) the Majority Noteholders shall have made written
request upon the Indenture Trustee to institute such action, suit or
proceeding in its own name as Indenture Trustee under this Agreement
and such Holder shall have offered to the Indenture Trustee such
reasonable indemnity as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Indenture
Trustee, for 30 days after its receipt of such notice, request, and
offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding and during such 30-day period no
request or waiver inconsistent with such written request has been given
to the Indenture Trustee pursuant to this Section or Section 13.04; no
one or more Holders of Notes or Certificates shall have any right in
any manner whatever by virtue or by availing itself or themselves of
any provisions of this Agreement to affect, disturb, or prejudice the
rights of the Holders of any other of the Notes or the Certificates, or
to obtain or seek to obtain priority over or preference to any other
such Holder, or to enforce any right, under this Agreement except in
the manner provided in this Agreement and for the equal, ratable, and
common benefit of all Noteholders or all Certificateholders, as
applicable. For the protection and enforcement of the provisions of
this Section, each Noteholder, each Certificateholder and the Indenture
Trustee shall be entitled to such relief as can be given either at law
or in equity. Nothing in this Agreement shall be construed as giving
the Noteholders any direct right to make a claim on the Policy.
(c) In the event the Indenture Trustee shall receive
conflicting or inconsistent requests and indemnity from two or more
groups of Holders of Securities, each representing less than the
required amount of the Securities, the Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any
other provisions of this Agreement.
SECTION 17.04 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS AND WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
(EXCEPT WITH REGARD TO THE UCC).
SECTION 17.05 Notices. All demands, notices, and communications under
this Agreement shall be in writing, personally delivered, sent by facsimile to,
sent by courier to or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given unless otherwise provided herein, upon
receipt:
(a) in the case of the Transferor, at the following address:
Bay View Transaction Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇; at the following phone
number: (▇▇▇) ▇▇▇-▇▇▇▇; and at the following fax number (▇▇▇) ▇▇▇-▇▇▇▇.
TRUST AND SERVICING AGREEMENT
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(b) in the case of the Servicer, at the following address: Bay
View Acceptance Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇; at the following phone number:
(▇▇▇) ▇▇▇-▇▇▇▇; and at the following fax number (▇▇▇) ▇▇▇-▇▇▇▇.
(c) in the case of the Owner Trustee at the following address:
Bay View 2003-LJ-1 Owner Trust, c/o Wilmington Trust Company, Owner
Trustee, Plaza Building, 1st Floor, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration; at the
following phone number (▇▇▇) ▇▇▇-▇▇▇▇, and at the following fax number
(▇▇▇) ▇▇▇-▇▇▇▇;
(d) in the case of the Insurer, to: Financial Security
Assurance Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Transaction Oversight Department, Re: Bay View 2003-LJ-1 Owner Trust,
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy Nos. (▇▇▇) ▇▇▇-▇▇▇▇, (212)
339-3529 (in each case in which notice or other communication to
Financial Security refers to an Event of Default, a claim on the Policy
or with respect to which failure on the part of Financial Security to
respond shall be deemed to constitute consent or acceptance, then a
copy of such notice of other communication should also be sent to the
attention of each of the General Counsel and the Head-Financial
Guaranty Group and shall be marked to indicate "URGENT MATERIAL
ENCLOSED");
(e) in the case of the Indenture Trustee and the Back-up
Servicer, at its Corporate Trust Office, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇;
(f) in the case of the Standby Servicer, at the following
address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇; at the following phone number (▇▇▇) ▇▇▇-▇▇▇▇; and at
the following fax number (▇▇▇) ▇▇▇-▇▇▇▇.
(g) in the case of Moody's, at the following address: ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
(h) in the case of Standard & Poor's, at the following
address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Asset-Backed Surveillance Department;
Any notice required or permitted to be mailed to a Noteholder or
Certificateholder, as the case may be, shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Note or
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Noteholder or the Certificateholder, as the case may be, shall receive such
notice.
SECTION 17.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificate or the Notes or the rights of the Holders thereof or of the Insurer.
