Exhibit 10.1
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FORM OF
SALE AND SERVICING
AGREEMENT
among
[________________________________],
as
Issuer
BAS SECURITIZATION LLC
as
Seller
[________________________________],
as Servicer
and
[________________________________],
as Indenture Trustee
Dated as of __________ [ ], 200_
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS................................................... 1
SECTION 1.1 Definitions............................................... 1
SECTION 1.2 Other Interpretive Provisions............................. 1
SECTION 1.3 Fiscal Year............................................... 1
ARTICLE II. CONVEYANCE OF RECEIVABLES..................................... 2
SECTION 2.1 Conveyance of Receivables................................. 2
ARTICLE III. THE RECEIVABLES............................................... 3
SECTION 3.1 Representations and Warranties as to Each Receivable...... 3
SECTION 3.2 Representations and Warranties as to the Receivables
in the Aggregate.......................................... 6
SECTION 3.3 Repurchase upon Breach.................................... 6
SECTION 3.4 Custodian of Receivable Files............................. 7
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES................... 9
SECTION 4.1 Duties of Servicer........................................ 9
SECTION 4.2 Collection of Receivable Payments......................... 10
SECTION 4.3 Realization upon Receivables.............................. 11
SECTION 4.4 Physical Damage Insurance................................. 11
SECTION 4.5 Maintenance of Security Interests in Financed Vehicles.... 12
SECTION 4.6 Covenants of Servicer..................................... 12
SECTION 4.7 Purchase by Servicer upon Breach.......................... 13
SECTION 4.8 Servicing Fee............................................. 13
SECTION 4.9 Servicer's Report......................................... 14
SECTION 4.10 Annual Statement as to Compliance; Notice of Default...... 14
SECTION 4.11 Assessments of Servicing Compliance; Registered Public
Accounting Firm Attestation Reports ...................... 15
SECTION 4.12 Access to Certain Documentation and Information Regarding
Receivables............................................... 16
SECTION 4.13 Reports to the Commission................................. 17
SECTION 4.14 Reports to the Rating Agencies............................ 22
SECTION 4.15 Servicer Expenses......................................... 22
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS.............................. 22
SECTION 5.1 Establishment of Trust Accounts........................... 22
SECTION 5.2 Collections............................................... 24
SECTION 5.3 [Reserved]................................................ 25
SECTION 5.4 Additional Deposits....................................... 25
SECTION 5.5 Distributions............................................. 25
SECTION 5.6 Statements to Certificateholders and Noteholders.......... 27
SECTION 5.7 Net Deposits.............................................. 28
SECTION 5.8 Reserve Account........................................... 28
ARTICLE VI. SELLER........................................................ 30
SECTION 6.1 Representations of Seller................................. 30
SECTION 6.2 Continued Existence....................................... 32
SECTION 6.3 [Reserved]................................................ 32
SECTION 6.4 Merger or Consolidation of Seller; Assumption of the
Obligations of Seller..................................... 32
SECTION 6.5 Limitation on Liability of Seller and Others.............. 32
SECTION 6.6 Seller May Own Certificates or Notes...................... 33
SECTION 6.7 [Reserved]................................................ 33
ARTICLE VII. SERVICER...................................................... 33
SECTION 7.1 Representations of Servicer............................... 33
SECTION 7.2 Indemnities of Servicer................................... 34
SECTION 7.3 Merger or Consolidation of Servicer; Assumption of
the Obligations of Servicer............................... 35
SECTION 7.4 Limitation on Liability of Servicer and Others............ 36
SECTION 7.5 [ ] Not To Resign as Servicer............................ 36
SECTION 7.6 Existence................................................. 37
SECTION 7.7 Servicer May Own Notes or Certificates.................... 37
SECTION 7.8 Use of Subservicers....................................... 37
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VIII. SERVICER TERMINATION EVENTS................................... 37
SECTION 8.1 Servicer Termination Event................................ 37
SECTION 8.2 Appointment of Successor.................................. 39
SECTION 8.3 Payment of Servicing Fee.................................. 40
SECTION 8.4 Notification to Noteholders and Certificateholders........ 40
SECTION 8.5 Waiver of Past Defaults................................... 40
ARTICLE IX. TERMINATION................................................... 40
SECTION 9.1 Optional Purchase of All Receivables;
Termination Notice........................................ 40
ARTICLE X. COMPLIANCE WITH REGULATION AB................................. 41
SECTION 10.1 Intent of the Parties; Reasonableness..................... 41
SECTION 10.2 Additional Representations and Warranties of the
Indenture Trustee......................................... 41
ARTICLE XI. MISCELLANEOUS PROVISIONS...................................... 42
SECTION 11.1 Amendment................................................. 42
SECTION 11.2 Protection of Title to Trust Property..................... 43
SECTION 11.3 Notices................................................... 45
SECTION 11.4 Assignment................................................ 45
SECTION 11.5 Limitations on Rights of Others........................... 46
SECTION 11.6 Severability.............................................. 46
SECTION 11.7 Separate Counterparts..................................... 46
SECTION 11.8 Headings.................................................. 46
SECTION 11.9 Governing Law............................................. 46
SECTION 11.10 Assignment to Indenture Trustee........................... 46
SECTION 11.11 Nonpetition Covenant...................................... 46
SECTION 11.12 Limitation of Liability of Owner Trustee and
Indenture Trustee......................................... 46
SECTION 11.13 Further Assurances........................................ 47
SECTION 11.14 No Waiver; Cumulative Remedies............................ 47
SECTION 11.15 Insolvency................................................ 47
SECTION 11.16 Regulation AB Compliance; Intent of Parties;
Reasonableness............................................ 47
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SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Location of Receivables Files
EXHIBITS
Exhibit A -- Form of Servicer's Report
Exhibit B -- Form of Monthly Certificateholder Statement
Exhibit C -- Form of Monthly Noteholder Statement
Exhibit D -- Form of Servicer's Certification
Exhibit E -- Form of Indenture Trustee's Certification
Exhibit F -- Servicing Criteria
Exhibit G-1 -- Additional Form 10-D Information
Exhibit G-2 -- Additional Form 10-K Information
Exhibit G-3 -- Form 8-K Information
APPENDIX
Appendix X -- Definitions
SALE AND SERVICING AGREEMENT dated as of __________ [ ], 200[ ] (this
"Agreement") among [ ] AUTO RECEIVABLES TRUST [ ] - [ ], a Delaware business
trust ("Issuer"), BAS SECURITIZATION LLC, a Delaware limited liability company
(in its capacity as seller, "Seller"), [ ], a [ ] (in its capacity as servicer,
"Servicer") and [_______________], a [__________________] (in its capacity as
indenture trustee, "Indenture Trustee").
WHEREAS, Issuer desires to purchase from Seller a portfolio of receivables
arising in connection with Motor Vehicle Loans purchased or originated by the
Seller Affiliates and sold to Seller under the Purchase Agreements;
WHEREAS, Seller is willing to sell such receivables to Issuer; and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
ARTICLE I.
DEFINITIONS.
SECTION 1.1 Definitions. Capitalized terms are used in this Agreement as
defined in Appendix X to this Agreement.
SECTION 1.2 Other Interpretive Provisions. For purposes of this Agreement,
unless the context otherwise requires: (a) accounting terms not otherwise
defined in this Agreement, and accounting terms partly defined in this Agreement
to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles; (b) terms defined in Article 9
of the UCC as in effect in the relevant jurisdiction and not otherwise defined
in this Agreement are used as defined in that Article; (c) the words "hereof,"
"herein" and "hereunder" and words of similar import refer to this Agreement as
a whole and not to any particular provision of this Agreement; (d) references to
any Article, Section, Schedule, Appendix or Exhibit are references to Articles,
Sections, Schedules, Appendices and Exhibits in or to this Agreement and
references to any paragraph, subsection, clause or other subdivision within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (e) the term "including" means
"including without limitation"; (f) except as otherwise expressly provided
herein, references to any law or regulation refer to that law or regulation as
amended from time to time and include any successor law or regulation; (g)
references to any Person include that Person's successors and assigns; and (h)
headings are for purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.
SECTION 1.3 Fiscal Year. The fiscal year of the Issuer will be the
calendar year.
ARTICLE II.
CONVEYANCE OF RECEIVABLES.
SECTION 2.1 Conveyance of Receivables. In consideration of Issuer's
delivery to, or upon the order of, Seller of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amounts of the Notes
and the initial Certificate Balance, respectively, Seller does hereby sell,
transfer, assign, set over and otherwise convey to Issuer, without recourse,
subject to the obligations herein (collectively, the "Trust Property"):
(a) all right, title and interest of Seller in and to the Receivables,
and all moneys received thereon after the Cutoff Date;
(b) all right, title and interest of Seller in the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of Seller in the Financed Vehicles and any other property that
shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the
Receivables from claims on any Insurance Policies covering Financed Vehicles or
the Obligors or from claims under any lender's single interest insurance policy
naming any Seller Affiliate as an insured;
(d) all rebates of premiums relating to Insurance Policies and rebates
of other items such as extended warranties financed under the Receivables, in
each case, to the extent the Servicer would, in accordance with its customary
practices, apply such amounts to the Principal Balance of the related
Receivable;
(e) the interest of Seller in any proceeds from (i) any Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement, (ii) a default by
an Obligor resulting in the repossession of the Financed Vehicle under the
applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other rights
relating to the Receivables under Dealer Agreements;
(f) all right, title and interest in all funds on deposit from time to
time in the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);
(g) all right, title and interest of Seller under each Purchase
Agreement, including the right of Seller to cause the Transferor to repurchase
Receivables from Seller;
(h) all right, title and interest of Seller in any instrument or
document relating to the Receivables; and
(i) the proceeds of any and all of the foregoing.
The sale, transfer, assignment, setting over and conveyance made hereunder
shall not constitute and is not intended to result in an assumption by Issuer of
any obligation of the Transferor to the Obligors, the Dealers or any other
Person in connection with the Receivables
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and the other assets and properties conveyed hereunder or any agreement,
document or instrument related thereto.
ARTICLE III.
THE RECEIVABLES.
SECTION 3.1 Representations and Warranties as to Each Receivable. Seller
hereby makes the following representations and warranties as to each Receivable
conveyed by it to Issuer hereunder on which Issuer shall rely in acquiring the
Receivables. Unless otherwise indicated, such representations and warranties
shall speak as of the Closing Date, but shall survive the sale, transfer and
assignment of the Receivables to Issuer and the pledge thereof to Indenture
Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. The Receivable has been fully and
properly executed by the parties thereto and (i) is a Direct Loan made by an
Originator or has been originated by a Dealer in the ordinary course of such
Dealer's business and has been purchased by an Originator, in either case, in
the ordinary course of such Originator's business and in accordance with such
Originator's underwriting standards to finance the retail sale by a Dealer of
the related Financed Vehicle or has otherwise been acquired by the Transferor,
(ii) the Originator of which has underwriting standards that require physical
damage insurance to be maintained on the related Financed Vehicle, (iii) is
secured by a valid, subsisting, binding and enforceable first priority security
interest in favor of the Transferor in the Financed Vehicle (subject to
administrative delays and clerical errors on the part of the applicable
government agency and to any statutory or other lien arising by operation of law
after the Closing Date which is prior to such security interest), which security
interest is assignable together with such Receivable, and has been so assigned
to Seller, and subsequently assigned by Seller to Issuer, (iv) contains
customary and enforceable provisions such that the rights and remedies of the
holder thereof are adequate for realization against the collateral of the
benefits of the security, (v) provided, at origination, for level monthly
payments (provided, that the amount of the last payment may be different), which
fully amortize the Initial Principal Balance over the original term, (vi)
provides for interest at the Contract Rate specified in the Schedule of
Receivables, (vii) was originated in the United States and (viii) constitutes
"chattel paper" as defined in the UCC.
(b) Individual Characteristics. The Receivables have the following
individual characteristics as of the Cutoff Date: (i) each Receivable is secured
by a Motor Vehicle; (ii) each Receivable has a Contract Rate of at least ____%
and not more than ____%; (iii) each Receivable had a remaining term, as of the
Cutoff Date, of not less than ______ and not more than ______; (iv) each
Receivable had an Initial Principal Balance of not less than _______ and not
more than _________; (v) no Receivable was more than 30 days past due as of the
Cutoff Date; (vi) no Financed Vehicle had been repossessed as of the Cutoff
Date; (vii) no Receivable is subject to a force placed Physical Damage Insurance
Policy on the related Financed Vehicle; [(viii) each Receivable is a Simple
Interest Receivable;] and (xi) the Dealer of the Financed Vehicle has no
participation in, or other right to receive, any proceeds of the Receivable. The
Receivables were selected using selection procedures that were not intended by
the Transferor or Seller to be adverse to the Holders.
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(c) Schedule of Receivables. The information with respect to each
Receivable set forth in the Schedule of Receivables, including (without
limitation) the account number of the Obligor, the Initial Principal Balance,
and the Contract Rate, was true and correct in all material respects as of the
close of business on the Cutoff Date.
(d) Compliance with Law. The Receivable complied at the time it was
originated or made, and will comply as of the Closing Date, in all material
respects with all requirements of applicable federal, state and local laws, and
regulations thereunder, including, to the extent applicable, usury laws, the
Federal Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Federal Trade Commission Act,
the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Fair Debt Collection Practices Act, Federal
Reserve Board Regulations B and Z and any other consumer credit, consumer
protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable in
all material respects by the holder thereof in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally, and the
Receivable is not subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury.
(f) Lien in Force. Neither Seller nor the Transferor has taken any
action which would have the effect of releasing the related Financed Vehicle
from the Lien granted by the Receivable in whole or in part.
(g) No Amendment or Waiver. No material provision of the Receivable has
been amended, waived, altered or modified in any respect, except such waivers as
would be permitted under this Agreement, and no amendment, waiver, alteration or
modification causes such Receivable not to conform to the other representations
or warranties contained in this Section 3.1.
(h) No Liens. Neither Seller nor the Transferor has received notice of
any Liens or claims, including Liens for work, labor, materials or unpaid state
or federal taxes, relating to the Financed Vehicle securing the Receivable, that
are or may be prior to or equal to the Lien granted by the Receivable.
(i) No Default. Except for payment delinquencies continuing for a period
of not more than 30 days as of the Cutoff Date, to the knowledge of Seller, no
default, breach, violation or event permitting acceleration under the terms of
the Receivable exists and no continuing condition that, with notice or lapse of
time, or both, would constitute a default, breach, violation or event permitting
acceleration under the terms of the Receivable has arisen.
(j) Insurance. The Receivable requires the Obligor to insure the
Financed Vehicle under a Physical Damage Insurance Policy, pay the premiums for
such insurance and keep such insurance in full force and effect.
(k) Good Title. No Receivable has been sold, transferred, assigned, or
pledged by Seller to any Person other than Issuer. Immediately prior to the
transfer and assignment herein
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contemplated, Seller had good and marketable title to the Receivable free and
clear of any Lien and had full right and power to transfer and assign the
Receivable to Issuer and, immediately upon the transfer and assignment of the
Receivable to Issuer, Issuer shall have good and marketable title to the
Receivable, free and clear of any Lien; and Issuer's interest in the Receivable
resulting from the transfer has been perfected under the UCC.
(l) Obligations. The Transferor has duly fulfilled all material
obligations on its part to be fulfilled under, or in connection with, the
Receivable.
(m) Possession. There is only one original executed Receivable, and
immediately prior to the Closing Date, the Transferor will have possession of
such original executed Receivable.
(n) No Government Obligor. The Obligor on the Receivable is not the
United States of America or any state thereof or any local government, or any
agency, department, political subdivision or instrumentality of the United
States of America or any state thereof or any local government.
(o) Marking Records. By the Closing Date, Seller shall have caused the
portions of Seller's and the Transferor's electronic master record of Motor
Vehicle Loans relating to the Receivables to be clearly and unambiguously marked
to show that the Receivable is owned by Issuer in accordance with the terms of
this Agreement.
(p) No Assignment. As of the Closing Date, Seller shall not have taken
any action to convey any right to any Person that would result in such Person
having a right to payments received under the Insurance Policies or Dealer
Agreements, or payments due under the Receivable, that is senior to, or equal
with, that of Issuer.
(q) Lawful Assignment. The Receivable has not been originated in, and is
not subject to the laws of, any jurisdiction under which the sale, transfer or
assignment of such Receivable hereunder or pursuant to transfers of the Notes or
Certificates are unlawful, void or voidable. Neither Seller nor the Transferor
has entered into any agreement with any Obligor that prohibits, restricts or
conditions the assignment of any portion of the Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Receivable is in
effect whereby the Dealer warrants title to the Motor Vehicle and indemnifies
the Transferor that is a party to said Dealer Agreement against the
unenforceability of each Receivable sold thereunder and the rights of the
Transferor thereunder, with regard to the Receivable sold hereunder, have been
validly assigned to and are enforceable against the Dealer by the Seller and
then to and by the Issuer, along with any Dealer Recourse.
(s) Composition of Receivable. No Receivable has a Principal Balance
which includes capitalized interest or late charges.
(t) Database File. The information included with respect to each
Receivable in the database file delivered pursuant to Section 4.9(b) is accurate
and complete in all material respects.
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SECTION 3.2 Representations and Warranties as to the Receivables in the
Aggregate. Seller hereby makes the following representations and warranties as
to the Receivables conveyed by it to Issuer hereunder on which Issuer shall rely
in acquiring the Receivables. Unless otherwise indicated, such representations
and warranties shall speak as of the Closing Date, but shall survive the sale,
transfer and assignment of the Receivables to Issuer and the pledge thereof to
Indenture Trustee pursuant to the Indenture.
(a) Amounts. The Original Pool Balance was $[_______________].
(b) Aggregate Characteristics. The Receivables had the following
characteristics in the aggregate as of the Cutoff Date: (i) approximately
[____]% of the Original Pool Balance was attributable to loans for purchases of
new Financed Vehicles, and approximately [____]% of the Original Pool Balance
was attributable to loans for purchases of used Financed Vehicles; (ii)
approximately [____]% of the Original Pool Balance was attributable to
Receivables the mailing addresses of the Obligors with respect to which are
located in the State of [________] and [____]% of the Original Pool Balance was
attributable to Receivables the mailing addresses of the Obligors with respect
to which are located in the State of [_____], [____]% in the State of [_______],
[____]% in the State of [______], and [____]% in the State of [______], and no
other state accounts for more than [____]% of the Original Pool Balance; (iii)
the weighted average Contract Rate of the Receivables was [_____]%; (iv) there
are [_____] Receivables being conveyed by Seller to Issuer; (v) the average
Cutoff Date Principal Balance of the Receivables was $[______]; and (vi) the
weighted average original term and weighted average remaining term of the
Receivables were [_____] months and [_____] months, respectively.
SECTION 3.3 Repurchase upon Breach. Seller, Servicer, Indenture Trustee or
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement promptly, in writing, upon the discovery (or, with respect to the
Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach or failure to be true of the representations or
warranties made by Seller in Section 3.1, provided that the failure to give such
notice shall not affect any obligation of Seller. If the breach or failure shall
not have been cured by the last day of the Collection Period which includes the
60th day (or if Seller elects, the 30th day) after the date on which Seller
becomes aware of, or receives written notice from Owner Trustee, Indenture
Trustee or Servicer of, such breach or failure, and such breach or failure
materially and adversely affects the interests of Issuer and the Holders in any
Receivable, Seller shall purchase each such affected Receivable from Issuer as
of such last day of such Collection Period at a purchase price equal to the
Purchase Amount for such Receivable as of such last day of such Collection
Period. Notwithstanding the foregoing, any such breach or failure with respect
to the representations and warranties contained in Section 3.1 will not be
deemed to have such a material and adverse effect with respect to a Receivable
if the facts resulting in such breach or failure do not affect the ability of
Issuer to receive and retain payment in full on such Receivable. In
consideration of the purchase of a Receivable hereunder, Seller shall remit the
Purchase Amount of such Receivable, no later than the close of business on the
next Deposit Date, in the manner specified in Section 5.4. The sole remedy of
Issuer, the Owner Trustee, the Indenture Trustee or the Holders with respect to
a breach or failure to be true of the representations or warranties made by
Seller pursuant to Section 3.1 shall be to require Seller to purchase
Receivables pursuant to this Section 3.3.
