EXHIBIT 10.1
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FORM OF SALE AND SERVICING
AGREEMENT
among
▇▇▇▇▇▇▇ AUTO TRUST 199_-_,
as Issuer,
▇▇▇▇▇▇▇ DEALER FINANCIAL SERVICES, INC.
as Servicer and Sponsor,
and
▇▇▇▇▇▇▇ AUTO RECEIVABLES CORP.,
as Depositor
Dated as of __________ __, 199_
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.1. Definitions.................................................2
SECTION 1.2. Other Definitional Provisions..............................18
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Receivables..................................19
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties of Depositor................20
SECTION 3.2. Repurchase upon Breach.....................................25
SECTION 3.2. Custody of Receivable Files................................26
SECTION 3.3. Duties of Servicer as Custodian............................26
SECTION 3.5. Instructions; Authority To Act.............................27
SECTION 3.6. Custodian's Indemnification................................27
SECTION 3.7. Effective Period and Termination...........................27
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of Servicer.........................................28
SECTION 4.2. Collection and Allocation of Receivable Payments...........29
SECTION 4.3. Realization upon Receivables...............................29
SECTION 4.4. Physical Damage Insurance; Other Insurance.................30
SECTION 4.5. Maintenance of Security Interests in Financed
Vehicles...................................................30
SECTION 4.6. Covenants of Servicer......................................30
SECTION 4.7. Purchase of Receivables upon Breach........................31
SECTION 4.8. Servicing Fee..............................................31
SECTION 4.9. Servicer's Certificate.....................................31
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.......32
SECTION 4.11. Annual Independent Certified Public Accountants'
Report.....................................................32
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables......................................33
SECTION 4.13. Servicer Expenses..........................................33
SECTION 4.14. Appointment of Subservicer.................................33
ARTICLE V
Distributions; Reserve Account; Statements to
Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts.............................34
SECTION 5.2. Collections.................................................36
SECTION 5.3. Application of Collections..................................37
SECTION 5.4. Additional Deposits.........................................37
SECTION 5.5. Distributions...............................................37
SECTION 5.6. Reserve Account.............................................39
SECTION 5.7. Advances....................................................39
SECTION 5.8. Statements to Certificateholders and Noteholders............40
SECTION 5.9. Net Deposits................................................41
ARTICLE VI
The Depositor
SECTION 6.1. Representations of Depositor................................41
SECTION 6.2. Corporate Existence.........................................43
SECTION 6.3. Liability of Depositor; Indemnities.........................44
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor...................................45
SECTION 6.5. Limitation on Liability of Depositor and Others.............46
SECTION 6.6. Depositor May Own Certificates or Notes.....................46
SECTION 6.7. Security Interest...........................................46
ARTICLE VII
The Servicer and the Sponsor
SECTION 7.1. Representations of BDFS.....................................46
SECTION 7.2. Indemnities of BDFS.........................................48
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of BDFS.........................................49
SECTION 7.4. Limitation on Liability of BDFS and Others..................50
SECTION 7.5. BDFS Not To Resign as Servicer..............................50
SECTION 7.6. Corporate Existence.........................................51
SECTION 7.7. Demand Note.................................................51
ARTICLE VIII
Default
SECTION 8.1. Servicer Default............................................51
SECTION 8.2. Appointment of Successor....................................53
SECTION 8.3. Payment of Servicing Fee; Repayment of Advances.............53
SECTION 8.4. Notification to Noteholders and Certificateholders..........53
SECTION 8.5. Waiver of Past Defaults.....................................54
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ARTICLE IX
Termination
SECTION 9.1. Optional Purchase of All Receivables........................54
SECTION 9.2. Mandatory Sale of all Contracts.............................55
ARTICLE X
Administrative Duties of the Servicer
SECTION 10.1. Administrative Duties.......................................57
SECTION 10.2. Records.....................................................59
SECTION 10.3. Additional Information To Be Furnished to the Issuer........59
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1. Amendment...................................................59
SECTION 11.2. Protection of Title to Trust................................60
SECTION 11.3. Notices.....................................................62
SECTION 11.4. Assignment..................................................63
SECTION 11.5. Limitations on Rights of Others.............................63
SECTION 11.6. Severability................................................63
SECTION 11.7. Separate Counterparts.......................................63
SECTION 11.8. Headings....................................................63
SECTION 11.9. Governing Law...............................................63
SECTION 11.10. Assignment to Trustee.......................................64
SECTION 11.11. Nonpetition Covenant........................................64
SECTION 11.12. Limitation of Liability of Owner Trustee and Trustee........64
SECTION 11.13. Independence of the Servicer................................64
SECTION 11.14. No Joint Venture............................................65
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SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivables
EXHIBITS
Exhibit A - Form of Monthly Securityholder Statement
Exhibit B - Form of Servicer's Certificate
Exhibit C - Auction Procedures
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SALE AND SERVICING AGREEMENT dated as
of __________ __, 199_, among ▇▇▇▇▇▇▇ AUTO TRUST
199_-_, a Delaware business trust, as issuer (the
"Issuer"), ▇▇▇▇▇▇▇ AUTO RECEIVABLES CORP., as
depositor (the "Depositor") and ▇▇▇▇▇▇▇ DEALER
FINANCIAL SERVICES, INC., ("BDFS") as servicer
(the "Servicer") and sponsor (the "Sponsor").
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts and
other motor vehicle installment sale contracts generally purchased by the
Originators (as hereinafter defined) from motor vehicle dealers, some of which
receivables were acquired by BDFS pursuant to the Loan Sale Agreement, all of
which receivables were acquired by the Depositor pursuant to the Loan Purchase
Agreement;
WHEREAS the Sponsor as of the date hereof has caused the
Depositor to form the Issuer;
WHEREAS the Depositor is willing to sell such receivables to the
Issuer and assign its rights but none of its obligations under the Loan Purchase
Agreement to the Issuer; and
WHEREAS the Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"ADVISER" has the meaning specified in Section 9.2.
"ACTUARIAL RECEIVABLE" means any Receivable under which the
portion of a payment allocable to principal and the portion of a payment
allocable to interest is determined in accordance with the Scheduled Payment.
"ADVANCE" means the amount, as of the close of business on the
last day of a Collection Period, which the Servicer is required to advance on
the related Actuarial Receivable pursuant to Section 5.7(a).
"AGGREGATE NET LOSSES" means, with respect to a Collection
Period, the aggregate principal balance of all Receivables newly designated
during such Collection Period as Liquidated Receivables minus Liquidation
Proceeds collected during such Collection Period with respect to all Liquidated
Receivables.
"AGREEMENT" means this Sale and Servicing Agreement, as the same
may be amended and supplemented from time to time.
"AMOUNT FINANCED" with respect to a Receivable means the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and any related costs.
"ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the
annual rate of finance charges stated in the related Contract.
"AUCTION" has the meaning specified in Section 9.2.
"AUCTION PROCEDURES" has the meaning specified in Section 9.2.
"AUCTION PROPERTY" has the meaning specified in Section 9.2.
"AVAILABLE PRINCIPAL" means, with respect to any Distribution
Date, the sum of the following amounts without duplication: (a) that portion of
all collections on the Receivables allocable to principal in respect of the
preceding Collection Period using (x) in the case of a Simple Interest
Receivable, the Simple Interest Method and (y) in the case of an Actuarial
Receivable, the actuarial method (including, with respect to Actuarial
Receivables, amounts withdrawn from the Payahead Account and allocable to
principal and excluding amounts deposited into the Payahead Account and
allocable to principal, in each case, in respect of the preceding Collection
Period); (b) Liquidation Proceeds attributable to the principal amount of
Receivables which became Liquidated Receivables during the preceding Collection
Period in accordance with the Servicer's customary servicing procedures; (c) all
Advances made by the Servicer of principal due on the Actuarial Receivables in
respect of the preceding Collection Period; (d) to the extent attributable to
principal, the Purchase Amount of each Receivable repurchased by the Depositor
or the Sponsor or purchased by the Servicer as of the close of business on the
last day of the preceding Collection Period; and (e) partial prepayments on
Receivables in respect of the preceding Collection Period relating to refunds of
extended warranty contract costs or of credit life or disability insurance
policy premiums, but only if such costs or premiums were financed by the
respective Obligor and only to the extent not included in clause (a) above;
provided, however, that in calculating the Available Principal all payments and
proceeds (including Liquidation Proceeds) of any Receivables (i) repurchased by
the Depositor or the Sponsor or purchased by the Servicer the Purchase Amount of
which has been included in the Available Principal on a prior Distribution Date,
and (ii) distributed to the Servicer, with respect to such Distribution Date, as
reimbursement for Outstanding Advances in accordance with Section 5.7 shall all
be excluded.
"BALLOON LOAN" means a Receivable originated with a stated
maturity of less than the period of time of the corresponding amortization
schedule.
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"BALLOON PAYMENT" means the final payment required to be made
under a Balloon Loan.
"BASIC DOCUMENTS" means the Certificate of Trust, the Trust
Agreement, the Indenture, the Loan Purchase Agreement, the Loan Sale Agreement,
the Depository Agreements and other documents and certificates delivered in
connection therewith.
"BDFS" means ▇▇▇▇▇▇▇ Dealer Financial Services, Inc., a Florida
corporation.
"CERTIFICATE" means a Trust Certificate (as defined in the Trust
Agreement).
"CERTIFICATE BALANCE" equals, initially, $_________ and,
thereafter, equals the initial Certificate Balance, reduced by all amounts
allocable to principal previously distributed to Certificateholders.
"CERTIFICATE DISTRIBUTION ACCOUNT" has the meaning assigned to
such term in the Trust Agreement.
"CERTIFICATE POOL FACTOR" as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the Certificate
Balance (after giving effect to distributions made on such date) divided by the
initial Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of
the Cutoff Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"CERTIFICATE RATE" means ___% per annum.
"CERTIFICATEHOLDER" has the meaning assigned to such term in the
Trust Agreement.
"CERTIFICATEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date, the sum of the Certificateholders' Interest Distributable
Amount and the Certificateholders' Principal Distributable Amount.
"CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with
respect to any Distribution Date, the excess of the Certificateholders' Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Certificateholders' Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest at the Certificate
Rate that is actually deposited in the Certificate Distribution Account on such
preceding Distribution Date, plus interest on such excess, to the extent
permitted by law, at the Certificate Rate from and including such preceding
Distribution Date to but excluding the current Distribution Date.
"CERTIFICATEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Interest Distributable Amount for such Distribution Date and the
Certificateholders' Interest Carryover Shortfall for such Distribution Date.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months for purposes of this definition.
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"CERTIFICATEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT"
means, with respect to any Distribution Date, the product of (i) one-twelfth of
the Certificate Rate (or, in the case of the first Distribution Date, the
Certificate Rate multiplied by a fraction, the numerator of which is the number
of days elapsed from and including the Closing Date to but excluding such
Distribution Date and the denominator of which is 360) and (ii) the Certificate
Balance on the immediately preceding Distribution Date, after giving effect to
all payments of principal to the Certificateholders on or prior to such
Distribution Date (or, in the case of the first Distribution Date, the
Certificate Balance on the Closing Date).
"CERTIFICATEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT"
means, with respect to any Distribution Date, the Certificateholders' Percentage
of the Principal Distribution Amount or, with respect to any Distribution Date
on or after the Distribution Date on which the outstanding principal balance of
the Notes is reduced to zero, 100% of the Principal Distribution Amount (less
any amount required on the first such Distribution Date to reduce the
outstanding principal balance of the Notes to zero, which shall be deposited
into the Note Distribution Account).
"CERTIFICATEHOLDERS' PERCENTAGE" means 100% minus the
Noteholders' Percentage.
"CERTIFICATEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of
the close of any Distribution Date, the excess of the Certificateholders'
Monthly Principal Distributable Amount and any outstanding Certificateholders'
Principal Carryover Shortfall from the preceding Distribution Date, over the
amount in respect of principal that is actually deposited in the Certificate
Distribution Account on such current Distribution Date.
"CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; PROVIDED, HOWEVER, that the Certificate-holders'
Principal Distributable Amount shall not exceed the Certificate Balance. In
addition, on the Certificate Final Scheduled Distribution Date, the principal
required to be distributed to Certificateholders will include the lesser of (a)
any payments of principal due and remaining unpaid on each Receivable in the
Trust as of the last day of the Collection Period preceding the Certificate
Final Scheduled Distribution Date or (b) the portion of the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Distribution Date and allocable to
principal) to reduce the Certificate Balance to zero, in either case after
giving effect to any required distribution of the Noteholders' Principal
Distributable Amount to the Note Distribution Account. In addition, on any
Distribution Date on which, after giving effect to all distributions to the
Servicer, the Noteholders and the Certificateholders on such Distribution Date,
(i) the outstanding principal balance of the Notes is zero and (ii) the amount
on deposit in the Reserve Account is equal to or greater than the Certificate
Balance, Certificateholders' Principal Distributable Amount shall include an
amount equal to such Certificate Balance.
"CLOSING DATE" means _______, 199_.
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"COLLECTION ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.1.
"COLLECTION PERIOD" means a calendar month, except with respect
to the first Collection Period, which shall be the period from the Cutoff Date
to _________ __, 199_. Any amount stated "as of the close of business on the
last day of a Collection Period" shall give effect to the following calculations
as determined as of the end of the day on such last day: (1) all applications of
collections, (2) all current and previous Payaheads, (3) all applications of
Payahead Balances, (4) all Advances and reductions of Outstanding Advances and
(5) all distributions to be made on the immediately following Distribution Date.
"COMPUTER TAPE" means the computer tapes furnished to the Trustee
describing certain characteristics of the Receivables as of the Cutoff Date.
"CONTRACT" means a motor vehicle retail installment sale
contract.
"CRAM DOWN LOSS" means, with respect to a Receivable if a court
of appropriate jurisdiction in a bankruptcy or insolvency proceeding shall have
issued an order reducing the amount owed on such Receivable or otherwise
modifying or restructuring the scheduled payments to be made on such Receivable,
an amount equal to (i) the excess of the principal balance of such Receivable
immediately prior to such order over the principal balance of such Receivable as
so reduced and/or (ii) if such court shall have issued an order reducing the
effective rate of interest on such Receivable, the net present value (using as
the discount rate the higher of the APR on such Receivable or the rate of
interest, if any, specified by the court in such order) of the scheduled
payments as so modified or restructured. A "Cram Down Loss" shall be deemed to
have occurred on the date of issuance of such order.
"CUMULATIVE NET LOSS RATIO" means, with respect to any
Distribution Date, a fraction, expressed as a percentage, the numerator of which
is an amount equal to the excess of (i) the cumulative amount of Realized Losses
and Cram Down Losses from the Cutoff Date through the last day of the related
Collection Period over (ii) the cumulative amount of Recoveries from the Cutoff
Date through the last day of the related Collection Period and the denominator
of which is the Initial Pool Balance.
"CUTOFF DATE" means __________ __, 199_.
"DEALER" means a motor vehicle dealer who sold a Financed Vehicle
and who originated and assigned the respective Receivable to an Originator under
an existing agreement between such Dealer and such Originator.
"DEALER AGREEMENT" means any agreement between a Dealer and an
Originator relating to the acquisition of Receivables from a Dealer by such
Originator.
"DELINQUENCY PERCENTAGE" means, with respect to a Collection
Period, the ratio of (a) the outstanding principal balance of all outstanding
Receivables 60 days or more delinquent (which amount shall include Receivables
in respect of Financed Vehicles that have been repossessed but not yet sold or
otherwise liquidated) as of the last day of such Collection Period, determined
in accordance with the Servicer's normal practices, divided by (b) the
outstanding principal balance of all Receivables on the last day of such
Collection Period.
"DELIVERY" when used with respect to Trust Account Property
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9.105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Trustee or its nominee
or custodian by physical delivery to the Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such
certificated security endorsed to, or registered in the name of, the Trustee or
its nominee or custodian or endorsed in blank to a financial intermediary (as
defined in Section 8-313 of the UCC) and the making by such financial
intermediary of entries on its books and records identifying such certificated
securities as belonging to the Trustee or its nominee or custodian and the
sending by such financial intermediary of a confirmation of the purchase of such
certificated security by the Trustee or its nominee or custodian, or (ii) by
delivery thereof to a "clearing corporation" (as defined in Section 8-102(3) 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 a "custodian bank" (as defined in Section 8-102(4)
of the UCC) or the nominee of either subject to the clearing corporation's
exclusive control, the sending of a confirmation by the financial intermediary
of the purchase by the 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 the 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
the Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that is a book-entry security held through the Federal
Reserve System pursuant to Federal book-entry regulations, the following
procedures, all in accordance with applicable law, including applicable Federal
regulations and Articles 8 and 9 of the UCC: book-entry registration of such
Trust Account Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such financial
intermediary of a deposit advice or other written confirmation of such
book-entry registration to the Trustee or its nominee or custodian of the
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purchase by the Trustee or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its books
and records identifying such book-entry security held through the Federal
Reserve System pursuant to Federal book-entry regulations as belonging to the
Trustee or its nominee or custodian and indicating that such custodian holds
such Trust Account Property solely as agent for the Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that
is an uncertificated security 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 the 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 the Trustee or its nominee or
custodian.
"DEPOSITOR" means ▇▇▇▇▇▇▇ Auto Receivables Corp., as the
depositor of the Receivables, and each successor to ▇▇▇▇▇▇▇ Auto Receivables
Corp., (in the same capacity) to the extent permitted hereunder.
"DEPOSITORY AGREEMENTS" mean the Certificate Depository Agreement
and the Note Depository Agreement.
"DETERMINATION DATE" means, with respect to any Distribution
Date, the earlier of the eighth Business Day of the month in which a
Distribution Date occurs and the fourth Business Day preceding such Distribution
Date.