TRUST AND SERVICING AGREEMENT
110
SECTION 17.07 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided below or in Sections 12.03 and 13.03 and as
provided in the provisions of this Agreement concerning the resignation of the
Servicer, the Back-up Servicer or the Standby Servicer, this Agreement may not
be assigned by the Transferor, the Servicer, the Back-up Servicer or the Standby
Servicer without the prior written consent of the Owner Trustee and the
Controlling Party.
SECTION 17.08 Insurer. Without limiting the generality of the
foregoing, all covenants and agreements in this Agreement which confer rights
upon the Insurer shall be for the benefit of and run directly to the Insurer to
the extent expressly set forth herein or in the other Basic Documents, and the
Insurer shall be entitled to rely on and enforce such covenants and agreements,
subject, however, to the limitations on such rights provided in this Agreement
and the Basic Documents. The Insurer may disclaim any of its respective rights
and powers under this Agreement (but not its duties and obligations under the
Policy), upon delivery of a written notice to the Owner Trustee. Nothing herein,
however, shall be construed to have created a fiduciary obligation of the Owner
Trustee to any person or persons other than the Certificateholders.
SECTION 17.09 Nonpetition Covenants. The Owner Trustee (in its
individual capacity and as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Certificate, and the Indenture Trustee and
each Noteholder by accepting the benefits of this Agreement, hereby covenant and
agree that they will not at any time institute against the Transferor or the
Trust, or join in any institution against the Transferor or the Trust of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any federal or state bankruptcy or similar law in
connection with any obligations relating to the Certificates, the Notes, this
Agreement or any of the Basic Documents.
SECTION 17.10 No Recourse. Each Certificateholder, by accepting a
Certificate, acknowledges that such Certificateholder's Certificate represents a
100% beneficial interest in the assets of the Trust only and does not represent
an interest in or obligation of the Transferor, the Servicer, the Back-up
Servicer, the Standby Servicer, BVAC, the Owner Trustee, the Indenture Trustee,
the Insurer, the Collateral Agent or any Affiliate thereof, and no recourse may
be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Certificate or the Basic Documents.
SECTION 17.11 No Legal Title to Trust Property in Certificateholder.
The Certificateholder shall not have legal title to any part of the Trust
Property. The Certificateholder shall be entitled to receive distributions only
in accordance with the Indenture, the Spread Account Agreement and this
Agreement. No transfer, by operation of law or otherwise, of any right, title or
interest of the Certificateholder to and in its ownership interest in the Trust
Property shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Property.
SECTION 17.12 Further Assurances. The Transferor, the Servicer, the
Back-up Servicer and the Standby Servicer agree to do and perform, from time to
time, any and all acts and to execute any and all further instruments required
or reasonably requested by the Indenture Trustee or the Insurer more fully to
effect the purposes of this Agreement and the other Basic
TRUST AND SERVICING AGREEMENT
111
Documents, including, without limitation, the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.
SECTION 17.13 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, the Insurer, the
Noteholders or the Certificateholder, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 17.14 Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Indenture Trustee,
the Noteholders and the Certificateholder, respectively, and their respective
successors and permitted assigns. Except as may be otherwise provided in this
Agreement, no other person will have any right or obligation hereunder. The
Owner Trustee (including in its individual capacity), the Spread Account
Depositor Owner Trustee (including in its individual capacity) and the Insurer
are each an express third party beneficiary of this Agreement. Each of the
parties to the Purchase Agreement hereby agrees that the Insurer shall be
permitted but not obligated to enforce the rights of the Transferor directly
thereunder in the place and stead of the Transferor but the Insurer shall have
no obligations under the Purchase Agreement.
SECTION 17.15 Actions by Noteholders or Certificateholders.
(a) Wherever in this Agreement a provision is made that an
action may be taken or a notice, demand, or instruction given by
Noteholders or by Certificateholders, as the case may be, such action,
notice, demand or instruction may be taken or given by any Noteholder
or by any Certificateholder, unless such provision requires a specific
percentage of Noteholders or Certificateholders, as the case may be.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be taken
or given by Noteholders or Certificateholders, as the case may be, may
be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders or
Certificateholders, as the case may be, in person or by an agent duly
appointed in writing.
