Exhibit 10
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EXECUTION COPY
SALE AND SERVICING AGREEMENT
between
DAIMLERCHRYSLER AUTO TRUST 2003-A
Issuer,
and
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC,
Seller and Servicer
Dated as of August 1, 2003
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ARTICLE I
Definitions
Section 1.01 Definitions............................................................................1
Section 1.02 Other Definitional Provisions.........................................................13
ARTICLE II
Conveyance of Receivables
Section 2.01 Conveyance of Receivables.............................................................14
Section 2.02 Conveyance of Fixed Value Payments and Fixed Value
Finance Charges.......................................................................15
Section 2.03 Fixed Value Securities................................................................15
ARTICLE III
The Receivables
Section 3.01 Representations and Warranties of Seller with Respect to
the Receivables.......................................................................16
Section 3.02 Repurchase upon Breach................................................................19
Section 3.03 Custody of Receivable Files...........................................................20
Section 3.04 Duties of Servicer as Custodian.......................................................20
Section 3.05 Instructions; Authority To Act........................................................21
Section 3.06 Custodian's Indemnification...........................................................21
Section 3.07 Effective Period and Termination......................................................21
Section 3.08 Representations and Warranties as to the Security Interest of
the Issuer in the Receivables.........................................................21
ARTICLE IV
Administration and Servicing of Receivables
Section 4.01 Duties of Servicer....................................................................22
Section 4.02 Collection and Allocation of Receivable Payments......................................23
Section 4.03 Realization upon Receivables..........................................................23
Section 4.04 Physical Damage Insurance.............................................................23
Section 4.05 Maintenance of Security Interests in Financed Vehicles................................24
Section 4.06 Covenants of Servicer.................................................................24
Section 4.07 Purchase of Receivables upon Breach...................................................24
Section 4.08 Servicing Fee.........................................................................24
Section 4.09 Servicer's Certificate................................................................24
Section 4.10 Annual Statement as to Compliance; Notice of Default..................................25
Section 4.11 Annual Independent Certified Public Accountants' Report...............................25
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Section 4.12 Access to Certain Documentation and Information
Regarding Receivables.................................................................26
Section 4.13 Servicer Expenses.....................................................................26
Section 4.14 Appointment of Subservicer............................................................26
ARTICLE V
Distributions; Reserve Account; Statements to Certificateholders and Noteholders
Section 5.01 Establishment of Deposit Account......................................................26
Section 5.02 Collections...........................................................................28
Section 5.03 Application of Collections............................................................28
Section 5.04 Additional Deposits...................................................................29
Section 5.05 Distributions.........................................................................29
Section 5.06 Reserve Account.......................................................................30
Section 5.07 Statements to Noteholders and Certificateholders......................................31
Section 5.08 Net Deposits..........................................................................32
ARTICLE VI
The Seller
Section 6.01 Representations of Seller.............................................................32
Section 6.02 Preservation of Existence.............................................................33
Section 6.03 Liability of Seller; Indemnities......................................................33
Section 6.04 Merger or Consolidation of, or Assumption of Obligations
of, Seller............................................................................34
Section 6.05 Limitation on Liability of Seller and Others..........................................35
Section 6.06 Seller May Own Notes..................................................................35
ARTICLE VII
The Servicer
Section 7.01 Representations of Servicer...........................................................35
Section 7.02 Indemnities of Servicer...............................................................37
Section 7.03 Merger or Consolidation of, or Assumption of Obligations
of, Servicer..........................................................................37
Section 7.04 Limitation on Liability of Servicer and Others........................................38
Section 7.05 DCS Not To Resign as Servicer.........................................................38
ARTICLE VIII
Default
Section 8.01 Servicer Default......................................................................39
Section 8.02 Appointment of Successor..............................................................40
Section 8.03 Notification to Noteholders and Certificateholders....................................41
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Section 8.04 Waiver of Past Defaults...............................................................41
ARTICLE IX
Termination
Section 9.01 Optional Purchase of All Receivables..................................................41
ARTICLE X
Miscellaneous
Section 10.01 Amendment.............................................................................42
Section 10.02 Protection of Title to Trust..........................................................43
Section 10.03 Notices...............................................................................44
Section 10.04 Assignment by the Seller or the Servicer..............................................45
Section 10.05 Limitations on Rights of Others.......................................................45
Section 10.06 Severability..........................................................................45
Section 10.07 Separate Counterparts.................................................................45
Section 10.08 Headings..............................................................................45
Section 10.09 Governing Law.........................................................................46
Section 10.10 Assignment by Issuer..................................................................46
Section 10.11 Nonpetition Covenants.................................................................46
Section 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee........................46
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Schedule of YSOA
EXHIBIT A Form of Distribution Statement to Noteholders........................................A-1
EXHIBIT B Form of Servicer's Certificate.......................................................B-1
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SALE AND SERVICING AGREEMENT dated as of August 1, 2003, between
DAIMLERCHRYSLER AUTO TRUST 2003-A, a Delaware statutory trust (the
"Issuer"), and DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC, a Michigan
limited liability company, as seller and servicer.