"DISTRIBUTION DATE" means, with respect to each Collection
Period, the fifteenth day of the following month, or if such day is not a
Business Day, the immediately following Business Day, commencing in _________.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution (other than the Depositor
or any affiliate of the Depositor) organized under the laws of the United States
of America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers and acting as
trustee for funds deposited in such account, so long as any of the securities of
such depository institution have a credit rating from each Rating Agency in one
of its generic rating categories which signifies investment grade.
"ELIGIBLE INSTITUTION" means a depository institution (other than
the Depositor or any affiliate of the Depositor) organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), which (i) has (A) either a
long-term senior unsecured debt rating of AAA or a short-term senior unsecured
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debt or certificate of deposit rating of A-l+ or better by Standard & Poor's and
(B)(1) a long-term senior unsecured debt rating of Al or better and (2) a
short-term senior unsecured debt rating of P-l or better by ▇▇▇▇▇'▇, or any
other long-term, short-term or certificate of deposit rating acceptable to the
Rating Agencies and (ii) whose deposits are insured by the Federal Deposit
Insurance Corporation. If so qualified, the Owner Trustee or the Trustee may be
considered an Eligible Institution.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution (including the Depositor or any Affiliate
of the Depositor) or trust company incorporated under the laws of the United
States of America or any state thereof or the District of Columbia (or any
domestic branch of a foreign bank) and subject to supervision and examination by
federal or state banking or depository institution authorities (including
depository receipts issued by any such institution or trust company as custodian
with respect to any obligation referred to in clause (a) above or portion of
such obligation for the benefit of the holders of such depository receipts);
PROVIDED, HOWEVER, that at the time of the investment or contractual commitment
to invest therein (which shall be deemed to be made again each time funds are
reinvested following each Distribution Date), the commercial paper or other
short-term senior unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such depository
institution or trust company) of such depository institution or trust company
shall have a credit rating from Standard & Poor's of A-1+ and from Moody's of
P-1;
(c) commercial paper (including commercial paper of the
Depositor or any Affiliate of the Depositor) having, at the time of the
investment or contractual commitment to invest therein, a rating from Standard &
Poor's of A-1+ and from Moody's of P-1;
(d) investments in money market funds (including funds for
which the Depositor, the Trustee or the Owner Trustee or any of their respective
Affiliates is investment manager or advisor) having a rating from Standard &
Poor's of AAA-m or AAAm-G and from Moody's of Aaa;
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security
that is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in either
case entered into with a depository institution or trust company (acting as
principal) referred to in clause (b) above; and
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(g) any other investment which would not cause either
Rating Agency to downgrade or withdraw its then current rating of the Notes or
the Certificates.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended.
"FINAL SCHEDULED DISTRIBUTION DATE" means with respect to (i) the
Notes, the _____________ Distribution Date and (ii) the Certificates, the
______________ Distribution Date.
"FINAL SCHEDULED MATURITY DATE" means ________________.
"FINANCED VEHICLE" means a new or used automobile, (including
passenger car, minivan, sport/utility vehicle or light truck) together with all
accessions thereto, securing an Obligor's indebtedness under the respective
Receivable.
"GP INTEREST" means the 1% interest in the Trust held by the
Depositor pursuant to the Trust Agreement.
"INDENTURE" means the Indenture dated as of __________ __, 199_,
between the Issuer and the Trustee, as the same may be amended and supplemented
from time to time.
"INITIAL POOL BALANCE" means the Pool Balance as of the Cutoff
Date, which is $____________.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a)
the filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver
(including any receiver appointed under the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended), liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due, or the taking of action by such Person in furtherance of any
of the foregoing.
"INTEREST DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of the following amounts without duplication: (a)
that portion of all collections on the Receivables allocable to interest in
respect of the preceding Collection Period using (x) in the case of a Simple
Interest Receivable, the Simple Interest Method and (y) in the case of an
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Actuarial Receivable, the actuarial method (including, with respect to Actuarial
Receivables, amounts withdrawn from the Payahead Account and allocable to
interest, and excluding amounts deposited into the Payahead Account and
allocable to interest, in each case in respect of the preceding Collection
Period); (b) Liquidation Proceeds attributable to interest on the Receivables
which became Liquidated Receivables during the preceding Collection Period in
accordance with the Servicer's customary servicing procedures; (c) all Advances
made by the Servicer of interest due on the Actuarial Receivables; (d) the
Purchase Amount of each Receivable repurchased by the Depositor or the Sponsor
or purchased by the Servicer as of the close of business on the last day of the
preceding Collection Period to the extent attributable to accrued interest on
such Receivable; (e) Recoveries for such Collection Period and (f) Investment
Earnings for such Distribution Date; PROVIDED, HOWEVER, that in calculating the
Interest Distribution Amount (i) all payments and proceeds (including
Liquidation Proceeds) of any Receivables repurchased by the Depositor or the
Sponsor or purchased by the Servicer the Purchaser Amount of which has been
included in the Interest Distribution Amount on a prior Distribution Date, and
(ii) distributed to the Servicer with respect to such Distribution Date, as
reimbursement for Outstanding Advances in accordance with Section 5.7 shall all
be excluded.
"INVESTMENT EARNINGS" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts (except the Payahead Account) and the
Certificate Distribution Account to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.1(b).
"ISSUER" means ▇▇▇▇▇▇▇ Auto Trust 199_-_.
"LIEN" means a security interest, lien, charge, pledge or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
which attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"LIQUIDATED RECEIVABLES" means, Receivables (i) which have been
liquidated by the Servicer through the sale of the related Financed Vehicle,
(ii) as to which all or a portion representing 10% or more of a scheduled
payment due is 150 or more days delinquent or (iii) with respect to which
proceeds have been received which, in the Servicer's judgment, constitute the
final amounts recoverable in respect of such Receivable.
"LIQUIDATION DISTRIBUTION DATE" has the meaning specified in
Section 9.2.
"LIQUIDATION PROCEEDS" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source (other
than any proceeds from any Dealer commission) on a Liquidated Receivable during
the Collection Period in which such Receivable became a Liquidated Receivable,
net of the sum of any amounts expended by the Servicer in connection with such
liquidation and any amounts required by law to be remitted to the Obligor on
such Liquidated Receivable.
"LOAN SALE AGREEMENT" means the Loan Sale Agreement dated as of
__________ __, 199_ among BDFS and the Originators.
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"LOAN PURCHASE AGREEMENT" means the Loan Purchase Agreement dated
as of __________ __, 199_ among BDFS and the Depositor.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or its
successor.
"NET LOSSES" means the sum of Realized Losses and Cram Down
Losses minus Recoveries for any Collection Period.
"NOTE DISTRIBUTION ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.1.
"NOTE POOL FACTOR" for the Notes as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of Notes divided by the original outstanding principal balance
of the Notes. The Note Pool Factor for the Notes will be 1.0000000 as of the
Cutoff Date; thereafter, the Note Pool Factor for the Notes will decline to
reflect reductions in the outstanding principal balance of the Notes.
"NOTEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount.
"NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect
to any Distribution Date, the excess of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Noteholders' Interest Carryover Shortfall on such preceding Distribution Date,
over the amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the Interest Rate from such preceding
Distribution Date through the current Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect
to any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date. Interest shall be computed on
the basis of a 360 day year of twelve 30-day months.
"NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the product of (i) one-twelfth of the Interest
Rate (or, in the case of the first Distribution Date, the Interest Rate
multiplied by a fraction, the numerator of which is the number of days elapsed
from and including the Closing Date to but excluding such Distribution Date and
the denominator of which is 360) and (ii) the outstanding principal balance of
the Notes on the immediately preceding Distribution Date, after giving effect to
all distributions of principal to Noteholders on such Distribution Date (or, in
the case of the first Distribution Date, on the Closing Date).
"NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the Noteholders' Percentage of the Principal
Distribution Amount.
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"NOTEHOLDERS' PERCENTAGE" means 100% until the point in time at
which the Notes have been paid in full and zero thereafter.
"NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of the
close of any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal that is actually deposited in the Note Distribution Account.
"NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect
to any Distribution Date, the sum of the Noteholder's Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
PROVIDED, HOWEVER, that the Noteholders' Principal Distributable Amount shall
not exceed the outstanding principal balance of the Notes. In addition, on the
Final Scheduled Distribution Date of the Notes, the principal required to be
deposited in the Note Distribution Account will include the amount necessary
(after giving effect to the other amounts to be deposited in the Note
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Outstanding Amount of such Notes to zero.
"OBLIGOR" on a Receivable means the purchaser or co-purchasers of
the Financed Vehicle and any other Person who owes payments under the
Receivable.
"OFFICERS' CERTIFICATE" means a certificate signed by (a) the
president, any senior vice president or any vice president and (b) a secretary
or assistant secretary of the Depositor, the Sponsor or the Servicer, as
appropriate, provided that no one person may sign in a capacity fulfilling both
clause (a) and clause (b).
"ORIGINATORS" means the subsidiaries of ▇▇▇▇▇▇▇ Bank, N.A. which
sold Receivables to BDFS pursuant to the Loan Sale Agreement.
"OUTSTANDING ADVANCES" on the Actuarial Receivables means the
sum, as of the close of business on the last day of a Collection Period, of all
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Advances as reduced as provided in Section 5.7(a).
"OWNER TRUST ESTATE" has the meaning assigned to such term in the
Trust Agreement.
"OWNER TRUSTEE" means ____________, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, its successors
in interest or any successor Owner Trustee under the Trust Agreement.
"PAYAHEAD" on an Actuarial Receivable means the amount, as of the
close of business on the last day of a Collection Period, computed in accordance
with Section 5.3 with respect to such Receivable.
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"PAYAHEAD ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.1.
"PAYAHEAD BALANCE" on an Actuarial Receivable means the sum, as
of the close of business on the last day of a Collection Period, of all
Payaheads made by or on behalf of the Obligor with respect to such Actuarial
Receivable, as reduced by applications of previous Payaheads with respect to
such Actuarial Receivable, pursuant to Sections 5.3 and 5.7.
"PERSON" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"PHYSICAL PROPERTY" has the meaning assig ▇▇▇ to such term in the
definition of "Delivery" above.
"POOL BALANCE" as of the close of business on the last day of a
Collection Period means the aggregate Principal Balance of the Receivables
(excluding Purchased Receivables and Liquidated Receivables).
"PRINCIPAL BALANCE" of a Receivable, as of the close of business
on the last day of a Collection Period, means the Amount Financed minus the sum
of (i)(a) with respect to a Simple Interest Receivable, that portion of all
payments made by or on behalf of the related Obligor on or prior to such day and
allocable to principal using the Simple Interest Method and (b) in the case of
an Actuarial Receivable, that portion of all Scheduled Payments due on or prior
to such day allocable to principal using the actuarial method, (ii) any refunded
portion of extended warranty protection plan costs or of physical damage, theft,
credit life, credit accident or health insurance premiums included in the Amount
Financed, (iii) any payment of the Purchase Amount with respect to the
Receivable allocable to principal, (iv) any prepayment in full or any partial
prepayments applied to reduce the Principal Balance of the Receivable and (v)
Cram Down Losses in respect of such Receivable.
"PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of (i) (a) with respect to Simple Interest
Receivables, that portion of all collections on the Receivable allocable to
principal in respect of the preceding Collection Period and (b) with respect to
Actuarial Receivables, the sum of (x) the amount of all Scheduled Payments
allocable to principal due during the preceding Collection Period and (y) the
portion of all prepayments in full allocable to principal received during the
preceding Collection Period, in the case of both (a) and (b), without regard to
any extensions or modifications thereof effected after the Cutoff Date, other
than with respect to any extensions or modifications required in connection with
Cram Down Losses during such Collection Period; (ii) the principal balance of
each Receivable that was repurchased by the Depositor or the Sponsor, or
purchased by the Servicer, in each case, as of the close of business on the last
day of the preceding Collection Period (except to the extent included in (i)
above; (iii) the principal balance of each Liquidated Receivable which became
such during the preceding Collection Period (except to the extent included in
(i) above); (iv) partial prepayments on Receivables in respect of the preceding
Collection Period relating to refunds of extended service contracts, or of
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physical damage, credit life, credit accident or heath insurance premium,
disability insurance policy premiums, but only if such costs or premiums were
financed by the respective Obligor and only to the extent not included in clause
(i) above; and (v) the aggregate amount of Cram Down Losses during such
Collection Period.
"PURCHASE AMOUNT" means the amount, as of the close of business
on the last day of a Collection Period, required to prepay in full the
respective Receivable under the terms thereof including interest at the APR to
the end of the month of purchase (without giving effect to Outstanding
Advances).
"PURCHASED RECEIVABLE" means a Receivable purchased as of the
close of business on the last day of a Collection Period by (i) the Servicer
pursuant to Section 4.7 or (ii) repurchased by the Depositor or the Sponsor
pursuant to Section 3.2.
"RATING AGENCY" means Moody's and/or Standard & Poor's. If no
such organization or successor is any longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization or other comparable
Person designated by the Depositor, notice of which designation shall be given
to the Trustee, the Owner Trustee and the Servicer.
"RATING AGENCY CONDITION" means, with respect to any action, that
each Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that neither
of the Rating Agencies shall have notified the Depositor, the Servicer, the
Owner Trustee or the Trustee in writing that such action will, in and of itself,
result in a reduction or withdrawal of the then current rating of the Notes, or
the Certificates.
"REALIZED LOSSES" means the excess of the Principal Balance of
any Liquidated Receivable over Liquidation Proceeds to the extent allocable to
principal.
"RECEIVABLE" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) but excluding Liquidated Receivables
and Purchased Receivables.
"RECEIVABLE FILES" means the documents specified in Section 3.3.
"RECOVERIES" means, with respect to any Liquidated Receivable,
monies collected in respect thereof, from whatever source (other than any
proceeds from any Dealer commission), during any Collection Period following the
Collection Period in which such Receivable became a Liquidated Receivable, net
of the sum of any amounts expended by the Servicer for the account of the
Obligor and any amounts required by law to be remitted to the Obligor.
"RELATED FINANCED VEHICLE" means a Financed Vehicle securing the
Obligor's indebtedness under a Related Receivable.
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"RELATED ORIGINATOR" means, with respect to any Receivable, the
Originator who originated such Receivable and who sold such Receivable to BDFS
pursuant to the Loan Sale Agreement.
"RELATED RECEIVABLE" means, with respect to any Originator, a
Receivable originated by such Originator who sold such Receivable to BDFS
pursuant to the Loan Sale Agreement.
"RESERVE ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.1.
"RESERVE ACCOUNT INITIAL DEPOSIT" means an amount equal to
$_________.
"RESERVE ACCOUNT TRANSFER AMOUNT" means an amount equal to the
lesser of (i) the amount of cash or other immediately available funds on deposit
in the Reserve Account on such Distribution Date (before giving effect to any
withdrawals therefrom relating to such Distribution Date) or (ii) the amount, if
any, by which (x) the sum of the Total Servicing Fee, the Noteholders' Interest
Distributable Amount, the Certificateholders' Interest Distributable Amount, the
Noteholders' Principal Distributable Amount and the Certificateholders'
Principal Distributable Amount for such Distribution Date exceeds (y) the sum of
the Interest Distribution Amount and the Available Principal for such
Distribution Date.
"SCHEDULED PAYMENT" on an Actuarial Receivable means that portion
of the payment required to be made by the Obligor during the respective
Collection Period sufficient to amortize the Principal Balance under the
actuarial method over the term of the Actuarial Receivable (except, in the case
a Balloon Loan, to the extent necessary to amortize the Principal Balance to the
amount of the Balloon Payment over the life of the Actuarial Receivable) and to
provide interest at the APR.
"SECURITIES" means the Notes and the Certificates.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERVICER" means BDFS, the servicer of the Receivables, and each
successor to BDFS, (in the same capacity) pursuant to Section 7.3 or 8.2.
"SERVICER DEFAULT" means an event specified in Section 8.1.
"SERVICER'S CERTIFICATE" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.9, substantially in the form of Exhibit
B.
"SERVICING FEE" has the meaning specified in Section 4.8.
"SERVICING FEE RATE" means 1.00% per annum.
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"SIMPLE INTEREST METHOD" means the method of allocating a fixed
level payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed rate
of interest multiplied by the unpaid principal balance multiplied by the period
of time elapsed since the preceding payment of interest was made and the
remainder of such payment is allocable to principal.
"SIMPLE INTEREST RECEIVABLE" means any Receivable under which the
portion of a payment allocable to principal and the portion of a payment
allocable to interest is determined in accordance with the Simple Interest
Method.
"SPECIFIED RESERVE ACCOUNT BALANCE" means, with respect to any
Distribution Date the greater of (a) ____% of the sum of the aggregate
outstanding principal amount of Notes plus the outstanding Certificate Balance
on such Distribution Date (after giving effect to all payments on the Notes and
distributions with respect to the Certificates to be made on such Distribution
Date), except that, if on any Distribution Date (x) the Cumulative Net Loss
Ratio exceeds the Trigger Percentage for such Distribution Date or (y) the
average of the Delinquency Percentages for the three preceding Collection
Periods exceeds ____%, then the Specified Reserve Account Balance shall be an
amount equal to ____% of the sum of the aggregate outstanding principal amount
of the Notes and the aggregate outstanding Certificate Balance on such
Distribution Date (after giving effect to all payments on the Notes and
distributions with respect to the Certificates to be made on such Distribution
Date); or (b) ___% of the sum of the aggregate initial principal balance of the
Notes plus the initial Certificate Balance.
"SPONSOR" means BDFS, as the sponsor of the Issuer.
"STANDARD & POOR'S" means Standard & Poor's Ratings Group, or its
successor.