(c) The fact and date of the execution by any Noteholder or
any Certificateholder of any instrument or writing may be proved in any
reasonable manner which the Indenture Trustee deems sufficient.
(d) Any request, demand, authorization, direction, notice,
consent, waiver, or other act by a Noteholder or a Certificateholder,
as the case may be, shall bind such Noteholder or Certificateholder, as
the case may be, and every subsequent holder of such Certificate or
Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to
be done by the Indenture Trustee, the Transferor, the Servicer, the
Back-up Servicer or the Standby Servicer in
TRUST AND SERVICING AGREEMENT
112
reliance thereon, whether or not notation of such action is made upon
such Certificate or Note.
(e) The Indenture Trustee may require such additional proof of
any matter referred to in this Section as it shall deem necessary.
SECTION 17.16 Corporate Obligation. No recourse may be taken, directly
or indirectly, against any partner, incorporator, subscriber to the capital
stock, stockholder, director, officer or employee of the Transferor, the
Servicer, the Back-up Servicer or the Standby Servicer with respect to their
respective obligations and indemnities under this Agreement or any certificate
or other writing delivered in connection herewith.
SECTION 17.17 Covenant Not File a Bankruptcy Petition. The parties
hereto agree that until one year and one day after such time as the Notes issued
under the Indenture are paid in full and all amounts due to the Insurer under
the Insurance Agreement are paid in full, they shall not (i) institute the
filing of a bankruptcy petition against the Transferor or the Trust based upon
any claim in its favor arising hereunder or under the Basic Documents; (ii) file
a petition or consent to a petition seeking relief on behalf of the Transferor
or the Trust under the Bankruptcy Law; or (iii) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
the Transferor or the Trust or a substantial portion of the property of the
Transferor or the Trust. The parties hereto agree that all obligations of the
Issuer and the Transferor are non-recourse to the Trust Property except as
specifically set forth in the Basic Documents.
SECTION 17.18 Independence of the Servicer, Back-up Servicer and
Standby Servicer. For all purposes of this Agreement, each of the Servicer,
Back-up Servicer and Standby Servicer shall be an independent contractor and
shall not be subject to the supervision of the Trust, the Indenture Trustee or
the Owner Trustee with respect to the manner in which it accomplishes the
performance of its obligations hereunder. Unless expressly authorized by this
Agreement, the Servicer, Back-up Servicer and Standby 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 17.19 No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Servicer, the Back-up Servicer or the Standby Servicer and
either of the Trust 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.
SECTION 17.20 Headings. The headings of articles and sections and the
table of contents contained in this Agreement are provided for convenience only.
They form no part of this Agreement and shall not affect its construction or
interpretation. Unless otherwise indicated, all references to articles and
sections in this Agreement refer to the corresponding articles and sections of
this Agreement.
TRUST AND SERVICING AGREEMENT
113
SECTION 17.21 Entire Agreement. This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
this Agreement supersedes and replaces any agreement or understanding that may
have existed between the parties prior to the date hereof in respect of such
subject matter.
SECTION 17.22 Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been countersigned
by Wilmington Trust Company not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall Wilmington Trust
Company in its individual capacity or, except as expressly provided in this
Agreement, as Owner Trustee, 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 of the Issuer 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 this Agreement.
SECTION 17.23 Effect of Policy Expiration Date. Notwithstanding
anything to the contrary set forth herein, all references to any right of the
Insurer to direct, appoint, consent to, accept, approve of, take or omit to take
any action under this Agreement or any other Basic Document shall be
inapplicable at all times after the Policy Expiration Date or when the Insurer
is not the Controlling Party, and (i) if such reference provides for another
party or parties to take or omit to take such action following an Insurer
Default, such party or parties shall also be entitled to take or omit to take
such action, following the Policy Expiration Date and (ii) if such reference
does not provide for another party or parties to take or omit to take such
action following an Insurer Default, then the Indenture Trustee acting at the
direction of the Majority Noteholders shall have the right to take or omit to
take any such action, following the Policy Expiration Date or so long as an
Insurer Default has occurred and is continuing. In addition, any other provision
of this Agreement or any other Basic Document which is operative based in whole
or in part on whether an Insurer Default has or has not occurred shall, at all
times on or after the Policy Expiration Date, be deemed to refer to whether or
not the Policy Expiration Date has occurred.