WHEREAS the Issuer desires to purchase a portfolio of receivables arising
in connection with automobile retail installment sale contracts generated by
DaimlerChrysler Services North America LLC in the ordinary course of business;
and
WHEREAS DaimlerChrysler Services North America LLC is willing to sell
such receivables to, and to service such receivables on behalf of, the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
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Section 1.01 Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Amortizing Payment" means, with respect to each Fixed Value Receivable
and each Collection Period prior to the date on which the Fixed Value Payment
relating to such Receivable is due, the amount specified in the applicable
Contract in the payment schedule as the "Amount of Each Payment", except that
in the case of a prepayment, liquidation or repurchase by the Seller or
purchase by the Servicer, the Amortizing Payment shall be equal to the
aggregate "Amount of Each Payment" that has not yet been paid for the period
through and including the last payment prior to the date when the Fixed Value
Payment is due less the amount of the unearned finance charges under the
related Contract allocable to such amount in accordance with the Servicer's
customary procedures.
"Amortizing Payment Finance Charge" means, with respect to each payment
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary procedures)
that is allocable to the related Principal Balance.
"Amount Financed" means (i) with respect to a Standard Receivable, the
amount advanced under such Standard Receivable toward the purchase price of
the Financed Vehicle and any related costs and (ii) with respect to a Fixed
Value Receivable, an amount equal to the present value of the fixed level
payment monthly installments (not including the amount designated as the Fixed
Value Payment) under such Fixed Value Receivable, assuming that each payment
is made on the due date in the month in which such payment is due, discounted
at the APR for such Fixed Value Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the related Contract.
"Basic Documents" means the Indenture, the Trust Agreement, the
Administration Agreement and the Purchase Agreement.
"Cash Release Amount" means on each Payment Date on and after the First
Release Payment Date, the greater of:
(i) the lesser of (a) D - [S - (P x 96.25%)] or (b) D minus the
outstanding principal balance of the Class A-1 Notes immediately prior to
such Payment Date
or
(ii) $0.00
where
D = the sum of (a) principal collections and principal payments
contained in the Total Distribution Amount for such Payment Date and
(b) the excess, if any, of (x) the interest collections, interest
payments and investment earnings contained in such Total
Distribution Amount over (y) the sum of (A) the Servicing Fee for
such Payment Date and any unpaid Servicing Fees for prior Payment
Dates, (B) accrued and unpaid interest on the Notes and (C) the
amount, if any, required to be deposited into the Reserve Account
pursuant to Section 5.05(a)(ii)(B);
S = the sum of the aggregate Outstanding Amount of the Notes and the
Certificate Balance before giving effect to payments made on the
Notes and Certificates on such Payment Date;
P = the Related Pool Balance minus the YSOA for such Payment Date.
"Certificate Balance" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificates" has the meaning assigned to such term in the Trust
Agreement.
"Class" means any one of the classes of Notes.
"Class A-1 Final Scheduled Payment Date" means August 9, 2004.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is
registered in the Note Register.
"Class A-2 Final Scheduled Payment Date" means December 8, 2005.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is
registered in the Note Register.
"Class A-3 Final Scheduled Payment Date" means November 8, 2006.
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"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is
registered in the Note Register.
"Class A-4 Final Scheduled Payment Date" means October 8, 2009.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is
registered in the Note Register.
"Collection Period" means a calendar month (or in the case of the first
Collection Period, the period from August 1, 2003 to and including August 31,
2003). The "related Collection Period" for a Payment Date is the Collection
Period ending immediately prior to such Payment Date. Unless otherwise
specified, any amount stated as of the last day of a Collection Period or as
of the first day of a Collection Period shall give effect to the following
calculations as determined as of the close of business on such last day: (1)
all applications of collections, and (2) all distributions to be made on the
related Payment Date.