"TOTAL DISTRIBUTION AMOUNT" means, for each Distribution Date,
the sum of (i) the Interest Distribution Amount, (ii) the Available Principal
and (iii) the Reserve Account Transfer Amount, in each case in respect of such
Distribution Date.
"TOTAL SERVICING FEE" means with respect to each Distribution
Date the Servicing Fee for the related Collection Period and all accrued and
unpaid Servicing Fees for prior Collection Periods.
"TRANSFER DATE" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"TRIGGER PERCENTAGE" means (i) in the case of any Distribution
Date prior to ___ Distribution Date, ___%, (ii) in the case of any Distribution
Date on and after the ___ Distribution Date but prior to the ___ Distribution
Date, ___%, (iii) in the case of any Distribution Date on and after the ___
Distribution Date but prior to the ___ Distribution Date, ___%, (iv) in the case
of any Distribution Date on and after the ___ Distribution Date but prior to the
___ Distribution Date, ___% and (v) in the case of any Distribution Date on and
after the ___ Distribution Date, ___%.
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"TRUST" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts
and investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
"TRUST ACCOUNTS" has the meaning assigned thereto in Section 5.1.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement
dated as of __________ __, 199_, between the Depositor and the Owner Trustee, as
the same may be amended and supplemented from time to time.
"TRUST OFFICER" means, (i) in the case of the Trustee, any
Officer within the Corporate Trust Office of the Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject and (ii) in the case of the Owner Trustee, any officer in the corporate
trust office of the Owner Trustee with direct responsibility for the
administration of this Agreement or any of the Basic Documents on behalf of the
Owner Trustee.
"TRUST PROPERTY" has the meaning assigned thereto in Section 2.1.
"TRUSTEE" means the Person acting as Trustee under the Indenture,
its successors in interest and any successor trustee under the Indenture.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized terms
used herein and not otherwise defined herein have the meanings assigned to them
in the Indenture, or, if not defined therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed hereby
and in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
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(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section, Schedule
and Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
ARTICLE II.
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. In consideration of the Issuer's
delivery to or upon the order of the Depositor on the Closing Date of the net
proceeds from the sale of the Notes and the Certificates and the other amounts
to be distributed from time to time to the Depositor in accordance with the
terms of this Agreement, the Depositor does hereby sell, transfer, assign, set
over and otherwise convey to the Issuer, without recourse (subject to
the obligations herein):
(a) all right, title and interest of the Depositor in and to the
Receivables, and all moneys received thereon (other than any proceeds from any
Dealer commission), on or after the Cutoff Date and, with respect to Receivables
which are Actuarial Receivables, all monies received thereon prior to the Cutoff
Date that are due on or after the Cutoff Date;
(b) all right, title and interest of the Depositor in the
security interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Depositor in the Financed Vehicles;
(c) all right, title and interest of the Depositor in and to any
proceeds from claims on any physical damage, repossession, loss, skip, credit
life and credit accident, vendor's single interest and health insurance policies
or certificates relating to the Financed Vehicles or the Obligors;
(d) all right, title and interest of the Depositor in and to
refunds for the costs of extended service contracts with respect to Financed
Vehicles, refunds of unearned premiums with respect to credit life and credit
accident and health insurance policies or certificates covering an Obligor or
Financed Vehicle or his or her obligations with respect to a Financed Vehicle
and any recourse to Dealers for any of the foregoing;
(e) the interest of the Depositor in any proceeds from any
Receivable repurchased by a Dealer, pursuant to a Dealer Agreement, as a result
of a breach of representation or warranty in the related Dealer Agreement or a
default by an Obligor resulting in the repossession of the Financed Vehicle
under such Dealer Agreement;
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(f) all right, title and interest in all funds on deposit from
time to time in the Certificate Distribution Account, in the Trust Accounts,
including the Reserve Account Initial Deposit, and in all investments and
proceeds thereof (including all income thereon);
(g) all right, title and interest of the Depositor under the
Loan Purchase Agreement; and
(h) the proceeds of any and all of the foregoing (the items
specified in clauses (a) through (h) is referred to herein as the "Trust
Property").
It is the intention of the Depositor that the transfer and
assignment contemplated by this Agreement shall constitute a sale of the
Receivables and other Trust Property from the Depositor to the Trust and the
beneficial interest in and title to the Receivables and such other Trust
Property shall not be part of the Depositor's estate in the event of the filing
of a bankruptcy petition by or against the Depositor under any bankruptcy law.
In the event that, notwithstanding the intent of the Depositor, the transfer and
assignment contemplated hereby is held not to be a sale, this Agreement shall
constitute a grant of a security interest in the Trust Property for the benefit
of the Securityholders.
ARTICLE III.
THE RECEIVABLES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR AND
SPONSOR. The Sponsor and the Depositor, jointly and severally, make the
following representations and warranties as to the Receivables on which the
Issuer is deemed to have relied in acquiring the Receivables. Such
representations and warranties speak as of the execution and delivery of the
Agreement, but shall survive the sale, transfer and assignment of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(a) TITLE. It is the intention of the Depositor that the transfer
and assignment contemplated by the Loan Sale Agreement constitute a sale of the
Related Receivables from the Originators to BDFS pursuant to the Loan Sale
Agreement and that the beneficial interest in and title to such Related
Receivables not be part of the debtor's estate in the event of the filing of a
petition for bankruptcy or insolvency by or against such Originator. No Related
Receivable has been sold, transferred, assigned or pledged by such Originator to
any Person other than BDFS pursuant to the Loan Sale Agreement. Immediately
prior to the transfer and assignment contemplated by the Loan Sale Agreement,
such Originator had good and marketable title to each Related Receivable
conveyed by it to BDFS, free and clear of all Liens and, immediately upon the
transfer thereof, BDFS shall have good and marketable title to each such Related
Receivable, free and clear of all Liens; and the transfer of the Related
Receivables to BDFS has been perfected under the UCC. It is the intention of the
Depositor that the transfer and assignment contemplated by the Loan Purchase
Agreement constitute a sale of the Receivables from the BDFS to the Depositor
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pursuant to the Loan Purchase Agreement and that the beneficial interest in and
title to such Receivables not be part of the debtor's estate in the event of the
filing of a petition for bankruptcy or insolvency by or against BDFS. No
Receivable has been sold, transferred, assigned or pledged by such Originator to
any Person other than the Depositor pursuant to the Loan Purchase Agreement.
Immediately prior to the transfer and assignment contemplated by the Loan
Purchase Agreement, BDFS had good and marketable title to each Receivable
conveyed by it to the Depositor, free and clear of all Liens and, immediately
upon the transfer thereof, the Depositor shall have good and marketable title to
each Receivable, free and clear of all Liens; and the transfer of the
Receivables to the Depositor has been perfected under the UCC. It is the
intention of the Depositor that the transfer and assignment herein contemplated
constitute a sale of the Receivables from the Depositor to the Issuer and that
the beneficial interest in and title to such Receivables not be part of the
debtor's estate in the event of the filing of a petition for receivership by or
against the Depositor. No Receivable has been sold, transferred, assigned or
pledged by the Depositor to any Person other than the Issuer. Immediately prior
to the transfer and assignment herein contemplated, the Depositor had good and
marketable title to each Receivable, free and clear of all Liens and,
immediately upon the transfer thereof, the Issuer shall have good and marketable
title to each such Receivable, free and clear of all Liens; and the transfer of
the Receivables to the Issuer has been perfected under the UCC.
(b) ALL FILINGS MADE. All filings (including UCC filings)
necessary in any jurisdiction to give the Depositor a first priority perfected
security interest in the Receivables, to give the Issuer a first priority
perfected ownership interest in the Receivables, and to give the Trustee a first
priority perfected security interest therein, shall have been presented to the
Trustee for filing in the appropriate filing offices. Upon such filing, the
Trustee will have a first priority perfected security interest in the Trust
Property.
(c) CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) has been
either originated by a Dealer in the regular course of such Dealer's business
and purchased from such Dealer by an Originator in the ordinary course of the
Originator's business or otherwise originated by the Originator in the ordinary
course of the Originator's business, and each Obligor was approved in accordance
with the Related Originator's standard underwriting procedures in effect at the
time such Receivable was originated or purchased, (B) was conveyed by the
Related Originator to the Depositor, (C) has created or shall create a valid,
subsisting and enforceable first priority security interest in favor of the
Related Originator in the Related Financed Vehicle, which security interest has
been assigned by the Related Originator to the Depositor, which is assignable by
the Depositor to the Issuer and by the Issuer to the Trustee, (D) contains
customary and enforceable provisions under the laws of the State governing such
Receivable such that the rights and remedies of the holder thereof are adequate
for realization against the collateral of the benefits of the security; and (E)
provides for level monthly payments that fully amortizes the Amount Financed by
maturity (except for the last payment, which may be different from the level
payment and except, with respect to a Balloon Loan, to the extent of the Balloon
Payment).
(d) SCHEDULE OF RECEIVABLES. The information set forth in
Schedule A to this Agreement is true and correct in all material respects as of
the opening of business on the Cutoff Date and no selection procedures believed
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by the Depositor to be adverse to the Noteholders or the Certificateholders were
utilized in selecting the Receivables. The Computer Tape regarding the
Receivables is true and correct in all material respects as of the Cutoff Date.
(e) COMPLIANCE WITH LAW. Each Receivable, the sale of the
Financed Vehicle and the sale of any physical damage and credit life and credit
accident and health insurance and any extended service contracts complied in all
material respects at the time it was originated or made and at the Closing Date
(after giving effect to the transactions contemplated by the Basic Documents)
complies in all material respects with all requirements of applicable federal,
state and local laws and regulations thereunder, including usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldier's and Sailor's Civil Relief Act of 1940, state
adaptations of the National Consumer Act and the Uniform Consumer Credit Code,
and other consumer credit laws and equal credit opportunity and disclosure laws.
(f) BINDING OBLIGATION. Each Receivable represents the legal,
valid and binding payment obligation in writing of the Obligor thereunder,
enforceable by the holder thereof in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws now or hereafter in
effect related to or affecting creditors' rights generally and subject to
general principles of equity (whether applied in a proceeding at law or in
equity) and all parties to such Receivable had full legal capacity to execute
and deliver such Receivable and all other documents related thereto and to grant
the security interest purported to be granted thereby.
(g) NO GOVERNMENT OBLIGOR. None of the Receivables is due from
the United States of America or any state or from any agency, department or
instrumentality of the United States of America or any state.
(h) SECURITY INTEREST IN FINANCED VEHICLE. Immediately prior to
the sale, assignment, and transfer thereof under the Agreement, (i) each
Receivable shall be secured by a validly perfected first priority security
interest in the Financed Vehicle in favor of the Related Originator as secured
party or (ii) application has been made with the appropriate governmental
authority for a valid perfected first priority security interest in the Financed
Vehicle in favor of the Related Originator, and such security interest is or
shall be prior to all other Liens upon and security interests in such Financed
Vehicle which now exist or may hereafter arise or be created (except, as to
priority, for any tax liens or mechanics' liens which may arise after the
Closing Date).
(i) RECEIVABLES IN FORCE. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from the
Lien granted by the related Receivable in whole or in part unless another
vehicle has been substituted as collateral securing the Receivable without any
other modification to such Receivable.
(j) NO WAIVER. No provision of a Receivable has been modified
or waived except as reflected in the Receivable File relating to such
Receivable.
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(k) NO AMENDMENTS. No Receivable has been amended, except as
permitted pursuant to Section 4.2.
(l) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Receivable. The
operation of the terms of any Receivable or the exercise of any right thereunder
will not render such Receivable unenforceable in whole or in part or subject to
any such right of rescission, setoff, counterclaim, or defense.
(m) NO LIENS. As of the Cutoff Date, there are no Liens or
claims, including Liens for work, labor, materials or unpaid state or federal
taxes relating to any Financed Vehicle securing the related Receivable, that are
or may be prior to or equal to the Lien granted by such Receivable.
(n) NO DEFAULT. Except for payment delinquencies continuing for
a period of not more than thirty days as of the Cutoff Date and, except as
permitted in this paragraph, no default, breach, violation or event (in any such
case) permitting acceleration under the terms of any Receivable has occurred;
and no continuing condition that with notice or the lapse of time would
constitute a default, breach, violation or event (in any such case) permitting
acceleration under the terms of any Receivable has arisen; and the Depositor has
not waived and shall not waive any of the foregoing.
(o) MATURITY OF RECEIVABLES. Each Receivable has an original
maturity of not more than ___ months; the weighted average original maturity of
the Receivables is ___ months as of the Cutoff Date; the remaining term of each
Receivable is ___ months or less as of the Cutoff Date; the weighted average
remaining term of the Receivables is ___ months as of the Cutoff Date; and the
latest scheduled maturity of any Receivable shall be no later than the Final
Scheduled Maturity Date.
(p) NO BANKRUPTCIES. No Obligor on any Receivable was noted in
the related Receivable File as having filed for bankruptcy in a proceeding which
remained undischarged as of the Cutoff Date.
(q) NO REPOSSESSIONS. As of the Cutoff Date, no Financed Vehicle
securing any Receivable is in repossession status.
(r) CHATTEL PAPER. Each Receivable constitutes "chattel paper"
as defined in the UCC.
(s) APR. The weighted average Annual Percentage Rate of the
Receivables as of the Cutoff Date is approximately ___%.
(t) PRINCIPAL BALANCE. Each Receivable has an outstanding
principal balance as of the Cutoff Date of not less than ___ or more than $____.
The average principal balance of the Receivables as of the Cutoff Date is $___.
The aggregate principal balance of the Receivables as of the Cutoff Date is
$___.
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(u) FINANCING. Approximately ___% of the aggregate principal
balance of the Receivables, constituting approximately ___% of the number of
Receivables, as of the Cutoff Date, represents financing of new vehicles; the
remainder of the Receivables represents financing of used vehicles.
Approximately ___% of the aggregate principal balance of the Receivables,
constituting approximately ___% of the number of Receivables, as of the Cutoff
Date, represents financing of Balloon Loans. Approximately ___% of the aggregate
Principal Balance of the Receivables, constituting approximately ___% of the
number of Receivables, as of the Cutoff Date, represents financing of Simple
Interest Receivables; the remainder of the Receivables represents financing of
Actuarial Receivables.
(v) PAID-AHEAD. Approximately ___% of the aggregate Principal
Balance of the Receivables, constituting approximately ___% of the number of
Receivables are paid-ahead for a period of one to six months. No Receivable is
paid-ahead more than eight months.
(w) INSURANCE; OTHER. The Servicer, in accordance with its
customary procedures, has confirmed (A) that each Obligor has obtained insurance
covering the Financed Vehicle as of the date of execution of the Related
Receivable insuring against loss and damage due to fire, theft, collision and
other risks generally covered by comprehensive and collision coverage and that
each Receivable requires the Obligor to maintain such insurance naming the
applicable Originator and its successors and assigns as a loss payee, (B) each
Receivable that finances the cost of premiums for credit life and credit
accident and health insurance is covered by an insurance policy or certificate
of insurance naming the applicable Originator as loss payee (lienholder) under
each such insurance policy and certificate of insurance and (C) as to each
Receivable that finances the cost of an extended service contract, the
respective Financed Vehicle which secures the Receivable is covered by an
extended service contract.
(x) LAWFUL ASSIGNMENT. No Receivable has been originated in, or
as of the Closing Date is subject to the laws of, any jurisdiction under which
the sale, transfer and assignment of such Receivable or this Agreement or the
pledge of such Receivable to the Trustee under the Indenture (i) is unlawful,
void, voidable or unenforceable in accordance with its terms or (ii) would
render such Receivable void, voidable or unenforceable in accordance with its
terms. None of any Originator or the Depositor has entered into any agreement
with any account debtor that prohibits, restricts or conditions the assignment
of all or any portion of the Receivable.
(y) NO INSURANCE PREMIUMS. As of the Cutoff Date, no portion of
the principal balance of any Receivable included amounts attributable to the
payment of any physical damage or theft insurance premium.
(z) ONE ORIGINAL. There is only one manually executed original
copy of each Receivable.
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(aa) ORIGINATION OF RECEIVABLES. Based on the billing address of
the Obligors and the principal balance of Receivables as of the Cutoff Date,
approximately ___% of the Receivables were originated in ___, approximately ___%
of the Receivables were originated in ___ and approximately ___% of the
Receivables were originated in ___, each Obligor has been approved by the
Originator based on the Originator's standard underwriting procedures as in
effect at the time the related Receivable was entered into. Based on the billing
address of the Obligors and the principal balance of the Receivables as of the
Cutoff Date, not more than 10% of the Receivables were originated in any one
state other than ___, ___ and ___.
(bb) RECEIVABLE FILES. The Receivable Files are kept at the
Depositor's office listed in Schedule B and are segregated from any other
Receivable Files. The Receivable Files have been marked to indicate the
Depositor's ownership interest therein.
(cc) COMPUTER RECORDS. As of the Closing Date, the accounting and
computer records relating to the Receivables of the Depositor and each
Originator have been marked to show the absolute ownership by the Owner Trustee
on behalf of the Trust of the Receivables.