SECTION 17.24 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed in any number of counterparts, each of which counterparts shall be
deemed to be an original, and all of which counterparts shall constitute but one
and the same instrument.
SECTION 17.25 Consent to Jurisdiction.
(a) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION, SUIT
OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH
TRUST AND SERVICING AGREEMENT
114
ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION OR FOR RECOGNITION
OR ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN SUCH NEW YORK
STATE COURT OR IN SUCH FEDERAL COURT. THE PARTIES HERETO AGREE THAT A
FINAL JUDGMENT IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND AGREE
NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION
OR PROCEEDING IS IMPROPER OR THAT THE RELATED DOCUMENTS OR THE SUBJECT
MATTER THEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS.
(b) To the extent permitted by applicable law, the parties
hereto shall not seek and hereby waive the right to any review of the
judgment of any such court by any court of any other nation or
jurisdiction which may be called upon to grant an enforcement of such
judgment.
(c) Each of the Transferor and the Servicer hereby agree that
until such time as the Notes and the Reimbursement Obligations have
been paid in full and the Insurance Agreement has terminated, each of
the Transferor and BVAC shall have appointed, with prior written notice
to the Insurer, an agent registered with the Secretary of State of the
State of New York, with an office in the County of New York in the
State of New York, as its true and lawful attorney and duly authorized
agent for acceptance of service of legal process (which as of the date
hereof is CT Corporation System, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇). SST has appointed an agent registered with the Secretary of
State of the State of New York, with an office in the County of New
York in the State of New York, as its true and lawful attorney and duly
authorized agent for acceptance of service of legal process (which as
of the date this Agreement is National Corporate Research, Ltd. located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10122). Each of
the Transferor and BVAC agrees that service of such process upon such
Person shall constitute personal service of such process upon it.
SECTION 17.26 Trial by Jury Waived. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION
WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
TRUST AND SERVICING AGREEMENT
115
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION DOCUMENTS TO
WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS WAIVER.
SECTION 17.27 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certifications. The certifications
required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules of the Securities and
Exchange Commission promulgated thereunder to be included in filings with
respect to the Trust pursuant to the Securities Exchange Act of 1934, as
amended, shall be made by BVAC, so long as BVAC is the Servicer; if BVAC is no
longer the Servicer, such certifications shall be made by the Transferor. If
BVAC is no longer the Servicer, the successor Servicer shall provide to the
Transferor all information as the Transferor may reasonably request in order to
fulfill its obligations to make such certifications. In addition, the Indenture
Trustee shall provide to BVAC or the Transferor (whichever of the two is then
required to make such certifications) with a certification signed by a
Responsible Officer (as defined in the Indenture) stating that such Responsible
Officer is not actually aware (without any independent duty of inquiry or
investigation) of any matters which would cause the certification to be made by
BVAC or the Transferor, as the case may be, to be incorrect.
[remainder of page intentionally left blank; signature page follows]
TRUST AND SERVICING AGREEMENT
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IN WITNESS WHEREOF, the parties hereto have caused this Trust and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
BAY VIEW TRANSACTION CORPORATION,
as Transferor
By:
----------------------------------
Name:
Title:
BAY VIEW ACCEPTANCE CORPORATION,
as Servicer
By:
----------------------------------
Name:
Title:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Indenture Trustee and
Back-up Servicer
By:
----------------------------------
Name:
Title:
SYSTEM & SERVICES TECHNOLOGIES, INC.,
as Standby Servicer
By:
----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Owner Trustee
By:
----------------------------------
Name:
Title:
TRUST AND SERVICING AGREEMENT
EXHIBIT 1
Owner Trustee's Certificate
pursuant to Section 15.05
of the Trust and Servicing Agreement
Wilmington Trust Company, as owner trustee (the "Owner Trustee") of the
Bay View 2003-LJ-1 Owner Trust created pursuant to the Trust and Servicing
Agreement (the "Trust Agreement") dated as of August 1, 2003, among
Bay View
Transaction Corporation, as depositor (the "Transferor"), Bay View Acceptance
Corporation, as Servicer (the "Servicer"), Deutsche Bank Trust Company Americas,
as Back-up Servicer and as Indenture Trustee, Systems & Services Technologies,
Inc., as Standby Servicer, and the Owner Trustee, does hereby sell, transfer,
assign, and otherwise convey to Bay View Acceptance Corporation without
recourse, representation, or warranty, all of the Owner Trustee's right, title,
and interest in and to all of the Receivables (as defined in the Trust
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which have been repurchased by the Transferor pursuant to Section