"Company" means DaimlerChrysler Retail Receivables LLC, a Michigan
limited liability company, and any successor in interest or, if the Rights (as
defined in the Purchase Agreement) have been assigned to a Person that becomes
a transferee in accordance with Section 5.05 of the Purchase Agreement, such
transferee Person and any successor in interest.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Structured Finance, DCAT 2003-A; or at such other address as the Indenture
Trustee may designate from time to time by notice to the Noteholders and the
Seller, or the principal corporate trust office of any successor Indenture
Trustee (of which address such successor Indenture Trustee will notify the
Noteholders and the Seller).
"Cutoff Date" means August 1, 2003.
"DCS" means DaimlerChrysler Services North America LLC, a Michigan
limited liability company, or its successors.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
and assigned the related Receivable to DCS under an existing agreement between
such dealer and DCS.
"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 Indenture
Trustee or its nominee or custodian by physical delivery to the Indenture
Trustee or its nominee or custodian endorsed to, or registered in the
name of, the Indenture Trustee or its nominee or custodian or endorsed in
blank, and, with respect to a certificated security (as defined in
Section 8-102 of the UCC) transfer
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thereof (i) by delivery of such certificated security endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank to a securities intermediary (as defined
in Section 8-102 of the UCC) and the making by such securities
intermediary of entries on its books and records identifying such
certificated securities (as defined in Section 8-102 of the UCC) of the
Indenture Trustee or its nominee or custodian or (ii) by delivery thereof
to a "clearing corporation" (as defined in Section 8-102 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 securities
intermediary by the amount of such certificated security, the
identification by the clearing corporation on its books and records that
the certificated securities are credited to the sole and exclusive
securities account of the securities intermediary, the maintenance of
such certificated securities by such clearing corporation or a custodian
or the nominee of such clearing corporation subject to the clearing
corporation's exclusive control, and the making by such securities
intermediary of entries on its books and records identifying such
certificated securities as being credited to the securities account of
the Indenture Trustee or its nominee or custodian (all of the foregoing,
"Physical Property"), and, in any event, any such Physical Property in
registered form shall be in the name of the Indenture Trustee or its
nominee or custodian; and such additional or alternative procedures as
may hereafter become appropriate to effect the complete transfer of
ownership of any such Trust Account Property (as defined herein) to the
Indenture 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 are book-entry securities 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 securities
intermediary which is also a "depository" pursuant to applicable Federal
regulations; the identification by the Federal Reserve Bank of such
book-entry securities on its record being credited to the securities
intermediary's securities account; the making by such securities
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 being credited to the Indenture
Trustee's securities account; and such additional or alternative
procedures as may hereafter become appropriate to effect complete
transfer of ownership of any such Trust Account Property to the Indenture
Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not
governed by clause (a) above, registration on the books and records of
the issuer thereof in the name of the securities intermediary, the
sending of a confirmation by the securities intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such securities intermediary of
entries on its books and records identifying
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such uncertificated certificates as belonging to the Indenture Trustee or
its nominee or custodian.
"Deposit Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a)(i).
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories that
signifies investment grade.
"Eligible Institution" means (a) a depository institution organized under
the laws of the United States of America or any one of the states thereof or
the District of Columbia (or any domestic branch of a foreign bank), which (i)
has either (A) a long-term unsecured debt rating of "AAA" or better by
Standard & Poor's and "A1" or better by Moody's or (B) a certificate of
deposit rating of "A-1+" by Standard & Poor's and "P-1" or better by Moody's,
or any other long-term, short-term or certificate of deposit rating acceptable
to the Rating Agencies and (ii) whose deposits are insured by the FDIC or (b)
the corporate trust department of the Indenture Trustee, the Owner Trustee or
JPMorgan Chase Bank. If so qualified, the Indenture Trustee, the Owner Trustee
or JPMorgan Chase Bank may be considered an Eligible Institution for the
purposes of clause (a) of this definition.