SECTION 3.2. REPURCHASE UPON BREACH. The Sponsor, the Depositor,
the Servicer or the Owner Trustee, as the case may be, shall inform the other
parties to this Agreement and the Trustee promptly, in writing, upon its
discovery of any breach of the Depositor's and the Sponsor's representations and
warranties made pursuant to Section 3.1. Unless any such breach shall have been
cured by the last day of the first Collection Period following the discovery
thereof by the Owner Trustee or receipt by the Owner Trustee of written notice
from the Sponsor, the Depositor or the Servicer of such breach, the Sponsor and
the Depositor shall be jointly and severally obligated to repurchase any
Receivable in which the interests of the Noteholders or Certificateholders are
materially and adversely affected by any such breach as of the last day of such
Collection Period. In consideration of and simultaneously with the repurchase of
the Receivable, the Sponsor and/or the Depositor shall remit to the Collection
Account the Purchase Amount in the manner specified in Section 5.4 and the
Issuer shall execute such assignments and other documents reasonably requested
by the Sponsor and/or the Depositor in order to effect such repurchase. The sole
remedy of the Issuer, the Owner Trustee, the Trustee, the Noteholders or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 3.1 and the agreement contained in this Section shall be to
require the Sponsor and/or the Depositor to repurchase Receivables pursuant to
this Section, subject to the conditions contained herein. Neither the Owner
Trustee nor the Trustee shall have a duty to conduct any affirmative
investigation as to the occurrence of any conditions requiring the repurchase of
any Receivable pursuant to this Section.
SECTION 3.3. CUSTODY OF RECEIVABLE FILES. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Issuer and the Trustee hereby revocably appoints the Servicer, and the Servicer
hereby accepts such appointment, to act as the agent of the Issuer and the
Trustee as custodian of the following documents or instruments which are hereby
constructively delivered to the Trustee, as pledgee of the Issuer with respect
to each Receivable:
(a) the original of the Receivable;
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(b) a record of the information supplied by the Obligor in the
original credit application;
(c) the original certificate of title or such documents that the
Servicer shall keep on file, in accordance with its customary procedures,
evidencing the security interest of the Depositor in the Financed Vehicle (it
being understood that the original certificates of title generally are not
delivered to the Servicer for 90 days but that promptly upon delivery they shall
be delivered to the Servicer as custodian hereunder); and
(d) any and all other documents that the Servicer shall keep on
file, in accordance with its customary procedures, relating to a Receivable, an
Obligor or a Financed Vehicle.
SECTION 3.4. DUTIES OF SERVICER AS CUSTODIAN. (a) SAFEKEEPING.
The Servicer shall hold the Receivable Files on behalf of the Issuer and the
Trustee and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian the Servicer shall
act with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable automotive receivables that the Servicer services for itself or
others. The Servicer shall conduct, or cause to be conducted, periodic audits of
the Receivable Files held by it under this Agreement and of the related
accounts, records and computer systems, in such a manner as shall enable the
Issuer or the Trustee to verify the accuracy of the Servicer's record keeping.
The Servicer shall promptly report to the Issuer and the Trustee any failure on
its part to hold the Receivable Files and maintain its accounts, records and
computer systems as herein provided and promptly take appropriate action to
remedy any such failure.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B to
this Agreement or at such other office as shall be specified to the Issuer and
the Trustee by written notice not later than 90 days after any change in
location. Upon reasonable prior notice, the Servicer shall make available to the
Issuer and the Trustee or their respective duly authorized representatives,
attorneys or auditors a list of locations of the Receivable Files and records
and computer systems maintained by the Servicer at such times during normal
business hours as the Issuer or the Trustee shall instruct.
(c) RELEASE OF DOCUMENTS. Upon written instruction from the
Trustee, the Servicer shall release any Receivable File to the Trustee, the
Trustee's agent, or the Trustee's designee, as the case may be, at such place or
places as the Trustee may designate, as soon as practicable and upon the release
and delivery of any such document in accordance with the instructions of the
Trustee, the Servicer shall be released from any further liability and
responsibilities under this Section 3.4 with respect to such documents unless
and until such time as such document may be returned to the Servicer.
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SECTION 3.5. INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall
be deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of the
Trustee.
SECTION 3.6. CUSTODIAN'S INDEMNIFICATION. The Servicer as
custodian shall indemnify and hold harmless the Trust, the Owner Trustee and the
Trustee and each of their officers, directors, employees and agents for any and
all liabilities, obligations, losses, compensatory damages, payments, costs or
expenses (including reasonable attorneys' fees and expenses) that may be imposed
on, incurred by or asserted against the Trust, the Owner Trustee or the Trustee
or any of their officers, directors, employees and agents as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer as custodian of the Receivable Files where the final determination
that any such improper act or omission by the Servicer resulted in such
liability, obligation, loss, damage, payment, cost or expense is established by
a court of law, by an arbitrator or by way of settlement agreed to by the
Servicer; PROVIDED, HOWEVER, that the Servicer shall not be liable to the Trust
or the Owner Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Owner Trustee and the
Servicer shall not be liable to the Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of the Trustee.
This provision shall not be considered to limit the Servicer's or any other
party's rights, obligations, liabilities, claims or defenses which arise as a
matter of law or pursuant to any other provision of this Agreement.
SECTION 3.7. EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
BDFS shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.1, the appointment of such Servicer as custodian
shall be terminated by the Trustee or by the Holders of Notes evidencing not
less than 25% of the Outstanding Amount of the Notes or, with the consent of
Holders of the Notes evidencing not less than 25% of the Outstanding Amount of
the Notes, by the Owner Trustee or by Certificateholders evidencing not less
than 25% of the Certificate Balance, in the same manner as the Trustee or such
Holders may terminate the rights and obligations of the Servicer under Section
8.1. The Trustee or, with the consent of the Trustee, the Owner Trustee, may
terminate the Servicer's appointment as custodian, with cause, at any time upon
written notification to the Servicer, and without cause upon 30 days' prior
written notification to the Servicer and the Rating Agencies. As soon as
practicable after any termination of such appointment, the Servicer shall
deliver the Receivable Files to the Trustee or the Trustee's agent at such place
or places as the Trustee may reasonably designate in writing. If the Servicer
shall be terminated as custodian hereunder for any reason but shall continue to
serve as Servicer, the Trustee shall, or shall cause its agent to, make the
Receivable Files available to the Servicer during normal business hours upon
reasonable notice so as to permit the Servicer to perform its obligations as
Servicer hereunder.
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ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. DUTIES OF SERVICER. The Servicer, as agent for the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons or periodic statements or
invoices to Obligors, reporting any tax information to Obligors, accounting for
collections and furnishing monthly and annual statements to the Owner Trustee
and the Trustee with respect to distributions and making Advances pursuant to
Section 5.7. Subject to the provisions of Section 4.2, the Servicer shall follow
its customary standards, policies and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Trustee, the Certificateholders and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Issuer (in the case of a Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce such Receivable the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Trustee, the Certificateholders or the Noteholders. The Owner Trustee shall upon
the written request of the Servicer furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate (as certified
to the Owner Trustee by the Servicer) to enable the Servicer to carry out its
servicing and administrative duties hereunder.
SECTION 4.2. COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS.
(a) The Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself or
others. The Servicer shall allocate collections between principal and interest
in accordance with the customary servicing procedures it follows with respect to
all comparable automotive receivables that it services for itself or others.
(b) The Servicer may not grant extensions or modify the original
due dates of a Receivable; PROVIDED, HOWEVER, that the Servicer may (i) grant
one extension with respect to a Receivable of one month in any rolling twelve
month period and may change the original due date once during the term of a
Receivable to a new due date within 20 days of the original scheduled due date
of such Receivable and (ii) grant extensions or modify the original due dates of
a Receivable with respect to a Receivable for which a court of appropriate
jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the scheduled payments or other terms on such Receivable;
provided, however, that the Servicer may not extend the date for final payment
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by the Obligor of any Receivable beyond the last day of the Collection Period
preceding the Certificate Final Scheduled Distribution Date. The Servicer may in
its discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing a Receivable. The Servicer shall
not voluntarily agree to any reduction of (i) the original interest rate, (ii)
the amount of any Scheduled Payment on a Precomputed Receivable or the original
regular scheduled payment on a Simple Interest Receivable, or (iii) the
Principal Balance of any Receivable.
SECTION 4.3. REALIZATION UPON RECEIVABLES. On behalf of the
Issuer, the Servicer shall use all reasonable efforts, consistent with its
customary servicing procedures, to repossess or otherwise convert the ownership
of the Financed Vehicle securing any Receivable as to which the Servicer shall
have determined eventual payment in full is unlikely. From time to time, as
appropriate for servicing or foreclosing upon any Receivable, the Owner Trustee
shall, upon written request of the Servicer, execute such documents as shall be
necessary to prosecute any such proceedings. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize proceeds from Receivables repurchased by a Dealer,
pursuant to a Dealer Agreement, as a result of a breach of representation or
warranty in the related Dealer Agreement or a default by an Obligor resulting in
the repossession of the Financed Vehicle under such Dealer Agreement. The
foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its reasonable discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.
SECTION 4.4. PHYSICAL DAMAGE INSURANCE; OTHER INSURANCE. (a) The
Servicer shall, in accordance with its customary servicing procedures, verify
(i) that each Obligor shall have obtained insurance covering the Financed
Vehicle, as of the date of the execution of the Receivable, insuring against
loss and damage due to fire, theft, collision and other risks generally covered
by comprehensive and collision coverage and that each Receivable requires the
Obligor to maintain such physical loss and damage insurance naming the Related
Originator and its successors and assigns as a loss payee, (ii) that each
Receivable that finances the cost of premiums for credit life and credit
accident and health insurance is covered by an insurance policy or certificate
naming the Originator as policyholder (creditor) and (iii) as to each Receivable
that finances the cost of an extended service contract, the respective Financed
Vehicle which secures the Receivable is covered by an extended service contract.
(b) To the extent applicable, the Servicer shall not take any
action which would result in noncoverage under any of the insurance policies
referred to in Section 4.4(a) which, but for the actions of the Servicer, would
have been covered thereunder. The Servicer, on behalf of the Trustee shall take
such reasonable action as shall be necessary to permit recovery under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any of
the foregoing insurance policies, shall be deposited in the Collection Account
pursuant to Section 5.2. The parties hereto acknowledge that the Servicer shall
not be required to force place any insurance coverage referred to in Section
4.4(a)(i) above, or any other insurance coverage.
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SECTION 4.5. MAINTENANCE OF SECURITY INTERESTS IN FINANCED
VEHICLES. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of (i) the
security interest created by each Receivable in the related Financed Vehicle and
(ii) the interest of the Trust in the Receivables created by this Agreement,
including but not limited to obtaining the execution by the Obligors and the
recording, registering, filing, re-recording, re-registering and refiling of all
security agreements, financing statements and continuation statements or
instruments as are necessary to maintain the security interest granted by
Obligors under the respective Receivables, the Originators under the Loan Sale
Agreement, BDFS under the Loan Purchase Agreement, the Depositor hereunder and
the Issuer under the Indenture. The Servicer is hereby authorized to take such
steps as are necessary to re-perfect such security interest on behalf of the
Issuer and the Trustee in the event of the relocation of a Financed Vehicle or
for any other reason.
SECTION 4.6. COVENANTS OF SERVICER. The Servicer shall not
release the Financed Vehicle securing any Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by the Obligor thereunder or repossession or except as may be required by
an insurer in order to receive proceeds from insurance covering such Financed
Vehicle, nor shall the Servicer impair the rights of the Issuer, the Trustee,
the Certificateholders or the Noteholders in such Receivables (it being
understood that no action of the Servicer taken in compliance with the terms of
this Agreement shall be deemed to impair such rights), nor shall the Servicer
increase the number of scheduled payments due under a Receivable.
Notwithstanding the foregoing, the Servicer may grant extensions or modify the
original due dates of a Receivable or make such other changes with respect to a
Receivable for which a court of appropriate jurisdiction in a bankruptcy or
insolvency proceeding shall have issued an order reducing the amount owed on
such Receivable or otherwise modifying or restructuring the scheduled payments
on such Receivable; provided, however, that the Servicer may not extend the date
for final payment by the Obligor of any Receivable beyond the last day of the
Collection Period preceding the Certificate Final Scheduled Distribution Date.
SECTION 4.7. PURCHASE OF RECEIVABLES UPON BREACH. The Servicer or
the Owner Trustee shall inform the other party and the Trustee and the Depositor
promptly, in writing, upon the discovery of any breach pursuant to Section
4.2(b), 4.5 or 4.6. Unless the breach shall have been cured by the last day of
the second Collection Period following such discovery thereof by the Owner
Trustee or the receipt by the Owner Trustee of notice of such breach, the
Servicer shall be obligated to purchase any Receivable in which the interests of
the Noteholders or the Certificateholders are materially and adversely affected
by such breach as of the last day of such second Collection Period (or, at the
Servicer's option, the last day of the first Collection Period following the
discovery). In consideration of the purchase of any such Receivable pursuant to
the preceding sentence, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.4. The sole remedy of the Issuer, the Owner
Trustee, the Trustee, the Certificateholders or the Noteholders with respect to
a breach of Section 4.2(b), 4.5 or 4.6 shall be to require the Servicer to
purchase Receivables pursuant to this Section. Neither the Trustee nor the Owner
Trustee shall have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the purchase of any Receivable pursuant to
this Section.
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SECTION 4.8. SERVICING FEE. The servicing fee for (a) the
___Distribution Date shall equal $___ and (b) for each Distribution Date
thereafter shall equal the product of (i) one-twelfth, (ii) the Servicing Fee
Rate and (iii) the Pool Balance as of the first day of the related Collection
Period (the "Servicing Fee"). In addition, the "Servicing Fee" described in (a)
and (b) above shall include late fees, prepayment charges and other similar
charges allowed by applicable law with respect to Receivables collected (from
whatever source) on the Receivables.
SECTION 4.9. SERVICER'S CERTIFICATE. Not later than 11:00 a.m.
(New York time) on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Trustee and the Depositor, with a copy to the Rating
Agencies, a Servicer's Certificate containing all information necessary to make
the distributions pursuant to Sections 5.5 and 5.6 (including, if required,
withdrawals from or deposits to the Payahead Account and Advances by the
Servicer pursuant to Section 5.7) for the Collection Period preceding the date
of such Servicer's Certificate. Receivables to be purchased by the Servicer or
to be repurchased by the Depositor or the Sponsor shall be identified by the
Servicer by account number with respect to such Receivable (as specified in
Schedule A).
SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF
DEFAULT. (a) The Servicer shall deliver to the Owner Trustee and the Trustee, on
or before April 30 of each year beginning April 30, 199_, an Officers'
Certificate, dated as of December 31 of the preceding year, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
(or, in the case of the first such report, during the period from the Closing
Date to December 31, 199_) and of its performance under this Agreement has been
made under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement throughout such year (or, in the case of the first such
certificate, such longer period) or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The Trustee shall send a copy of
such certificate and the report referred to in Section 4.11 to the Rating
Agencies. A copy of such certificate and the report referred to in Section 4.11
may be obtained by any Certificateholder by a request in writing to the Owner
Trustee addressed to the Corporate Trust Office (as defined in the Trust
Agreement) or by any Noteholder by a request in writing to the Trustee addressed
to the Corporate Trust Office. Upon the telephone request of the Owner Trustee,
the Trustee will promptly furnish the Owner Trustee a list of Noteholders as of
the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Trustee
and the Rating Agencies, promptly after having obtained knowledge thereof, but
in no event later than five (5) Business Days thereafter, written notice in an
Officers' Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Default under Section 8.1(a) or (b).
SECTION 4.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
REPORT. The Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Servicer or the
Depositor, to deliver to the Depositor, the Owner Trustee and the Trustee on or
before April 30 of each year as of December 31 of the preceding fiscal year,
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beginning April 30, 199_, (1) a report addressed to the Board of Directors of
the Servicer, to the effect that such firm has examined the financial statements
of the Servicer and issued its report and therefor and that such examination was
made in accordance with generally accepted auditing standards (except as
otherwise noted therein), and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered necessary in
the circumstances; and (2) a report on description of lease and loan servicing
operations and tests of operating effectiveness in form and substance as is
currently prepared on an annual basis with respect to Servicer. The Servicer
shall also concurrently cause the accountants to deliver a report addressed to
the Servicer, the Trustee and the Owner Trustee to the effect that (1) a review
in accordance with agreed upon procedures was made of three randomly selected
Servicer Certificates; (2) except as disclosed in the report, no exceptions or
errors in the Servicer Certificates were found; and (3) the delinquencies and
loss information, relating to the Receivables contained in the Servicer
Certificates were found to be accurate.
Such report will also indicate that the firm is independent of
the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 4.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING RECEIVABLES. The Servicer shall provide to the Certificateholders and
Noteholders access to the Receivable Files in such cases where the
Certificateholders or the Noteholders shall be required by applicable statutes
or regulations to review such documentation as demonstrated by evidence
satisfactory to the Servicer in its reasonable judgment. Access shall be
afforded without charge, but only upon reasonable request (not less than
seventy-two hours) and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section shall affect the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section.
SECTION 4.13. SERVICER EXPENSES. The Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
SECTION 4.14. APPOINTMENT OF SUBSERVICER. The Servicer may at any
time appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; PROVIDED, HOWEVER, that the Rating Agency Condition shall
have been satisfied in connection therewith; PROVIDED FURTHER that the Servicer
shall remain obligated and be liable to the Issuer, the Owner Trustee, the
Trustee, the Certificateholders and the Noteholders for the servicing and
administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the subservicer shall be as agreed between
the Servicer and its subservicer from time to time and none of the Issuer, the
Owner Trustee, the Trustee, the Certificateholders or the Noteholders shall have
any responsibility therefor.
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ARTICLE V.
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.1. ESTABLISHMENT OF TRUST ACCOUNTS. (a) (i) The
Servicer, for the benefit of the Noteholders and the Certificateholders, shall
establish and maintain in the name of the Trustee an Eligible Deposit Account
(the "Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders and the
Certificateholders. The Collection Account shall initially be established with
the Trustee.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Trustee an Eligible Deposit
Account (the "Note Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders. The Note Distribution Account shall
initially be established with the Trustee.