7.02 or Section 8.08 and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
__________.
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EXHIBIT 1 TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT 2
Owner Trustee's Certificate
pursuant to Section 15.05
of the Trust and Servicing Agreement
Wilmington Trust Company, as trustee (the "Owner Trustee") of the Bay
View 2003-LJ-1 Owner Trust created pursuant to the Trust and Servicing Agreement
(the "Trust Agreement") dated as of August 1, 2003, among Bay View Transaction
Corporation, as depositor (the "Transferor"), Bay View Acceptance Corporation,
as Servicer (the "Servicer"), Deutsche Bank Trust Company Americas, as Back-up
Servicer and Indenture Trustee, System & Services Technologies, Inc., as Standby
Servicer, and the Owner Trustee, does hereby sell, transfer, assign, and
otherwise convey to the Servicer, representation, or warranty, all of the Owner
Trustee's right, title, and interest in and to all of the Receivables (as
defined in the Trust Agreement) identified in the attached Servicer's
Certificate as "Purchased Receivables," which have been purchased by the
Servicer pursuant to Section 8.10 or Section 16.02, and all security and
documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
__________.
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EXHIBIT 2 TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT 3
Form of Servicer's Certificate
pursuant to Section 8.12
of the Trust and Servicing Agreement
SERVICER'S CERTIFICATE
EXHIBIT 3 TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT A
CERTIFICATE OF TRUST OF
BAY VIEW 2003-LJ-1 OWNER TRUST
This Certificate of Trust of Bay View 2003-LJ-1 Owner Trust (the
"Trust"), dated as of August ___, 2003, is being duly executed and filed by
Wilmington Trust Company, a Delaware banking corporation, as trustee, to form a
statutory trust under the Delaware Statutory Trust Act (12 Del. Code, Section
3801 et seq.).
1. Name. The name of the statutory trust formed hereby is BAY VIEW
2003-LJ-1 OWNER TRUST.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company, Plaza Building,
1st Floor, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Corporate Trust Administration.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as owner
trustee under a Trust Agreement dated as
of August 1, 2003.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT B
[Form of Certificate]
BAY VIEW 2003-LJ-1 OWNER TRUST
AUTOMOBILE RECEIVABLE
BACKED CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the
property of which includes a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and used
automobiles, light-duty trucks, sport utility vehicles and vans. The contracts
were sold to the Trust by Bay View Transaction Corporation.
(This Certificate does not represent an interest in or obligation of
Bay View Transaction Corporation or any of its affiliates. Neither this
Certificate nor the underlying Receivables, as defined below, are insured or
guaranteed by any other government agency).
NUMBER One Unit
R-1
THIS CERTIFIES THAT __________________, is the registered owner of a
nonassessable, fully-paid interest in the Bay View 2003-LJ-1 Owner Trust (the
"Trust"), a Delaware statutory trust. The Trust was created pursuant to a Trust
and Servicing Agreement dated as of August 1, 2003 (the "Agreement"), among Bay
View Transaction Corporation as Transferor, Bay View Acceptance Corporation, as
Servicer, Deutsche Bank Trust Company Americas, as Back-up Servicer and
Indenture Trustee, System & Services Technologies, Inc., as Standby Servicer and
Wilmington Trust Company, as Owner Trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Owner Trustee by any Certificateholder upon request. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions, and conditions of the Agreement, to which
Agreement the holder of this Certificate by virtue of the acceptance hereof
assents and by which such holder is bound. The property of the Trust includes a
pool of simple and precomputed interest loan and security agreements and
installment sales contracts for new and used automobiles, light-duty trucks,
sport utility vehicles and vans (the "Receivables"), all monies paid thereon,
and all monies due thereon, including Accrued Interest, after July 31, 2003 (but
excluding Accrued Interest paid or due before the Closing Date), security
interests in the vehicles financed thereby, certain bank accounts and the
proceeds thereof and certain other property and rights described in the
Agreement and the proceeds of the foregoing.