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SECTION 3.4 Custodian of Receivable Files. (a) Custody. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, Issuer,
upon the execution and delivery of this Agreement, revocably appoints Custodian,
as agent, and Custodian accepts such appointment, to act as agent on behalf of
Issuer to maintain custody of the following documents or instruments, which are
hereby constructively delivered to Issuer with respect to each Receivable
(collectively, a "Receivable File"):
(i) the fully executed original of the Receivable;
(ii) any documents customarily delivered to or held by Servicer
evidencing the existence of any Physical Damage Insurance
Policies;
(iii) the original credit application, fully executed by the
Obligor;
(iv) the original certificate of title, or such other documents as
the Transferor, as appropriate, keeps on file, in accordance
with its customary procedures, evidencing the security
interest of the Transferor in the Financed Vehicle;
(v) originals or true copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the
Receivable; and
(vi) any and all other documents or electronic records that the
Transferor or Servicer, as the case may be, keeps on file, in
accordance with its customary procedures, relating to the
Receivable, any Insurance Policies, the Obligor or the
Financed Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall hold the
Receivable Files as agent on behalf of Issuer and maintain such accurate and
complete accounts, records and computer systems pertaining to each Receivable as
shall enable Servicer and Issuer to comply with the terms and provisions of this
Agreement applicable to them. In performing its duties as Custodian hereunder,
Custodian shall act with reasonable care, exercising the degree of skill,
attention and care that Custodian exercises with respect to receivable files
relating to other similar motor vehicle loans owned and/or serviced by Custodian
and that is consistent with industry standards. In accordance with its customary
practice with respect to its retail installment sale contracts, Custodian shall
conduct, or cause to be conducted, periodic audits of the Receivable Files held
by it under this Agreement, and of the related accounts, records, and computer
systems, and shall maintain the Receivable Files in such a manner as shall
enable Owner Trustee to verify, if Owner Trustee so elects, the accuracy of the
record keeping of Custodian. Custodian shall promptly report to Owner Trustee
any failure on its part to hold the Receivable Files and maintain its accounts,
records and computer systems as herein provided, and promptly take appropriate
action to remedy any such failure. Custodian hereby acknowledges receipt of the
Receivable File for each Receivable listed on the Schedule of Receivables.
Nothing herein shall be deemed to require Issuer, Owner Trustee or Indenture
Trustee to verify the accuracy of the record keeping of the Custodian.
(c) Maintenance of and Access to Records. Custodian shall maintain each
Receivable File at the location specified in Schedule B to this Agreement, or at
such other office of Custodian within the United States (or, in the case of any
successor Custodian, within the
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State in which its principal place of business is located) as shall be specified
to Issuer by 30 days' prior written notice. At the reasonable direction of the
Owner Trustee or Indenture Trustee, Custodian shall make available to Owner
Trustee, Indenture Trustee and their respective agents (or, when requested in
writing by Owner Trustee or Indenture Trustee, their respective attorneys or
auditors) the Receivable Files and the related accounts, records and computer
systems maintained by Custodian at such times during the normal business hours
of Custodian for purposes of inspecting, auditing or making copies of abstracts
of the same.
(d) Release of Documents. Upon written instructions from Indenture
Trustee (or, if no Notes are then Outstanding, Owner Trustee), Custodian shall
release any document in the Receivable Files to Indenture Trustee or Owner
Trustee or its respective agent or designee, as the case may be, at such place
or places as Indenture Trustee or Owner Trustee may designate, as soon
thereafter as is practicable. Any document so released shall be handled by
Indenture Trustee or Owner Trustee with due care and returned to Custodian for
safekeeping as soon as Indenture Trustee or Owner Trustee or its respective
agent or designee, as the case may be, shall have no further need therefor.
(e) Title to Receivables. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time have
or in any way attempt to assert any interest in such Receivable File or the
related Receivable, other than solely for the purpose of collecting or enforcing
the Receivable for the benefit of Issuer and that the entire equitable interest
in such Receivable and the related Receivable File shall at all times be vested
in Issuer.
(f) Instructions; Authority to Act. Custodian shall be deemed to have
received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer of Indenture
Trustee or Owner Trustee, as applicable. A certified copy of excerpts of certain
resolutions of the Board of Directors of Indenture Trustee or Owner Trustee, as
applicable, shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by Custodian of written notice to the contrary given by Indenture
Trustee or Owner Trustee, as applicable.
(g) Custodian's Indemnification. Custodian shall indemnify and hold
harmless Issuer, Owner Trustee and Indenture Trustee, and each of their
respective officers, directors, employees and agents and the Holders from and
against any and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses (including legal fees if any) of any kind whatsoever
that may be imposed on, incurred or asserted against Issuer, Owner Trustee,
Indenture Trustee or the Holders as the result of any act or omission of
Custodian relating to the maintenance and custody of the Receivable Files;
provided that Custodian shall not be liable hereunder to the Owner Trustee or
Indenture Trustee to the extent that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith or negligence of Owner Trustee or Indenture Trustee, as
the case may be. Indemnification under this subsection (g) shall survive
termination of this Agreement and the resignation or removal of Owner Trustee or
Indenture Trustee, as the case may be. If Custodian shall have made any
indemnity payments to Owner Trustee or Indenture Trustee pursuant to this
Section 3.3(g) and Owner Trustee or Indenture Trustee thereafter shall collect
any of such amounts from Persons other than Custodian, Owner Trustee or
Indenture Trustee, as the case
8
may be, shall, as soon as practicable following such receipt thereof, repay such
amounts to Custodian, without interest.
(h) Effective Period and Termination. Servicer's appointment as
Custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this subsection (h). If
Servicer shall resign as Servicer in accordance with Section 7.5 or if all of
the rights and obligations of Servicer shall have been terminated under Section
8.1, the appointment of Servicer as Custodian hereunder may be terminated by the
Owner Trustee or Indenture Trustee or by the Holders of Notes evidencing [not
less than 50%] of the aggregate Outstanding Amount of the Notes (or, if no Notes
are then Outstanding, the Holders of Certificates representing [not less than
50%] of the Certificate Balance), in each case in the same manner as Owner
Trustee or Indenture Trustee or such Holders may terminate the rights and
obligations of Servicer under Section 8.1. The Indenture Trustee, at the
direction of Holders of Notes evidencing [not less than 50%] of the aggregate
Outstanding Amount of the Notes, or, if no Notes are then Outstanding, the Owner
Trustee at the direction of Holders of Certificates evidencing [not less than
50%] of the Certificate Balance, may terminate Servicer's appointment as
Custodian hereunder at any time with cause, or with 30 days' prior written
notice without cause. As soon as practicable after any termination of such
appointment Servicer shall deliver, or cause to be delivered, the Receivable
Files to Indenture Trustee or Owner Trustee, as applicable, or its respective
agent or designee at such place or places as Indenture Trustee or Owner Trustee,
as applicable, may reasonably designate. Notwithstanding any termination of
Servicer as Custodian hereunder (other than in connection with a termination
resulting from the termination of Servicer, as such, pursuant to Section 8.1),
from and after the date of such termination, and for so long as Servicer is
acting as such pursuant to this Agreement, Indenture Trustee shall provide, or
cause the successor Custodian to provide, access to the Receivable Files to
Servicer, at such times as Servicer shall reasonably request, for the purpose of
carrying out its duties and responsibilities with respect to the servicing of
the Receivables hereunder.
(i) Delegation. Custodian may, at any time without notice or consent,
delegate any or all of its duties under the Basic Documents to the Transferor;
provided that no such delegation shall relieve Custodian of its responsibility
with respect to such duties and Custodian shall remain obligated and liable to
Issuer and the Holders for its duties hereunder as if Custodian alone were
performing such duties.
ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES.
SECTION 4.1 Duties of Servicer. (a) Servicer is hereby authorized to act
as agent for Issuer and in such capacity shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables), and
perform the other actions required by Servicer under this Agreement, with
reasonable care. Without limiting the standard set forth in the preceding
sentence, Servicer shall use a degree of skill, attention and care that is not
less than Servicer exercises with respect to comparable Motor Vehicle Loans that
it services for itself or others and that is consistent with prudent industry
standards. Servicer's duties shall include the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by federal,
state or local governmental authorities, investigating delinquencies, sending
9
payment coupons or monthly invoices to Obligors, reporting required tax
information to Obligors, accounting for Collections, monitoring the status of
Physical Damage Insurance Policies with respect to the Financed Vehicles as
provided in Section 4.4(a), furnishing monthly and annual statements to Owner
Trustee and Indenture Trustee with respect to distributions, providing
collection and repossession services in the event of Obligor default and
performing the other duties specified herein.
In accordance with its customary servicing procedures, Servicer shall also
administer and enforce all rights and responsibilities of the holder of the
Receivables provided for in the Physical Damage Insurance Policies as provided
in Section 4.4 and the Dealer Agreements. Without limiting the generality of the
foregoing, Servicer is hereby authorized and empowered by Issuer to execute and
deliver, on behalf of itself, Indenture Trustee, Issuer, Owner Trustee and the
Holders, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided that notwithstanding the foregoing, Servicer shall not,
except pursuant to an order from a court of competent jurisdiction, release an
Obligor from payment of any unpaid amount under any Receivable or waive the
right to collect the unpaid balance of any Receivable from the Obligor, except
in connection with a de minimis deficiency which Servicer would not attempt to
collect in accordance with its customary procedures. If Servicer shall commence
a legal proceeding to enforce a Receivable, Issuer shall thereupon be deemed to
have automatically assigned such Receivable to Servicer, which assignment shall
be solely for purposes of collection.
(b) Servicer may, at any time without notice (except that Servicer shall
give written notice to each Rating Agency of any delegation outside the ordinary
course of business of the substantial portion of its servicing business) or
consent, delegate specific duties to sub-contractors who are in the business of
performing such duties; provided that no such delegation shall relieve Servicer
of its responsibility with respect to such duties and Servicer shall remain
obligated and liable to Issuer and the Holders for servicing and administering
the Receivables in accordance with this Agreement as if Servicer alone were
performing such duties.
SECTION 4.2 Collection of Receivable Payments. (a) Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and
otherwise act with respect to the Receivables, the Physical Damage Insurance
Policies, the Dealer Agreements and related property in such manner as will, in
the reasonable judgment of Servicer, maximize the amount to be received by
Issuer with respect thereto, in accordance with the standard of care required by
Section 4.1. Servicer shall be entitled to amend or modify any Receivable in
accordance with its customary procedures if Servicer believes in good faith that
such amendment or modification is in Issuer's best interests; provided that
Servicer may not, unless ordered by a court of competent jurisdiction or
otherwise required by applicable law, (i) extend a Receivable beyond the Final
Scheduled Maturity Date or (ii) reduce the Principal Balance or Contract Rate of
any Receivable. If Servicer fails to comply with the provisions of the preceding
sentence, Servicer shall be required to purchase the Receivable or Receivables
affected thereby, for the Purchase Amount, in the manner specified in Section
4.7 as of the last day of the Collection Period in which such failure occurs.
Servicer may, in its discretion (in accordance with its customary standards,
policies and procedures), waive any
10
prepayment charge, late payment charge, extension fee or any other fee that may
be collected in the ordinary course of servicing a Receivable.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor against
an amount payable by the Obligor with respect to such Receivable, Servicer shall
deposit the amount so set off in the Collection Account, no later than the close
of business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.
SECTION 4.3 Realization upon Receivables. (a) On behalf of Issuer,
Servicer shall charge off a Receivable in accordance with its customary
standards (and, in no event later than [____] days after a Receivable shall have
become delinquent) and shall use reasonable efforts to repossess and liquidate
the Financed Vehicle securing any Defaulted Receivable as soon as feasible after
such Receivable becomes a Defaulted Receivable, in accordance with the standard
of care required by Section 4.1. In taking such action, Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of Motor Vehicle Loans, and as are otherwise
consistent with the standard of care required under Section 4.1, which shall
include exercising any rights under the Dealer Agreements and selling the
Financed Vehicle at public or private sale. Servicer shall be entitled to
recover all reasonable expenses incurred by it in the course of repossessing and
liquidating a Financed Vehicle into cash proceeds or pursuing any deficiency
claim against the related Obligor, but only out of the cash proceeds of such
Financed Vehicle or any deficiency obtained from the Obligor. The foregoing
shall be subject to the provision that, in any case in which a Financed Vehicle
shall have suffered damage, Servicer 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.
(b) If Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement, the act of commencement shall be deemed to be an automatic
assignment from Issuer to Servicer of the rights under such Dealer Agreement.
If, however, in any enforcement suit or legal proceeding, it is held that
Servicer may not enforce a Dealer Agreement on the grounds that it is not a real
party in interest or a Person entitled to enforce the Dealer Agreement, Owner
Trustee, on behalf of Issuer, at Servicer's expense, shall take such steps as
Servicer deems necessary to enforce the Dealer Agreement, including bringing
suit in Issuer's name or the name of Owner Trustee or Indenture Trustee.
SECTION 4.4 Physical Damage Insurance. (a) The Receivables require that
each Financed Vehicle be insured under a Physical Damage Insurance Policy.
Servicer shall monitor or cause to be monitored, the status of such physical
damage insurance coverage to the extent consistent with its customary servicing
procedures. If Servicer shall determine that an Obligor has failed to obtain or
maintain a Physical Damage Insurance Policy covering the related Financed
Vehicle, Servicer shall use reasonable efforts in accordance with its customary
servicing procedures to enforce the rights of the holder of the Receivable under
the Receivable to require the Obligor to obtain such physical damage insurance,
provided that Servicer shall not be required to take such actions if there is in
place a lender's single interest policy with respect to
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the related Financed Vehicle that complies with Servicer's customary
requirements. It is understood that Servicer will not "force-place" any Physical
Damage Insurance Policy on any Financed Vehicle.
(b) Servicer may ▇▇▇ to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Issuer. If
Servicer elects to commence a legal proceeding to enforce a Physical Damage
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of Issuer under such Physical Damage Insurance Policy
to Servicer for purposes of collection only. If, however, in any enforcement
suit or legal proceeding it is held that Servicer may not enforce a Physical
Damage Insurance Policy on the grounds that it is not a real party in interest
or a holder entitled to enforce the Physical Damage Insurance Policy, Owner
Trustee, on behalf of Issuer, at Servicer's expense, shall take such steps as
Servicer deems necessary to enforce such Physical Damage Insurance Policy,
including bringing suit in Issuer's name or the name of Owner Trustee or
Indenture Trustee. Servicer shall make all claims and enforce its rights under
any lender's single interest insurance policy (to the extent such claims or
rights relate to Receivables) for the benefit of the Issuer and shall treat as
Collections all related proceeds of such policies.
SECTION 4.5 Maintenance of Security Interests in Financed Vehicles.
Servicer, in accordance with the standard of care required under Section 4.1,
shall take such reasonable steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle for
the benefit of Issuer and the Indenture Trustee. Issuer hereby authorizes
Servicer, and Servicer hereby agrees, to take such reasonable steps as are
necessary to re-perfect such security interest on behalf of Issuer in the event
Servicer receives notice of the relocation of a Financed Vehicle. If there has
been a Servicer Termination Event, Servicer, at its expense, shall promptly and
duly execute and deliver such documents and instruments, and take such other
reasonable actions as may be necessary, as evidenced by an Opinion of Counsel
delivered to Issuer, Owner Trustee and Indenture Trustee to perfect Issuer's and
Indenture Trustee's interest in the Trust Property against all other Persons,
including the delivery of the Receivables and the Receivable Files to Indenture
Trustee (or Owner Trustee if no Notes are then Outstanding) or its agent or
designee, the endorsement and delivery of the Physical Damage Insurance Policies
or the notification of the insurers thereunder, the execution of transfer
instruments, and the endorsement to Indenture Trustee (or Owner Trustee if no
Notes are then Outstanding) and the delivery of the certificates of title to the
Financed Vehicles to the appropriate department or departments of motor vehicles
(or other appropriate governmental agency).
SECTION 4.6 Covenants of Servicer. Servicer makes the following covenants
on which Issuer relies in acquiring the Receivables:
(a) Security Interest to Remain in Force. Servicer shall not release any
Financed Vehicle from the security interest granted by the related Receivable in
whole or in part, except upon payment in full of the Receivable or as otherwise
contemplated herein.
(b) No Impairment. Servicer shall not impair in any material respect the
rights of the Issuer or the Holders in the Receivables, the Dealer Agreements or
the Physical Damage Insurance Policies or, subject to clause (c), otherwise
amend or alter the terms thereof if, as a
12
result of such amendment or alteration, the interests of Issuer and the Holders
hereunder would be materially adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify any
Receivable (including the grant of any extension thereunder), except in
accordance with Section 4.2.
SECTION 4.7 Purchase by Servicer upon Breach. Seller, Servicer, Indenture
Trustee or Owner Trustee, as the case may be, shall inform the other parties
promptly, in writing, upon the discovery (or, in the case of the Indenture
Trustee or Owner Trustee, upon actual knowledge of a Responsible Officer) of any
breach by Servicer of its covenants under Section 4.5 or 4.6; provided that the
failure to give such notice shall not affect any obligation of Servicer. Unless
the breach shall have been cured by the last day of the Collection Period which
includes the 60th day (or the 30th day, if Servicer so elects) after the date on
which Servicer becomes aware of, or receives written notice of, such breach, and
such breach materially and adversely affects the interests of Issuer and the
Holders in any Receivable, Servicer shall purchase such Receivable from Issuer
as of the last day of the Collection Period at a purchase price equal to the
Purchase Amount for such Receivable as of the last day of such Collection
Period; provided that in the case of a breach of the covenant contained in
Section 4.6(c), Servicer shall be obligated to purchase the affected Receivable
or Receivables on the Deposit Date immediately succeeding the Collection Period
during which Servicer becomes aware of, or receives written notice of, such
breach. In consideration of the purchase of a Receivable hereunder, Servicer
shall remit the Purchase Amount of such Receivable in the manner specified in
Section 5.4. The sole remedy of Issuer, Owner Trustee, Indenture Trustee or the
Holders against Servicer with respect to a breach pursuant to Section 4.5 or 4.6
shall be to require Servicer to repurchase Receivables pursuant to this Section
4.7.
SECTION 4.8 Servicing Fee. The servicing fee for (a) the [ ], 200_
Distribution Date shall equal [_______] and (b) for each Distribution Date
thereafter shall equal the product of (i) one-twelfth, (ii) the Servicing Fee
Rate and (iii) the Pool Balance as of the opening of business on the first day
of the related Collection Period (the "Servicing Fee"). Servicer shall also be
entitled to retain any late fees, extension fees, prepayment charges (including,
in the case of any Rule of 78's Receivable or Sum of Periodic Balances
Receivable that is prepaid in full, amounts received in excess of the
outstanding Principal Balance of such Receivable and accrued interest thereon
calculated as if such Receivable were an Actuarial Receivable) and certain
non-sufficient funds charges and other administrative fees or similar charges
allowed by applicable law with respect to Receivables collected (from whatever
source) on the Receivables and shall be paid any interest earned on deposits in
the Trust Accounts and the Certificate Distribution Account (the "Supplemental
Servicing Fee"). It is understood and agreed that Available Interest or
Available Principal shall not include any amounts retained by Servicer which
constitute Supplemental Servicing Fees. The Servicing Fee in respect of a
Collection Period (together with any portion of the Servicing Fee that remains
unpaid from prior Distribution Dates), if the Rating Agency Condition is
satisfied, may be paid at the beginning of such Collection Period out of
Collections for such Collection Period. As provided in Section 5.5(c), as
additional compensation, Servicer shall be entitled to receive on each
Distribution Date, any Additional Servicing for such Distribution Date.
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SECTION 4.9 Servicer's Report. (a) On each Determination Date, Servicer
shall deliver to Owner Trustee, Indenture Trustee, each Paying Agent and Seller,
with a copy to the Rating Agencies, a Servicer's Report substantially in the
form of Exhibit A, containing all information necessary to make the transfers
and distributions pursuant to Sections 5.4, 5.5 and 5.8 for the Collection
Period preceding the date of such Servicer's Report together with all
information necessary for the Owner Trustee to send statements to
Certificateholders pursuant to Section 5.6 and Indenture Trustee to send copies
of statements received by the Indenture Trustee to Noteholders pursuant to the
Indenture and Section 5.6 of this Agreement. Receivables to be purchased by
Servicer shall be identified by Servicer by account number with respect to such
Receivable (as specified in the Schedule of Receivables).
(b) Servicer shall provide Indenture Trustee with a database file for
the Receivables at or prior to the Closing Date (but with information as of the
close of business on the Cutoff Date).
SECTION 4.10 Annual Statement as to Compliance; Notice of Default.
The Indenture Trustee and Servicer shall deliver, and the Servicer shall cause
each Additional Servicer engaged by it to deliver, in electronic form, to the
Seller, the Owner Trustee, the Indenture Trustee and each Rating Agency on or
before March 5th of each year, or if such day is not a Business Day the next
Business Day (with a ten calendar day cure period, but in no event later than
March 15th), followed by a hard copy within ten calendar days, commencing March
20__, a certificate in the form required by Item 1123 of Regulation AB, to the
effect that (i) an authorized officer of the Indenture Trustee, Servicer or
Additional Servicer, as the case may be, has reviewed (or a review has been made
under his or her supervision of) such party's activities under this Agreement,
or such other applicable agreement in the case of an Additional Servicer, during
the prior calendar year or a portion thereof and (ii) to the best of such
officer's knowledge, based on such review, such party has fulfilled all of its
obligations under this Agreement, or such other applicable agreement in the case
of an Additional Servicer, in all material respects throughout the prior
calendar year or portion thereof or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof. Promptly after receipt of such
certificate, the Seller shall review such certificate and, if applicable,
consult with the Servicer, the Owner Trustee and Indenture Trustee as to the
nature of any failure to fulfill any obligation under the Agreement, or such
other applicable agreement in the case of an Additional Servicer, in any
material respect.