"Eligible Investments" means 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
the full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of
the United States of America or any state thereof (or any domestic branch
of a foreign bank) and subject to supervision and examination by Federal
or State banking or depository institution authorities; provided,
however, that at the time of the investment or contractual commitment to
invest therein, the commercial paper or other short-term 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) thereof shall have a credit rating from each of the Rating
Agencies in the highest applicable rating category granted thereby;
(c) commercial paper, variable amount notes or other short term debt
obligations having, at the time of the investment or contractual
commitment to invest therein, a rating from each of the Rating Agencies
in the highest applicable rating category granted thereby;
(d) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest applicable rating
category granted thereby
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(including funds for which the Indenture Trustee or the Owner Trustee or
any of their respective Affiliates is investment manager or advisor);
(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) described in clause (b);
(g) repurchase obligations with respect to any security or whole
loan, entered into with (i) a depository institution or trust company
(acting as principal) described in clause (b) above (except that the
rating referred to in the proviso in such clause (b) shall be "A-1" or
higher in the case of Standard & Poor's) (such depository institution or
trust company being referred to in this definition as a "financial
institution"), (ii) a broker/dealer (acting as principal) registered as a
broker or dealer under Section 15 of the Exchange Act (a "broker/dealer")
the unsecured short-term debt obligations of which are rated "P-1" by
Moody's and at least "A-1" by Standard & Poor's at the time of entering
into such repurchase obligation (a "rated broker/dealer"), (iii) an
unrated broker/dealer (an "unrated broker/dealer"), acting as principal,
that is a wholly-owned subsidiary of a non-bank holding company the
unsecured short-term debt obligations of which are rated "P-1" by Moody's
and at least "A-1" by Standard & Poor's at the time of entering into such
repurchase obligation (a "Rated Holding Company") or (iv) an unrated
subsidiary (a "Guaranteed Counterparty"), acting as principal, that is a
wholly-owned subsidiary of a direct or indirect parent Rated Holding
Company, which guarantees such subsidiary's obligations under such
repurchase agreement; provided that the following conditions are
satisfied:
(A) the aggregate amount of funds invested in repurchase
obligations of a financial institution, a rated broker/dealer, an
unrated broker/dealer or Guaranteed Counterparty in respect of which
the Standard & Poor's unsecured short-term ratings are "A-1" (in the
case of an unrated broker/dealer or Guaranteed Counterparty, such
rating being that of the related Rated Holding Company) shall not
exceed 20% of the sum of the then outstanding principal balance of
the Notes (there being no limit on the amount of funds that may be
invested in repurchase obligations in respect of which such Standard
& Poor's rating is "A-1+" (in the case of an unrated broker/dealer
or Guaranteed Counterparty, such rating being that of the related
Rated Holding Company));
(B) in the case of the amount allocated to the Reserve Account,
the rating from Standard & Poor's in respect of the unsecured
short-term debt obligations of the financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty (in
the case of an unrated broker/dealer or Guaranteed Counterparty,
such rating being that of the related Rated Holding Company) shall
be "A-1+";
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(C) the repurchase obligation must mature within 30 days of the
date on which the Indenture Trustee or the Issuer, as applicable,
enters into such repurchase obligation;
(D) the repurchase obligation shall not be subordinated to any
other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on behalf of the
Indenture Trustee or the Issuer, as applicable;
(F) the repurchase obligation shall require that the collateral
subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(i) the Indenture Trustee or the Issuer, as applicable,
shall have received an opinion of counsel (which may be
in-house counsel) to the effect that the guarantee of the
related Rated Holding Company is a legal, valid and binding
agreement of the Rated Holding Company, enforceable in
accordance with its terms, subject as to enforceability to
bankruptcy, insolvency, reorganization and moratorium or other
similar laws affecting creditors' rights generally and to
general equitable principles;
(ii) the Indenture Trustee or the Issuer, as applicable,
shall have received (x) an incumbency certificate for the
signer of such guarantee, certified by an officer of such Rated
Holding Company and (y) a resolution, certified by an officer
of the Rated Holding Company, of the board of directors (or
applicable committee thereof) of the Rated Holding Company
authorizing the execution, delivery and performance of such
guarantee by the Rated Holding Company;
(iii) the only conditions to the obligation of such Rated
Holding Company to pay on behalf of the Guaranteed Counterparty
shall be that the Guaranteed Counterparty shall not have paid
under such repurchase obligation when required (it being
understood that no notice to, demand on or other action in
respect of the Guaranteed Counterparty is necessary) and that
the Indenture Trustee or the Issuer shall make a demand on the
Rated Holding Company to make the payment due under such
guarantee;
(iv) the guarantee of the Rated Holding Company shall be
irrevocable with respect to such repurchase obligation and
shall not be subordinated to any other obligation of the Rated
Holding Company; and
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(v) each of Standard & Poor's and Moody's has confirmed in
writing to the Indenture Trustee or Issuer, as applicable, that
it has reviewed the form of the guarantee of the Rated Holding
Company and has determined that the issuance of such guarantee
will not result in the downgrade or withdrawal of the ratings
assigned to the Notes.
(H) the repurchase obligation shall require that the repurchase
obligation be overcollateralized and shall provide that, upon any
failure to maintain such overcollateralization, the repurchase
obligation shall become due and payable, and unless the repurchase
obligation is satisfied immediately, the collateral subject to the
repurchase agreement shall be liquidated and the proceeds applied to
satisfy the unsatisfied portion of the repurchase obligation;
(h) any other investment with respect to which the Issuer or the
Servicer has received written notification from the Rating Agencies that
the acquisition of such investment as an Eligible Investment will not
result in a withdrawal or downgrading of the ratings on the Notes.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Maturity Date" means August 1, 2009.