This Certificate represents an interest in certain assets of the Trust,
including the right to receive a portion of the collections and other amounts at
the times and in the amounts specified
EXHIBIT B TO
TRUST AND SERVICING AGREEMENT
1
in the Agreement. The rights of the Certificateholders in the assets of the
Trust are subordinated to the rights of the Noteholders as set forth in the
Indenture and the Agreement.
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Agreement or be valid for any purpose. Registration of transfer of
this Certificate to a person may not be effected unless (a) the Insurer consents
to such transfer, (b) such transfer will not adversely affect the tax treatment
of the Trust or the Notes, and (c) the Rating Agency Condition has been
satisfied with respect to such transfer.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The Servicer may at its
option cause the Owner Trustee to sell the corpus of the Trust at a price not to
be less than the price specified in the Agreement; however, such right is
exercisable only as of the last day of a Collection Period on which the Pool
Balance is less than or equal to 10% of the Original Pool Balance. The
Certificateholders are required to pay any unpaid fees and expenses of the Owner
Trustee and in connection with such disposition.
Although this Certificate summarizes certain provisions of the
Agreement, this Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Owner Trustee. In the event of any
inconsistency or conflict between the terms of this Certificate and the terms of
the Agreement, the terms of the Agreement shall control. By acceptance of this
Certificate, the holder agrees to be bound by the terms of the Agreement,
including the agreement to treat the Trust as a partnership for income tax
purposes and the Certificates as an equity interest therein.
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed.
Dated: August 14, 2003
BAY VIEW 2003-LJ-1 OWNER TRUST
By Wilmington Trust Company, not in its
individual capacity, but solely in
its capacity as Owner Trustee
By ,
------------------------------------
Responsible Officer
EXHIBIT B TO
TRUST AND SERVICING AGREEMENT
2
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the Within-mentioned Agreement.
Deutsche Bank Trust Company Americas,
no in its individual capacity, but solely in its
capacity as Indenture Trustee
By ,
----------------------------------------------
Signatory
Dated: August 14, 2003
EXHIBIT B TO
TRUST AND SERVICING AGREEMENT
3
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or typewrite name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing Attorney to transfer said Certificate on the books
of the Certificate Registrar, with full power of substitution in the premises.
Dated:
----------
*
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Certificate in every
particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by a member of the New York Stock
Exchange or a commercial bank, trust company savings bank or other
savings and loan institution.
EXHIBIT B TO
TRUST AND SERVICING AGREEMENT
4
EXHIBIT C
CONFIRMATION OF COMPUTER TAPE
Bay View Acceptance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Financial Security Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Bay View 2003-LJ-1 Owner Trust
Month Year
------- --------
Under the Trust and Servicing Agreement dated as of August 1, 2003
among Wilmington Trust Company, as Owner Trustee, Bay View Acceptance
Corporation, as Servicer, Bay View Transaction Corporation, as Transferor,
Systems & Services Technologies, Inc., as Standby Servicer, and Deutsche Bank
Trust Company Americas, as Indenture Trustee and Back-up Servicer (the
"Servicing Agreement"), the undersigned is hereby providing written confirmation
that (i) it has received the Computer Tape, (ii) such Computer Tape is in
readable form. Capitalized terms shall have the meaning ascribed to such terms
in the Servicing Agreement.