A copy of each such certificate and the reports referred to in Section
4.11 may be obtained by any Certificateholder by a request in writing to Owner
Trustee addressed to the Corporate Trust Office or by any Noteholder by a
request in writing to Indenture Trustee addressed to the Corporate Trust Office.
Upon the written request of Owner Trustee, Indenture Trustee will promptly
furnish Owner Trustee a list of Noteholders as of the date specified by Owner
Trustee.
14
SECTION 4.11 Assessments of Servicing Compliance; Registered Public
Accounting Firm Attestation Reports.
(a) Each of the Servicer and the Indenture Trustee shall furnish, and
shall cause any Servicing Function Participant engaged by it to furnish, at such
party's expense, to the Seller, the Owner Trustee and the Indenture Trustee in
electronic form, not later than March 5th of each year, or if such day is not a
Business Day the next Business Day (with a ten calendar day cure period, but in
no event later than March 15th), followed by a hard copy within ten calendar
days, commencing in March 20___, a report on an assessment of compliance with
the Servicing Criteria applicable to it that contains (A) a statement by such
party of its responsibility for assessing compliance with the Servicing Criteria
applicable to it, (B) a statement that such party used the Servicing Criteria to
assess compliance with the Servicing Criteria applicable to it, (C) such party's
assessment of compliance with the Servicing Criteria applicable to it as of an
for the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 4.13, including, if there has been any material instance of
noncompliance with the Servicing Criteria applicable to it, a discussion of each
such failure and the nature and status thereof, and (D) a statement that a
registered public accounting firm has issued an attestation report on such
party's assessment of compliance with the Servicing Criteria applicable to such
party as of an for such period.
Each such assessment of compliance report shall be addressed to the Seller
and the Indenture Trustee and signed by an authorized officer of the applicable
party, and shall address each of the Relevant Servicing Criteria set forth on
Exhibit F hereto, or as set forth in the notification furnished to the Seller,
the Owner Trustee and the Indenture Trustee pursuant to Section 4.10. The
Servicer and the Indenture Trustee hereby acknowledge and agree that their
respective assessments of compliance will cover the items identified on Exhibit
F hereto as being covered by such party. The parties to this Agreement
acknowledge that where a particular Servicing Criterion has multiple components,
each party's assessment of compliance (and related attestation of compliance)
will relate only to those components that are applicable to such party. Promptly
after receipt of each such report on assessment of compliance, the Seller shall
review each such report and, if applicable, consult with the Servicer or the
Indenture Trustee as to the nature of any material instance of noncompliance
with the Servicing Criteria applicable to it (or any Servicing Function
Participant engaged or utilized by the Servicer or the Indenture Trustee, as
applicable).
(b) Each of the Servicer and the Indenture Trustee, at its own expense,
shall cause, and shall cause any Servicing Function Participant engaged by it,
at such party's expense, to cause, not later than March 5th of each year or if
such day is not a Business Day, the next Business Day (with a ten calendar day
cure period), commencing in March 2__, a registered public accounting firm
(which may also render other services to the Servicer, the Indenture Trustee, or
such other Servicing Function Participants, as the case may be) and that is a
member of the American Institute of Certified Public Accountants to furnish
electronically a report to the Indenture Trustee, the Owner Trustee and the
Seller (with a hard copy to follow within ten calendar days), to the effect that
(i) it has obtained a representation regarding certain matters from the
management of such party, which includes an assertion that such party has
complied with the Servicing Criteria applicable to it, and (ii) on the basis of
an examination conducted by such firm in accordance with standards
15
for attestation engagements issued or adopted by the Public Company Accounting
Oversight Board, it is expressing an opinion as to whether such party's
assessment of compliance with the Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Servicing Criteria. In the event that
an overall opinion cannot be expressed, such registered public accounting firm
shall state in such report why it was unable to express such an opinion. Such
report must be available for general use and not contain restricted use
language. Promptly after receipt of each such accountants/ attestation report,
the Seller shall review the report and, if applicable, consult with the Servicer
or the Indenture Trustee if such report (i) states that a party's assessment of
compliance was not fairly stated in any material respect or (ii) is unable to
state an overall opinion.
(c) No later than 30 days following the end of each fiscal year for the
Issuer for which a Form 10-K is required to be filed, (i) the Servicer shall
forward to the Indenture Trustee and the Seller the name of each Servicing
Function Participant engaged by it and what Servicing Criteria will be addressed
in the report on assessment of compliance prepared by such Servicing Function
Participant and (ii) the Indenture Trustee shall forward to the Seller the name
of each Servicing Function Participant engaged by it and what Servicing Criteria
will be addressed in the report on assessment of compliance prepared by such
Servicing Function Participant, in each case to the extent of any change from
the prior year's notice, if any.
(d) Beginning with fiscal year 20__ and thereafter, none of the Servicer,
the Indenture Trustee or any Servicing Function Participant engaged by such
parties shall be required to deliver or cause the delivery of any such
assessments or attestation reports until April 15th unless such party has
received written notice from the Seller that a Form 10-K is required to be filed
in respect of the Issuer for the preceding fiscal year.
SECTION 4.12 Access to Certain Documentation and Information
Regarding Receivables. Servicer shall provide to the Certificateholders,
Noteholders, Bank Regulatory Authorities, and the supervisory agents and
examiners of Bank Regulatory Authorities access to the Receivable Files in such
cases where the Certificateholders or Noteholders or Bank Regulatory Authorities
shall be required by applicable statutes or regulations to review such
documentation as demonstrated by evidence satisfactory to Servicer in its
reasonable judgment. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of Servicer. Nothing in this Section 4.12 shall affect the obligation of
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section 4.12. Any Holder, by its acceptance of a Certificate or Note, as
applicable, shall be deemed to have agreed to keep any information
16
obtained by it pursuant to this Section 4.12 confidential and not to use such
information for any other purpose, except as required by applicable law.
SECTION 4.13 Reports to the Commission.
(a) The Indenture Trustee and the Servicer shall reasonably cooperate with
the Seller and the Issuer to enable the Issuer to satisfy its reporting
requirements under the Exchange Act and the parties hereto shall reasonably
cooperate to enable the Commission requirements with respect to the Seller to be
met in the event that the Commission issues additional interpretive guidelines
or promulgates rules or regulations, or in the event of any other change of law
that would require reporting arrangements or the allocation of responsibilities
with respect thereto, as described in this Section 4.13, to be conducted or
allocated in a different manner. Without limiting the generality of the
foregoing, the Indenture Trustee shall prepare on behalf of the Seller any
Current Reports on Form 8-K (each, a "Form 8-K"), Distribution Reports on Form
10-D (each, a "Form 10-D") and Annual Reports on Form 10-K (each, a "Form 10-K")
as required by the Exchange Act and the rules and regulations of the Commission
thereunder, the Servicer shall sign and the Indenture Trustee shall file (via
the Commission's Electronic Data Gathering and Retrieval System) such forms on
behalf of the Seller. Notwithstanding the foregoing, the Seller shall file the
Form 8-Ks in connection with the issuance of the Notes or Certificates.
(b) Each Form 10-D shall be filed by the Indenture Trustee within 15 days
after each Distribution Date and will include a copy of the monthly statement to
the Noteholders or the Certificateholders delivered pursuant to Section 5.6
(each, a "Distribution Date Statement") for such Distribution Date as an exhibit
thereto. In addition, the Indenture Trustee shall include under Item 1 of each
Form 10-D any information required by Item 1121 of Regulation AB to the extent
relevant that is not included on the Distribution Date Statement. Any disclosure
in addition to the Distribution Date Statement and any other information
required by Item 1121 of Regulation AB ("Additional Form 10-D Information")
shall be determined by the party preparing such information as set forth on
Exhibit G-1 hereto and the Indenture Trustee shall compile such disclosure
pursuant to the following paragraph. The Indenture Trustee will have no duty or
liability for any failure hereunder to determine or prepare any Additional Form
10-D Information, except to the extent of its obligations as set forth in the
next paragraph.
As set forth on Exhibit G-1 hereto, within five calendar days after the
related Distribution Date, certain parties hereto shall be required to provide
to the Seller, the Owner Trustee and the Indenture Trustee, to the extent
known by such parties, any Additional Form 10-D Information, if applicable. The
Seller will be responsible for all reasonable fees and expenses assessed or
incurred by the Indenture Trustee in connection with including any Additional
Form 10-D Information on Form 10-D pursuant to this paragraph, including
converting any such disclosure to an ▇▇▇▇▇-compatible format.
After preparing the Form 10-D, the Indenture Trustee shall forward
electronically a draft copy of the Form 10-D to the Seller and the Servicer for
review. No later than two Business Days prior to the 15th calendar day after the
related Distribution Date, the Seller and Servicer shall each indicate to the
Indenture Trustee their consent to the form and substance of the draft Form 10-D
(which consent may be in electronic form). If a Form 10-D cannot be filed on
time
17
or if a previously filed Form 10-D needs to be amended, the Indenture
Trustee will follow the procedures set forth in Section 4.13(e). Promptly (but
no later than one Business Day) after filing with the Commission, the Indenture
Trustee will make available on its internet website a final executed copy of
each Form 10-D. The Indenture Trustee shall have no liability for any loss,
expense, damage or claim arising out of or with respect to any failure to
properly prepare and/or timely file such Form 10-D, where such failure results
from the Indenture Trustee's inability or failure to obtain or receive, on a
timely basis, any information from any party hereto (other than the Indenture
Trustee or any Servicing Function Participant utilized by the Indenture Trustee)
needed to prepare, arrange for execution or file such Form 10-D, not resulting
from its own negligence, bad faith or willful misconduct.
(c) On or before 90 days after the end of each fiscal year of the Issuer
(or such earlier date as may be required by the Exchange Act and the rules and
regulations of the Commission), commencing in 20___, the Indenture Trustee shall
file a Form 10-K, in form and substance as required by applicable law or
applicable Commission staff interpretations. Each such Form 10-K shall include
the following items, in each case to the extent they have been delivered to the
Indenture Trustee within the applicable time frames set forth in this Agreement:
(i) an annual compliance statement for the Indenture Trustee, the Servicer and
each Additional Servicer, as described under Section 4.10, (ii)(A) the annual
reports on assessment of compliance with Servicing Criteria for the Servicer,
the Indenture Trustee and each Servicing Function Participant, as described
under Section 4.11, and (B) if the Servicer's, the Indenture Trustee's or each
Servicing Function Participant's report on assessment of compliance with
Servicing Criteria described under Section 4.11 identifies any material instance
of noncompliance or is not included, disclosure identifying such instance of
noncompliance or disclosure that such report is not included and an explanation
thereof, as the case may be, (iii)(A) the registered public accounting firm
attestation report for the Servicer, the Indenture Trustee and each Servicing
Function Participant, as described under Section 4.11, and (B) if any registered
public accounting firm attestation report described under Section 4.11
identifies any material instance of noncompliance or is not included, disclosure
identifying such instance of noncompliance or disclosure that such report is not
included and an explanation thereof, as the case may be, and (iv) a
Certification as described in this Section 4.13(c). Any disclosure or
information in addition to (i) through (iv) above that is required to be
included on Form 10-K ("Additional Form 10-K Information") shall be prepared by
the party responsible for preparing such disclosure as set forth on Exhibit G-2
hereto and the Indenture Trustee shall compile such disclosure pursuant to the
following paragraph. The Indenture Trustee will have no duty or liability for
any failure hereunder to determine or prepare any Additional Form 10-K
Information, except to the extent of its obligations as set forth in the next
paragraph.
As set forth on Exhibit G-2 hereto, no later than March 1st of each year
that the Issuer is subject to the Exchange Act reporting requirements, commencing
in 20___, certain parties to this Agreement shall be required to provide to the
Indenture Trustee, the Owner Trustee and the Seller, to the extent known by such
applicable parties, any Additional Form 10-K Information, if applicable. The
Seller will be responsible for all reasonable fees and expenses assessed or
incurred by the Indenture Trustee in connection with including any Additional
Form 10-K Information on Form
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10-K pursuant to this paragraph, including converting any such disclosure to an
▇▇▇▇▇-compatible format.
After preparing the Form 10-K, the Indenture Trustee shall forward
electronically a draft copy of the Form 10-K to the Seller and the Servicer for
review. No later than the close of business on the third Business Day prior to
the 10-K filing deadline, a senior officer of the Servicer in charge of the
master servicing function shall sign the Form 10-K and return an electronic or
fax copy of such signed Form 10-K, together with a signed copy of the
certification (the "Certification") attached hereto as Exhibit D and required to
be included with each Form 10-K pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as
amended (with an original executed hard copy of each to follow by overnight
mail) to the Indenture Trustee. If a Form 10-K cannot be filed on time or if a
previously filed Form 10-K needs to be amended, the Indenture Trustee will
follow the procedures set forth in Section 4.13(e). Promptly (but no later than
one Business Day) after filing with the Commission, the Indenture Trustee will
make available on its internet website a final executed copy of each Form 10-K.
The parties to this Agreement acknowledge that the performance by the Indenture
Trustee of its duties under this Section 4.13(c) related to the timely
preparation and filing of Form 10-K is contingent upon such parties (and any
Additional Servicer or Servicing Function Participant) strictly observing all
applicable deadlines in the performance of their duties under this Section 4.13,
Section 4.10 and Section 4.11. The Indenture Trustee shall have no liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare and/or timely file such Form 10-K, where such failure
results from the Indenture Trustee's inability or failure to obtain or receive,
on a timely basis, any information from any party hereto (other than the
Indenture Trustee or any Servicing Function Participant utilized by the
Indenture Trustee) needed to prepare, arrange for execution or file such Form
10-K, not resulting from its own negligence, bad faith or willful misconduct.
For so long as the Issuer is subject to the reporting requirements of the
Exchange Act, the Indenture Trustee shall provide to the Servicer, on or before
March 5th of each year, or if such day is not a Business Day the next Business
Day (with a ten calendar day cure period), followed by a hard copy within ten
days, commencing in March 20___, and otherwise within a reasonable period of
time upon request, a certification in the form attached hereto as Exhibit E. In
the event the Indenture Trustee is terminated or resigns pursuant to the terms
of this Agreement, such Indenture Trustee shall provide a certification in the
form attached hereto as Exhibit E with respect to the period of time it was
subject to this Agreement. In addition, the Indenture Trustee shall indemnify
and hold harmless the Seller, the Servicer, the Owner Trustee, the Indenture
Trustee and their officers, directors and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon any inaccuracy in (i) the assessment of compliance with the Servicing
Criteria pursuant to Section 4.11 provided by the Indenture Trustee or any
Servicing Function Participant appointed by the Indenture Trustee and (ii) the
certification provided by the Indenture Trustee pursuant to this Section
4.13(c), any breach of the obligations under Sections 4.10 and 4.13(c) of the
Indenture Trustee or any Servicing Function Participant appointed by the
Indenture Trustee or the Indenture Trustee's or such Servicing Function
Participant's negligence, bad faith or willful misconduct in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Seller, the Servicer, the Indenture
19
Trustee and their officers, directors and affiliates in such proportion as is
appropriate to reflect the relative fault of the Seller, the Servicer, the
Trustee and each of their officers, directors and affiliates on the one hand and
the Indenture Trustee on the other in connection with a breach of the Indenture
Trustee's obligations under this Section 4.13(c) or the Indenture Trustee's
negligence, bad faith or willful misconduct in connection therewith.
(d) Prior to the latest date on which the Form 10-K may be timely filed
each year, the Servicer shall enforce the obligation of the Servicer to provide
the certification required pursuant to the Servicing Agreement.
(e) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and
also if requested by the Seller, the Indenture Trustee shall prepare and file on
behalf of the Issuer any Form 8-K, as required by the Exchange Act, provided
that the Seller shall file the initial Form 8-Ks in connection with the issuance
of the Notes and the Certificates. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K (such
information, "Form 8-K Information") shall be reported to the Seller, the Owner
Trustee and the Indenture Trustee by the parties set forth on Exhibit G-3 hereto
and compiled by the Indenture Trustee pursuant to the following paragraph. The
Indenture Trustee will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Information or any Form 8-K, except to the
extent of its obligations as set forth in the next paragraph.
As set forth on Exhibit G-3 hereto, for so long as the Issuer is subject
to the Exchange Act reporting requirements, no later than 12:00 noon on the
second Business Day after the occurrence of a Reportable Event certain parties
to this Agreement shall be required to provide to the Seller, the Owner Trustee
and the Indenture Trustee, to the extent known by such applicable parties, any
Form 8-K Information, if applicable. The Seller will be responsible for all
reasonable fees and expenses assessed or incurred by the Indenture Trustee in
connection with including any Form 8-K Information on Form 8-K pursuant to this
paragraph, including converting any such disclosure to an ▇▇▇▇▇-compatible
format.
After preparing the Form 8-K, the Indenture Trustee shall forward
electronically a draft copy of the Form 8-K to the Seller for review,
verification and execution by the Seller. No later than 12:00 noon on the fourth
Business Day after the Reportable Event, an officer of the Seller shall sign the
Form 8-K and return an electronic or fax copy of such signed Form 8-K (with an
original executed hard copy to follow by overnight mail) to the Indenture
Trustee. Promptly (but no later than one Business Day) after filing with the
Commission, the Indenture Trustee will make available on its internet website a
final executed copy of each Form 8-K filed by it. If a Form 8-K cannot be filed
on time or if a previously filed Form 8-K needs to be amended, the Indenture
Trustee will follow the procedures set forth in Section 4.13(f). The Seller
acknowledges that the performance by the Indenture Trustee of its duties under
this Section 4.13(e) related to the timely preparation and filing of Form 8-K is
contingent upon the parties to this Agreement and any other Person obligated to
provide Form 8-K Information as set forth on Exhibit G-3 hereto observing all
applicable deadlines in the performance of their duties under this Section
4.13(e). The Indenture Trustee shall have no liability for any loss, expense,
damage
20
or claim arising out of or with respect to any failure to properly prepare
and/or timely file such Form 8-K, where such failure results from the Indenture
Trustee's inability or failure to obtain or receive, on a timely basis, any
information from any party hereto (other than the Indenture Trustee or any
Servicing Function Participant utilized by the Indenture Trustee) needed to
prepare, arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(f) In the event that the Indenture Trustee is unable to timely file with
the Commission all or any required portion of any Form 8-K, Form 10-D or Form
10-K required to be filed by this Agreement because required information was
either not delivered to it or delivered to it after the delivery deadlines set
forth in this Agreement or for any other reason, the Indenture Trustee will
immediately notify the Seller and the Servicer by telephone. In the case of Form
10-D and Form 10-K, the Seller, Servicer, Owner Trustee and Indenture Trustee
will cooperate to prepare and file a Form 12b-25 pursuant to Rule 12b-25 of the
Exchange Act. In the case of Form 8-K, the Indenture Trustee will, upon receipt
of all information required to be included on Form 8-K, file such Form 8-K.
Within five calendar days following the original due date of the Form 10-D, the
Indenture Trustee shall prepare and file the related Form 10-D. Within 15
calendar days following the original due date of the Form 10-K, the Indenture
Trustee shall prepare and file the related Form 10-K. In the event that any
previously filed Form 8-K, Form 10-D or Form 10-K needs to be amended, the party
to this Agreement deciding that an amendment to such Form 8-K, Form 10-D or Form
10-K is required will notify the Seller, the Owner Trustee, the Indenture
Trustee and the Servicer and such parties will cooperate to prepare any
necessary Form 8-K/A, Form 10-D/A or Form 10-K/A. Any Form 12b-25 or any
amendment to Form 10-D or Form 10-K shall be signed by a senior officer of the
Servicer in charge of the servicing function. Any amendment to Form 8-K or any
Form 15 (as described in Section 4.13(h)) shall be signed by an officer of the
Seller. The Seller and Servicer acknowledge that the performance by the
Indenture Trustee of its duties under this Section 4.13(f) related to the timely
preparation and filing of a Form 12b-25 or any amendment to Form 8-K, Form 10-D
or Form 10-K is contingent upon the Servicer and the Seller performing their
duties under this Section. The Indenture Trustee shall have no liability for any
loss, expense, damage, claim arising out of or with respect to any failure to
properly prepare and/or timely file any such Form 12b-25 or any amendments to
Form 8-K, Form 10-D or Form 10-K, where such failure results from the Indenture
Trustee's inability or failure to obtain or receive, on a timely basis, any
information from any other party hereto (other than the Indenture Trustee or any
Servicing Function Participant utilized by the Indenture Trustee) needed to
prepare, arrange for execution or file such Form 12b-25 or any amendments to
Form 8-K, Form 10-D or Form 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
(g) Upon any filing with the Commission, the Indenture Trustee shall
promptly deliver or otherwise make available to the Seller a copy of any such
executed report, statement or information.