(iii) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the
Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders and the Certificateholders.
The Reserve Account shall be maintained with the Trustee as long as
the Trustee is an Eligible Institution.
(b) Funds on deposit in the Collection Account, the Note
Distribution Account, the Payahead Account and the Reserve Account
(collectively, the "Trust Accounts") and the Certificate Distribution Account
shall be invested by the Trustee with respect to Trust Accounts and by the Owner
Trustee with respect to the Certificate Distribution Account (or any custodian
with respect to funds on deposit in any such account) in Eligible Investments
selected in writing by the Servicer (pursuant to standing instructions delivered
to a Trust Officer of the Trustee and a Trust Officer of the Owner Trustee or
other written notice so delivered); PROVIDED, HOWEVER, it is understood and
agreed that neither the Trustee nor the Owner Trustee shall be liable for any
loss arising from such investment in Eligible Investments. All such Eligible
Investments shall be held by or on behalf of the Trustee or the Owner Trustee,
as applicable, for the benefit of the Noteholders or the Certificateholders, as
applicable; on each Distribution Date all interest and other investment income
(net of losses and investment expenses) on funds on deposit therein shall be
deposited into the Collection Account and shall be deemed to constitute a
portion of the Interest Distribution Amount. Other than as permitted by the
Rating Agencies, funds on deposit in the Collection Account, the Note
Distribution Account, the Certificate Distribution Account, the Payahead Account
and the Reserve Account shall be invested in Eligible Investments that will
mature so that such funds will be available at the close of business on the
Transfer Date preceding the following Distribution Date. Funds deposited in a
Trust Account or the Certificate Distribution Account on a Transfer Date which
immediately precedes a Distribution Date upon the maturity of any Eligible
Investments are not required to be invested overnight.
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(c) (i) The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the
Trust Accounts and in all proceeds thereof (including all income
thereon) and all such funds, investments, proceeds and income
shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole
dominion and control of the Trustee for the benefit of the
Noteholders and the Certificateholders, or the Noteholders, as
the case may be. If, at any time, any of the Trust Accounts or
the Certificate Distribution Account ceases to be an Eligible
Deposit Account, the Trustee (or the Servicer on its behalf) or
the Owner Trustee, as applicable, shall within 10 Business Days
(or such longer period as to which each Rating Agency may
consent) establish a new Trust Account or new Certificate
Distribution Account, as applicable, as an Eligible Deposit
Account and shall transfer any cash and/or any investments to
such new Trust Account or a new Certificate Distribution Account,
as applicable. In connection with the foregoing, the Servicer
agrees that, in the event that (A) any of the Trust Accounts
(other than the Certificate Distribution Account) are not
accounts with the Trustee or (B) the Certificate Distribution
Account is not an account with the Owner Trustee, the Servicer
shall notify the Trustee or the Owner Trustee, as applicable, in
writing promptly upon any of such Trust Accounts ceasing to be an
Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the Trustee,
and with respect to the Certificate Distribution Account, the Owner
Trustee, agrees, by its respective acceptance hereof, that:
(A) any Trust Account Property or any property in the
Certificate Distribution Account that is held in deposit
accounts shall be held solely in Eligible Deposit Accounts
subject to the penultimate sentence of Section 5.1(c)(i); and,
except as otherwise provided herein, each such Eligible
Deposit Account shall be subject to the exclusive custody and
control of the Trustee with respect to the Trust Accounts and
the Owner Trustee with respect to the Certificate Distribution
Account, and the Trustee or the Owner Trustee, as applicable,
shall have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be delivered to the Trustee in
accordance with paragraph (a) of the definition of "Delivery"
and shall be held, pending maturity or disposition, solely by
the Trustee or a financial intermediary (as such term is
defined in Section 8-313(4) of the UCC) acting solely for the
Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book-entry regulations
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shall be delivered in accordance with paragraph
(b) of the definition of "Delivery" and shall be maintained by
the Trustee, pending maturity or disposition, through continued
book-entry registration of such Trust Account Property as
described in such paragraph; and
(D) any Trust Account Property that is an
"uncertificated security" under Article 8 of the UCC and that
is not governed by clause (C) above shall be delivered to the
Trustee in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by the Trustee, pending
maturity or disposition, through continued registration of the
Trustee's (or its nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the
Trustee or by the Owner Trustee with the consent of the Trustee, to
instruct the Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer or the Owner
Trustee to carry out its respective duties hereunder or permitting the
Trustee to carry out its duties under the Indenture.
(d) (i) The Servicer shall establish and maintain with the Trustee an
Eligible Deposit Account (the "Payahead Account"). On the Closing Date,
the Depositor shall cause to be deposited $___in the Payahead Account
representing all collected funds received in connection with the
Actuarial Receivables prior to the Cutoff Date that are due on or after
the Cutoff Date, consisting of all or a portion of the Scheduled
Payments due on the Actuarial Receivables in any Collection Period
following the first Collection Period.
(ii) The Servicer shall on or prior to each Distribution Date
(and prior to deposits to the Note Distribution Account or the
Certificate Distribution Account) transfer from the Collection Account
to the Payahead Account all Payaheads as described in Section 5.3
received by the Servicer during the Collection Period. Notwithstanding
the foregoing and the first sentence of Section 5.2, for so long as the
Servicer is permitted to make monthly remittances to the Collection
Account pursuant to Section 5.2, Payaheads need not be remitted to and
deposited in the Payahead Account but instead may be remitted to and
held by the Servicer. So long as such condition is met, the Servicer
shall not be required to segregate or otherwise hold separate any
Payaheads remitted to the Servicer as aforesaid but shall be required
to remit Payaheads to the Collection Account in accordance with Section
5.5(a).
SECTION 5.2. COLLECTIONS. On the Closing Date, the Depositor
shall cause to be deposited $___in the Collection Account representing all
collected funds received on the Receivables after the Cutoff Date and prior to
the Closing Date. The Servicer shall remit within two Business Days of receipt
thereof to the Collection Account all collected funds received from payments by
or on behalf of the Obligors with respect to the Receivables, and all
Liquidation Proceeds, both as collected during the Collection Period.
Notwithstanding the foregoing, for so long as (i) the Servicer is BDFS, (ii) no
Servicer Default shall have occurred and be continuing,
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(iii) if the Servicer does not have a short term debt rating or deposit rating
as applicable, of at least A-1 from Standard & Poor's and P-1 from Moody's, a
guaranty, letter of credit, surety bond or other similar instrument is issued
covering collections, any amounts referred to in clause (e) of the definition of
Available Principal and Liquidation Proceeds held by BDFS, which is acceptable
to the Rating Agencies and issued by an entity, which has a short-term debt or
deposit rating, as applicable, of at least A-1 from Standard & Poor's and P-1
from Moody's; and (iv) the Rating Agency Condition shall have been satisfied
(and any conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with), the Servicer shall remit such collections to the
Collection Account on the related Transfer Date. For purposes of this Article V
the phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer, the Sponsor or
the Depositor.
SECTION 5.3. APPLICATION OF COLLECTIONS. (a) All
collections for the Collection Period shall be applied by the
Servicer as follows:
With respect to each Actuarial Receivable (other than a
Purchased Receivable), payments by or on behalf of the Obligor shall be applied
first to reduce Outstanding Advances as described in Section 5.7(a). Next, any
excess shall be applied, in the case of Actuarial Receivables, to the Scheduled
Payment and, shall be applied in the case of Simple Interest Receivables, to
interest and principal in accordance with the Simple Interest Method. With
respect to Actuarial Receivables, any remaining excess shall be added to the
Payahead Balance, and shall be applied to prepay the Actuarial Receivable, but
only if the sum of such excess and the previous Payahead Balance shall be
sufficient to prepay the Actuarial Receivable in full. Otherwise, any such
remaining excess payments shall constitute a Payahead and shall increase the
Payahead Balance.
(b) All Liquidation Proceeds shall be applied to the
related Receivable in accordance with the Servicer's customary
servicing procedures.
SECTION 5.4. ADDITIONAL DEPOSITS. The Servicer shall deposit
in the Collection Account the aggregate Advances pursuant to Section 5.7. The
Servicer, the Sponsor and the Depositor shall deposit or cause to be deposited
in the Collection Account the aggregate Purchase Amount with respect to any
Purchased Receivables and the Depositor shall deposit therein any amounts to be
paid under Section 9.1. The Servicer will deposit or cause to be deposited the
aggregate Purchase Amount with respect to Purchased Receivables within two
Business Days after such obligations become due, unless the Servicer shall not
be required to make deposits within two Business Days of receipt pursuant to
Section 5.2 (in which case such deposit will be made by the related Transfer
Date). All such other deposits shall be made on the Transfer Date following the
end of the related Collection Period.
SECTION 5.5. DISTRIBUTIONS. (a) On each Distribution Date, the
Trustee shall cause to be transferred from the Payahead Account, or from the
Servicer in the event the provisions of Section 5.1(d)(ii) are applicable, (i)
to the Collection Account, in immediately available funds, the aggregate
previous Payaheads to be applied to Scheduled Payments on Actuarial Receivables
for the related Collection Period or prepayments for the related Collection
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Period, pursuant to Sections 5.3 and 5.7, in the amounts set forth in the
Servicer's Certificate for such Distribution Date and (ii) to the Depositor, in
immediately available funds, the investment earnings, net of losses on the
Payaheads for the related Collection Period. A single, net transfer may be made.
(b) On each Determination Date, the Servicer shall calculate
all amounts required to determine the amounts to be deposited from the Reserve
Account into the Collection Account and from the Collection Account into the
Note Distribution Account and the Certificate Distribution Account.
(c) On or before each Distribution Date, the Servicer shall
instruct the Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section 4.9)
to withdraw from the Reserve Account and deposit in the Collection Account and
the Trustee shall so withdraw and deposit the Reserve Account Transfer Amount
for such Distribution Date.
(d) The Servicer shall instruct the Trustee (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 4.9) to make, and the Trustee shall make,
a distribution from the Collection Account to the Servicer by 11:00 a.m. (New
York time), amounts in respect of Outstanding Advances to the extent that the
Servicer is entitled to reimbursement in respect thereof in accordance with
Section 5.7. Subject to the last paragraph of this Section 5.5(d), no later than
each Distribution Date, the Servicer shall instruct the Trustee (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 4.9) to make, and the Trustee shall make,
the following deposits and distributions from the Collection Account for deposit
in the applicable Account by 10:00 a.m. (New York time), to the extent of the
Total Distribution Amount, in the following order of priority:
(i) to the Servicer, from the Total Distribution
Amount, the Total Servicing Fee;
(ii) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i), the
Noteholders' Interest Distributable Amount;
(iii) to the Owner Trustee for deposit in the Certificate
Distribution Account, from the Total Distribution Amount remaining
after the application of clause (i) and clause (ii), the
Certificateholders' Interest Distributable Amount;
(iv) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (i)
through (iii), the Noteholders' Principal Distributable Amount;
(v) to the Owner Trustee for deposit in the Certificate
Distribution Account, from the Total Distribution Amount remaining
after the application of clauses (i) through
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(iv), the Certificateholders' Principal Distributable Amount; and
(vi) to the Trustee for deposit in the Reserve Account, from
the Total Distribution Amount, the amounts remaining after the
application of clauses (i) through (v) above PROVIDED, HOWEVER, that
following the occurrence of an Event of Default pursuant to Section
5.1(i), 5.1(ii), 5.1(iv) or 5.1(v) of the Indenture, an acceleration of
the Notes pursuant to Section 5.2 of the Indenture or an Insolvency
Event with respect to the holder of the GP Interest, amounts on deposit
in the Collection Account will be deposited in the Note Distribution
Account to the extent necessary to pay accrued and unpaid interest on
the Notes and then, to the extent funds are available therefore,
principal on the Notes until the principal balance of the Notes has
been reduced to zero, before any amounts are deposited in the
Certificate Distribution Account. Following the payment in full of the
Notes, amounts on deposit in the Collection Account will be deposited
in the Certificate Distribution Account to the extent necessary to pay
accrued and unpaid interest on the Certificates and then, to the extent
funds are available therefore, principal on the Certificates until the
principal balance thereof has been reduced to zero.
In the event that the Collection Account is maintained with
an institution other than the Trustee, the Servicer shall instruct and cause
such institution to make all deposits and distributions pursuant to this Section
5.5(d) on the related Transfer Date.
SECTION 5.6. RESERVE ACCOUNT. (a) On the Closing Date, the
Depositor shall deposit the Reserve Account Initial Deposit into the Reserve
Account. In no circumstances will the Depositor be required to deposit from its
own funds any amounts in the Reserve Account other than the Reserve Account
Initial Deposit to be made on the Closing Date.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to any and all deposits and withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve
Account Balance for such Distribution Date, the Servicer shall instruct the
Trustee to distribute, and the Trustee shall distribute, the amount of the
excess to the Depositor. Amounts properly distributed to the Depositor pursuant
to Section 5.6(b) shall be deemed released from the Trust and the security
interest therein granted to the Trustee and the Depositor shall in no event
thereafter be required to refund any such distributed amounts.
SECTION 5.7. ADVANCES. (a) As of the close of business on the
last day of each Collection Period, if the payments by or on behalf of the
Obligor on an Actuarial Receivable (other than a Purchased Receivable) shall be
less than the Scheduled Payment, the Payahead Balance shall be applied by the
Servicer to the extent of the shortfall and such Payahead Balance shall be
reduced accordingly. Next, the Servicer shall advance any remaining shortfall
(such amount an "Advance"), to the extent that the Servicer, at its sole
discretion, shall determine that the Advance shall be recoverable from the
Obligor, the Purchase Amount, Liquidation Proceeds or proceeds of any other
Actuarial Receivables. With respect to each Actuarial Receivable, the Advance
shall increase Outstanding Advances. Outstanding Advances shall be reduced by
subsequent payments by or on behalf of the Obligor, collections of Liquidation
Proceeds in respect of the related Receivable or payments of the Purchase Amount
of the related Receivable.
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If the Servicer shall determine that an Outstanding Advance
with respect to any Actuarial Receivable shall not be recoverable as aforesaid,
the Servicer shall be reimbursed from any collections (including Liquidation
Proceeds) on other Actuarial Receivables in the Trust and Outstanding Advances
with respect to such Actuarial Receivables shall be reduced accordingly.
(b) The Servicer shall not make any advance with
respect to interest on or principal of Simple Interest
Receivables.
SECTION 5.8. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS.
On each Determination Date, the Servicer shall provide to the Trustee (with a
copy to the Rating Agencies) for the Trustee to forward to each Noteholder of
record, to each Paying Agent, if any, and to the Owner Trustee for the Owner
Trustee to forward to each Certificateholder of record, a statement
substantially in the form of Exhibit A, setting forth at least the following
information as to the Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to
principal of the Notes and to the Certificate Balance of
the Certificates;
(ii) the amount of such distribution allocable to
interest on or with respect to the Notes and to the
Certificates;
(iii) the Pool Balance as of the close of business on the last
day of the preceding Collection Period, after giving effect to payments
allocated to principal reported under (i) above;
(iv) the aggregate outstanding principal balance of the Notes,
the Note Pool Factor for the Notes, the Certificate Balance and the
Certificate Pool Factor after giving effect to payments allocated to
principal reported under (i) above;
(v) the amount of the Total Servicing Fee paid to the
Servicer with respect to the related Collection Period;
(vi) the amount of the aggregate Realized Losses, net
of Recoveries, if any, for such Collection Period;
(vii) the Reserve Account Transfer Amount, if any, for such
Distribution Date, the average of the Charge-off Rates and the
Delinquency Percentages for the three preceding Collection Periods, the
Specified Reserve Account Balance for such Distribution Date, the
amount distributed to the Depositor from the Reserve Account on such
Distribution Date, and the balance of the Reserve Account (if any) on
such Distribution Date, after giving effect to changes therein on such
Distribution Date;
(viii) the Noteholders' Interest Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall, the Noteholders'
Principal Carryover Shortfall, and the Certificateholders' Principal
Carryover Shortfall;
(ix) the aggregate Purchase Amount paid by the Sponsor, the
Depositor or the Servicer with respect to the related Collection
Period;
(x) the aggregate Payahead Balance;
(xi) the amounts collected by the Servicer;
(xii) the amounts received by the Trust from the Servicer;
and
(xiii) delinquency information relating to the Receivables
which are 30, 60 and 90 days delinquent.
Each amount set forth pursuant to paragraph (i), (ii), (v) or
(viii) above shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes or the initial Certificate Balance, as
applicable.
SECTION 5.9. NET DEPOSITS. As an administrative convenience,
if the Servicer is not required to remit collected funds within two Business
Days of receipt thereof, the Servicer will be permitted to make the deposit of
such funds, aggregate Advances and Purchase Amounts for or with respect to the
Collection Period net of distributions to be made to the Servicer with respect
to the Collection Period. Similarly, the Servicer may cause to be made a single,
net transfer, from the Collection Account to the Payahead Account, or vice
versa. The Servicer, however, will account to the Owner Trustee, the Trustee,
the Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.10. RESERVED.
ARTICLE VI.
THE DEPOSITOR
SECTION 6.1. REPRESENTATIONS OF DEPOSITOR. The Depositor makes
the following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and shall survive the sale of the Receivables to the
Issuer and the pledge thereof to the Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly
organized and validly existing as a corporation in good standing under the laws
of the State of New York with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the Receivables.
(b) DUE QUALIFICATION. The Depositor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall
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require such qualifications.