Deutsche Bank Trust Company Americas
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Date:
---------------------
EXHIBIT C TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT D
CONFIRMATION OF COMPUTER TAPE
Bay View Acceptance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Financial Security Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Bay View 2003-LJ-1 Owner Trust
Month Year
------- --------
Under the Trust and Servicing Agreement dated as of August 1, 2003
among Wilmington Trust Company, as Owner Trustee, Bay View Acceptance
Corporation, as Servicer, Bay View Transaction Corporation, as Transferor,
Systems & Services Technologies, Inc., as Standby Servicer, and Deutsche Bank
Trust Company Americas, as Indenture Trustee and Back-up Servicer (the
"Servicing Agreement"), the undersigned is hereby providing written confirmation
that (i) it has received the Computer Tape, (ii) such Computer Tape is in the
correct format subject only to minor changes or modifications that would not
significantly affect the Standby Servicer's assumption and performance of the
Servicer's duties hereunder (subject to those duties that would be specifically
excluded if the Standby Servicer was the successor Servicer) and (iii) it has
verified the completeness of the Computer Tape in accordance with its duties set
forth in Schedule C to the Servicing Agreement. Capitalized terms shall have the
meaning ascribed to such terms in the Servicing Agreement.
Systems & Services Technologies, Inc.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Date:
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EXHIBIT D TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT E
Exception List under Section 8.08(b)
EXHIBIT E TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT F
CERTIFICATION
The undersigned, Deutsche Bank Trust Company Americas, as Indenture
Trustee, hereby certifies pursuant to Section 8.08(b) of the Trust and Servicing
Agreement, dated as of August 1, 2003 (the "Trust Agreement"), among Bay View
Transaction Corporation, as Transferor, Bay View Acceptance Corporation, as
Servicer, Deutsche Bank Trust Company Americas, as Indenture Trustee and Back-up
Servicer, Systems & Services Technologies, Inc., as Standby Servicer, and
Wilmington Trust Company, as Owner Trustee, that it has performed the review
required by Section 8.08(b)(iv) of the Trust Agreement of the [Exception List
dated __________/Updated Exception List Dated ___________, 200____] and prepared
the Updated Exception List attached hereto in accordance with such Section
8.08(b)(iv) with respect to the Reserve Release Date to occur on _____________,
2003.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Trust Agreement.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Indenture Trustee
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Date:
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EXHIBIT F TO
TRUST AND SERVICING AGREEMENT
1
EXHIBIT G
BAY VIEW ACCEPTANCE CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
, 200 .
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Deutsche Bank Trust Company Americas,
Indenture Trustee
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ NYC 60-2606
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust and Agency Services
Re: Instructions for Reserve Release Amount
Ladies and Gentlemen:
Pursuant to Section 8.08(b)(v) of the Trust and Servicing Agreement,
dated as of August 1, 2003 (the "Trust Agreement"), among Bay View Transaction
Corporation, as Transferor, Bay View Acceptance Corporation, as Servicer,
Deutsche Bank Trust Company Americas, as Indenture Trustee and Back-up Servicer,
Systems & Services Technologies, Inc., as Standby Servicer, and Wilmington Trust
Company, as Owner Trustee, you are hereby instructed to release from the Reserve
Account by wire transfer today to Bay View Acceptance Corporation (in accordance
with the wire transfer instructions previously delivered) $__________, such
amount representing the Reserve Release Amount with respect to the Receivables
most recently deleted from the Exception List, as reflected in the certified
Updated Exception List delivered by you on __________, 200__. The agreement by
the Insurer that above amount represents the correct Reserve Release Amount is
evidenced by the acknowledgment of the Insurer below.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Trust Agreement.
EXHIBIT G TO
TRUST AND SERVICING AGREEMENT
1
Very truly yours,
BAY VIEW ACCEPTANCE CORPORATION
By:
---------------------------------------
Name:
Title:
Acknowledged and agreed as of the date set forth above as to the
Reserve Release Amount set forth herein:
FINANCIAL SECURITY ASSURANCE, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
EXHIBIT G TO
TRUST AND SERVICING AGREEMENT
2
Schedule A
to the Trust and Servicing Agreement
SCHEDULE OF RECEIVABLES
Transferor
Account Number
(as of the Cut-off Date) Name of Obligor Amount Financed
$
A COPY OF THE SCHEDULE OF RECEIVABLES, INCLUDING THE ABOVE
CAPTIONED INFORMATION WITH RESPECT TO EACH RECEIVABLE, WAS
DELIVERED TO THE OWNER TRUSTEE WITH A COUNTERPART OF THE TRUST
AND SERVICING AGREEMENT.