(h) The obligations set forth in paragraphs (a) through (g) of this
Section shall only apply with respect to periods for which the Indenture Trustee
is obligated to file reports on Form 8-K, 10-D or 10-K. Unless otherwise
instructed by the Seller, prior to January 30th of the first year in which the
Indenture Trustee is permitted to do so under Section 15(d) of the Exchange Act
and other applicable law and regulations, the Indenture Trustee shall prepare
and file with the Commission a Form 15 Suspension Notification with respect to
the Issuer, with a copy to the Seller. At any time after the filing of a Form 15
Suspension Notification, if the number of Certificateholders of record exceeds
the number set forth in Section 15(d) of the Exchange
21
Act or the regulations promulgated pursuant thereto which would cause the Trust
to again become subject to the reporting requirements of the Exchange Act, the
Indenture Trustee shall recommence preparing and filing reports on Form 10-D and
10-K as required pursuant to this Section and the parties hereto will again have
the obligations set forth in paragraphs (a) through (g) of this Section.
(i) The Seller, the Indenture Trustee and the Servicer shall notify the
Seller and the Indenture Trustee of any proceedings of the type described in
Item 1117 of Regulation AB, together with a description thereof, within five
Business Days of any such party's knowledge thereof. In addition, the Seller,
the Indenture Trustee and the Servicer shall notify the Seller and the Indenture
Trustee of any affiliations or relationships that develop following the Closing
Date between the Seller, the Indenture Trustee or the Servicer and any of
parties listed in Item 1119 of Regulation AB, together with a description
thereof, within five Business Days of any such party's knowledge thereof.
SECTION 4.14 Reports to the Rating Agencies. Servicer shall deliver
to each Rating Agency a copy of all reports or notices furnished or delivered
pursuant to this Article IV and a copy of any amendments, supplements or
modifications to this Agreement and any other information reasonably requested
by such Rating Agency to monitor this transaction.
SECTION 4.15 Servicer Expenses. Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of the Owner Trustee, Indenture Trustee, independent
accountants, taxes imposed on Servicer and expenses incurred in connection with
distributions and reports to Certificateholders and Noteholders.
ARTICLE V.
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS.
SECTION 5.1 Establishment of Trust Accounts. (a) Servicer shall cause to
be established:
(i) (i) For the benefit of the Noteholders and the
Certificateholders, in the name of Indenture Trustee, an
Eligible Deposit Account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and the
Certificateholders.
(ii) For the benefit of the Noteholders, in the name of Indenture
Trustee, an Eligible Deposit Account (the "Note Distribution
Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the
Noteholders.
(iii) For the benefit of the Noteholders and the Certificateholders,
in the name of Indenture Trustee, an Eligible Deposit Account
(the "Payahead Account"), bearing a designation clearly
indicating that the funds therein are held for the benefit of
the Noteholders and the Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account, the Payahead Account and the Reserve Account (collectively the "Trust
Accounts") and the Certificate Distribution Account shall be invested by
Indenture Trustee with respect to the Trust Accounts (or any custodian with
respect to funds on deposit in any such account) in Eligible Investments
selected in writing by Servicer (pursuant to standing instructions or
otherwise); provided that it is understood and agreed that neither Servicer,
Indenture Trustee nor Owner Trustee shall be liable for any loss arising from
such investment in Eligible Investments. All such Eligible Investments shall be
held by or on behalf of Indenture Trustee for the benefit of the
22
Noteholders and the Certificateholders; provided that on each Distribution Date
all interest and other investment income (net of losses and investment expenses)
on funds on deposit in the Trust Accounts shall be distributed to Servicer and
shall not be available to pay the distributions provided for in Section 5.5 and
shall not otherwise be subject to any claims or rights of Holders. Other than as
permitted by the Rating Agencies, funds on deposit in the Trust Accounts shall
be invested in Eligible Investments that will mature so that such funds will be
available at the close of business on the Deposit Date preceding the next
Distribution Date. No Eligible Investment shall be sold or otherwise disposed of
prior to its scheduled maturity unless a default occurs with respect to such
Eligible Investment and Servicer directs Indenture Trustee in writing to dispose
of such Eligible Investment. Funds deposited in a Trust Account on a Deposit
Date which immediately precedes a Distribution Date upon the maturity of any
Eligible Investments are not required to be (but are permitted to be) invested
overnight.
(c) Indenture Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (excluding investment income thereon) and all such funds, investments
and proceeds shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and control
of Indenture Trustee for the benefit of the Noteholders and the
Certificateholders; provided, however, the Indenture Trustee shall not be
charged with any obligation for the benefit of the Certificateholders except as
provided by the terms of this Agreement. If, at any time, any of the Trust
Accounts or the Certificate Distribution Account ceases to be an Eligible
Deposit Account, Indenture Trustee (or Servicer on its behalf) or Owner Trustee,
as applicable, shall within 10 Business Days (or such longer period as to which
each Rating Agency may consent) establish a new Trust Account or Certificate
Distribution Account, as applicable, as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust Account or new
Certificate Distribution Account, as applicable. In connection with the
foregoing, Servicer agrees that, in the event that any of the Trust Accounts are
not accounts with Indenture Trustee, Servicer shall notify Indenture Trustee in
writing promptly upon any of such Trust Accounts ceasing to be an Eligible
Deposit Account.
(d) With respect to the Trust Account Property, Indenture Trustee
agrees, by its acceptance hereof, that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts and,
except as otherwise provided herein, each such Eligible
Deposit Account shall be subject to the exclusive custody and
control of Indenture Trustee with respect to the Trust
Accounts, and, except as otherwise provided in the Basic
Documents, Indenture Trustee shall have sole signature
authority with respect thereto;
(ii) any Trust Account Property that constitutes Physical Property
shall be delivered to Indenture Trustee, in accordance with
paragraph (a) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by Indenture
Trustee, or a "securities intermediary" (as such term is
defined in Section 8-102(14) of the UCC) acting solely for
Indenture Trustee;
23
(iii) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by Indenture Trustee pending maturity or
disposition, through continued book-entry registration of such
Trust Account Property as described in such paragraph; and
(iv) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed
by clause (iii) above shall be delivered to Indenture Trustee
in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by Indenture Trustee
pending maturity or disposition, through continued
registration of Indenture Trustee's (or its nominee's)
ownership of such security.
Effective upon Delivery of any Trust Account Property, Indenture Trustee shall
be deemed to have represented that it has purchased such Trust Account Property
for value, in good faith and without notice of any adverse claim thereto.
SECTION 5.2 Collections. (a) Servicer shall remit within two Business Days
of receipt thereof to the Collection Account all payments by or on behalf of the
Obligors with respect to the Receivables (other than any amounts constituting
Supplemental Servicing Fees) and all Liquidation Proceeds, both as collected
during the Collection Period. Notwithstanding the foregoing, if [_______] is the
Servicer and (x) shall have the Required Rating or (y) Indenture Trustee
otherwise shall have received written notice from each of the Rating Agencies
that the then outstanding rating on the Notes or the Certificates would not be
lowered or withdrawn as a result, Servicer may deposit all amounts referred to
above for any Collection Period into the Collection Account not later than the
close of business on the Deposit Date with respect to such Collection Period;
provided that (i) if a Servicer Termination Event has occurred and is
continuing, (ii) Servicer has been terminated as such pursuant to Section 8.1 or
(iii) Servicer ceases to have the Required Rating, Servicer shall deposit such
amounts (including any amounts then being held by Servicer) into the Collection
Account as provided in the preceding sentence. For purposes of this Article V
the phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than Servicer, Seller or any Seller
Affiliate.
(b) With respect to each Receivable (other than a Purchased Receivable
or a Precomputed Receivable), collections and payments by or on behalf of the
Obligor (other than any amounts constituting Supplemental Servicing Fees) for
each Collection Period shall be applied to interest and principal in accordance
with the Simple Interest Method, as applied by Servicer. Any excess shall be
applied to prepay the Receivable. All Liquidation Proceeds shall be treated as
Available Interest.
(c) With respect to each Precomputed Receivable, collections and
payments by or on behalf of an Obligor (other than any amounts constituting
Supplemental Servicing Fees) for each Collection Period shall be applied to the
scheduled payments due on such Precomputed Receivable for such Collection
Period. To the extent such collections and payments on a Precomputed Receivable
during a Collection Period exceed the scheduled payment on such
24
Precomputed Receivable and are insufficient to prepay the Precomputed Receivable
in full, collections shall be treated as Payaheads until such later Collection
Period as such Payaheads may be transferred to the Collection Account and
applied either to the scheduled payments due or to prepay the Precomputed
Receivable in full in accordance with Section 5.5.
SECTION 5.3 [Reserved].
SECTION 5.4 Additional Deposits. Servicer shall deposit or cause to be
deposited in the Collection Account the aggregate Purchase Amounts with respect
to Purchased Receivables and Servicer shall deposit therein all amounts, if any,
to be paid under Section 9.1. All such deposits shall be made not later than the
Deposit Date following the end of the related Collection Period.
SECTION 5.5 Distributions. (a) On each Determination Date, Servicer shall
calculate all amounts required to determine the amounts to be deposited on the
related Distribution Date from the Reserve Account and the Payahead Account into
the Collection Account and from the Collection Account into the Note
Distribution Account, the Certificate Distribution Account and the Payahead
Account.
(b) On or before each Distribution Date, Servicer shall instruct
Indenture Trustee in writing (based on the information contained in the
Servicer's Report delivered on the related Determination Date pursuant to
Section 4.9) to, and the Indenture Trustee shall:
(i) (i) withdraw from the Payahead Account and deposit in the
Collection Account, in immediately available funds, (x) with
respect to each Precomputed Receivable for which the payments
made by or on behalf of the Obligor for the related Collection
Period are less than the scheduled payment for the related
Collection Period, the amount of Payaheads, if any, made with
respect to such Receivable which, when added to the amount of
such payments, is equal to the amount of such scheduled
payment, (y) with respect to each Precomputed Receivable for
which prepayments insufficient to prepay the Receivable in
full have been made by or on behalf of the Obligor for the
related Collection Period, the amount of Payaheads, if any,
made with respect to such Receivable which, when added to the
amount of such prepayments, is equal to an amount sufficient
to prepay such Receivable in full, and (z) the amount of all
Payaheads, if any, made with respect to any Purchased
Receivable;
(ii) withdraw from the Collection Account and deposit in the
Payahead Account (or receive from the Servicer, which will
remit to the Indenture Trustee for deposit in the Payahead
Account, as the case may be), in immediately available funds,
the aggregate amount of Collections on Precomputed Receivables
treated as Payaheads pursuant to Section 5.2 for the
Collection Period related to such Distribution Date; and
(iii) withdraw from the Reserve Account and deposit in the
Collection Account the Reserve Account Transfer Amount for
such Distribution Date.
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(c) Subject to the last paragraph of this Section 5.5(c), on each
Distribution Date, Servicer shall instruct Indenture Trustee in writing (based
on the information contained in the Servicer's Report delivered on the related
Determination Date pursuant to Section 4.9) to make, and Indenture Trustee shall
make, the following deposits and distributions from the Collection Account for
deposit in the applicable account by 11:00 a.m. (New York time), to the extent
of the Total Distribution Amount, in the following order of priority:
(i) to Servicer, from the Total Distribution Amount, the Servicing
Fee for the related Collection Period and all accrued and
unpaid Servicing Fees for prior Collection Periods;
(ii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clause (i), the
Noteholders' Interest Distributable Amount;
(iii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clause (i) through
clause (iii), the Noteholders' Principal Distributable Amount;
(iv) to the Note Distribution Account (or, if the Outstanding
Amount of the Notes has been reduced to zero, to the
Certificate Distribution Account) for distribution in respect
of principal, from the Total Distribution Amount remaining
after the application of clause (i) through clause (iv), the
lesser of (A) such remaining Total Distribution Amount and (B)
the Additional Principal Distributable Amount for such
Distribution Date;
(v) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clause
(i) and clause (ii), the Certificateholders' Interest
Distributable Amount;
(vi) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses
(i) through (v), the Certificateholders' Principal
Distributable Amount;
(vii) to the Reserve Account, from the Total Distribution Amount
remaining after the application of clauses (i) through (vi),
until the amount on deposit in the Reserve Account equals the
Specified Reserve Account Balance;
(viii)to the Servicer, Additional Servicing for such Distribution
Date; and
(ix) the Transferor, any amounts remaining.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of the
Notes, the Total Distribution Amount remaining after the application of clause
(i) and (ii) above will be deposited in the Note Distribution Account to the
extent necessary to reduce the principal amount of the Notes to zero in
accordance with and in the priority set forth in Section 5.4 of the Indenture,
and the Certificateholders will not receive any distributions until the
principal amount and accrued
26
interest on the Notes have been paid in full. In the event that the Collection
Account is maintained with an institution other than Indenture Trustee,
Indenture Trustee shall instruct and cause such institution to make all deposits
and distributions pursuant to this Section 5.5(c) on the related Deposit Date.
(d) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to zero and
the Indenture has been discharged in accordance with its terms. The protections,
immunities and standard of care afforded the Indenture Trustee under the
Indenture shall apply to the performance of its duties hereunder.
SECTION 5.6 Statements to Certificateholders and Noteholders. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to Owner Trustee
for Owner Trustee to forward to each Certificateholder of record, a statement
substantially in the form of Exhibit A setting forth at least the following
information as to the Notes and the Certificates to the extent applicable:
(a) the date of such Distribution Date and the Determination Date for
such Distribution Date;
(b) the applicable Record Date and Interest Period;
(c) the amount of such distribution allocable to principal of each class
of Notes and to the Certificate Balance of the Certificates;
(d) the amount of such distribution allocable to interest on or with
respect to each class of Notes and to the Certificates;
(e) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(f) the aggregate outstanding principal balance of each class of the
Notes, the Note Pool Factor for each such class, the Certificate Balance and the
Certificate Pool Factor after giving effect to payments allocated to principal
reported under clause (a) above;
(g) the amount of the Servicing Fee paid to Servicer with respect to the
related Collection Period and with respect to previously accrued and unpaid
Servicing Fees;
(h) the amount of the aggregate Realized Losses, if any, for such
Collection Period;
(i) the Reserve Account Transfer Amount, if any, for such Distribution
Date, the Specified Reserve Account Balance for such Distribution Date, the
amount distributed to the Transferor from the Reserve Account on such
Distribution Date, and the balance of the Reserve Account (if any) on such
Distribution Date, after giving effect to changes therein on such Distribution
Date;
(j) the Noteholders' Interest Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall, the Noteholders' Principal
Carryover Shortfall, and the Certificateholders' Principal Carryover Shortfall,
if any, in each case as applicable to each class of securities, and the change
in such amounts from the preceding statement;
(k) the Additional Principal Distributable Amount for such Distribution
Date;
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(l) the aggregate Purchase Amounts paid by Servicer with respect to the
related Collection Period;
(m) the number, and aggregate Principal Balance outstanding, of
Receivables past due in 30-day increments until foreclosure or other
disposition;
(n) any expenses or indemnification amounts paid by the Issuer, the
specific purpose of each payment and the parties to whom such payments were
made;
(o) any material modifications, extensions or waivers as to the Account
terms, fees, penalties or payments since the previous Distribution Date and
cumulatively since the Cut-off Date;
(p) unless such information is set forth in the Form 10-D relating to such
Distribution Date and provided the Indenture Trustee is reasonably able to
include such information on the statement, any material breaches of
representations and warranties relating to the Accounts or the Receivables and
any material breach of covenants hereunder; and
(q) the number and aggregate principal balance of any Receivables
repurchased by the Servicer from the Issuer since the previous Distribution Date.
Each amount set forth pursuant to paragraph (c), (d), (g) or (j) above shall be
expressed as a dollar amount per $1,000 of the initial principal balance of the
Notes (or class thereof) or the initial Certificate Balance, as applicable.
The Indenture Trustee will make the monthly statement to the Noteholders
or the Certificateholders (and, at its option, any additional files containing
the same information in an alternative format) available each month to the
Noteholders or the Certificateholders, and other parties to this Agreement via
the Indenture Trustee's Internet website, initially located at "www.[insert
website address]." The Indenture Trustee will also make available copies of
periodic reports the Indenture Trustee files with the Commission, including
distribution reports on Form 10-D, annual reports on Form 10-K, current reports
on Form 8-K and amendments to these reports, available through this website
promptly (but no later than one Business Day) after they are filed with the
Commission. Assistance in using the website can be obtained by calling the
Indenture Trustee's customer service desk at [insert phone number]. Parties that
are unable to use the website are entitled to have a paper copy mailed to them
via first class mail by calling the customer service desk and indicating such.
The Indenture Trustee shall have the right to change the way the monthly
statements to the Noteholders or the Certificateholders are distributed in order
to make such distribution more convenient and/or more accessible to the above
parties and the Indenture Trustee shall provide timely and adequate notification
to all above parties regarding any such changes.
SECTION 5.7 Net Deposits. As an administrative convenience, unless
Servicer is required to remit Collections within two (2) Business Days of
receipt thereof, Servicer will be permitted to make the deposit of Collections
and Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to Servicer with respect to the Collection Period.
Servicer, however, will account to Owner Trustee, Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.8 Reserve Account. (a) The Servicer shall establish and maintain
in the name of the Indenture Trustee, as agent for the Issuer, the Noteholders
and Certificateholders, an Eligible Deposit Account (the "Reserve Account"). The
Reserve Account shall be initially established and maintained with the Indenture
Trustee (the "Securities Intermediary"). On the Closing Date, Servicer shall
deposit or cause to be deposited in the Reserve Account an amount equal to the
Reserve Account Deposit.
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(b) Indenture Trustee shall, at the written direction of Servicer,
direct the Securities Intermediary to invest funds on deposit in the Reserve
Account in Eligible Investments selected by Servicer and confirmed in writing by
Servicer to Indenture Trustee; provided that it is understood and agreed that
none of Indenture Trustee, Securities Intermediary, Servicer or Issuer shall be
liable for any loss arising from such investment in Eligible Investments. Funds
on deposit in the Reserve Account shall be invested in Eligible Investments that
will mature so that all such funds will be available at the close of business on
each Deposit Date; provided that to the extent permitted by the Rating Agencies
following written request by Servicer, funds on deposit in the Reserve Account
may be invested in Eligible Investments that mature later than the next Deposit
Date. Funds deposited in the Reserve Account on a Deposit Date upon the maturity
of any Eligible Investments are not required to be (but may be) invested
overnight.
(c) The Securities Intermediary hereby expressly agrees with the
Indenture Trustee that: (i) all matters relating to the Reserve Account shall be
governed by the laws of the State of [___________]; (ii) all Eligible
Investments held by the Securities Intermediary on behalf of the Indenture
Trustee in the Reserve Account shall be treated as "financial assets" (as
defined in Article 8 of the [_________________] Uniform Commercial Code; (iii)
the Securities Intermediary will treat the Indenture Trustee as entitled to
exercise the rights comprising the investments or financial assets credited to
the Reserve Account; (iv) the financial assets credited to the Reserve Account
shall not be registered in the name of, payable to the order of, or specially
indorsed to the Indenture Trustee; and (v) the Securities Intermediary will not
agree to comply with entitlement orders originated by any Person with respect to
the investments or financial assets held in the Reserve Account other than the
Indenture Trustee.
(d) The Reserve Account shall be under the sole custody and control of
Indenture Trustee. If, at any time, the Reserve Account ceases to be an Eligible
Deposit Account, Indenture Trustee shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Reserve Account as an Eligible Deposit Account and
shall transfer or cause to be transferred any cash and/or any investments that
are in the existing account which is no longer an Eligible Deposit Account to
such new Reserve Account.
(e) Amounts on deposit in the Reserve Account will be released to the
Transferor on each Distribution Date to the extent that the amount credited to
the Reserve Account would exceed the Specified Reserve Account Balance. Upon any
distribution to the Transferor of amounts from the Reserve Account, the Holders
will not have any rights in, or claims to, such amounts. Amounts distributed to
the Transferor from the Reserve Account in accordance with this Section 5.8
shall not be available under any circumstances to Issuer, Owner Trustee,
Indenture Trustee or the Holders and the Transferor shall in no event thereafter
be required to refund any such distributed amounts.
(f) With respect to the Reserve Account Property, the Transferor, Issuer
and the Indenture Trustee agree that the Reserve Account Deposit and all other
funds and Reserve Account Property shall be delivered to Indenture Trustee for
credit to the Reserve Account. In addition:
(i) any Reserve Account Property that constitutes Physical
Property shall be delivered to Indenture Trustee in accordance
with paragraph (a) of the definition of "Delivery" and shall
be held, pending maturity or disposition, solely by Indenture
Trustee or a financial intermediary (as such term is defined
in Section 8-313(4) of the UCC) acting solely for Indenture
Trustee;
(ii) any Reserve Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by Indenture Trustee pending maturity or
disposition, through continued book-entry registration of such
Reserve Account Property as described in such paragraph; and
(iii) any Reserve Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed
by clause (ii) above shall be delivered to Indenture Trustee
in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by Indenture Trustee
pending maturity or disposition, through continued
registration of Indenture Trustee's (or its nominee's)
ownership of such security.
Effective upon the crediting of any Reserve Account Property to the Reserve
Account, Indenture Trustee shall be deemed to have represented that it has
purchased such Reserve Account Property for value, in good faith and without
notice of any adverse claim thereto.