"Financed Vehicle" means an automobile or light-duty truck, together with
all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable or Fixed Value Receivable.
"First Release Payment Date" means the Payment Date on which the Class
A-1 Notes have been paid in full.
"Fitch" means Fitch, Inc., or its successor.
"Fixed Value Finance Charge" means, with respect to each payment
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary procedures)
that is allocable to the related Fixed Value Payment.
"Fixed Value Payment" means, with respect to each Fixed Value Receivable,
the amount specified on the applicable Contract as the "Amount of Fixed Value
Payment" reduced (i) in the case of a prepayment or repurchase, by the amount
of the unearned finance charges under the Contract allocable to such payment
in accordance with the Servicer's customary procedures and (ii) in the case of
a liquidation, by the excess of Liquidation Proceeds collected by the Servicer
over the Amortizing Payment on such date.
"Fixed Value Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that provides for amortization of
the loan over a series of fixed level payment monthly installments in
accordance with the simple interest method, but also requires a final payment
that is greater than the scheduled monthly payments and is due after payment
of such scheduled monthly payments and that may be made by (i) payment in full
in cash of a fixed value amount, (ii) return of the Financed Vehicle to the
Servicer provided certain
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conditions are satisfied or (iii) refinancing the final fixed value payment in
accordance with specified conditions. No Fixed Value Receivables will be
transferred to the Trust.
"Fixed Value Securities" has the meaning assigned to such term in Section
2.03.
"Indenture" means the Indenture dated as of August 1, 2003, between the
Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Overcollateralization Amount" means $53,237,764.65.
"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, 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.
"Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses), if any, on
amounts on deposit in the Deposit Account to be applied on such Payment Date
pursuant to Section 5.01(b).
"Issuer" means DaimlerChrysler Auto Trust 2003-A.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the Servicer
through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated Receivable,
the moneys collected in respect thereof, from whatever source 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.
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"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by the chairman of the
board, any vice president, the controller or any assistant controller, the
president, a treasurer, assistant treasurer, secretary or assistant secretary
of the Seller, the Company or the Servicer, as appropriate.
"OMSC Receivable" means any Standard Receivable acquired by DCS from the
Overseas Military Sales Corporation, or its successor.
"Opinion of Counsel" means one or more written opinions of counsel, who
may be an employee of or counsel to the Seller, the Company or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee
or the Rating Agencies, as applicable.
"Original Pool Balance" means $1,910,004,660.84.
"Overcollateralization Amount" means, with respect to any Payment Date,
(i) the Related Pool Balance minus (ii) the Securities Amount minus (iii) the
YSOA.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under
the Trust Agreement.
"Payment Date" means, with respect to each Collection Period, the eighth
day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on September 8, 2003.
"Payment Determination Date" means, with respect to any Payment Date, the
Business Day immediately preceding such Payment Date.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of
such day (excluding Purchased Receivables and Liquidated Receivables).
"Principal Balance" of a Receivable, as of the close of business on any
date of determination, means the Amount Financed minus the sum of (i) the
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 (ii) the principal portion of the Purchase Amount paid with respect to the
Receivable.
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"Purchase Agreement" means the Purchase Agreement dated as of August 1,
2003, between the Seller and the Company.
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full a Receivable under
the terms thereof including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or by the Seller pursuant to Section 3.02.
"Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer. Any notice required to be given to a
Rating Agency pursuant to this Agreement shall also be given to Fitch,
although Fitch shall not be deemed to be a Rating Agency for any purposes of
this Agreement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall
be acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Company, the Servicer, the
Owner Trustee and the Indenture Trustee in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable.
"Receivable Files" means the documents specified in Section 3.03.
"Related Pool Balance" means, with respect to any Payment Date, the Pool
Balance as of the end of the related Collection Period.
"Reserve Account" means the account that is part of the Deposit Account
and is designated as such, established and maintained pursuant to Section
5.01.
"Reserve Account Initial Deposit" means the initial deposit of cash and
Eligible Investments in the amount of $4,442,000 made by the Seller into the
Deposit Account on the Closing Date.
"Securities Amount" means, with respect to any Payment Date, the sum of
the aggregate Outstanding Amount of the Notes and the Certificate Balance
after giving effect to payments of principal made on the Notes and payments
pursuant to Section 5.05(a)(ii)(E) made on the Certificates on such Payment
Date.