(c) POWER AND AUTHORITY OF THE DEPOSITOR. The Depositor has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under each of the Basic Documents to which the Depositor
is a party; the Depositor has full corporate power and authority to sell and
assign the property to be sold and assigned to and deposited with the Issuer and
the Depositor has duly authorized such sale and assignment to the Issuer by all
necessary corporate action; and the execution, delivery and performance of each
of the Basic Documents to which the Depositor is a party has been duly
authorized by the Depositor by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement and each of the Basic
Documents to which the Depositor is a party constitute legal, valid and binding
obligations of the Depositor, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect relating
to creditors' rights generally and subject to general principles of equity
(whether applied in a proceeding at law or in equity).
(e) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the articles of
association or by-laws of the Depositor, or any material indenture, agreement or
other instrument to which the Depositor is a party or by which it shall be
bound; nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or,
to the best of its knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending against the Depositor or, to its best knowledge, threatened against the
Depositor, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Depositor of its obligations under, or
the validity or enforceability of the Basic Documents, the Notes or the
Certificates or (iv) seeking to affect adversely the Federal or state income tax
or ERISA attributes of the Issuer, the Notes or the Certificates.
(g) ALL CONSENTS. All authorizations, licenses, consents,
orders or approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government instrumentality
required to be obtained, effected or given by the Depositor in connection with
the execution and delivery by the Depositor of this Agreement or any of the
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Basic Documents to which it is a party and the performance by the Depositor of
the transactions contemplated by this Agreement or any of the Basic Documents to
which it is a party, have been duly obtained, effected or given and are in full
force and effect, except where failure to obtain the same would not have a
material adverse effect upon the rights of the Issuer, the Noteholders or the
Certificateholders.
SECTION 6.2. CORPORATE EXISTENCE. (a) During the term of this
Agreement, subject to Section 6.4, the Depositor will keep in full force and
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement, the Basic Documents and each other instrument or agreement necessary
or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) During the term of this Agreement, the Depositor shall
observe the applicable legal requirements for the recognition of the Depositor
as a legal entity separate and apart from its affiliates, including as follows:
(i) the Depositor shall maintain corporate records and books
of account separate from those of its affiliates;
(ii) except as otherwise provided in this Agreement, the
Depositor shall not commingle its assets and funds with those of its
affiliates;
(iii) the Depositor shall hold such appropriate meetings of
its Board of Directors as are necessary to authorize all the
Depositor's corporate actions required by law to be authorized by the
Board of Directors, shall keep minutes of such meetings and of
meetings of its stockholder(s) and observe all other customary
corporate formalities (and any successor Depositor not a corporation
shall observe similar procedures in accordance with its governing
documents and applicable law);
(iv) the Depositor shall at all times hold itself out to the
public under the Depositor's own name as a legal entity separate and
distinct from its affiliates; and (v) all transactions and dealings
between the Depositor and its affiliates will be conducted on an
arm's-length basis.
SECTION 6.3. LIABILITY OF DEPOSITOR; INDEMNITIES. The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Depositor under this Agreement and
the representations made by the Depositor in this Agreement.
(a) The Depositor shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee and the Trustee and their respective officers,
directors, employees and agents from and against any taxes that may at any time
be asserted against any such Person with respect to the transactions
contemplated in this Agreement and any of the Basic Documents (except any income
taxes arising out of fees paid to the Owner Trustee or the Trustee and except
any taxes to
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which the Owner Trustee or the Trustee may otherwise be subject to), including
any sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Issuer, not including any
taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of the Certificates
and the Notes, or asserted with respect to ownership of the Receivables or
Federal or other income taxes arising out of distributions on the Certificates
and the Notes) and reasonable costs and expenses in defending against the same
or in connection with any application relating to the Notes or Certificates
under any state securities laws.
(b) The Depositor shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee, the Trustee, the Certificateholders and the
Noteholders and the officers, directors, employees and agents of the Issuer, the
Owner Trustee and the Trustee from and against any and all costs, expenses,
losses, claims, damages and liabilities to the extent arising out of, or imposed
upon such Person through (i) the Depositor's willful misfeasance, bad faith or
gross negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this Agreement
and (ii) the Depositor's or the Issuer's violation of federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificates or in connection with any application relating to the Notes or
Certificates under any state securities laws.
(c) The Depositor shall be liable as primary obligor for, and
shall indemnify, defend and hold harmless the Owner Trustee and its officers,
directors, employees and agents from and against any and all losses, claims,
damages and liabilities and reasonable costs and expenses arising out of, or
incurred in connection with, this Agreement or any of the Basic Documents, the
Owner Trust Estate, the acceptance or performance of the trusts and duties set
forth herein and in the Trust Agreement or the action or the inaction of the
Owner Trustee hereunder and under the Trust Agreement, except to the extent that
such cost, expense, loss, claim, damage or liability: (i) shall be due to the
willful misfeasance, bad faith or negligence of the Owner Trustee, or (ii) shall
arise from the breach by the Owner Trustee of any of its representations or
warranties set forth in Section 7.3 of the Trust Agreement. Such liability and
indemnification shall survive the termination of the Trust. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant to this
paragraph, the Owner Trustee's choice of legal counsel shall be subject to the
approval of the Depositor, which approval shall not be unreasonably withheld.
(d) The Depositor shall pay any and all taxes levied or
assessed upon all or any part of the Trust Estate (other than those taxes
expressly excluded from the Depositor's responsibilities pursuant to the
parentheticals in paragraph (a) above).
Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee or the Trustee and the termination
of this Agreement or the Indenture or the Trust Agreement, as applicable, and
shall include reasonable fees and expenses of counsel and other reasonable
expenses of litigation. If the Depositor shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made
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thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Depositor, without interest.
SECTION 6.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, DEPOSITOR. Any Person (a) into which the Depositor may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Depositor shall be a party or (c) which may succeed to the properties and assets
of the Depositor substantially as a whole, shall be the successor to the
Depositor without the execution or filing of any document or any further act by
any of the parties to this Agreement; PROVIDED, HOWEVER, that the Depositor
hereby covenants that it will not consummate any of the foregoing transactions
except upon satisfaction of the following: (i) the surviving Depositor if other
than ▇▇▇▇▇▇▇ Auto Receivables Corp. executes an agreement of assumption to
perform every obligation of the Depositor under this Agreement, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 3.1 or 6.1 shall have been breached and no Event of Default,
and no event that, after notice or lapse of time, or both, would become an Event
of Default shall have happened and be continuing, (iii) the Depositor shall have
delivered to the Owner Trustee and the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and that the Rating Agency Condition shall
have been satisfied with respect to such transaction, (iv) the surviving
Depositor shall have a consolidated net worth at least equal to that of the
predecessor Depositor, (v) such transaction will not result in a material
adverse federal or state tax consequence to the Issuer, the Noteholders or the
Certificateholders and (vi) unless ▇▇▇▇▇▇▇ Auto Receivables Corp., is the
surviving entity, the Depositor shall have delivered to the Owner Trustee and
the Trustee an Opinion of Counsel either (A) stating that, in the opinion of
such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and Trustee,
respectively, in the Receivables and reciting the details of such filings, or
(B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interests.
SECTION 6.5. LIMITATION ON LIABILITY OF DEPOSITOR AND OTHERS.
The Depositor and any director or officer or employee or agent of the Depositor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document (provided that such reliance shall not limit in
any way the Depositor's obligations under Section 3.2). The Depositor shall not
be under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 6.6. DEPOSITOR MAY OWN CERTIFICATES OR NOTES. The
Depositor and any Affiliate thereof may in its individual or any other capacity
become the owner or pledgee of Certificates or Notes with the same rights as it
would have if it were not the Depositor or an Affiliate thereof, except as
expressly provided herein or in any Basic Document.
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SECTION 6.7. SECURITY INTEREST. During the term of this
Agreement, the Depositor will not take any action to assign the security
interest in any Financed Vehicles other than pursuant to the Basic Documents.
ARTICLE VII.
THE SERVICER AND THE SPONSOR
SECTION 7.1. REPRESENTATIONS OF BDFS. BDFS makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of the
Agreement and shall survive the sale of the Receivables to the Issuer and the
pledge thereof to the Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. BDFS is duly organized and
validly existing as a corporation in good standing under the laws of the State
of New York with the corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the power,
authority and legal right to service the Receivables.
(b) DUE QUALIFICATION. BDFS is duly qualified to do business
and has obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its business
(including the servicing of the Receivables as required by this Agreement) shall
require such qualifications.
(c) POWER AND AUTHORITY OF BDFS. BDFS has the corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery and performance of this
Agreement have been duly authorized by BDFS by all necessary corporate action.
All authorizations, consents, orders or approvals of or registrations or
declarations with any court, regulatory body, administrative agency or other
government instrumentality required to be obtained, effected or given by BDFS in
connection with the execution and delivery by BDFS of this Agreement or any of
the Basic Documents to which it is a party and the performance by BDFS of the
transactions contemplated by this Agreement or any of the Basic Documents to
which it is a party, have been duly obtained, effected or given and are in full
force and effect, except where failure to obtain the same would not have a
material adverse effect upon the rights of the Issuer, the Noteholders or the
Certificateholders.
(d) BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of BDFS, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and subject to general principles of equity (whether
applied in a proceeding of law or in equity).
(e) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
result in any breach of any of the terms
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and provisions of, nor constitute (with or without notice or lapse of time or
both) a default under the certificate of incorporation or by-laws of BDFS, or
any material indenture, agreement or other instrument to which BDFS is a party
or by which it shall be bound; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the best of its knowledge, any order, rule or regulation
applicable to BDFS of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over BDFS or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending against BDFS, or, to its best knowledge, threatened against BDFS, before
any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over BDFS or its properties: (i) asserting
the invalidity of this Agreement or any of the Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by this
Agreement or any of the Basic Documents, (iii) seeking any determination or
ruling that could reasonably be expected to have a material and adverse effect
on the performance by BDFS of its obligations under, or the validity or
enforceability of this Agreement or any of the Basic Documents, the Notes or the
Certificates or (iv) seeking to affect adversely the federal or state income tax
or ERISA attributes of the Issuer, the Notes or the Certificates.
(g) NO AMENDMENT OR WAIVER. No provision of any Receivable has
been waived, altered or modified in any respect, except pursuant to a document,
instrument or writing included in the relevant Receivable File, and no such
amendment, waiver, alteration or modification causes such Receivable not to
conform to the other warranties contained in this Section or those of the
Depositor and the Sponsor contained in Section 3.1.
(h) APPROVALS. All approvals, licenses, authorizations,
consents, orders or other actions of any person, corporation or other
organization, or of any court, governmental agency or body or official, required
in connection with the execution and delivery of this Agreement have been or
will be taken or obtained on or prior to the Closing Date.
(i) LOCATION OF RECEIVABLE FILES. The Receivable Files are kept
in the offices of the Servicer, specified in Schedule B, or at such other office
specified in accordance with Section 3.4(b).
(j) DEMAND NOTE. The Sponsor has contributed the Demand Note
(as defined in the Trust Agreement) to the Depositor on or before the Closing
Date.
SECTION 7.2. INDEMNITIES OF SERVICER. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Trustee, the Depositor, the Certificateholders
and the Noteholders and any of the officers, directors, employees and agents of
the Issuer, the Owner Trustee, the Trustee or the
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Depositor from any and all losses, claims, damages, liabilities and reasonable
costs and expenses (including reasonable attorneys' fees and expenses) to the
extent arising out of, or imposed upon any such Person through, the gross
negligence, willful misfeasance or bad faith of the 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 or by
reason of the reckless disregard of its obligations and duties under this
Agreement or by reason of the reckless disregard of the obligations of any
subservicer under any subservicing agreement, where the final determination that
any such cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, any such gross negligence, willful
misfeasance, bad faith or recklessness on the part of the Servicer or any
subservicer, is established by a court of law, by an arbitrator or by way of
settlement agreed to by the Servicer. Notwithstanding the foregoing, if the
Servicer is rendered unable, in whole or in part, by virtue of an act of God,
act of war, fires, earthquake or other natural disasters, to satisfy its
obligations under this Agreement, the Servicer shall not be deemed to have
breached any such obligation upon the sending of written notice of such event to
the other parties hereto, for so long as the Servicer remains unable to perform
such obligation as a result of such event. This provision shall not be construed
to limit the Servicer's or any other party's rights, obligations, liabilities,
claims or defenses which arise as a matter of law or pursuant to any other
provision of this Agreement.
The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Trustee, the Depositor, the Certificateholders
and the Noteholders or any of the officers, directors, employees and agents of
the Issuer, the Owner Trustee, the Trustee or the Depositor from any and all
losses, claims, damages, liabilities and reasonable costs and expenses
(including reasonable attorneys' fees and expenses) to the extent arising out of
or imposed upon any such Person as a result of any compensation payable to any
subcustodian or subservicer (including any fees payable in connection with the
release of any Receivable File from the custody of such subservicer or in
connection with the termination of the servicing activities of such subservicer
with respect to any Receivable) whether pursuant to the terms of any
subservicing agreement or otherwise.
The Servicer shall indemnify, defend and hold harmless the
Trustee, the Owner Trustee, the Trust, the Depositor, the Certificateholders and
the Noteholders from and against any taxes that may at any time be asserted
against the Trustee, the Trust, the Owner Trustee, the Certificateholders, the
Noteholders or the Depositor (other than any taxes based upon the income of any
such person), with respect to the transactions contemplated herein including,
without limitation, any sales, gross receipts, general corporation, tangible
personal property, privilege, or license taxes and costs and expenses in
defending against the same.
The Servicer shall indemnify, defend, and hold harmless the
Owner Trustee and Trustee from and against all reasonable costs and expenses,
losses, claims, damages, and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties herein
contained, if any, except to the extent that such reasonable cost or expense,
reasonable loss, claim, damage or liability: (a) shall be due to the willful
misfeasance, bad faith, or gross negligence (except for errors in judgment) of
the Owner Trustee or Trustee; (b) relates to any tax other than the taxes with
respect to which the Servicer shall be required to
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indemnify the Owner Trustee or Trustee; or (c) shall arise from the Owner
Trustee's or Trustee's breach of any of its representations or warranties set
forth in the Trust Agreement or the Indenture, as applicable.
Indemnification under this Section shall survive the
resignation and removal of the Trustee and the Owner Trustee or the termination
of this Agreement.
SECTION 7.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, BDFS. Any Person (a) into which BDFS may be merged or
consolidated, (b) which may result from any merger or consolidation to which
BDFS shall be a party or (c) which may succeed to the properties and assets of
BDFS, substantially as a whole, shall be the successor to BDFS without the
execution or filing of any document or any further act by any of the parties to
this Agreement; PROVIDED, however, that BDFS 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 BDFS, executes an agreement
of assumption to perform every obligation of BDFS under this Agreement, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.1 shall have been breached and no Servicer
Default, and no event that, after notice or lapse of time, or both, would become
a Servicer Default shall have occurred and be continuing, (iii) the Servicer
shall have delivered to the Owner Trustee and the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Servicer shall have a consolidated net worth at least equal to that of
the predecessor Servicer, and (v) such transaction will not result in a material
adverse federal or state tax consequence to the Issuer, the Noteholders or the
Certificateholders.
SECTION 7.4. LIMITATION ON LIABILITY OF BDFS AND OTHERS.
Neither BDFS nor any of its directors, officers, employees or agents shall be
under any liability to the Issuer, the Noteholders or the Certificateholders,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action by BDFS or any subservicer pursuant to this
Agreement or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect BDFS or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. BDFS or any subservicer and any of
their respective directors, officers, employees or agents may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.
Except as provided in this Agreement BDFS shall not be under any obligation
to appear in, prosecute or defend any legal action that shall be incidental to
its duties to service the Receivables in accordance with this Agreement, and
that in its opinion may involve it in any expense or liability; provided,
HOWEVER, that BDFS, may (but shall not be required to) undertake any reasonable
action that it may deem necessary or desirable in respect of the Basic Documents
to protect the interests of the Certificateholders under this Agreement and the
Noteholders under the Indenture.
SECTION 7.5. BDFS NOT TO RESIGN AS SERVICER. Subject to the
provisions of Section 7.3, BDFS 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 BDFS, as Servicer shall be communicated to the Owner Trustee and
the Trustee at the earliest practicable time (and, if such communication is not
in writing, shall be confirmed in writing at the earliest practicable time) and
any such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Owner Trustee and the Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until the
earlier of the Trustee or a Successor Servicer having assumed the
responsibilities and obligations of the resigning Servicer in accordance with
Section 8.2 or the date upon which any regulatory authority requires such
resignation.
SECTION 7.6. CORPORATE EXISTENCE. (a) During the term of this
Agreement, subject to Section 6.4, BDFS will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby.
(a) During the term of this Agreement, BDFS shall observe the
applicable legal requirements for the recognition of BDFS as a legal entity
separate and apart from its affiliates, including as follows:
(i) BDFS shall maintain corporate records and books
of account separate from those of its affiliates;
(ii) except as otherwise provided in this Agreement,
BDFS shall not commingle its assets and funds with those
of its affiliates;
(iii) BDFS shall hold such appropriate meetings of its Board
of Directors as are necessary to authorize all BDFS's corporate actions
required by law to be authorized by the Board of Directors, shall keep
minutes of such meetings and of meetings of its stockholder(s) and
observe all other customary corporate formalities (and any successor
Servicer not a corporation shall observe similar procedures in
accordance with its governing documents and applicable law);
(iv) BDFS shall at all times hold itself out to the
public under BDFS's own name as a legal entity separate
and distinct from its affiliates; and
(v) all transactions and dealings between BDFS and
its affiliates will be
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conducted on an arm's-length basis.
SECTION 7.7. DEMAND NOTE. (a) During the term of this
Agreement, the Sponsor will keep the Demand Note (as defined in the Trust
Agreement) issued to the Depositor in full force and effect and will not cancel,
waive or terminate such Demand Note.
ARTICLE VIII.