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(g) Issuer and Servicer agree to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments (including any UCC financing
statements or this Agreement) as may be determined to be necessary in an Opinion
of Counsel to Issuer delivered to Owner Trustee and Indenture Trustee in order
to perfect the interests created by this Section 5.8 and otherwise fully to
effectuate the purposes, terms and conditions of this Section 5.8. Issuer and
Servicer shall:
(1) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certificates and other
documents with respect to such interests and perform all such other acts
as may be necessary in order to perfect or to maintain the perfection of
Indenture Trustee's security interest; and
(2) make the necessary filings of financing statements or
amendments thereto within five days after the occurrence of any of the
following: (i) any change in their respective names or any trade names,
(ii) any change in the location of their respective chief executive
offices or principal places of business or (iii) any merger or
consolidation or other change in their respective identities or corporate
structures; and shall promptly notify Owner Trustee and Indenture Trustee
of any such filings under clauses (1) or (2) of this Subsection (g).
(h) Investment earnings attributable to the Reserve Account Property and
proceeds therefrom shall be held by Indenture Trustee for the benefit of the
Transferor. Investment earnings attributable to the Reserve Account Property
shall not be available to pay the distributions provided for in Section 5.5 and
shall not otherwise be subject to any claims or rights of the Holders or
Servicer. Indenture Trustee shall cause all investment earnings attributable to
the Reserve Account to be distributed on each Distribution Date to the
Transferor.
(i) The Transferor may at any time, without consent of Holders, sell,
transfer, convey or assign in any manner its rights to and interests in
distributions from the Reserve Account; provided that (i) the Rating Agencies
confirm in writing that such action will not result in a reduction or withdrawal
of the rating of any class of Notes or Certificates, (ii) the Transferor
provides to Owner Trustee and Indenture Trustee an Opinion of Counsel from
independent counsel that such action will not cause Issuer to be classified as
an association (or publicly traded partnership) taxable as a corporation for
federal income tax purposes and (iii) such transferee or assignee agrees in
writing to take positions for federal income tax purposes consistent with the
federal income tax positions agreed to be taken by the Transferor.
ARTICLE VI.
SELLER.
SECTION 6.1 Representations of Seller. Seller makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to Issuer and the pledge
thereof to Indenture Trustee pursuant to the Indenture.
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(a) Organization and Good Standing. Seller has been duly organized and
is validly existing as a Delaware limited liability company in good standing
under the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted and had at all relevant times, and has,
full power, authority and legal right to acquire, own and sell the Receivables
and the other properties and rights included in the Owner Trust Estate assigned
to Issuer pursuant to Article II.
(b) Power and Authority. Seller has the power, authority and legal right
to execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms and to sell and assign the
property to be sold and assigned to and deposited with Issuer as the Owner Trust
Estate; and the execution, delivery and performance of this Agreement and the
Basic Documents to which it is a party have been duly authorized by Seller by
all necessary limited liability company action.
(c) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement or the Basic Documents to which it is
a party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(d) Valid Sale; Binding Obligation. Seller intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the other
properties and rights included in the Owner Trust Estate conveyed by Seller to
Issuer hereunder, enforceable against creditors of and purchasers from Seller;
and each of this Agreement and the Basic Documents to which it is a party
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its respective terms, subject, as to enforceability,
to applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement of the
rights of creditors generally and to equitable limitations on the availability
of specific remedies.
(e) No Violation. The execution, delivery and performance by Seller of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under or result in the creation or imposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the organic documents of
Seller, (ii) any material indenture, contract, lease, mortgage, deed of trust or
other instrument or agreement to which Seller is a party or by which Seller is
bound or (iii) any law, order, rule or regulation applicable to Seller of any
federal or state regulatory body, any court, administrative agency or other
governmental instrumentality having jurisdiction over Seller.
(f) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of Seller, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over Seller or its properties (i) asserting the invalidity of this
Agreement, any other Basic Document, the Notes or the
31
Certificates, (ii) seeking to prevent the issuance of the Notes or Certificates
or the consummation of any of the transactions contemplated by this Agreement or
any other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Seller of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable, or (iv) that
may materially and adversely affect the federal or state income, excise
franchise or similar tax attributes of the Notes or the Certificates.
(g) Chief Executive Office. The chief executive office of Seller is [ ].
SECTION 6.2 Continued Existence. During the term of this Agreement,
subject to Section 6.4, Seller will keep in full force and effect its existence,
rights and franchises as a limited liability company organized under the laws of
the State of Delaware and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby.
SECTION 6.3 [Reserved].
SECTION 6.4 Merger or Consolidation of Seller; Assumption of the
Obligations of Seller. Any Person (a) into which Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Seller shall be a party or (c) which may succeed to the properties and assets of
Seller substantially as a whole, shall be the successor to Seller without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided that Seller hereby covenants that it will not
consummate any of the foregoing transactions except upon satisfaction of the
following: (i) the surviving Seller if other than Special Purpose Entity,
executes an agreement of assumption to perform every obligation of Seller under
this Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 or 6.1 shall have been
breached, (iii) Seller shall have delivered to Owner Trustee and Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section 6.4 and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Seller shall have a consolidated net worth at
least equal to that of the predecessor Seller, (v) such transaction will not
result in a material adverse federal or state tax consequence to Issuer, the
Noteholders or the Certificateholders and (vi) unless Special Purpose Entity is
the surviving entity, Seller shall have delivered to Owner Trustee and Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of Owner Trustee and Indenture Trustee, respectively, in
the Receivables and reciting the details of such filings, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests.
SECTION 6.5 Limitation on Liability of Seller and Others. Seller and any
director or officer or employee or agent of Seller may rely in good faith on the
advice of counsel or on any
32
document of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising under any Basic Document (provided that such
reliance shall not limit in any way Seller's obligations under Section 3.2).
Seller shall not be under any obligation to appear in, prosecute or defend any
legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
SECTION 6.6 Seller May Own Certificates or Notes. Seller and any Affiliate
thereof may in its individual or any other capacity become the owner or pledgee
of Certificates or Notes with the same rights as it would have if it were not
Seller or an Affiliate thereof, except as expressly provided herein or in any
Basic Document. Except as set forth herein or in the other Basic Documents,
Notes and Certificates so owned by or pledged to Seller or any such Affiliate
shall have an equal and proportionate benefit under the provisions of this
Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates.
SECTION 6.7 [Reserved].
ARTICLE VII.
SERVICER.
SECTION 7.1 Representations of Servicer. Servicer makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery of the
Agreement and shall survive the sale, transfer and assignment of the Receivables
to Issuer and the pledge thereof to Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Servicer has been duly organized and
is validly existing as a state banking corporation in good standing under the
laws of the State of [ ], with the power and authority to own its properties and
to conduct its business as such properties are presently owned and such business
is presently conducted, and had at all relevant times, and shall have, the
power, authority and legal right to service the Receivables and the other
properties and rights included in the Owner Trust Estate.
(b) Due Qualification. Servicer shall be duly qualified to do business
as a foreign corporation in good standing, and shall have obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications.
(c) Power and Authority. Servicer has the power, authority and legal
right to execute and deliver this Agreement and the Basic Documents to which it
is a party and to carry out their respective terms; and the execution, delivery
and performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.
(d) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement, the Basic
33
Documents to which it is a party or the consummation of the transactions
contemplated hereby or thereby, other than (i) as may be required under the blue
sky or securities laws of any State or the Securities Act of 1933, as amended,
and (ii) the filing of UCC financing statements.
(e) Binding Obligation. Each of this Agreement and the Basic Documents
to which it is a party constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by Servicer of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under, or result in the creation or disposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the [certificate of
incorporation] or bylaws of Servicer, (ii) any material indenture, contract,
lease, mortgage, deed of trust or other instrument or agreement to which
Servicer is a party or by which Servicer is bound or (iii) any law, order, rule
or regulation applicable to Servicer of any federal or state regulatory body,
any court, administrative agency or other governmental instrumentality having
jurisdiction over Servicer.
(g) No Proceedings. There are no proceedings or investigations pending,
or, to Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency or tribunal or other governmental instrumentality having
jurisdiction over Servicer or its properties (i) asserting the invalidity of
this Agreement, any other Basic Document, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Servicer of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable or (iv) that
may materially and adversely affect the federal or state income, excise,
franchise or similar tax attributes of the Notes or the Certificates.
SECTION 7.2 Indemnities of Servicer. (a) Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by it under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
and any of the respective officers, directors, employees and agents of Issuer,
Owner Trustee, Indenture Trustee or Seller from any and all costs, expenses,
losses, claims, damages and liabilities (including reasonable attorneys' fees
and expenses) to the extent arising out of, or imposed upon any such Person
through, the gross negligence, willful misfeasance or bad faith (other than
errors in judgment) of Servicer in the performance of its obligations and duties
under this Agreement or in the performance of the obligations and duties of any
subservicer under any subservicing agreement.
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(c) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, and Indenture Trustee and their respective officers, directors,
employees and agents from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in this
Agreement or in the other Basic Documents, including any sales, gross receipts,
general corporation, tangible or intangible personal property, franchise,
privilege, or license taxes, or any taxes of any kind which may be asserted
(but, in the case of all indemnified Persons other than Issuer, not including
any Federal or other income taxes arising out of transactions contemplated by
this Agreement and the other Basic Documents) against the Issuer, and costs and
expenses in defending against the same.
(d) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, Certificateholders and the Noteholders or
any of the respective officers, directors, employees and agents of Issuer, Owner
Trustee, Indenture Trustee or Seller from any and all costs, expenses, losses,
claims, damages and liabilities (including reasonable attorneys' fees and
expenses) to the extent arising out of or imposed upon any such Person as a
result of any compensation payable to any subcustodian or subservicer (including
any fees payable in connection with the release of any Receivable File from the
custody of such subservicer or subcustodian or in connection with the
termination of the servicing activities of such subservicer with respect to any
Receivable) whether pursuant to the terms of any subcustodian or subservicing
agreement or otherwise.
(e) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
or any of the respective directors, officers, employees and agents of Issuer,
Owner Trustee, Indenture Trustee and Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting from
the use, ownership or operation of any Financed Vehicle.
(f) Servicer shall indemnify, defend and hold harmless Indenture Trustee
and Owner Trustee and any of their respective officers, directors, employees and
agents from any and all costs, expenses, losses, claims, damages and liabilities
(including reasonable attorneys' fees and expenses) to the extent arising out of
the transactions contemplated by the Indenture, the Sale and Servicing Agreement
and the Administration Agreement unless such costs, expenses, losses, claims,
damages and liabilities are due to the negligence, willful misfeasance or bad
faith of the Indenture Trustee or Owner Trustee, respectively.
(g) Indemnification under this Section 7.2 shall survive the resignation
or removal of Owner Trustee or Indenture Trustee and the termination of this
Agreement or the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and other expenses of
litigation. If Servicer shall have made any indemnity payments pursuant to this
Section 7.2 and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to Servicer, without interest.
SECTION 7.3 Merger or Consolidation of Servicer; Assumption of the
Obligations of Servicer. Any Person (a) into which Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Servicer shall be a party, (c) which may
35
succeed to the properties and assets of Servicer, substantially as a whole, or
(d) 50% of the voting stock of which is owned directly or indirectly by
[_______], may become the successor to Servicer; provided that, unless [_______]
is the surviving party to such transaction, Servicer hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Servicer if other than [_______], executes
an agreement of assumption to perform every obligation of Servicer under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 7.1 shall have been breached
and no Servicer Termination Event, and no event that, after notice or lapse of
time, or both, would become a Servicer Termination Event shall have occurred and
be continuing, (iii) Servicer shall have delivered to Owner Trustee and
Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 7.3 and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, and that the Rating Agency Condition shall have been satisfied
with respect to such transaction, (iv) the surviving Servicer shall have a
consolidated net worth at least equal to that of the predecessor Servicer and
(v) such transaction will not result in a material adverse Federal or state tax
consequence to Issuer, the Noteholders or the Certificateholders.
SECTION 7.4 Limitation on Liability of Servicer and Others. (a) Neither
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to Issuer, the Noteholders or the Certificateholders, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action by Servicer or any subservicer pursuant to this Agreement
or for errors in judgment; provided that this provision shall not protect
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties (except for errors in judgment) or by reason of reckless
disregard of obligations and duties under this Agreement. Servicer or any
subservicer and any of their respective directors, officers, employees or agents
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
(b) Except as provided in this Agreement, Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided that Servicer may (but shall not be required to) undertake any
reasonable action that it may deem necessary or desirable in respect of the
Basic Documents to protect the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the legal
expense and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
SECTION 7.5 [ ] Not To Resign as Servicer. Subject to the provisions of
Section 7.3, [ ] hereby agrees not to resign from the obligations and duties
hereby imposed on it as Servicer under this Agreement except upon determination
that the performance of its duties hereunder shall no longer be permissible
under applicable law or if such resignation is required by regulatory
authorities. Notice of any such determination permitting the resignation of [ ]
as Servicer shall be communicated to Owner Trustee and Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of
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Counsel to such effect delivered to Owner Trustee and Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the earlier of the date upon which Indenture Trustee or a
Successor Servicer has assumed the responsibilities and obligations of the
resigning Servicer in accordance with Section 8.2 or the date upon which any
regulatory authority requires such resignation.
SECTION 7.6 Existence. Subject to the provisions of Section 7.3, during
the term of this Agreement, [ ] will keep in full force and effect its
existence, rights and franchises as a [ ].
SECTION 7.7 Servicer May Own Notes or Certificates. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity, become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Servicer or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Except as set forth herein or in the
other Basic Documents, Notes and Certificates so owned by or pledged to Servicer
or any such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement and the other Basic Documents, without preference,
priority or distinction as among all of the Notes and Certificates.
SECTION 7.8 Use of Subservicers. Notwithstanding the foregoing, to the
extent the Servicer engages any affiliate or third party vendor in connection
with the performance of any of its duties under this Agreement, the Servicer
shall immediately notify the Seller in writing of such engagement. To the extent
the Seller notifies the Servicer and the Indenture Trustee that it has
determined that any such affiliate or third party vendor is a Servicing Function
Participant, the Servicer shall cause such Servicing Function Participant to
prepare a separate assessment and attestation report, as contemplated by Section
4.11 of this Agreement and deliver such report to the Indenture Trustee as set
forth in Section 4.13 of this Agreement. In addition, to the extent the Seller
notifies the Servicer and the Indenture Trustee that it has determined that any
such Servicing Function Participant would be a "servicer" within the meaning of
Item 1101 of Regulation AB and meets the criteria in Item 1108(a)(2)(i), (ii) or
(iii) of Regulation AB (an "Additional Servicer"), the Servicer shall cause such
Additional Servicer to prepare a separate compliance statement as contemplated
by Section 4.10 of this Agreement and deliver such statement to the Indenture
Trustee as set forth in Section 4.13 of this Agreement.
In addition, if the Seller determines any such Servicing Function
Participant would be a "servicer" within the meaning of Item 1101 of Regulation
AB, the Servicer shall cause such Servicing Function Participant to provide the
Seller and the Indenture Trustee the information required by Section 1108(b) and
1108(c) of Regulation AB within two Business Days following such engagement. To
the extent the Servicer terminates any such Servicing Function Participant that
the Seller has determined is a "servicer" within the meaning of Item 1101 of
Regulation AB, the Servicer shall provide the Seller and the Indenture Trustee
the information required to enable them Indenture Trustee to accurately and
timely report such event under Item 6.02 of Form 8-K (if the Trust's Exchange
Act reporting requirements have not been suspended pursuant to Section 15(d) of
the Exchange Act as set forth in Section 7.8.
ARTICLE VIII.
SERVICER TERMINATION EVENTS.
SECTION 8.1 Servicer Termination Event. If any one of the following events
(a "Servicer Termination Event") shall occur and be continuing:
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(a) any failure by Servicer to deliver to Indenture Trustee and Owner
Trustee the Servicer's Report in accordance with Section 4.9, or any failure by
Servicer to deliver to Indenture Trustee or Owner Trustee for deposit in any of
the Trust Accounts or the Certificate Distribution Account any required payment
or to direct Indenture Trustee or Owner Trustee to make any required
distributions therefrom [that shall continue unremedied for a period of five (5)
Business Days after written notice of such failure is received by Servicer from
Owner Trustee or Indenture Trustee or after discovery of such failure by an
Authorized Officer of Servicer]; or
(b) failure on the part of Servicer to duly observe or to perform in any
material respect any other covenants or agreements of Servicer set forth in this
Agreement or any other Basic Document to which it is a party, which failure
shall[ (i)] materially and adversely affect the rights of either the
Certificateholders or Noteholders [and (ii) continue unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given (A) to Servicer by Owner Trustee or
Indenture Trustee or (B) to Servicer and to Owner Trustee and Indenture Trustee
by the Holders of Notes evidencing [not less than 25%] of the Outstanding Amount
of the Notes or Holders of Certificates [evidencing not less than 25%] of the
outstanding Certificate Balance, as applicable (or for such longer period, not
in excess of 120 days, as may be reasonably necessary to remedy such default;
provided that such default is capable of remedy within 120 days and Servicer
delivers an Officer's Certificate to Owner Trustee and Indenture Trustee to such
effect and to the effect that Servicer has commenced or will promptly commence,
and will diligently pursue, all reasonable efforts to remedy such default)]; or
(c) an Insolvency Event occurs with respect to Servicer, the Transferor
or any of their respective successors;
then, [and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of Notes
evidencing greater than 50% of the Outstanding Amount of the Notes (or, if no
Notes are then Outstanding, either the Owner Trustee or the Holders of
Certificates evidencing greater than 50% of the Certificate Balance), by notice
then given in writing to Servicer (and to Owner Trustee or Indenture Trustee, as
applicable, if given by the Holders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.2) of Servicer
under this Agreement]. On or after the receipt by Servicer of such written
notice, all authority and power of Servicer under this Agreement, whether with
respect to the Notes, the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in Indenture Trustee or such
Successor Servicer as may be appointed under Section 8.2; and, without
limitation, Indenture Trustee and Owner Trustee are hereby authorized and
empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the Successor Servicer, Indenture
Trustee and Owner Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement, including the
transfer to the Successor Servicer for administration by it of all cash amounts
that shall at the time be held by the predecessor Servicer for deposit, or shall
thereafter be received by it with respect to a Receivable. Servicer shall
promptly transfer its electronic records relating to the Receivables to
38
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the Successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section 8.1 shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs and
expenses. Upon receipt of notice of the occurrence of a Servicer Termination
Event, Indenture Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.2 Appointment of Successor. (a) Upon Servicer's receipt of
notice of termination, pursuant to Section 8.1 or Servicer's resignation (if and
to the extent permitted in accordance with the terms of this Agreement), the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation, until
the earlier of (i) the date 45 days from the delivery to Owner Trustee and
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (ii) the date
upon which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of Servicer's termination or resignation hereunder, Indenture Trustee
shall appoint a Successor Servicer, and the Successor Servicer shall accept its
appointment by a written assumption in form acceptable to Owner Trustee and
Indenture Trustee. In the event that a Successor Servicer has not been appointed
at the time when the predecessor Servicer has ceased to act as Servicer in
accordance with this Section 8.2, Indenture Trustee without further action shall
automatically be appointed the Successor Servicer and Indenture Trustee shall be
entitled to the Servicing Fee. Notwithstanding the above, Indenture Trustee
shall, if it shall be unwilling or unable so to act, appoint or petition a court
of competent jurisdiction to appoint, any established institution, having a net
worth of not less than $50,000,000 and whose regular business shall include the
servicing of motor vehicle receivables, as the successor to Servicer under this
Agreement; provided, that the appointment of any such Successor Servicer will
not result in the withdrawal or reduction of the outstanding rating assigned to
the Certificates or Notes by any Rating Agency.
(b) Upon appointment, the Successor Servicer (including Indenture
Trustee acting as Successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement. No Successor Servicer shall be liable for any acts or omissions of
any predecessor Servicer.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder other than those relating to the management,
administration, servicing, custody or collection of the Receivables and the
other rights and properties included in the Owner Trust Estate. The Successor
Servicer shall, upon its appointment pursuant to this Section 8.2 and as part of
its duties and responsibilities under this Agreement, promptly take all action
it deems necessary or appropriate so that the predecessor Servicer (in whatever
capacity) is paid or
39
reimbursed all amounts it is entitled to receive under this Agreement on each
Distribution Date subsequent to the date on which it is terminated as Servicer
hereunder. Without limiting the generality of the foregoing, the predecessor
Servicer will be entitled to receive all accrued and unpaid Servicing Fees
through and including the effective date of the termination of the predecessor
Servicer.
SECTION 8.3 Payment of Servicing Fee. If Servicer shall be replaced, the
predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees through the date of the Successor Servicer's acceptance hereunder
and any Supplemental Servicing Fees accrued and unpaid or received prior to such
date, in each case, in accordance with Section 4.8.
SECTION 8.4 Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, Owner Trustee shall give prompt written notice thereof to
Certificateholders and Indenture Trustee shall give prompt written notice
thereof to Noteholders subject to the Rating Agency Condition.