"Seller" means DCS and its successors in interest to the extent permitted
hereunder.
"Servicer" means DCS, as the servicer of the Receivables, and each
successor to DCS (in the same capacity) pursuant to Section 7.03 or 8.02.
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"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means a certificate of the Servicer delivered
pursuant to Section 4.09, substantially in the form of Exhibit B.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.
"Servicing Fee Rate" means 1/12 of 1.00%.
"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 a
fraction, the numerator of which is the number of days elapsed since the
preceding payment of interest was made, the denominator of which is 365, and
the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
"Specified Reserve Amount" means, with respect to any Payment Date, an
amount equal to the Reserve Account Initial Deposit.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"Standard Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that is not a Fixed Value
Receivable.
"Total Distribution Amount" means, for any Payment Date and the
Collection Period preceding such Payment Date, the sum of the following
amounts, without duplication: (a) all collections on Receivables (including
payments relating to refunds of extended warranty protection plan costs or of
physical damage, credit life or disability insurance policy premiums, but only
to the extent that such costs or premiums were financed by the respective
obligor as of the date of the related Contract), (b) all Liquidation Proceeds
of Receivables that became Liquidated Receivables in accordance with the
Servicer's customary servicing procedures, (c) the Purchase Amount of each
Receivable that became a Purchased Receivable in such Collection Period and
(d) Investment Earnings deposited in the Deposit Account during such
Collection Period.
"Trust" means the Issuer.
"Trust Account Property" means the Deposit Account, all amounts and
investments held from time to time in the Deposit 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.
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"Trust Agreement" means the Amended and Restated Trust Agreement dated as
of August 1, 2003, among the Seller, the Company and the Owner Trustee.
"Trust Officer" means, in the case of the Indenture Trustee, any Officer
within the Corporate Trust Office of the Indenture Trustee, including any Vice
President, Assistant Vice President, Secretary, Assistant Secretary or any
other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
"YSOA" means, with respect to a Payment Date, the dollar amount set forth
opposite such Payment Date in Schedule YSOA.
Section 1.02 Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement 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 certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such 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 certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; Article, Section, Schedule and
Exhibit references contained in this Agreement are references to Articles,
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.
(f) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
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(g) For all purposes of this Agreement and the Basic Documents, interest
with respect to all Classes of Notes other than the Class A-1 Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months;
and interest with respect to the Class A-1 Notes shall be computed on the
basis of the actual number of days in each applicable Class A-1 Interest
Accrual Period divided by 360.
ARTICLE II
Conveyance of Receivables
-------------------------
Section 2.01 Conveyance of Receivables. In consideration of the Issuer's
delivery to or upon the order of the Seller of (x) $1,261,866,732.00 (which
amount represents the Original Pool Balance less (i) the Reserve Account
Initial Deposit, (ii) the Initial Overcollateralization Amount, (iii) the
initial YSOA, (iv) the Class A-1 Principal Balance, (v) the initial
Certificate Balance and (vi) certain other discounts and expenses of the
Issuer), and (y) the Certificates, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Issuer, without recourse (subject
to the obligations of the Seller set forth herein), all right, title and
interest of the Seller in and to:
(a) the Receivables and all moneys received thereon on and after
August 1, 2003;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Seller
in such Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims on any
physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors;
(d) any proceeds from recourse to Dealers with respect to
Receivables with respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual payment
in full is unlikely;
(e) any Financed Vehicle that shall have secured a Receivable and
shall have been acquired by or on behalf of the Seller, the Servicer, the
Company or the Trust;
(f) all funds on deposit from time to time in the Deposit Account,
including the Reserve Account Initial Deposit, and in all investments and
proceeds thereof (including all income thereon); and
(g) the proceeds of any and all of the foregoing.
The Seller hereby directs the Issuer to issue the Certificates to
the Company. The Seller and the Issuer acknowledge that $450,000,000 of
the purchase price of the Receivables owed by the Issuer to the Seller
pursuant to this Section 2.01 (which amount
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is not included in the first sentence of Section 2.01) shall be offset by
the Issuer against delivery of the Class A-1 Notes to the order of the
Seller.
Section 2.02 Conveyance of Fixed Value Payments and Fixed Value Finance
Charges. Promptly following the transfer to the Issuer of the Receivables on
the Closing Date, the Issuer shall, without further action hereunder, be
deemed to sell, transfer, assign, set over and otherwise convey to the Seller,
effective as of the Closing Date, without recourse, representation or
warranty, all the right, title and interest of the Issuer in and to the Fixed
Value Payments and the Fixed Value Finance Charges, if any, all monies due and
to become due and all amounts received with respect thereto and all proceeds
thereof, subject to Section 5.03(b).