DEFAULT
SECTION 8.1. SERVICER DEFAULT. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Trustee for
deposit in any of the Trust Accounts or the Certificate Distribution Account any
required payment or to direct the Trustee to make any required distributions
therefrom that shall continue unremedied for a period of five Business Days
after written notice of such failure is received by the Servicer from the Owner
Trustee or the Trustee or after discovery of such failure by an Authorized
Officer of the Servicer; or
(b) failure on the part of the Servicer duly to observe or to
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement or any other Basic Document, which failure
shall (i) materially and adversely affect the rights of either the
Certificateholders or Noteholders and (ii) continue unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given (A) to the Servicer by the Owner
Trustee or the Trustee or (B) to the Servicer and to the Owner Trustee and the
Trustee by the Holders of Notes evidencing not less than 25% of the Outstanding
Amount of the Notes or Holders of Certificates evidencing not less than 25% of
the outstanding Certificate Balance, as applicable (or for such longer period,
not in excess of 120 days, as may be reasonably necessary to remedy such
default; provided that such default is capable of remedy within 120 days and the
Servicer delivers an Officers' Certificate to the Owner Trustee and the Trustee
to such effect and to the effect that the Servicer has commenced or will
promptly commence, and will diligently pursue, all reasonable efforts to remedy
such default); or
(c) an Insolvency Event occurs with respect to the
Servicer or any successor;
then, and in each and every case, so long as the Servicer
Default shall not have been remedied, either the Trustee, or the Holders of
Notes evidencing not less than 25% of the Outstanding Amount of the Notes, by
notice then given in writing to the Servicer and the Owner Trustee (and to the
Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.2) of the
Servicer under this Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Notes, the Certificates or the Receivables or
otherwise, shall, without further action, pass to and be vested in the Trustee
or such successor Servicer as may be appointed under Section 8.2; and, without
limitation, the Trustee and the Owner Trustee are hereby authorized and
empowered to execute and deliver, on
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behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the successor Servicer, the Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
predecessor Servicer for deposit, or shall thereafter be received by it with
respect to a Receivable. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection with transferring the Receivable Files
to the successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Owner Trustee
shall give notice thereof to the Rating Agencies.
SECTION 8.2. APPOINTMENT OF SUCCESSOR. (a) Upon the Servicer's
receipt of notice of termination, pursuant to Section 8.1 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the earlier
of (x) the date 45 days from the delivery to the Owner Trustee and the Trustee
of written notice of such resignation (or written confirmation of such notice)
in accordance with the terms of this Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Trustee shall appoint a successor
Servicer, and the successor Servicer shall accept its appointment by a written
assumption in form acceptable to the Owner Trustee and the Trustee. In the event
that a successor Servicer has not been appointed at the time when the
predecessor Servicer has ceased to act as Servicer in accordance with this
Section, the Trustee without further action shall automatically be appointed the
successor Servicer and the Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Trustee shall, if it shall be unwilling or unable
so to act, appoint or petition a court of competent jurisdiction to appoint, any
established institution, having a net worth of not less than $50,000,000 and
whose regular business shall include the servicing of automotive receivables, as
the successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement. No successor Servicer shall be liable for any acts or omissions of
any predecessor Servicer.
SECTION 8.3. PAYMENT OF SERVICING FEE; REPAYMENT OF ADVANCES.
If the Servicer shall change, the predecessor Servicer shall be entitled to (i)
receive any accrued and
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unpaid Servicing Fees through the date of the successor Servicer's acceptance
hereunder in accordance with Section 4.8. and (ii) reimbursement for Outstanding
Advances pursuant to Sections 5.3 and 5.7 with respect to all Advances made by
the predecessor Servicer.
SECTION 8.4. NOTIFICATION TO NOTEHOLDERS AND
CERTIFICATEHOLDERS. Upon the receipt by a Trust Officer of the Owner Trustee of
written notice of any termination of, or appointment of a successor to, the
Servicer pursuant to this Article VIII, the Owner Trustee shall give prompt
written notice thereof to Certificateholders and the Trustee shall give prompt
written notice thereof to Noteholders subject to the Rating Agency Condition.
SECTION 8.5. WAIVER OF PAST DEFAULTS. The Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes (or
the Holders (as defined in the Trust Agreement) of Certificates evidencing not
less than a majority of the outstanding Certificate Balance, as applicable, in
the case of any default which does not adversely affect the Trustee or the
Noteholders) may, on behalf of all Noteholders and Certificateholders, waive in
writing any default by the Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any required deposits
to or payments from any of the Trust Accounts in accordance with this Agreement.
Upon any such waiver of a past default, such default shall cease to exist, and
any Servicer Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
ARTICLE IX.
TERMINATION
SECTION 9.1. OPTIONAL PURCHASE OF ALL RECEIVABLES. (a) On the
last day of any Collection Period immediately preceding a Determination Date as
of which the then outstanding Pool Balance is 10% or less of the Initial Pool
Balance, the Depositor shall have the option to purchase the Owner Trust Estate,
other than the Trust Accounts and the Certificate Distribution Account. To
exercise such option, the Depositor shall deposit pursuant to Section 5.4 in the
Collection Account an amount which, when added to the amounts on deposit in the
Collection Account for such Distribution Date, equals the sum of (a) the unpaid
principal amount of the then outstanding Notes, plus accrued and unpaid interest
thereon, plus (b) the Certificate Balance plus accrued and unpaid interest
thereon. The Notes and the Certificates will be redeemed concurrently therewith.
(b) Upon any sale of the assets of the Trust pursuant to
Section 9.2 of the Trust Agreement, the Servicer shall instruct the Trustee to
deposit the proceeds from such sale after all payments and reserves therefrom
(including the expenses of such sale) have been made (the "Insolvency Proceeds")
in the Collection Account. On the Distribution Date on which the Insolvency
Proceeds are deposited in the Collection Account (or, if such proceeds are not
so deposited on a Distribution Date, on the Distribution Date immediately
following such deposit), the Servicer shall instruct the Trustee to make, and
the Trustee shall make, the following deposits and distributions (after the
application on such Distribution Date of the Total Distribution
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Amount pursuant to Section 5.5) from the Insolvency Proceeds and any funds
remaining on deposit in the Reserve Account (including the proceeds of any sale
of investments therein):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding
principal balance of the Notes (after giving effect to the reduction in
the outstanding principal balance of the Notes to result from the
deposits made in the Note Distribution Account on such Distribution
Date);
(iii) to the Owner Trustee for deposit in the Certificate
Distribution Account, any portion of the Certificateholders' Interest
Distributable Amount not otherwise deposited into the Certificate
Distribution Account on such Distribution Date; and
(iv) to the Owner Trustee for deposit in the Certificate
Distribution Account, the Certificate Balance and any
Certificateholders' Principal Carryover Shortfall Amount (after giving
effect to the reduction in the Certificate Balance to result from the
deposits made in the Certificate Distribution Account on such
Distribution Date).
Any Insolvency Proceeds remaining after the deposits described
above shall be paid to the holder of the GP Interest.
(c) Notice of any termination of the Trust shall be given by
the Servicer to the Owner Trustee, the Trustee and the Rating Agencies as soon
as practicable after the Servicer has received notice thereof.
(d) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Trustee pursuant to this Agreement.
SECTION 9.2. MANDATORY SALE OF ALL CONTRACTS. In accordance
with the procedures and schedule set forth in Exhibit C hereto (the "Auction
Procedures"), the Trustee (or, if the Notes have been paid in full and the
Indenture shall have been discharged in accordance with its terms, the Owner
Trustee) shall conduct or shall cause to be conducted an auction (the "Auction")
of the Receivables remaining in the Trust (such Receivables hereinafter referred
to as the "Auction Property") in order to effect a termination of the Trust
pursuant to Section 9.1 of the Trust Agreement on the second Distribution Date
succeeding the Record Date on which the Pool Balance is 5% or less of the
Initial Pool Balance and at such time as the Depositor shall have not exercised
its option contained in Section 9.1. Such Auction shall be conducted within 10
days following the Distribution Date following the Record Date on which the Pool
Balance is 5% or less of the Initial Pool Balance. The Depositor, the Sponsor,
or the Servicer may, but shall not be required to, bid at the Auction. Such
Trustee shall sell or shall cause the sale and transfer of the Auction Property
to the highest bidder therefor at the Auction provided that;
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(i) the Auction has been conducted in accordance with
the Auction Procedures;
(ii) such Trustee has received good faith bids for the Auction
Property from two prospective purchasers that are considered by such
Trustee, in its sole discretion, to be competitive participants in the
market for motor vehicle retail installment sale contracts and other
motor vehicle installment sale contracts;
(iii) a financial advisor, as advisor to such Trustee (in such
capacity, the "Advisor"), shall have advised such Trustee in writing
that at least two of such bidders (including the winning bidder) are
participants in the market for motor vehicle retail installment sale
contracts and other motor vehicle installment sale contracts willing
and able to purchase the Auction Property;
(iv) the highest bid in respect of the Auction Property is not
less than the aggregate fair market value of the Auction Property (as
determined by such Trustee in its sole discretion);
(v) any bid submitted by the Depositor, the Sponsor, the
Servicer or any affiliate of any of them shall reasonably represent the
fair market value of the Auction Property, as independently verified
and represented in writing by a qualified independent third party
evaluator (which may include the Advisor or an investment bank firm)
selected by such Trustee; and
(vi) the highest bid would result in proceeds from the sale of
the Auction Property which will be at least equal to the sum of (A) the
greater of (1) the aggregate Purchase Price for the Receivables
(including defaulted Receivables), plus the appraised value of any
other property held by the Trust (less liquidation expenses) or (2) an
amount that, when added to amounts on deposit in the Collection Account
and available for distribution to Securityholders on the second
Distribution Date following the consummation of such sale (the
"Liquidation Distribution Date"), would result in proceeds sufficient
to distribute to Securityholders the amounts of interest due to the
Securityholders for such Distribution Date and any unpaid interest
payable to the Securityholders with respect to one or more prior
Distribution Dates and the outstanding principal amount of the Notes
and the Certificate Balance, and (B) the Total Servicing Fee payable on
such second Distribution Date.
Provided that all of the conditions set forth in clauses (i)
through (vi) have been met, such Trustee shall sell and transfer the Auction
Property, without representation, warranty or recourse, to such highest bidder
in accordance with and upon completion of the Auction Procedures. Such Trustee
shall deposit the purchase price for the Auction Property in the
Collection Account at least one Business Day prior to such second succeeding
Distribution Date. In addition, the Auction must stipulate that the Servicer be
retained to service the Receivables on terms substantially similar to those in
the Agreement. In the event that any of such conditions are not met or such
highest bidder fails or refuses to comply with any of the Auction Procedures,
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such Trustee shall decline to consummate such sale and transfer. In the event
such sale and transfer is not consummated in accordance with the foregoing,
however, such Trustee may from time to time in the future, but shall not be
under any further obligation to, solicit bids for sale of the assets of the
Trust upon the same terms and conditions as set forth above.
If any of the foregoing conditions are not met, such Trustee
shall decline to consummate such sale and shall not be under any obligation to
solicit any further bids or otherwise negotiate any further sale of Receivables
remaining in the Trust. In such event, however, such Trustee may from time to
time solicit bids in the future for the purchase of such Receivables pursuant to
this Section 9.2.
If applicable, the Indenture Trustee shall provide notice to
the Owner Trustee of the termination of the Trust pursuant to this Section 9.2
as soon as practicable upon the consummation of the mandatory sale of the
Receivables pursuant to this Section 9.2.
ARTICLE X
ADMINISTRATIVE DUTIES OF THE SERVICER
SECTION 10.1. ADMINISTRATIVE DUTIES. (a) DUTIES WITH RESPECT TO
THE INDENTURE AND DEPOSITORY AGREEMENTS. The Servicer shall perform all its
duties and the duties of the Issuer under the Depository Agreements. In
addition, the Servicer shall consult with the Owner Trustee as the Servicer
deems appropriate regarding the duties of the Issuer under the Indenture and the
Depository Agreements. The Servicer shall monitor the performance of the Issuer
and shall provide notice to the Owner Trustee when action is necessary to comply
with the Issuer's duties under the Indenture and the Depository Agreements. The
Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture and the Depository
Agreements. In furtherance of the foregoing, the Servicer shall take all
appropriate action that is the duty of the Issuer to take pursuant to the
Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER. (i) In addition to the
duties of the Servicer set forth in this Agreement or any of the Basic
Documents, the Servicer shall perform such calculations and shall prepare for
execution by the Issuer or the Owner Trustee or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer or the Owner
Trustee to prepare, file or deliver pursuant to this Agreement or any of the
Basic Documents, and at the request of the Owner Trustee shall take all
appropriate action that it is the duty of the Issuer to take pursuant to this
Agreement or any of the Basic Documents. Subject to Section 10.4, and in
accordance with the directions of the Owner Trustee, the Servicer shall
administer, perform or supervise the performance of such other activities in
connection with the Collateral (including the Basic Documents) as are not
covered by any of the foregoing provisions and as are expressly requested by the
Owner Trustee and are reasonably within the capability of the Servicer.
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(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Servicer shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding
tax is imposed on the Issuer's payments (or allocations of income) to
an Owner (as defined in the Trust Agreement) as contemplated in Section
5.2(c) of the Trust Agreement. Any such notice shall specify the amount
of any withholding tax required to be withheld by the Owner Trustee
pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Servicer shall be responsible for
performance of the duties of the Owner Trustee and the holder of the GP
Interest set forth in Section 5.6(a), (b), (c) and (d) of the Trust
Agreement with respect to, among other things, accounting and reports
to Owners (as defined in the Trust Agreement); PROVIDED, HOWEVER, that
the Owner Trustee shall retain responsibility for the distribution to
Certificateholders of the Schedule K-1s furnished to the Owner Trustee
by the Servicer which are necessary to enable each Certificateholder to
prepare its federal and state income tax returns.
(iv) The Servicer shall perform the duties of the Servicer
specified in Section 10.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the
Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any
of its Affiliates; PROVIDED, HOWEVER, that the terms of any such
transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Servicer's opinion, no
less favorable to the Issuer in any material respect.
(c) TAX MATTERS. The Servicer shall prepare and file, on
behalf of the holder of the GP Interest, all tax returns, tax elections,
financial statements and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in Article V of the Trust
Agreement, including without limitation forms 1099 and 1066. All tax returns
will be signed by the holder of the GP Interest.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Servicer are non-ministerial, the Servicer shall
not take any action pursuant to this Article X unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Trustee of the proposed action and the Owner Trustee and, with
respect to items (A), (B), (C) and (D) below, the Trustee shall not have
withheld consent or provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the
Indenture;
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(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Receivables);
(C) the amendment, change or modification of
this Agreement or any of the Basic Documents;
(D) the appointment of successor Note Registrars,
successor Paying Agents and successor Trustees pursuant to the
Indenture or the appointment of Successor Servicers or the
consent to the assignment by the Note Registrar, Paying Agent
or Trustee of its obligations under the Indenture; and
(E) the removal of the Trustee.
(e) EXCEPTIONS. Notwithstanding anything to the contrary in
this Agreement, except as expressly provided herein or in the other Basic
Documents, the Servicer, in its capacity hereunder, shall not be obligated to,
and shall not, (1) make any payments to the Noteholders or Certificateholders
under the Basic Documents, (2) sell the Indenture Trust Estate pursuant to
Section 5.4 of the Indenture, (3) take any other action that the Issuer directs
the Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.
SECTION 10.2. RECORDS. The Servicer shall maintain appropriate
books of account and records relating to services performed under this
Agreement, which books of account and records shall be accessible for inspection
by the Issuer at any time during normal business hours.
SECTION 10.3. ADDITIONAL INFORMATION TO BE FURNISHED TO THE
ISSUER. The Servicer shall furnish to the Issuer from time to time such
additional information regarding the Collateral as the Issuer shall reasonably
request.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. AMENDMENT. This Agreement may be amended by the
Sponsor, the Depositor, the Servicer and the Owner Trustee, with the consent of
the Trustee (which consent may not be unreasonably withheld), but without the
consent of any of the Noteholders or the Certificateholders, to cure any
ambiguity or defect, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Trustee, adversely affect in any material
respect the interests of any Noteholder or Certificateholder.
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This Agreement may also be amended from time to time by the
Sponsor, the Depositor, the Servicer and the Owner Trustee, with the consent of
the Trustee, the consent of the Holders of Notes evidencing not less than a
majority of the Outstanding Amount of the Notes and the consent of the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the Certificate Balance for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the Holders (as defined in the Trust Agreement) of all the outstanding
Certificates affected thereby.
Prior to its execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Rating Agencies. Promptly after its execution of any
such amendment or consent, the Owner Trustee shall furnish written notification
of the substance of such amendment or consent to each Rating Agency, each
Certificateholder and the Trustee.
It shall not be necessary for the consent of Certificateholders
or Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Owner Trustee and the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent to the execution
and delivery of such amendment have been satisfied and the Opinion of Counsel
referred to in Section 11.2(i)(1) has been delivered. The Owner Trustee and the
Trustee may, but shall not be obligated to, enter into any such amendment which
affects
the Owner Trustee's or the Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
SECTION 11.2. PROTECTION OF TITLE TO TRUST. (a) The Depositor
shall execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places as may
be required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Trustee in the Receivables and in the proceeds
thereof. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall (nor shall
the Servicer permit an Originator to) 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
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paragraph (a) above seriously misleading within the meaning of ss. 9-402(7) of
the UCC, unless it shall have given the Owner Trustee and the Trustee at least
five days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Depositor and the Servicer shall have an
obligation to give the Owner Trustee and the Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment. The Servicer shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall (and shall cause each Originator with
respect to the Related Receivables to) maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
and Payahead Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that refer to
a Receivable shall indicate clearly the interest of the Issuer and the Trustee
in such Receivable and that such Receivable is owned by the Issuer and has been
pledged to the Trustee. Indication of the Issuer's and the Trustee's interest in
a Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the related Receivable shall have been paid in full
or repurchased by the Depositor or the Sponsor or purchased by the Servicer.