SECTION 8.5 Waiver of Past Defaults. The Holders of Notes evidencing [not
less than a majority] of the Outstanding Amount of the Notes (or the Holders of
Certificates evidencing [not less than a majority] of the outstanding
Certificate Balance, as applicable, in the case of any default which does not
adversely affect Indenture Trustee or the Noteholders) may, on behalf of all
Noteholders and Certificateholders, waive in writing any default by Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to any of the Trust Accounts in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE IX.
TERMINATION.
SECTION 9.1 Optional Purchase of All Receivables; Termination Notice. (a)
On the last day of any Collection Period immediately preceding a Determination
Date as of which the then outstanding Pool Balance is [10]% or less of the
Original Pool Balance, Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts, and the Certificate Distribution
Account and any funds or investments therein. To exercise such option, Servicer
shall deposit pursuant to Section 5.4 in the Collection Account an amount which,
when added to the amounts on deposit in the Collection Account for such
Distribution Date, equals the sum of (i) the unpaid principal amount of the then
outstanding Class B Notes, plus accrued and unpaid interest thereon, plus (ii)
the Certificate Balance plus accrued and unpaid interest thereon. The Class B
Notes and the Certificates will be redeemed concurrently therewith.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.
40
(c) Notice of any termination of Issuer shall be given by Servicer to
Owner Trustee, Indenture Trustee and the Rating Agencies as soon as practicable
after Servicer has received notice thereof.
ARTICLE X.
COMPLIANCE WITH REGULATION AB.
SECTION 10.1 Intent of the Parties; Reasonableness. The Seller, the
Indenture Trustee and the Servicer acknowledge and agree that the purpose of
this Article X is to facilitate compliance by the Seller with the provisions of
Regulation AB and related rules and regulations of the Commission. The Seller
shall not exercise its right to request delivery of information or other
performance under these provisions other than in good faith, or for purposes
other than the Seller's compliance with the Securities Act, the Exchange Act and
the rules and regulations of the Commission thereunder (or the provision in a
private offering of disclosure comparable to that required under the Securities
Act). The Indenture Trustee agrees to cooperate in good faith with any
reasonable request by the Seller for information regarding the Indenture Trustee
which is required in order to enable the Seller to comply with the provisions of
Items 1103(a)(1), 1109(a), 1109(b), 1117, 1118, 1119 and 1122 of Regulation AB
as it relates to the Indenture Trustee or to the Indenture Trustee's obligations
under this Agreement. The Servicer shall cooperate fully with the Seller to
deliver to the Seller (including any of its assignees or designees), any and all
statements, reports, certifications, records and any other information necessary
in the good faith determination of the Seller to permit the Seller to comply
with the provisions of Regulation AB, together with such disclosures relating to
the Servicer and the Accounts, or the servicing of the Receivables, reasonably
believed by the Seller to be necessary in order to effect such compliance.
SECTION 10.2 Additional Representations and Warranties of the
Indenture Trustee. The Indenture Trustee shall be deemed to represent to the
Seller, as of the date on which information is provided to the Seller under
Section 4.13(g) that, except as disclosed in writing to the Seller prior to such
date to the best of its knowledge: (i) neither the execution, delivery and
performance by the Indenture Trustee of this Agreement, the performance by the
Indenture Trustee of its obligations under this Agreement nor the consummation
of any of the transactions by the Indenture Trustee contemplated thereby, is in
violation of any indenture, mortgage, bank credit agreement, note or bond
purchase agreement, long-term lease, license or other agreement or instrument to
which the Indenture Trustee is a party or by which it is bound, which violation
would have a material adverse effect on the Indenture Trustee's ability to
perform its obligations under this Agreement, or of any judgment or order
applicable to the Indenture Trustee; and (ii) there are no proceedings pending
or threatened against the Indenture Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would have a material adverse effect on the
right, power and authority of the Indenture Trustee to enter into this Agreement
or to perform its obligations under this Agreement.
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ARTICLE XI.
MISCELLANEOUS PROVISIONS.
SECTION 11.1 Amendment. (a) This Agreement may be amended by Seller,
Servicer, Owner Trustee and Indenture Trustee (which consent may not be
unreasonably withheld), but without the consent of any of the Noteholders or the
Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement any
provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of
the provisions in this Agreement or of modifying in any manner
the rights of the Noteholders or the Certificateholders;
provided that such action shall not, as evidenced by an
Opinion of Counsel delivered to Owner Trustee and Indenture
Trustee, adversely affect in any material respect the
interests of any Noteholder or Certificateholder; and
(ii) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to
Issuer of all or any portion of the Receivables to be
derecognized under generally accepted accounting principles
("GAAP") by ---- Seller to Issuer, (b) Issuer to avoid
becoming a member of Seller's or the Transferor's consolidated
group under GAAP or (c) the Seller, the Transferor or any of
their Affiliates to otherwise comply with or obtain more
favorable treatment under any law or regulation or any
accounting rule or principle; it being a condition to any such
amendment that each Rating Agency will have notified the
Seller, the Servicer, the Indenture Trustee and the Owner
Trustee in writing that the amendment will not result in a
reduction or withdrawal of the rating of any outstanding Notes
or Certificates with respect to which it is a Rating Agency.
(b) This Agreement may also be amended from time to time by Seller,
Servicer, Owner Trustee and Indenture Trustee, with the consent of the Holders
of Notes evidencing [not less than a majority] of the Outstanding Amount of the
Notes and the consent of the Holders of
42
Certificates evidencing [not less than a majority] of the Certificate Balance
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided that no
such amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (ii) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificate Balance, the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes and the Holders of all the outstanding
Certificates of each class affected thereby.
(c) Prior to the execution of any such amendment or consent, Servicer
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section 11.1 to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied and the Opinion
of Counsel referred to in Section 11.2(i)(1) has been delivered. Owner Trustee
and Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects Owner Trustee's or Indenture Trustee's, as applicable,
own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2 Protection of Title to Trust Property. (a) Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law to fully preserve, maintain and protect the interest of Issuer
and the interests of Indenture Trustee in the Receivables and the proceeds
thereof. Seller shall deliver (or cause to be delivered) to Owner Trustee and
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither Seller nor Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-503 of the UCC, unless it
shall have given Owner Trustee and Indenture Trustee at least five days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) Each of Seller and Servicer shall have an obligation to give Owner
Trustee and Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive
43
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment or new financing statement. Servicer shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) Servicer shall maintain its computer systems so that, from and after
the time of sale under this Agreement of the Receivables, Servicer's master
computer records (including any backup archives) that refer to a Receivable
shall indicate clearly the interest of Issuer and Indenture Trustee in such
Receivable and that such Receivable is owned by Issuer and has been pledged to
Indenture Trustee pursuant to the Indenture. Indication of Issuer's and
Indenture Trustee's interest in a Receivable shall be deleted from or modified
on Servicer's computer systems when, and only when, the related Receivable shall
have been paid in full or purchased by Servicer.
(f) If at any time Servicer shall propose to sell, grant a security
interest in or otherwise transfer any interest in automotive receivables to any
prospective purchaser, lender or other transferee, Servicer shall give to such
prospective purchaser, lender or other transferee computer tapes, records or
printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate clearly that
such Receivable has been sold and is owned by Issuer and has been pledged to
Indenture Trustee.
(g) Servicer shall permit Indenture Trustee, Owner Trustee and their
respective agents at any time during normal business hours to inspect, audit and
make copies of and abstracts from Servicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall
have reasonable grounds to believe that such request is necessary in connection
with the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to Owner Trustee or to Indenture Trustee,
within thirty (30) Business Days, a list of all Receivables (by contract number
and name of Obligor) then owned by Issuer, together with a reconciliation of
such list to the Schedule of Receivables and to each of Servicer's Reports
furnished before such request indicating removal of Receivables from Issuer.
(i) Servicer shall deliver to Owner Trustee and Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment thereto, an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of Issuer and Indenture
44
Trustee in the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or
(B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest; and
within 120 days after the beginning of each calendar year beginning with the
first calendar year beginning more than three months after the Cutoff Date, an
Opinion of Counsel, dated as of a date during such 120-day period, either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of Issuer and 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.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to preserve and protect the interest of Issuer and Indenture Trustee in the
Receivables.
(j) Servicer shall, to the extent required by applicable law, cause the
Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 11.3 Notices. All demands, notices and communications upon
or to Seller, Servicer, Owner Trustee, Indenture Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered, sent by
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of Seller,
to BAS Securitization LLC, Bank of America ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: _________, (b) in the case of Servicer, to [ ], Attention:
_____________, (c) in the case of Issuer or Owner Trustee, at the Corporate
Trust Office, (d) in the case of Indenture Trustee, at the Corporate Trust
Office, [(e) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., to ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Securities
Group, (f) in the case of Standard & Poor's, to Standard & Poor's Ratings
Service, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇
▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance
Department, and (g) in the case of Fitch, to Fitch Information Services, Inc.,
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.] Any notice required or permitted
to be mailed to a Noteholder or Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Person as shown in the Note
Register or the Certificate Register, as applicable. Any notice so mailed within
the time prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
SECTION 11.4 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 3.4, 4.1, 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
Servicer, this Agreement may not be assigned by Seller or Servicer without the
prior written consent of the Owner Trustee, Indenture Trustee, the Noteholders
evidencing not less than 66 2/3% of the Outstanding Amount of the Notes and the
Certificateholders evidencing not less than 66 2/3% of the outstanding
Certificate Balance.
45
SECTION 11.5 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of Seller, Servicer, Issuer, Owner Trustee
and for the benefit of the Certificateholders and the Noteholders, as
third-party beneficiaries, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.6 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.
SECTION 11.7 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.8 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.9 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10 Assignment to Indenture Trustee. Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by Issuer to Indenture Trustee pursuant to the Indenture for
the benefit of the Noteholders of all right, title and interest of Issuer in, to
and under the Receivables and/or the assignment of any or all of Issuer's rights
and obligations hereunder to Indenture Trustee.
SECTION 11.11 Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, Servicer and Seller shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to Issuer, acquiesce, petition or otherwise invoke or cause Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of Issuer
or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of Issuer.
SECTION 11.12 Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by [_________________] not in its individual
capacity but solely in its capacity as Owner Trustee of Issuer and in no event
shall [ ] in its individual capacity or, except as expressly provided in the
Trust Agreement, as Owner Trustee have any liability for the representations,
46
warranties, covenants, agreements or other obligations of Issuer hereunder or in
any of the certificates, notices or agreements delivered pursuant hereto, as to
all of which recourse shall be had solely to the assets of 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 Issuer
hereunder, Owner Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by [_________________] not in its individual
capacity but solely as Indenture Trustee and in no event shall
[_________________] have any liability for the representations, warranties,
covenants, agreements or other obligations of Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of Issuer.
SECTION 11.13 Further Assurances. Seller and the Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by Owner Trustee or
Indenture Trustee to more fully effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 11.14 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, Indenture Trustee,
the Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided are cumulative
and not exhaustive of any rights, remedies, powers and privileges provided by
law.
SECTION 11.15 Insolvency. The Servicer, Seller and Indenture Trustee
shall each notify the Seller and the Indenture Trustee of any of the events
enumerated in Item 1.03 of Form 8-K with respect to any of the Servicer, Seller
or Indenture Trustee at least two Business Days prior to the effective date
thereof and shall provide the Seller and the Indenture Trustee with all
information required by the Seller to comply with its reporting obligation under
Item 1.03 of Form 8-K not later than the effective date of any such event.
SECTION 11.16 Regulation AB Compliance; Intent of Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with requests made by the Seller in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection with the Issuer, the Servicer, the Owner Trustee
and the Indenture Trustee shall cooperate fully with the Seller to deliver to
the Seller (including its assignees or designees), any and all statements,
reports, certifications, records and any other information available to such
party and reasonably necessary in the good faith determination of the Seller to
permit the Seller to comply with the provisions of Regulation AB, together with
such disclosures relating to the Servicer and the Indenture Trustee, as
applicable, reasonably believed by the Seller to be necessary in order to effect
such compliance.
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
[ ]
[By:_________________________, not in its
individual capacity, but solely as
Owner Trustee]
By:_______________________________________
Name:
Title:
BAS SECURITIZATION LLC
Seller
By:_______________________________________
Name:
Title:
[ ],
Servicer,
By:_______________________________________
Name:
Title:
______________________, not in its
individual capacity but solely as
Indenture Trustee,
By:_______________________________
Name:
Title:
48
SCHEDULE A
SCHEDULE OF RECEIVABLES
(Delivered on Disk to Trustee and Owner Trustee)
Schedule A-1
Schedule A-1
SCHEDULE B
LOCATION OF RECEIVABLES FILES
The Receivables sold by the Transferor to Seller and sold by Seller to
Issuer are located at the offices of such Seller Affiliate listed below.
[ ]
Schedule B-1
Schedule B-1
EXHIBIT A
FORM OF SERVICER'S REPORT
Exhibit A-1
Exhibit A-1
EXHIBIT B
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
Exhibit B-1
Exhibit B-1
EXHIBIT C
FORM OF MONTHLY NOTEHOLDERS' STATEMENT
Exhibit C-1
Exhibit C-1
EXHIBIT D
Form of Certification
I, [________], a [_____________] of [__________] (the "Servicer"), certify
that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on
Form 10-K of the [________] Trust (the "Exchange Act Periodic Reports");
2. Based on my knowledge, the Exchange Act Periodic Reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered
by this report is included in the Exchange Act Periodic Reports;
4. I am responsible for reviewing the activities performed by the servicer
and based on my knowledge and the compliance reviews conducted in
preparing the servicer compliance statements required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act
Periodic Reports, the servicer has fulfilled its obligations under the
sale and servicing agreement, dated __________ ___, 20___, among [___], as
issuer, BAS Securitization LLC, as seller, [__________], as servicer, and
[__________], as indenture trustee; and
5. All of the reports on assessment of compliance with the servicing criteria
for asset-backed securities and their related attestation reports on
assessment of compliance with servicing criteria for asset-backed
securities required to be included in this report in accordance with Item
1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d- 18 have been
included as an exhibit to this report, except as otherwise disclosed in
this report. Any material instances of noncompliance described in such
reports have been disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: [___________].
[_________], 20
By:__________________________________
Name:
Title:
Exhibit D-1
EXHIBIT E
FORM OF CERTIFICATION
The Indenture Trustee hereby certifies to the Servicer and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal year [___]
(the "Annual Report"), and all reports on Form 10-D required to be filed
in respect of period covered by the Annual Report (collectively with the
Annual Report, the "Reports"), of the Trust;
2. To my knowledge, the Reports, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
the Annual Report;
3. To my knowledge, the distribution information required to be provided by
the Indenture Trustee under the sale and servicing agreement, dated
__________ ___, 20___, among [___], as issuer, BAS Securitization LLC, as
seller, [__________], as servicer, and [__________], as indenture trustee
(the "Sale and Servicing Agreement") for inclusion in the Reports is
included in the Reports;
4. I am responsible for reviewing the activities performed by the Indenture
Trustee under the Sale and Servicing Agreement, and based on my
knowledge and the compliance review conducted in preparing the compliance
statement of the Indenture Trustee required in the Annual Report under
Item 1123 of Regulation AB, and except as disclosed in the Reports, the
Indenture Trustee has fulfilled its obligations under the Sale and
Servicing Agreement in all material respects; and
5. The report on assessment of compliance with servicing criteria for
asset-backed securities of the Indenture Trustee and its related
attestation report on assessment of compliance with servicing criteria
required to be included in the Annual Report in accordance with Item 1122
of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has been
included as an exhibit to the Annual Report. Any material instances of
non-compliance are described in such report and have been disclosed in the
Annual Report.
[____________]
as Indenture Trustee
By:__________________________________
Name:
Title:
Exhibit E-1
EXHIBIT F
Relevant Servicing Criteria
----------------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA PARTIES RESPONSIBLE
----------------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
----------------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any Servicer and Indenture Trustee
performance or other triggers and events of default in
accordance with the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third Servicer and Indenture Trustee
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such servicing
activities.
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a Not applicable
back-up servicer for the mortgage loans are maintained.
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect Servicer
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
CASH COLLECTION AND ADMINISTRATION
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate Servicer and Indenture Trustee
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor Servicer and Indenture Trustee
or to an investor are made only by authorized personnel.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash Servicer and Indenture Trustee
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve Indenture Trustee
accounts or accounts established as a form of and Servicer
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Exhibit F-1
----------------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA PARTIES RESPONSIBLE
----------------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured Servicer and Indenture Trustee
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent Servicer and Indenture Trustee
unauthorized access.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all Servicer and Indenture Trustee
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of
days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
INVESTOR REMITTANCES AND REPORTING
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the Servicer and Indenture Trustee
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the
transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage loans
serviced by the Servicer.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in Servicer and Indenture Trustee
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two Servicer and Indenture Trustee
business days to the Servicer's investor records, or such
other number of days specified in the transaction
agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree Servicer and Indenture Trustee
with cancelled checks, or other form of payment, or custodial
bank statements.
----------------------------------------------------------------------------------------------------------------------
Exhibit F-2
----------------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA PARTIES RESPONSIBLE
----------------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
----------------------------------------------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as Custodian and Servicer
required by the transaction agreements or related mortgage
loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as Custodian and Servicer
required by the transaction agreements
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool Servicer
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in Servicer
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree Servicer
with the Servicer's records with respect to an obligor's
unpaid principal balance.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's Servicer
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, Servicer
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during Servicer
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on
at least a monthly basis, or such other period specified in
the transaction agreements, and describe the entity's
activities in monitoring delinquent mortgage loans including,
for example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary (e.g.,
illness or unemployment).
----------------------------------------------------------------------------------------------------------------------
Exhibit F-3
----------------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA PARTIES RESPONSIBLE
----------------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage Servicer
loans with variable rates are computed based on the related
mortgage loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as Servicer
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
of days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or Servicer
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment Servicer
to be made on behalf of an obligor are paid from the
servicer's funds and not charged to the obligor, unless
the late payment was due to the obligor's error or
omission.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within Servicer
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are Servicer and Indenture Trustee
recognized and recorded in accordance with the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Servicer and Indenture Trustee
Item 1114(a)(1) through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the transaction
agreements.
----------------------------------------------------------------------------------------------------------------------
Exhibit F-4
EXHIBIT G-1
Additional Form 10-D Disclosure
----------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-D PARTY RESPONSIBLE
----------------------------------------------------------------------------------------------------------------------
Item 1: Distribution and Pool Performance Information Servicer and Indenture Trustee
Any information required by 1121 which is NOT included on
the Monthly Statement
----------------------------------------------------------------------------------------------------------------------
Item 2: Legal Proceedings per Item 1117 of Reg AB (i) All parties to the SSA (as to themselves), (ii) the
Servicer and Indenture Trustee as to the issuing entity,
(iii) the Seller as to the sponsor, any 1106(b)
originator, any 1100(d)(1) party
----------------------------------------------------------------------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds Seller
----------------------------------------------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Securities Indenture Trustee
----------------------------------------------------------------------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Indenture Trustee
Holders
----------------------------------------------------------------------------------------------------------------------
Item 6: Significant Obligors of Pool Assets Seller / Servicer
----------------------------------------------------------------------------------------------------------------------
Item 7: Significant Enhancement Provider As to information required pursuant to Item 1114(b)(2),
Information Seller and, as to information required pursuant to
Item 1115(b), Indenture Trustee
----------------------------------------------------------------------------------------------------------------------
Item 8: Other Information Any party responsible for disclosure items on Form 8-K
----------------------------------------------------------------------------------------------------------------------
Item 9: Exhibits Indenture Trustee
----------------------------------------------------------------------------------------------------------------------
Exhibit G-1-1
EXHIBIT G-2
Additional Form 10-K Disclosure
-----------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-K PARTY RESPONSIBLE
-----------------------------------------------------------------------------------------------------------------------
Item 1B: Unresolved Staff Comments Seller
-----------------------------------------------------------------------------------------------------------------------
Item 9B: Other Information Any party responsible for disclosure items on Form 8-K
-----------------------------------------------------------------------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules Indenture Trustee/Seller
-----------------------------------------------------------------------------------------------------------------------
Additional Item: Disclosure per Item 1117 of Reg AB (i) All parties to the SSA (as to themselves), (ii) the
Servicer and Indenture Trustee as to the issuing entity,
(iii) the Seller as to the sponsor, any 1106(b)
originator, any 1100(d)(1) party
-----------------------------------------------------------------------------------------------------------------------
Additional Item: Disclosure per Item 1119 of Reg AB (i) All parties to the Pooling and Servicing Agreement
as to themselves, (ii) the Seller as to he sponsor,
originator, significant obligor, enhancement or support
provider
-----------------------------------------------------------------------------------------------------------------------
Additional Item: Disclosure per Item 1112(b) of Reg AB Seller / Servicer
-----------------------------------------------------------------------------------------------------------------------
Additional Item: Disclosure per Items 1114(b)(2) and As to information required pursuant to Item 1114(b)(2),
1115(b) of Reg AB Seller and, as to information required pursuant to Item
1115(b), Indenture Trustee
-----------------------------------------------------------------------------------------------------------------------
Item 1B: Unresolved Staff Comments Seller
-----------------------------------------------------------------------------------------------------------------------
Exhibit G-2-1
EXHIBIT G-3
Form 8-K Disclosure
---------------------------------------------------------------------------------------------------------------
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------------------------------------------------------------------------------------------------------
Item 1.01: Entry into a Material Definitive Agreement All parties
---------------------------------------------------------------------------------------------------------------
Item 1.02: Termination of a Material Definitive All parties
Agreement
---------------------------------------------------------------------------------------------------------------
Item 1.03: Bankruptcy or Receivership Seller
---------------------------------------------------------------------------------------------------------------
Item 2.04: Triggering Events that Accelerate or Seller
Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement
---------------------------------------------------------------------------------------------------------------
Item 3.03: Material Modification to Rights of Indenture Trustee
Security Holders
---------------------------------------------------------------------------------------------------------------
Item 5.03: Amendments of Articles of Incorporation or Seller
Bylaws; Change of Fiscal Year
---------------------------------------------------------------------------------------------------------------
Item 6.01: ABS Informational and Computational Seller
Material
---------------------------------------------------------------------------------------------------------------
Item 6.02: Change of Servicer or Securities Servicer and Indenture Trustee
Administrator
---------------------------------------------------------------------------------------------------------------
Item 6.03: Change in Credit Enhancement or External As to material enhancement of support specified in
Support Item 1114(a)(1) through (3), Seller/Trustee and,
as to material enhancement or support specified in
Item 1115, Indenture Trustee
---------------------------------------------------------------------------------------------------------------
Item 6.04: Failure to Make a Required Distribution Indenture Trustee
---------------------------------------------------------------------------------------------------------------
Item 6.05: Securities Act Updating Disclosure Seller
---------------------------------------------------------------------------------------------------------------
Item 7.01: Reg FD Disclosure Seller
---------------------------------------------------------------------------------------------------------------
Item 8.01 Seller
---------------------------------------------------------------------------------------------------------------
Item 9.01 Seller
---------------------------------------------------------------------------------------------------------------
Exhibit G-3-1
APPENDIX X
DEFINITIONS
"Act" is defined in Section 11.3(a) of the Indenture.