Section 2.03 Fixed Value Securities. (a) At any time after the Closing
Date, at the option of the Seller and upon 10 days prior notice to the Owner
Trustee and the Indenture Trustee, the Seller will be permitted to sell to the
Issuer, and the Issuer shall be obligated to purchase from the Seller (subject
to the availability of funds), all or any portion of the Fixed Value Payments
and/or Fixed Value Finance Charges, if any, subject to the terms and
conditions described below. Upon any such sale, (x) the Seller and the Owner
Trustee will enter into an amendment to this Agreement and the Basic Documents
to provide for, at the election of the Seller, the issuance of certificates
representing ownership interests in the Trust to the extent of such Fixed
Value Payments and/or Fixed Value Finance Charges or the issuance of
indebtedness by the Issuer secured by such Fixed Value Payments (collectively,
the "Fixed Value Securities") and to make any other provisions herein or
therein that are necessary or desirable in connection therewith and (y) the
Owner Trustee will enter into any other agreements or instruments related
thereto as requested by the Seller; provided, however, that the Owner Trustee
may, but shall not be obligated to, enter into any such amendment, agreement
or instrument that affects the Owner Trustee's own rights, duties or
immunities under this Agreement or any other Basic Document; and provided,
further, that the obligation of the Issuer to purchase such Fixed Value
Payments and/or Fixed Value Finance Charges and of the Owner Trustee to enter
into any such amendment or other agreement or instrument is subject to the
following conditions precedent:
(i) such amendment and other agreements and instruments, in forms
satisfactory to the Owner Trustee and, in the case of amendments or
agreements to be executed and delivered by the Indenture Trustee, in
forms satisfactory to the Indenture Trustee, shall have been executed by
each other party thereto and delivered to the Owner Trustee or the
Indenture Trustee as appropriate;
(ii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel to
the effect that each condition precedent (including the requirement with
respect to all required filings) provided by this Section has been
complied with and such amendment or other agreement or instrument is
authorized or permitted by this Agreement;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such sale and issuance;
(iv) such sale and issuance and such amendment or other agreement or
instrument shall not adversely affect in any material respect the
interest of any
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Noteholder or Certificateholder, and the Seller shall have provided to
the Owner Trustee and the Indenture Trustee an Officer's Certificate to
such effect;
(v) the Owner Trustee and the Indenture Trustee shall have received
an Opinion of Counsel to the effect that such sale and issuance will not
have any material tax consequence to any Noteholder or Certificateholder;
and
(vi) all filings and other actions required to continue the first
perfected interest of the Trust in the Owner Trust Estate and the
Indenture Trustee in the Collateral shall have been duly made or taken by
the Seller.
(b) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments and
Fixed Value Finance Charges other than to the Issuer pursuant to paragraph
(a).
ARTICLE III
The Receivables
---------------
Section 3.01 Representations and Warranties of Seller with Respect to the
Receivables. The Seller makes the following representations and warranties as
to the Receivables on which the Issuer is deemed to have relied in acquiring
the Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement and as of the Closing Date, but shall survive
the sale, transfer and assignment of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. Each Standard Receivable and
Fixed Value Receivable (A) was originated in the United States of America
by a Dealer for the retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business, was fully and properly executed by the
parties thereto, was purchased by the Seller from such Dealer under an
existing dealer agreement, (B) has created or shall create a valid,
subsisting and enforceable first priority security interest in favor of
the Seller and is assignable by the Seller to the Issuer and by the
Issuer to the Indenture Trustee, (C) contains customary and enforceable
provisions such that the rights and remedies of the holder thereof are
adequate for realization against the collateral of the benefits of the
security, and (D) generally provides for level monthly payments
(provided, that the payment in the first or last month in the life of the
Standard Receivable or Fixed Value Receivable may be minimally different
from the level payments and that the payment in the last month of a Fixed
Value Receivable may be a Fixed Value Payment) that fully amortize the
Amount Financed by maturity and yield interest at the Annual Percentage
Rate. No Receivable conveyed to the Issuer on the Closing Date is an OMSC
Receivable or has forced-placed physical damage insurance.
(b) 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 applicable Cutoff Date, and no selection
procedures believed to be adverse to the Noteholders or
Certificateholders were utilized in selecting the Receivables. The
16
computer tape or other listing regarding the Standard Receivables and the
Fixed Value Receivables made available to the Issuer and its assigns
(which computer tape or other listing is required to be delivered as
specified herein) is true and correct in all respects.