SCHEDULE A TO
TRUST AND SERVICING AGREEMENT
1
Schedule B
to the Trust and Servicing Agreement
1. Location of Receivables:
Bay View Acceptance Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE B TO
TRUST AND SERVICING AGREEMENT
1
Schedule C
to the Trust and Servicing Agreement
SCHEDULE OF STANDBY SERVICER FEES AND
SUCCESSOR SERVICE FEES
SYSTEMS & SERVICES TECHNOLOGIES, INC.
A SUBSIDIARY OF JPMORGAN CHASE
I. FEES
A. Standby Servicing(1)
1. One-Time Setup Fee $2,500
2. Outside Legal Fees and Expenses At Cost
3. Monthly Fee(2) 4.5 bsp
B. Successor Servicing(3)
1. One Time Boarding Fee $5.00 per loan
2. Monthly Fee(2)(4) the greater of 100 bsp or
$5.00 per month
3. Minimum Monthly Fee $3,000
II. EXPENSES
A. Standby Servicing And Transfer Expenses
SST shall be reimbursed for all costs and expenses incurred in
connection with its Standby Servicing duties and the transfer of
contracts to SST for successor servicing. Such costs and expenses
include, but are not limited to, those related to travel, obligor
mailings, freight and file shipping.
B. Successor Servicing Expenses(3)
SST shall be reimbursed for all out-of-pocket expenses including, but
not limited to, those associated with asset recovery, liquidation,
sales, travel, lodging, legal proceedings related to
SCHEDULE C TO
TRUST AND SERVICING AGREEMENT
1
replevin actions or obligor bankruptcies, statement and mailing costs,
title processing, bank charges, field calls, and insurance tracking, if
any, in accordance with the terms of Section 8.05(a) of the Indenture.
Additionally, SST shall receive an administrative fee amounting to 8%
of the funds advanced by SST to cover any such expenses during any
monthly collection period. In order to avoid this administrative fee,
the trustee (or another party, as appropriate) may at any time during
the term establish and fund an advance account to be utilized by SST to
cover all such expenses and costs provided in this section for any
monthly collection period. Any such advance account must be fully
funded on a monthly basis in an amount sufficient to cover the
out-of-pocket expenses projected by SST for each subsequent monthly
collection period.
III. MISCELLANEOUS(3)
A. Claim Filing Costs
In the event SST files insurance claims in connection with any contract
serviced by SST, SST shall receive $25.00 per filing.
B. Administrative Fees/Servicing Charges
SST shall receive all administrative fees, including extension
processing fees, NSF fees and late charges received by SST during any
monthly collection period.
C. Deficiency Collections
Under separate agreement, SST may provide deficiency collections
services on a contingency fee basis.
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(1) Standby services limited to: (i) monthly receipt of an electronic loan data
transmission, including all relevant obligor contact information including
address and phone numbers, loan balance, payment information, and comment
histories (ii) receipt of and verification some information supplied on the
month-end servicer statement
(2) Basis points are annualized (i.e., applicable basis points/12) and shall be
based on beginning of month outstanding principal balance of each individual
Active Contract, as defined below.
(3) These items shall only apply to SST's performance of successor servicing
duties.
(4) SST shall receive this fee for all "Active Contracts" for any full or
partial month where it functions as the Servicer. Active Contract is defined as
any contract other than: (i) prepaid, fully satisfied contracts; (ii) contracts
in which the asset has been liquidated and SST has posted the liquidation
proceeds or any other anticipated proceeds (e.g., credit enhancement insurance);
or (iii) contracts in which SST has completed all work in connection with
processing and receiving insurance payoffs. There shall be a $0.50 monthly
servicing fee for each contract that is not an Active Contract until such time
as SST is duly instructed to write the obligor's balance down to $0.00.
SCHEDULE C TO
TRUST AND SERVICING AGREEMENT
2
Schedule D
to the Trust and Servicing Agreement
Delivery Requirements
The Indenture Trustee shall have sole control over each such investment
and the income thereon, and any certificate or other instrument evidencing any
such investment, if any shall, except for clearing corporation securities, be
delivered directly to the Indenture Trustee or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Indenture Trustee in a manner that complies with this Agreement and the
requirements of the definition of Eligible Investments.
SCHEDULE D TO
TRUST AND SERVICING AGREEMENT
1