"Actuarial Receivable" means a Receivable that provides for (i)
amortization of the loan over a series of fixed level payment monthly
installments and (ii) each monthly installment, including the monthly
installment representing the final payment on the Receivable, to consist of an
amount of interest equal to 1/12 of the Contract Rate of the loan multiplied by
the unpaid principal balance of the loan, and an amount of principal equal to
the remainder of the monthly installment.
"Additional Form 10-D Information" is defined in Section 4.13(b).
"Additional Form 10-K Information" is defined in Section 4.13(c).
"Additional Principal Distributable Amount" means, for any Distribution
Date, the excess of (a) the sum of the Outstanding Amount of the Notes plus the
Certificate Balance before giving effect to the distributions on such
Distribution Date over (b) the sum of (i) the Pool Balance as of the close of
business on the last day of the related Collection Period plus (ii) the sum of
the amounts deposited into the Note Distribution Account and the Certificate
Distribution Account in respect of the Principal Distribution Amount for such
Distribution Date.
"Additional Servicer" is defined in Section 7.8.
"Additional Servicing" means, for each Distribution Date, an amount equal
to the lesser of (i) the amount by which (A) the aggregate amount of the
Servicing Fee for such Distribution Date and all prior Distribution Dates
exceeds (B) the aggregate amount of Additional Servicing paid to the Servicer on
all prior Distribution Dates and (ii) the amount, if any, by which (A) the sum
of Available Interest and Available Principal for such Distribution Date exceeds
(B) the sum, without duplication of (x) the Servicing Fee paid on such
Distribution Date with respect to the related Collection Period and any accrued
and unpaid Servicing Fee for prior Collection Periods, (y) all amounts required
to be distributed to the Noteholders and the Certificateholders on such
Distribution Date, and (z) the amount, if any, deposited in the Reserve Account
on such Distribution Date.
"Administration Agreement" means the Administration Agreement among
[__________], as Administrator, [___________] Auto Receivables Trust [ ] - [ ],
as Issuer, and [_____________], as Indenture Trustee, as the same may be amended
and supplemented from time to time.
"Administration Fee" is defined in Section 4 of the Administration
Agreement.
"Administrator" means [__________] and each successor Administrator.
"Affiliate" means, with respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
or act as servicer with respect to the financial assets
of such specified Person unless such other Person controls the specified Person
through equity ownership or otherwise.
"Authenticating Agent" is defined in Section 2.13 of the Indenture.
"Authorized Officer" means, with respect to Issuer and Servicer, any
officer of Owner Trustee or Servicer, as applicable, who is authorized to act
for Owner Trustee or Servicer, as applicable, in matters relating to Issuer and
who is identified on the list of Authorized Officers delivered by each of Owner
Trustee and Servicer to Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
"Available Interest" means, for any Distribution Date, the sum of the
following amounts for the related Collection Period: (a) that portion of the
Collections on the Receivables received during such Collection Period that is
allocable to interest in accordance with Servicer's customary servicing
procedures, (b) all Liquidation Proceeds received during the related Collection
Period and (c) the Purchase Amounts, to the extent allocable to accrued
interest, of all Receivables that are purchased by Servicer as of the last day
of the related Collection Period. "Available Interest" for any Distribution Date
shall exclude all payments and proceeds of any Receivables the Purchase Amount
of which has been distributed on a prior Distribution Date.
"Available Principal" means, for any Distribution Date, the sum of the
following amounts with respect to the related Collection Period: (a) that
portion of all Collections on the Receivables received during such Collection
Period that is allocable to principal in accordance with Servicer's customary
servicing procedures and (b) the Purchase Amounts, to the extent attributable to
principal, of all Receivables purchased by Servicer as of the last day of the
related Collection Period. Available Principal on any Distribution Date shall
exclude all payments and proceeds of any Receivables the Purchase Amount of
which has been distributed on a prior Distribution Date.
"Bank Regulatory Authorities" means the Federal Reserve Board, the Federal
Deposit Insurance Corporation and Office of the Comptroller of Currency.
"Basic Documents" means the Federal Reserve Board, the Federal Deposit
Insurance Corporation and Office of the Comptroller Currency.
"Basic Documents" means the Purchase Agreement, the Security Agreement,
the Indenture, the Depository Agreements, the Sale and Servicing Agreement, the
Trust Agreement, the Administration Agreement, the Notes, [the Certificates] and
other documents and certificates delivered in connection therewith.
"Benefit Plan" is defined in Section 11.12 of the Trust Agreement.
"Book Entry Certificate" means a beneficial interest in the Certificates,
ownership of which shall be evidenced and transfers of which shall be made,
through book entries by a Clearing Agency as described in Section 3.11 of the
Trust Agreement.
Appendix X, Page 2
"Book Entry Note" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.
"Business Day" means a day that is not a Saturday or a Sunday and that in
the States of North Carolina, [ ] and the State in which the Corporate Trust
Office is located is neither a legal holiday nor a day on which banking
institutions are authorized by law, regulation or executive order to be closed.
"Certificate" means a certificate evidencing the beneficial interest of a
Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"Certificate Account Property" means the Certificate Distribution Account,
all amounts and investments held from time to time therein (whether in the form
of deposit account, Physical Property, book entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Certificate Balance" equals, initially, $[__________] and, thereafter,
equals the initial Certificate Balance, reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"Certificate Depository Agreement" means the agreement among the Trust,
Owner Trustee, Servicer and The Depository Trust Company, as the initial
Clearing Agency, dated as of the Closing Date, relating to the Certificates,
substantially in the form attached as Exhibit B to the Trust Agreement, as the
same may be amended and supplemented from time to time.
"Certificate Distribution Account" is defined in Section 5.1 of the Trust
Agreement.
"Certificate Pool Factor" as of the close of business on a Distribution
Date means a seven-digit decimal figure equal to the Certificate Balance (after
giving effect to distributions made on such date) divided by the initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Cutoff Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificate Rate" means [____]% per annum (computed on the basis of a
360-day year of twelve 30 day months).
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Certificateholders' Interest Carryover Shortfall" means, for any
Distribution Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Certificateholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest at the Certificate Rate that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date,
Appendix X, Page 3
plus interest on such excess, to the extent permitted by law, in an amount equal
to the product of one-twelfth multiplied by the Certificate Rate multiplied by
the amount of such excess.
"Certificateholders' Interest Distributable Amount" means, for any
Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date.
"Certificateholders' Monthly Interest Distributable Amount" means, for any
Distribution Date, an amount equal to one-twelfth (or the actual number of days
from and including the Closing Date to but excluding [__________________],
200[_] divided by 360, for the initial Distribution Date) of the Certificate
Rate multiplied by the Certificate Balance as of the close of business on the
immediately preceding Distribution Date, after giving effect to all payments of
principal to the Certificateholders on or prior to such Distribution Date (or,
in the case of the first Distribution Date, the Certificate Balance on the
Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means, for
any Distribution Date, the Certificateholders' Percentage of the Principal
Distribution Amount or, for any Distribution Date on or after the Distribution
Date on which the outstanding principal balance of the Class A-2 Notes is
reduced to zero, 100% of the Principal Distribution Amount (less any amount
required on the first such Distribution Date to reduce the outstanding principal
balance of the Class A-2 Notes to zero, which shall be deposited into the Note
Distribution Account).
"Certificateholders' Percentage" means 100% minus the Noteholders'
Percentage.
"Certificateholders' Principal Carryover Shortfall" means, as of the close
of business on any Distribution Date, the excess of the Certificateholders'
Monthly Principal Distributable Amount and any outstanding Certificateholders'
Principal Carryover Shortfall from the preceding Distribution Date, over the
amount in respect of principal that is actually deposited in the Certificate
Distribution Account on such current Distribution Date.
"Certificateholders' Principal Distributable Amount" means, for any
Distribution Date, the sum of the Certificateholders' Monthly Principal
Distributable Amount for such Distribution Date and the Certificateholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided that the Certificateholders' Principal Distributable Amount shall
not exceed the Certificate Balance. In addition, on the Final Scheduled
Distribution Date for the Certificates, the Certificateholders Principal
Distributable Amount will include, to the extent not included under the
preceding sentence, the amount that is necessary (after giving effect to the
other amounts to be deposited in the Certificate Distribution Account on such
Distribution Date and allocable to principal) to reduce the Certificate Balance
to zero.
"Certification" is defined in Section 4.11(d).
"Class A-1 Interest Rate" means [______]% per annum.
"Class A-1 Noteholders' Interest Carryover Shortfall" means, for any
Distribution Date, the excess of the Class A-1 Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class A-1 Noteholders' Interest Carryover
Appendix X, Page 4
Shortfall on such preceding Distribution Date, over the amount in respect of
interest on the Class A-1 Notes that was actually paid to holders of the Class
A-1 Notes on the preceding Distribution Date, plus interest on the amount of
interest due but not paid to Holders of the Class A-1 Notes on the preceding
Distribution Date, to the extent permitted by law, in an amount equal to the
product of (i) the quotient of the number of days elapsed in the related
Interest Period divided by 360 multiplied by (ii) the Class A-1 Interest Rate
multiplied by (iii) the amount of such interest due but not paid in respect of
the Class A-1 Notes.
"Class A-1 Noteholders' Interest Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class A-1 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-1 Noteholders' Interest Carryover
Shortfall, in each case for such Distribution Date.
"Class A-1 Noteholders' Monthly Interest Distributable Amount" means, for
any Distribution Date, the product of (i) the quotient of the number of days
elapsed during the related Interest Period divided by 360 multiplied by (ii) the
Class A-1 Interest Rate multiplied by (iii) the Outstanding Amount of the Class
A-1 Notes on the immediately preceding Distribution Date after giving effect to
all payments of principal to the Holders of the Class A-1 Notes on or prior to
such Distribution Date (or, in the case of the first Distribution Date, the
Outstanding Amount of the Class A-1 Notes on the Closing Date).
"Class A-1 Notes" means the Class A-1 [_____]% Asset Backed Notes,
substantially in the form of Exhibit D to the Indenture.
"Class A-2 Interest Rate" means [_____]% per annum.
"Class A-2 Noteholders' Interest Carryover Shortfall" means, for any
Distribution Date, the excess of the Class A-2 Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class A-2 Noteholders' Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest on the Class A-2 Notes
that was actually paid to holders of the Class A-2 Notes on the preceding
Distribution Date, plus interest on the amount of interest due but not paid to
Holders of the Class A-2 Notes on the preceding Distribution Date, to the extent
permitted by law, in an amount equal to the product of one-twelfth multiplied by
the Class A-2 Interest Rate multiplied by the amount of such interest due but
not paid in respect of the Class A-2 Notes.
"Class A-2 Noteholders' Interest Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class A-2 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-2 Noteholders' Interest Carryover
Shortfall, in each case for such Distribution Date.
"Class A-2 Noteholders' Monthly Interest Distributable Amount" means, for
any Distribution Date, the product of one-twelfth (or, in the case of the first
Distribution Date the actual number of days elapsed from and including the
Closing Date to but excluding [_________________], 200[_] divided by 360)
multiplied by the Class A-2 Interest Rate multiplied by the Outstanding Amount
of the Class A-2 Notes on the immediately preceding Distribution Date after
giving effect to all payments of principal to the Holders of the Class A-2 Notes
on or prior to such immediately preceding Distribution Date (or, in the case of
the first Distribution Date, the Outstanding Amount of the Class A-2 Notes on
the Closing Date).
Appendix X, Page 5
"Class A-2 Notes" means the Class A-2 [____]% Asset Backed Notes,
substantially in the form of Exhibit E to the Indenture.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [_____ __], 200[_].
"Code" means the Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Collection Period" means (a) in the case of the initial Collection
Period, the period from [but not including] the Cutoff Date to and including
[___________ __], 200[_] and (b) thereafter, each calendar month during the term
of the Sale and Servicing Agreement. With respect to any Determination Date,
Deposit Date or Distribution Date, the "related Collection Period" means the
Collection Period preceding the month in which such Determination Date, Deposit
Date or Distribution Date occurs.
"Collections" means all collections on the Receivables and any proceeds
from Insurance Policies and lender's single interest insurance policies.
"Commission" means the Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate per annum of
interest charged on the outstanding principal balance of such Receivable.
"Corporate Trust Office" means:
(a) as used in the Indenture, or otherwise with respect to Indenture
Trustee, the principal office of Indenture Trustee at which at any particular
time its corporate trust business shall be administered, which office at date of
the execution of the Indenture is located at [____________________________],
Attention: [________________] Telephone: [_____________]; Facsimile:
[_______________] or at such other address as Indenture Trustee may designate
from time to time by notice to the Noteholders, Servicer and Issuer, or the
principal corporate trust office of any successor Indenture Trustee (the address
of which the successor Indenture Trustee will [notify] the Noteholders and
Issuer); and
(b) as used in the Trust Agreement, or otherwise with respect to Owner
Trustee, the principal corporate trust office of Owner Trustee located at
[_____________]; or at such other
Appendix X, Page 6
address as Owner Trustee may designate by notice to the Certificateholders and
Depositor, or the principal corporate trust office of any successor Owner
Trustee (the address of which the successor owner trustee will [notify] the
Certificateholders and Depositor).
"Custodian" means Servicer in its capacity as agent of Issuer, as
custodian of the Receivable Files and any Transferor acting as agent for
Servicer for the purpose of maintaining custody of the Receivables Files.
"Cutoff Date" means the close of business on [__________], 200[_].
"Cutoff Date Principal Balance" means, with respect to any Receivable, the
Initial Principal Balance of such Receivable minus the sum of the portion of all
payments received under such Receivable from or on behalf of the related Obligor
on or prior to the Cutoff Date and allocable to principal in accordance with the
terms of the Receivable.
"Dealer" means, with respect to any Receivable, the seller of the related
Financed Vehicle.
"Dealer Agreement" means an agreement between an Originator and a Dealer
pursuant to which such Originator acquires Motor Vehicle Loans from the Dealer
or gives such Dealer the right to induce persons to apply to such Originator for
loans in connection with the retail sale of Motor Vehicles by such Dealer.
"Dealer Recourse" means, with respect to any Dealer, any rights and
remedies against such Dealer under the related Dealer Agreement (other than with
respect to any breach of representation or warranty thereunder) with respect to
credit losses on a Receivable secured by a Financed Vehicle sold by such Dealer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which Servicer has determined to
charge off during such Collection Period in accordance with its customary
servicing practices; provided that any Receivable which Servicer is obligated to
purchase shall be deemed to have become a Defaulted Receivable during a
Collection Period if Servicer fails to deposit the related Purchase Amount on
the related Deposit Date when due.
"Definitive Notes" is defined in Section 2.10 of the Indenture.
"Definitive Certificates" means either or both (as the context requires)
of (a) Certificates issued in certificated, fully registered form as provided in
Section 3.11 of the Trust Agreement and (b) Certificates issued in certificated,
fully registered form as provided in Section 3.13 of the Trust Agreement.
"Delivery" when used with respect to Trust Account Property means:
Appendix X, Page 7
(c) 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 and are susceptible of
physical delivery, transfer thereof to Indenture Trustee or its nominee or
custodian by physical delivery to Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a "certificated security"
(as defined in Section 8-102(4) of the UCC) transfer thereof (i) by delivery of
such certificated security endorsed to, or registered in the name of, Indenture
Trustee or its nominee or custodian or endorsed in blank to a "securities
intermediary" (as defined in Section 8-102(14) of the UCC) and the making by
such "financial intermediary" of entries on its books and records identifying
such certificated securities as belonging to Indenture Trustee or its nominee or
custodian and the sending by such financial intermediary of a confirmation of
the purchase of such certificated security by Indenture Trustee or its nominee
or custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(5) of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate securities
account of a financial intermediary by the amount of such certificated security,
the identification by the clearing corporation of the certificated securities
for the sole and exclusive account of the financial intermediary, the
maintenance of such certificated securities by such clearing corporation or its
nominee subject to its exclusive control, the sending of a confirmation by the
financial intermediary of the purchase by Indenture Trustee or its nominee or
custodian of such securities and the making by such financial intermediary of
entries on its books and records identifying such certificated securities as
belonging to Indenture Trustee or its nominee or custodian (all of the
foregoing, "Physical Property"), and, in any event, any such Physical Property
in registered form shall be in the name of Indenture Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such Trust
Account Property to Indenture Trustee or its nominee or custodian, consistent
with changes in applicable law or regulations or the interpretation thereof;
(d) with respect to any securities issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a financial intermediary which is also a "depository" pursuant to
applicable Federal regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such book-entry registration to
Indenture Trustee or its nominee or custodian of the purchase by Indenture
Trustee or its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records identifying such
book entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations as belonging to Indenture Trustee or its nominee or
custodian and indicating that such custodian holds such Trust Account Property
solely as agent for Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Trust Account Property to
Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
Appendix X, Page 8
(e) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by Indenture Trustee or its nominee or
custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to Indenture Trustee or its nominee or custodian.
"Deposit Date" means, with respect to any Collection Period, the Business
Day preceding the related Distribution Date.
"Depositor" means Seller in its capacity as Depositor under the Trust
Agreement.
"Depository Agreements" mean the Certificate Depository Agreement and the
Note Depository Agreement.
"Determination Date" with respect to any Collection Period, means the
tenth day of the calendar month following such Collection Period (or, if the
tenth day is not a Business Day, the next succeeding Business Day).
"Direct Loan" means motor vehicle promissory notes and security agreements
executed by an Obligor in favor of a motor vehicle lender.
"Distribution Date" means the 15th day of each month (or, if the 15th day
is not a Business Day, the next succeeding Business Day), commencing
[___________ __], 200[_].
"Dollar" and the sign "$" mean lawful money of the United States.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as the long-term
unsecured debt of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade. Any such accounts (other than the Reserve Account) may be
maintained with the Transferor, the Seller, or any of their Affiliates, if such
accounts meet the requirements described in clause (a) of the preceding
sentence.
"Eligible Institution" means a depository institution (which may be
Servicer (or any Affiliate of Servicer), Owner Trustee or Indenture Trustee)
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), (a) which has (i) either a long-term senior unsecured debt rating of AA
or a short-term senior unsecured debt or certificate of deposit rating of A-1+
or better by Standard & Poor's and (ii)(A) a short-term senior unsecured debt
rating of A-l or better by Standard & Poor's and (B) a short-term senior
unsecured debt rating of P-1 or better by Moody's, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (b) whose deposits are insured by the Federal Deposit Insurance
Appendix X, Page 9
Corporation. If so qualified, Servicer, any Affiliate of Servicer, Owner Trustee
or Indenture Trustee may be considered an Eligible Institution.