(f) If at any time the Sponsor, the Depositor or the Servicer
shall propose to sell, grant a security interest in or otherwise transfer any
interest in automotive receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Trustee.
(g) The Servicer shall permit the Trustee and its agents at any
time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request at any time the Owner Trustee or the Trustee
shall have reasonable grounds to believe that such request is necessary in
connection with the performance
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of its duties under this Agreement or any of the Basic Documents, the Servicer
shall furnish to the Owner Trustee or to the Trustee, within five Business Days,
a list of all Receivables (by contract number and name of Obligor) then held as
part of the Trust, together with a reconciliation of such list to the Schedule
of Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee
and the Trustee:
(1) promptly after the execution and delivery of
this Agreement and of each amendment thereto, an Opinion of
Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation
statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner
Trustee and the Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating
that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest; and
(2) within 120 days after the beginning of each
calendar year beginning with the first calendar year
beginning more than three months after the Cutoff Date, an
Opinion of Counsel, dated as of a date during such 120-day
period, either (A) stating that, in the opinion of such
counsel, all financing statements and continuation
statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner
Trustee and the Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating
that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (l) or (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(i) The Depositor shall, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the Securities
and Exchange Commission pursuant to Section 12(b) or Section 12(g) of the
Exchange Act within the time periods specified in such sections.
SECTION 11.3. NOTICES. All demands, notices and communications
upon or to the Depositor, the Servicer, the Owner Trustee, the Trustee or the
Rating Agencies under this Agreement shall be in writing, personally delivered,
sent by overnight courier or mailed by certified mail, return receipt requested,
and shall be deemed to have been duly given upon receipt (a) in the case of the
Depositor, to ▇▇▇▇▇▇▇ Auto Receivables Corp., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
-▇▇-
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, (b) in the
case of the Sponsor, to ▇▇▇▇▇▇▇ Dealer Financial Services, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, (c) in
the case of the servicer, to ▇▇▇▇▇▇▇ Dealer Financial Services, Inc., ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel, (d) in the case of the Issuer or the Owner Trustee, at the Corporate
Trust Office (as defined in the Trust Agreement), (e) in the case of the
Trustee, at the Corporate Trust Office, (f) in the case of Moody's, to ▇▇▇▇▇'▇
Investors Service, Inc., to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ABS Monitoring Department and (e) in the case of Standard & Poor's,
to Standard & Poor's Corporation, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of Asset Backed Surveillance Department.
SECTION 11.4. ASSIGNMENT. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Depositor or the Servicer.
SECTION 11.5. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of
this Agreement are solely for the benefit of the Depositor, the Servicer, the
Issuer, the Owner Trustee and for the benefit of the Certificateholders
(including the holder of the GP Interest), the Trustee and the Noteholders, as
third-party beneficiaries, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.6. SEVERABILITY. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.7. SEPARATE COUNTERPARTS. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.8. HEADINGS. The headings of the various
Articles and Sections herein are for convenience of reference
only and shall not define or limit any of the terms or
provisions hereof.
SECTION 11.9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10. ASSIGNMENT TO TRUSTEE. The Depositor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to
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the Trustee pursuant to the Indenture for the benefit of the Noteholders of all
right, title and interest of the Issuer in, to and under the Receivables and/or
the assignment of any or all of the Issuer's rights and obligations hereunder to
the Trustee.
SECTION 11.11. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, the Servicer and the Depositor shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
SECTION 11.12. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND
TRUSTEE. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by ____________, not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event
____________, in its individual capacity or, except as expressly provided in the
Trust Agreement, as Owner Trustee have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or under any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the
Issuer. For all purposes of this Agreement, in the performance of its duties or
obligations hereunder or in the performance of any duties or obligations of the
Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by ____________ not in its individual capacity
but solely as Trustee and in no event shall ____________ have any liability for
the representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer.
SECTION 11.13. INDEPENDENCE OF THE SERVICER. For all purposes of
this Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Servicer shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 11.14. NO JOINT VENTURE. Nothing contained in this
Agreement (i) shall constitute the Servicer and either of the Issuer or the
Owner Trustee as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (ii) shall be
construed to impose any liability as such on any of them or (iii) shall be
deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.
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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.
▇▇▇▇▇▇▇ AUTO TRUST 199_-_
By: ----------------------------------
not in its individual
capacity but solely as
Owner Trustee on behalf of the Trust,
By---------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ DEALER FINANCIAL SERVICES,
INC.,
Servicer and Sponsor,
By:----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ AUTO RECEIVABLES CORP.
Depositor,
By:-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
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Acknowledged and Accepted:
------------, not
in its individual capacity
but solely as Trustee,
By:----------------------------
Name:
Title:
Acknowledged and Accepted:
------------
not in its individual capacity
but solely as Owner Trustee,
By:---------------------------
Name:
Title:
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SCHEDULE A
SCHEDULE OF RECEIVABLES
Delivered to the Owner Trustee and the Trustee at Closing
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SCHEDULE B
LOCATION OF RECEIVABLES
▇▇▇▇▇▇▇ Dealer Financial Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Oxford Resources Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
FORM OF MONTHLY SECURITYHOLDER STATEMENT
▇▇▇▇▇▇▇ AUTO TRUST 199_-_
___% Asset Backed Notes
___% Asset Backed Certificates
Distribution Date:
Collection Period:
Under the Sale and Servicing Agreement dated as of __________ __, 199_
among ▇▇▇▇▇▇▇ Dealer Financial Services, Inc., as servicer (the "Servicer") and
sponsor (the "Sponsor"), ▇▇▇▇▇▇▇ Auto Receivables Corp., as depositor (the
"Depositor"), ▇▇▇▇▇▇▇ Auto Trust 199_-_, as issuer (the "Trust"), the Servicer
is required to prepare certain information each month regarding current
distributions to Noteholders and Certificateholders and the performance of the
Trust during the previous month. The information that is required to be prepared
with respect to the Distribution Date and Collection Period listed above is set
forth below. Certain of the information is presented on the basis of an original
principal amount of $1,000 per Note or Certificate, and certain other
information is presented based upon the aggregate amounts for the Trust as a
whole.
A. Information Regarding the Current Monthly Distribution.
1. Notes.
(a) The aggregate amount of the
distribution with respect to the
Notes................................................$--------
(b) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of interest on the Notes.....................$--------
(c) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of principal of the Notes....................$--------
(d) The amount of the distributions set
forth in paragraph A.1(a) payable
out of amounts withdrawn from the Reserve
Account with respect to the Notes....................$--------
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(e) The amount of the distribution set
forth in paragraph A.1.(a) above
per $1,000 interest in the Notes.....................$--------
(f) The amount of the distribution set
forth in paragraph A.1.(b) above
per $1,000 interest in the Notes.....................$--------
(g) The amount of the distribution set
forth in paragraph A.1.(c) above
per $1,000 interest in the Notes.....................$--------
(h) The amount of the distribution set
forth in paragraph A.1.(d) above
per $1,000 interest in the Notes.....................$--------
2. Certificates.
(a) The aggregate amount of the
distribution with respect to the
Certificates.........................................$--------
(b) The amount of the distribution set
forth in paragraph A.2.(a) above in
respect of interest on the Certificates...............$-------
(c) The amount of the distribution set
forth in paragraph A.2.(a) above in
respect of principal of the Certificates..............$-------
(d) The amount of the distributions set
forth in paragraph A.2(a) payable
out of amounts withdrawn from the Reserve
Account with respect to the Certificates.............$--------
(e) The amount of the distribution set
forth in paragraph A.2.(a) above
per $1,000 interest in the Certificates..............$--------
(f) The amount of the distribution set
forth in paragraph A.2.(b) above
per $1,000 interest in the Certificates...............$-------
(g) The amount of the distribution set
forth in paragraph A.2.(c) above
per $1,000 interest in the Certificates...............$-------
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(h) The amount of the distribution set
forth in paragraph A.2.(d) above
per $1,000 interest in the Certificates..............$--------
B. Information Regarding the Performance of the Trust.
1. Pool Balance, Note Principal Balance and Certificate Principal Balance.
(a) The Pool Balance at the close of business on
the last day of the Collection Period..............$--------
(b) The Note Balance after
giving effect to payments allocated to
principal as set forth in Paragraph A.1(c)........$--------
(c) The Note Pool Factor after
giving affect to the payments set
forth in paragraph A.1(c).........................$--------
(d) The Certificate Balance after
giving effect to payments allocated to
principal as set forth in Paragraph A.2(c)........$--------
(e) The Certificate Pool Factor after
giving affect to the payments set
forth in paragraph A.2(c).........................$--------
(f) The aggregate Purchase Amount for
all Receivables that were repurchased
in the preceding Collection Period................$--------
(g) The aggregate Payahead Balance on
such Distribution Date............................$--------
(h) The change in the Payahead Balance
from the preceding Distribution Date..............$--------
(i) The amount of Outstanding Advances on such
Distribution Date.................................$--------
(j) The change in Outstanding Advances
from the preceding Distribution Date..............$--------
(k) Total Collections by the Servicer.................$--------
(l) All amounts received by the Trust from
the Servicer......................................$--------
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2. Servicing Fee.
The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Collection Period $--------
3. Payment Shortfalls.
(a) The amount of the Noteholders'
Interest Carryover Shortfall after
giving effect to the payments set forth
in paragraph A.1(b) above...........................$---------
(b) The amount of the Noteholders'
Interest Carryover Shortfall set
forth in paragraph B.3.(a) above per
$1,000 interest with respect to
the Notes:..........................................$----------
(c) The amount of the Certificateholders'
Interest Carryover Shortfall after
giving effect to the payments set forth
in paragraph A.2(b) above...........................$----------
(d) The amount of the Certificateholders'
Interest Carryover Shortfall set
forth in paragraph B.3.(c) above per
$1,000 interest with respect to
the Certificates:...................................$---------
4. Losses and Delinquencies
(a) The change in the aggregate amount
of Cumulative Net Losses from the preceding
Distribution Date...................................$---------
(b) The aggregate amount of Cumulative Net Losses
on the Distribution Date set forth above for
the related Collection Period......................$---------
(c) The Cumulative Net Loss Ratio on the
Distribution Date set forth above...................$---------
(d) The aggregate amount scheduled to
be paid, including unearned finance
and other charges, for which Obligors
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are delinquent 60 days or more.......................$--------
(e) The Delinquency Percentage on the
Distribution Date set forth above....................$--------
5. Reserve Account
(a) The Reserve Account balance as of
the last day of the preceding
Collection Period, including earnings................$--------
(b) Earnings included in above balance...................$--------
(c) Transfer to Reserve Account from
Collection Account on Distribution
Date.................................................$--------
(d) The Reserve Account balance as of
the Distribution Date set forth above
after giving effect to the Collection
Account on such Distribution Date....................$--------
6. Delinquency
(a) Percentage of principal balance of
Receivables delinquent 1 to 30 days.................-------%
(b) Percentage of principal balance of
Receivables delinquent 31 to 60 days................-------%
(c) Percentage of principal balance of
Receivables delinquent 61 to 90 days................-------%
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EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
▇▇▇▇▇▇▇ DEALER FINANCIAL SERVICES, INC.
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is the [title], of ▇▇▇▇▇▇▇
Dealer Financial Services, Inc., a corporation organized under the laws of the
State of Florida ("BDFS") and that as such he is duly authorized to execute and
deliver this certificate on behalf of BDFS pursuant to Section 4.9 of the Sale
and Servicing Agreement, dated as of __________ __, 199_ (the "Agreement") by
and among BDFS as servicer (the "Servicer") and sponsor (the "Sponsor"), ▇▇▇▇▇▇▇
Auto Receivables Corp., as depositor (the "Depositor") and ▇▇▇▇▇▇▇ Auto Trust
199_-_, as issuer (the "Issuer"), (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement), and
further certifies that:
1. The Monthly Securityholder Statement for the period from
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. As of the date hereof, no Servicer Default or event that with
notice or lapse of time or both would become a Servicer Default has occurred.
[If a Servicer Default has occurred, such Servicer Default shall be specified
and its current status reported.]
IN WITNESS WHEREOF, we have affixed hereunto our signatures this
day of, .
▇▇▇▇▇▇▇ DEALER FINANCIAL
SERVICES, INC.
as Servicer
By:----------------------
Name:
Title:
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EXHIBIT C
TERMINATION - AUCTION PROCEDURES
The following sets forth the auction procedures to be followed
in connection with a sale effected pursuant to Section 9.2 of the Sale and
Servicing Agreement (the "Agreement"), dated as of __________ __, 199_ by and
among ▇▇▇▇▇▇▇ Auto Trust 199_-_ (the "Trust"), ▇▇▇▇▇▇▇ Dealer Financial
Services, Inc., as servicer (the "Servicer") and sponsor (the "Sponsor") and
▇▇▇▇▇▇▇ Auto Receivables Corp., as depositor (the "Depositor"). Capitalized
terms used herein that are not otherwise defined shall have the meanings
ascribed thereto in the Agreement. All references herein to "Trustee" shall be
references to ____________, as Indenture Trustee, pursuant to an Indenture,
dated as of __________ __, 199_, between the Trust and the Indenture Trustee.
However, if the Notes have been paid in full, and the Indenture has been
discharged in accordance with its terms, all references herein to "Trustee"
shall be references to the Owner Trustee.
PRE-AUCTION PROCESS
(a) Upon receiving notice of the Auction, the Advisor will
initiate its general Auction procedures consisting of the following:
(i) with the assistance of the Servicer, prepare a general
solicitation package along with a confidentiality agreement; (ii)
derive a list of qualified bidders, in a commercially reasonable
manner; (iii) initiate contact with all qualified bidders; (iv) send a
confidentiality agreement to all qualified bidders; (v) upon receipt
of a signed confidentiality agreement, send solicitation packages to
all interested bidders on behalf of the applicable Trustee; and (vi)
notify the Servicer of all potential bidders and anticipated
timetable.
(b) The general solicitation package will include: (i) the
prospectus from the public offering of the Notes and Certificates;
(ii) a copy of all monthly servicing reports or a copy of all annual
servicing reports and the prior year's monthly servicing reports;
(iii) a form of a Purchase Agreement and Sale and Servicing Agreement;
(iv) a description of the minimum purchase price required to cause the
Trustee to sell the Auction Property as set forth in Section 9.2 of
the Agreement; (v) a formal bidsheet; (vi) a detailed timetable; and
(vii) a preliminary data tape of the Pool Balance as of the related
Distribution Date reflecting the same data attributes used to create
the Cutoff Date tables for the Prospectus Supplement dated ________
__, 199_ relating to the offering of the Notes and Certificates.
(c) The applicable Trustee, with the assistance of the
Servicer and the Advisor, will maintain an auction package beginning
at the time of closing of the transaction, which will contain terms
(i)-(iii) listed in the preceding paragraph. If the Advisor is unable
to perform its role as advisor to the applicable Trustee, the Servicer
acting in its capacity under the Agreement will select a successor
Advisor and inform the applicable Trustee of its actions.
(d) The Advisor will send solicitation packages to all
bidders at least 15 business days before the date of the Auction.
Bidders will be required to submit any due diligence questions in
writing to the Advisor for determination of their relevancy, no later
than 10 business days
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before the date of the Auction. The Servicer and the Advisor
will be required to satisfy all relevant questions at least five
Business Days prior to the date of the Auction and distribute the
questions and answers to all bidders.
AUCTION PROCESS
(a) --------------------, in its role as Advisor to the
applicable Trustee, will be allowed to bid in the Auction, but will
not be required to do so.
(b) The Servicer will also be allowed to bid in the Auction
if it deems appropriate, but will not be required to do so.
(c) On the date of the Auction, all bids will be due by
facsimile to the offices of the applicable Trustee by 1:00 p.m. New
York City time, with the winning bidder to be notified by 2:00 p.m.
New York City time. All acceptable bids (as described in Section 9.2
of the Agreement) will be due on a conforming basis on the bid sheet
contained in the solicitation package.
(d) If the applicable Trustee receives fewer than two market
value bids from participants in the market for motor vehicle retail
installment sale contracts and other motor vehicle installment sale
contracts willing and able to purchase the Auction Property, the
applicable Trustee shall decline to consummate the sale.
(e) Upon notification to the winning bidder, a good faith
deposit equal to one percent (1%) of the Pool Balance will be required
to be wired to the applicable Trustee upon acceptance of the bid. This
deposit, along with any interest income attributable to it, will be
credited to the purchase price but will not be refundable. The
applicable Trustee will establish a separate account for the
acceptance of the good faith deposit, until such time as the account
is fully funded and all monies are transferred into the Collection
Account, such time not to exceed one Business Day before the related
Distribution Date (as described above).
(f) The winning bidder will receive on the date of the
Auction a copy of the draft Purchase Agreement, Sale and Servicing
Agreement and Servicer's Representations and Warranties (which shall
be substantially identical to the representations and warranties set
forth in Section ______ of the Agreement).
(g) ----------------, in its capacity as Advisor to the
applicable Trustee, will provide to the applicable Trustee a letter
concluding whether or not the winning bid is a fair market value bid.
----------------- will also provide such letter if it is the winning
bidder. In the case where ---------- or the Servicer is the winning
bidder it will in its letter provide for market comparable valuations.
(h) The Auction will stipulate that the Servicer be retained
to service the Receivables sold pursuant to the terms of the Purchase
and Sale Agreement and Servicing Agreement.
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