"Eligible Investments" shall mean any one or more of the following types
of investments:
(f) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(g) demand deposits, time deposits or certificates of deposit of any
depository institution (including any Affiliate of Transferor or Seller,
Indenture Trustee, Owner Trustee or any Affiliate of Indenture Trustee or Owner
Trustee) or trust company incorporated under the laws of the United States of
America or any state thereof or the District of Columbia (or any domestic branch
of a foreign bank) and subject to supervision and examination by Federal or
state banking or depository institution authorities (including depository
receipts issued by any such institution or trust company as custodian with
respect to any obligation referred to in clause (a) above or a portion of such
obligation for the benefit of the holders of such depository receipts); provided
that at the time of the investment or contractual commitment to invest therein
(which shall be deemed to be made again each time funds are reinvested following
each Distribution Date), the commercial paper or other short-term senior
unsecured debt obligations (other than such obligations the rating of which is
based on the credit of a Person other than such depository institution or trust
company) of such depository institution or trust company shall have a credit
rating from Standard & Poor's of A-1+ and from Moody's of P-1;
(h) commercial paper (including commercial paper of any Affiliate of
Seller or Transferor) having, at the time of the investment or contractual
commitment to invest therein, a rating from Standard & Poor's of A-1+ and from
Moody's of P-1;
(i) investments in money market funds (including funds for which
Indenture Trustee or Owner Trustee or any of their respective Affiliates or any
of Seller's or Transferor's Affiliates is investment manager or advisor) having
a rating from Standard & Poor's of AAA-m or AAAm-G and from Moody's of Aaa;
(j) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(k) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
referred to in clause (b) above; and
(l) any other investment with respect to which each Rating Agency has
provided written notice that such investment would not cause such Rating Agency
to downgrade or withdraw its then current rating of any class of Notes or the
Certificates.
"ERISA" is defined in Section 11.12 of the Trust Agreement.
"Event of Default" is defined in Section 5.1 of the Indenture.
Appendix X, Page 10
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"Expenses" is defined in Section 8.2 of the Trust Agreement.
"Final Scheduled Distribution Date" means for (a) the Class A-1 Notes, the
[______________] Distribution Date, (b) the Class A-2 Notes, the [_____________]
Distribution Date and (c) the Certificates, the [______________] Distribution
Date.
"Final Scheduled Maturity Date" means the last day of the Collection
Period immediately preceding the Final Scheduled Distribution Date for the
Certificates.
"Financed Vehicle" means a new or used automobile or light duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"Fitch" means Fitch, Inc., or its successor.
"Form 8-K" is defined in Section 4.13(a).
"Form 8-K Information" is defined in Section 4.13(e).
"Form 10-D" is defined in Section 4.13.
"Form 10-K" is defined in Section 4.13.
"GAAP" is defined in Section 11.1 of the Sale and Servicing Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto. Other forms of the verb "to Grant"
shall have correlative meanings.
"Holder" means, as the context may require, a Certificateholder or a
Noteholder or both.
"Indemnified Parties" is defined in Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of [_________ __], 200[_],
between Issuer and Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Trustee" means [__________________________], not in its
individual capacity but as trustee under the Indenture, or any successor trustee
under the Indenture.
Appendix X, Page 11
"Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of Issuer, any other obligor upon the
Notes, Seller, Transferor and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest (other than less than 5% of the outstanding amount of any publicly
traded security) in Issuer, any such other obligor, Seller, Transferor or any
Affiliate of any of the foregoing Persons and (c) is not connected with Issuer,
any such other obligor, Seller, Transferor or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered
to Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in the Indenture and that the signer is Independent within the
meaning thereof.
"Initial Principal Balance" means, in respect of a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and related costs, including accessories, service and warranty contracts,
insurance premiums, other items customarily financed as part of retail motor
vehicle loans and/or retail installment sales contracts and other fees charged
by the Transferor or the applicable Dealer and included in the amount to be
financed, the total of which is shown as the initial principal balance in the
note and security agreement or retail installment sale contract evidencing and
securing such Receivable.
"Insolvency Event" means, for a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver (including any
receiver appointed under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended), liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"Insurance Policies" means, all credit life and disability insurance
policies maintained by the Obligors and all Physical Damage Insurance Policies.
"Interest Period" means, with respect to any specified Distribution Date,
the period from and including the Closing Date (in the case of the first
Distribution Date) and thereafter from and including the preceding Distribution
Date to but excluding such specified Distribution Date.
Appendix X, Page 12
"Interest Rate" means, with respect to the (a) Class A-1 Notes, the Class
A-1 Interest Rate and (b) Class A-2 Notes, the Class A-2 Interest Rate.
"Issuer" means [ ].
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of Issuer by any one of its Authorized Officers and delivered
to Indenture Trustee.
"Lien" means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind, other than liens for taxes
not yet due and payable, mechanics' or materialmen's liens and other liens for
work, labor or materials, and any other liens that may attach by operation of
law.
"Liquidation Proceeds" means, with respect to any Receivable that has
become a Defaulted Receivable, (a) insurance proceeds received by Servicer with
respect to the Insurance Policies, (b) amounts received by Servicer in
connection with such Defaulted Receivable pursuant to the exercise of rights
under that Receivable and (c) the monies collected by Servicer (from whatever
source, including proceeds of a sale of a Financed Vehicle, a deficiency balance
recovered after the charge-off of the related Receivable or as a result of any
Dealer Recourse) on such Defaulted Receivable net of any expenses incurred by
Servicer in connection therewith and any payments required by law to be remitted
to the Obligor.
"Minimum Specified Reserve Balance" with respect to any Distribution Date
means the lesser of (i) $[__________] and (ii) the aggregate outstanding
principal amount of the Notes and the Certificate Balance (after giving effect
to any distributions on the Notes and Certificates on such Distribution Date).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Motor Vehicle" means a new or used automobile or light duty truck.
"Motor Vehicle Loan" means a Direct Loan or retail installment sales
contract secured by a Motor Vehicle originated by the Transferor or another
financial institution.
"Note" means a Class A-1 Note or Class A-2 Note.
"Note Depository Agreement" means the agreement among Issuer, Servicer and
The Depository Trust Company, as the initial Clearing Agency, dated as of the
Closing Date, relating to the Notes, as the same may be amended or supplemented
from time to time.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Sale and Servicing
Agreement.
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
"Note Owner" means, with respect to a Book-Entry Note, the person who is
the owner of such Book Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency
Appendix X, Page 13
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Note Pool Factor" for each class of Notes as of the close of business on
a Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of such class of Notes divided by the original outstanding
principal balance of such class of Notes. The Note Pool Factor for each class of
Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor
for each class of Notes will decline to reflect reductions in the outstanding
principal balance of such class of Notes.
"Noteholders' Distributable Amount" means, for any Distribution Date, the
sum of the Noteholders' Principal Distributable Amount and the Noteholders'
Interest Distributable Amount.
"Noteholders' Interest Carryover Shortfall" means, for any Distribution
Date, the excess of the Noteholders' Monthly Interest Distributable Amount for
the preceding Distribution Date and any outstanding Noteholders' Interest
Carryover Shortfall on such preceding Distribution Date, over the amount in
respect of interest at the Note Pool Factor that is actually deposited in the
Note Distribution Account on such preceding Distribution Date, plus interest on
such excess, to the extent permitted by law, in an amount equal to the product
of one-twelfth multiplied by the Note Pool Factor multiplied by the amount of
such excess.
"Noteholders' Interest Distributable Amount" means, for any Distribution
Date, the sum of (a) the Class A-1 Noteholders' Interest Distributable Amount
and (b) the Class A-2 Noteholders' Interest Distributable Amount for such
Distribution Date.
"Noteholders' Monthly Principal Distributable Amount" means, for any
Distribution Date, the Noteholders' Percentage of the Principal Distribution
Amount.
"Noteholders' Percentage" means 100% until the point in time at which the
Class A-1 Notes and Class A-2 Notes have been paid in full and zero thereafter.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
business on any specified Distribution Date, the excess of the Noteholders'
Monthly Principal Distributable Amount for such Distribution Date and any
outstanding Noteholders' Principal Carryover Shortfall from the Distribution
Date preceding the specified Distribution Date over the amount in respect of
principal that is actually deposited in the Note Distribution Account on the
specified Distribution Date.
"Noteholders' Principal Distributable Amount" means, for any Distribution
Date, the sum of the Noteholder's Monthly Principal Distributable Amount for
such Distribution Date and the Noteholders' Principal Carryover Shortfall as of
the close of business on the preceding Distribution Date; provided that the
Noteholders' Principal Distributable Amount shall not exceed the aggregate
outstanding principal balance of the Notes. In addition, on the Final Scheduled
Distribution Date of each class of Notes, the principal required to be deposited
in the Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account on
such Distribution Date and allocable to principal) to be paid to Noteholders of
such class to reduce the Outstanding Amount of such class of Notes to zero.
Appendix X, Page 14
"Note Register" and "Note Registrar" are defined in Section 2.4 of the
Indenture.
"Obligor" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the Receivable or
other Person who owes or may be primarily or secondarily liable for payments
under such Receivable.
"Officer's Certificate" means (a) for purposes of the Indenture, a
certificate signed by any Authorized Officer of Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of
Section 11.1 of the Indenture and TIA Section 314, and delivered to Indenture
Trustee; and (b) otherwise, a certificate signed by the chairman, the president,
any vice president or the treasurer of Seller or Servicer, as the case may be,
and delivered to Indenture Trustee. Unless otherwise specified, any reference in
the Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be employees of or
counsel to Issuer and who shall be satisfactory to Issuer, Owner Trustee or
Indenture Trustee, as applicable, and which opinion or opinions shall be
addressed to Issuer, Owner Trustee or Indenture Trustee, as applicable and shall
be in form and substance satisfactory to the Issuer, Owner Trustee and Indenture
Trustee, as applicable.
"Original Pool Balance" means the Pool Balance as of the Cutoff Date,
which is $[_____________].
"Originator" means, with respect to any Direct Loan or retail installment
sales contract, the Transferor that was the lender with respect to such Direct
Loan or that acquired such Direct Loan or retail installment sales contract from
a Dealer or other Person.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(m) Notes theretofore canceled by Note Registrar or delivered to Note
Registrar for cancellation;
(n) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with Indenture Trustee or any
Paying Agent in trust for the Holders of such Notes (provided that if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant to
the Indenture or provision therefor, satisfactory to Indenture Trustee); and
(o) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to Indenture Trustee is presented that any such Notes are held by a bona fide
purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
Issuer, any other obligor upon the Notes, Transferor or any Affiliate of any of
the foregoing Persons shall be disregarded and
Appendix X, Page 15
deemed not to be Outstanding, except that, in determining whether Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of Indenture Trustee either actually knows to be so owned or
has received written notice thereof shall be so disregarded. Notes so owned that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of Indenture Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not Issuer, any other
obligor upon the Notes, Transferor or any Affiliate of any of the foregoing
Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
class of Notes, as applicable, Outstanding at the date of determination.
"Owner" means each Person who is the beneficial owner of a Book Entry
Certificate as reflected in the records of the Clearing Agency or if a Clearing
Agency Participant is not the Owner, then as reflected in records of a Person
maintaining an account with such Clearing Agency (directly or indirectly, in
accordance with the rules of such Clearing Agency).
"Owner Trust Estate" means all right, title and interest of Issuer in and
to the property and rights assigned to Issuer pursuant to Article II of the Sale
and Servicing Agreement, all funds on deposit from time to time in the Trust
Accounts and the Certificate Distribution Account and all other property of
Issuer from time to time, including any rights of Owner Trustee and Issuer
pursuant to the Sale and Servicing Agreement.
"Owner Trustee" means [___________________], a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement, and any successor Owner Trustee hereunder.
"Payaheads" means early payments by or on behalf of Obligors on
Precomputed Receivables which, in accordance with the Servicer's customary
practices, do not constitute scheduled payments or full prepayments and are
applied to principal and interest in a subsequent period.
"Payahead Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Paying Agent" means (a) when used in the Indenture or otherwise with
respect to the Notes, Indenture Trustee or any other Person that meets the
eligibility standards for Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by Issuer to make the payments to and distributions
from the Collection Account and the Note Distribution Account, including payment
of principal of or interest on the Notes on behalf of Issuer; and (b) when used
in the Trust Agreement or otherwise with respect to the Certificates, Owner
Trustee or any other paying agent or co-paying agent appointed pursuant to
Section 3.9 of the Trust Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
Appendix X, Page 16
"Physical Damage Insurance Policy" means a theft and physical damage
insurance policy maintained by the Obligor under a Receivable, providing
coverage against loss or damage to or theft of the related Financed Vehicle.
"Physical Property" is defined in the definition of "Delivery" above.
"Pool Balance" means, at any time, the aggregate Principal Balance of the
Receivables (excluding Purchased Receivables and Defaulted Receivables) at such
time.
"Precomputed Receivable" means (i) an Actuarial Receivable, (ii) a Rule of
78's Receivable or (iii) a Sum of Periodic Balances Receivable.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Principal Balance" means, as of any time, for any Receivable, the
principal balance of such Receivable under the terms of the Receivable
determined in accordance with the Servicer's customary practices.
"Principal Distribution Amount" means, for any Distribution Date, the sum
of (a) the Available Principal for such Distribution Date and (b) the aggregate
amount of Realized Losses for the related Collection Period.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Agreement" means each agreement dated as of [_________ __],
200[_] between the Transferor and Seller under which the Transferor sells
Receivables to Seller.
"Purchase Amount" of any Receivable means, with respect to any Deposit
Date and the last day of the related Collection Period, an amount equal to the
sum of (a) the outstanding Principal Balance of such Receivable as of the last
day of such Collection Period and (b) the amount of accrued and unpaid interest
on such Principal Balance at the related Contract Rate from the date a payment
was last made by or on behalf of the Obligor through and including the last day
of such Collection Period, in each case after giving effect to the receipt of
monies collected on such Receivable in such Collection Period.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by Servicer pursuant to Section
4.7 of the Sale and Servicing Agreement or repurchased by Seller pursuant to
Section 3.3 of the Sale and Servicing Agreement.
"Rating Agencies" means [Moody's, Standard & Poor's and Fitch.]
Appendix X, Page 17
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified Transferor, Seller, Servicer, Owner
Trustee or Indenture Trustee in writing that such action will, in and of itself,
result in a reduction or withdrawal of the then current rating of any class of
Notes, or the Certificates.
"Realized Losses" means, for any Collection Period, the aggregate
Principal Balances of any Receivables that became Defaulted Receivables during
such Collection Period.
"Receivable" means each Motor Vehicle Loan described in the Schedule of
Receivables, but excluding (i) Defaulted Receivables to the extent the Principal
Balances thereof have been deposited in the Collection Account and (ii) any
Purchased Receivables.
"Receivable Files" is defined in Section 3.4 of the Sale and Servicing
Agreement.
"Record Date" means, with respect to any Distribution Date or Redemption
Date, the close of business on the day immediately preceding such Distribution
Date or Redemption Date; or, if Definitive Notes or Definitive Certificates have
been issued, the last day of the month preceding such Distribution Date.
"Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 10.1(a) of the Indenture or a payment to Noteholders pursuant to
Section 10.1(b) of the Indenture, the Distribution Date specified by Servicer or
Issuer pursuant to such Section 10.1(a) or (b).
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.1(a) of the Indenture, an amount equal to the unpaid
principal amount of the then outstanding Class A-2 Notes plus accrued and unpaid
interest thereon to but excluding the Redemption Date, (b) in the case of a
payment made to Noteholders pursuant to Section 10.1(b) of the Indenture, the
amount on deposit in the Note Distribution Account, but not in excess of the
amount specified in clause (a) or (c) in the case of a redemption of the
Certificates pursuant to Section 9.1 of the Trust Agreement, an amount equal to
the Certificate Balance of the Certificates plus accrued interest thereon but
excluding such Redemption Date.
"Regulation AB" shall mean Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
"Relevant Servicing Criteria" is the Servicing Criteria applicable to the
various parties, as set forth on Exhibit F attached hereto. For clarification
purposes, multiple parties can have responsibility for the same Relevant
Servicing Criteria. With respect to a Servicing Function Participant engaged by
the Trustee or the Servicer, the term "Relevant Servicing Criteria" may refer to
a portion of the Relevant Servicing Criteria applicable to the Trustee or the
Servicer.
"Reportable Event" is defined in Section 4.13(e).
"Required Rating" means a rating with respect to short term deposit
obligations of at least P-1 by Moody's and at least A-1 by Standard & Poor's.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.8 of the Sale and Servicing Agreement.
Appendix X, Page 18
"Reserve Account Deposit" means an amount equal to $[__________].
"Reserve Account Property" means the Reserve Account, the Reserve Account
Deposit and all proceeds of the Reserve Account and the Reserve Account Deposit,
including all securities, investments, general intangibles, financial assets and
investment property from time to time credited to and any security entitlement
to the Reserve Account.
"Reserve Account Transfer Amount" means, with respect to any Distribution
Date, an amount equal to the lesser of (a) the amount of cash or other
immediately available funds on deposit in the Reserve Account on such
Distribution Date (before giving effect to any withdrawals therefrom relating to
such Distribution Date) or (b) the amount, if any, by which (i) the sum of the
Servicing Fee for the related Collection Period and all accrued and unpaid
Servicing Fees for prior Collection Periods, the Noteholders' Interest
Distributable Amount, the Certificateholders' Interest Distributable Amount, the
Noteholders' Principal Distributable Amount and the Certificateholders'
Principal Distributable Amount for such Distribution Date exceeds (ii) the sum
of the Available Interest and the Available Principal for such Distribution
Date.
"Responsible Officer" means, with respect to Indenture Trustee, any
officer within the Corporate Trust Office of Indenture Trustee, including any
Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, or any other officer of Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Rule of 78's Receivable" means a Receivable that provides for the payment
by the Obligor of a specified total amount of payments, payable in equal monthly
installments on each due date, which total represents the principal amount
financed and add-on interest in an amount calculated at the stated Contract Rate
for the term of the Receivable and allocated to each monthly payment based upon
a fraction, the numerator of which is the number of payments scheduled to have
been made prior to the due date for such monthly payment on such Receivable and
the denominator of which is the sum of all such numbers of payments to be made
until the maturity of such Receivable.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
among Issuer, Indenture Trustee, [____________], as Servicer, and BAS
Securitization LLC, as Seller, dated as of [________], 200[_], as the same may
be amended and supplemented from time to time.
"Schedule of Receivables" means, with respect to the Motor Vehicle Loans
to be conveyed to Seller by the Transferor and to Issuer by Seller, the list
identifying such Motor Vehicle Loans delivered to Indenture Trustee at the
Closing.
"Secretary of State" means the Secretary of State of the State of [ ].
"Securities Intermediary" is defined in Section 5.8 of the Sale and
Servicing Agreement.
Appendix X, Page 19
"Security Agreement" means the agreement dated as of [______________],
200[_] between the Transferor and the Indenture Trustee under which the
Transferor grants a security interest in its Receivables and certain other
property described therein to the Indenture Trustee.
"Seller" means BAS Securitization LLC, a Delaware limited liability
company, and any successor pursuant to Section 6.4 of the Sale and Servicing
Agreement.
"Servicer" means [_____________] and each Successor Servicer.
"Servicer Termination Event" means an event specified in Section 8.1 of
the Sale and Servicing Agreement.
"Servicer's Report" means a report of Servicer delivered pursuant to
Section 4.9 of the Sale and Servicing Agreement, substantially in the form of
Exhibit A to that agreement.
"Servicing Criteria" means the "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time, which as of
the Closing Date are listed on Exhibit F hereto.
"Servicing Fee" is defined in Section 4.8 of the Sale and Servicing
Agreement.
"Servicing Fee Rate" means [1.00]% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment monthly installments between principal and interest, pursuant to which
such payment is allocated first to accrued and unpaid interest at the Contract
Rate on the unpaid principal balance and the remainder of such payment is
allocable to principal.
"Simple Interest Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means, for any Distribution Date, the
greater of (a) [___]% of the sum of the aggregate outstanding principal amount
of each class of Notes plus the outstanding Certificate Balance on such
Distribution Date (after giving effect to all payments on the Notes and
distributions with respect to the Certificates to be made on or prior to such
Distribution Date) and (b) the Minimum Specified Reserve Balance as of such
Distribution Date.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Successor Servicer" is defined in Section 3.7(e) of the Indenture.
"Sum of Periodic Balances Receivable" means a Receivable that provides for
the payment by the Obligor of a specified total amount of payments, payable in
equal monthly installments on each due date, which total represents the
principal amount financed and add-on interest in an amount calculated at the
stated Contract Rate for the term of the Receivable and
Appendix X, Page 20
allocated to each monthly payment based upon a fraction, the numerator of which
is the principal balance of such Receivable immediately prior to the due date
for such monthly payment and the denominator of which is the sum of all
principal balances for each monthly payment to be made until the maturity of
such Receivable.
"Supplemental Servicing Fee" is defined in Section 4.8 of the Sale and
Servicing Agreement.
"Total Distribution Amount" means, for each Distribution Date, the sum of
(a) the Available Interest, (b) the Available Principal and (c) the Reserve
Account Transfer Amount, in each case in respect of such Distribution Date.
"Transferor" means each [____________________________________].
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise) and all proceeds of the foregoing.
"Trust Accounts" is defined in Section 5.1 of the Sale and Servicing
Agreement.
"Trust Agreement" means the Trust Agreement dated as of [_______ __],
200[_], between Seller and Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the Noteholders (including all property and
interests Granted to Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Trust Property" shall have the meaning set forth in Section 2.1 of the
Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
Appendix X, Page 21