(c) Compliance with Law. Each Standard Receivable and Fixed Value
Receivable and the sale of the Financed Vehicle complied at the time it
was originated or made and, at the execution of this Agreement, 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 Texas Consumer Credit Code and
State adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(d) Binding Obligation. Each Standard Receivable and Fixed Value
Receivable represents the genuine, legal, valid and binding payment
obligation in writing of the Obligor, enforceable by the holder thereof
in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables or Fixed
Value 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.
(f) Security Interest in Financed Vehicle. Immediately prior to the
sale, assignment and transfer thereof, each Standard Receivable and Fixed
Value Receivable shall be secured by a validly perfected first security
interest in the Financed Vehicle in favor of the Seller as secured party
or all necessary and appropriate actions have been commenced that would
result in the valid perfection of a first security interest in the
Financed Vehicle in favor of the Seller as secured party.
(g) Receivables in Force. No Standard Receivable or Fixed Value
Receivable has been satisfied, subordinated or rescinded, nor has any
Financed Vehicle been released from the lien granted by the related
Standard Receivable or Fixed Value Receivable in whole or in part.
(h) No Amendments. No Standard Receivable or Fixed Value Receivable
has been amended such that the amount of the Obligor's scheduled payments
has been increased.
(i) No Waiver. No provision of a Standard Receivable or Fixed Value
Receivable has been waived.
(j) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Standard
Receivable or Fixed Value Receivable.
(k) No Liens. To the best of the Seller's knowledge, no liens or
claims have been filed for work, labor or materials relating to a
Financed Vehicle that are liens prior
17
to, or equal to or coordinate with, the security interest in the Financed
Vehicle granted by any Standard Receivable or Fixed Value Receivable.
(l) No Default. No Standard Receivable or Fixed Value Receivable has
a payment that is more than 30 days overdue as of the related Cutoff
Date, and, except as permitted in this paragraph, no default, breach,
violation or event permitting acceleration under the terms of any
Standard Receivable or Fixed Value Receivable has occurred; and no
continuing condition that with notice or the lapse of time would
constitute a default, breach, violation or event permitting acceleration
under the terms of any Standard Receivable or Fixed Value Receivable has
arisen; and the Seller has not waived and shall not waive any of the
foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that, at the origination of the Standard
Receivable or Fixed Value Receivable, the Obligor had obtained physical
damage insurance covering the Financed Vehicle and under the terms of the
Standard Receivable and Fixed Value Receivable the Obligor is required to
maintain such insurance.
(n) Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Standard
Receivables and Fixed Value Receivables from the Seller to the Issuer and
that the beneficial interest in and title to the Standard Receivables and
Fixed Value Receivables not be part of the debtor's estate in the event
of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No Standard Receivable or Fixed Value Receivable has been
sold, transferred, assigned or pledged by the Seller to any Person other
than the Issuer. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Standard
Receivable and Fixed Value Receivable free and clear of all Liens,
encumbrances, security interests and rights of others and, immediately
upon the transfer thereof, the Issuer shall have good and marketable
title to each Standard Receivable and Fixed Value Receivable, free and
clear of all Liens, encumbrances, security interests and rights of
others; and the transfer has been perfected under the UCC.
(o) Lawful Assignment. No Standard Receivable or Fixed Value
Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer and assignment of such
Standard Receivable or Fixed Value Receivable or any Receivable under
this Agreement or the Indenture is unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings) necessary
in any jurisdiction to give the Issuer a first perfected ownership
interest in the Standard Receivable and Fixed Value Receivables, and to
give the Indenture Trustee a first perfected security interest therein,
shall have been made.
(q) One Original. There is only one original executed copy of each
Standard Receivable and Fixed Value Receivable.
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(r) Maturity of Receivables. Each Standard Receivable and Fixed
Value Receivable has a final maturity date before August 1, 2009.
(s) Scheduled Payments. (A) Each Standard Receivable and Fixed Value
Receivable has a first scheduled due date on or prior to the end of the
month following the related Cutoff Date and (B) no Standard Receivable or
Fixed Value Receivable has a payment that is more than 30 days overdue as
of the related Cutoff Date, and has a final scheduled payment date no
later than the Final Scheduled Maturity Date.
(t) Location of Receivable Files. The Receivable Files are kept at
one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable or Fixed Value Receivable shall be no later than the
Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable and
Fixed Value Receivable has an outstanding principal balance of at least
$1,000.00.
(w) No Bankruptcies. No Obligor on any Standard Receivable or Fixed
Value Receivable as of the related Cutoff Date was noted in the related
Receivable File as the subject of a bankruptcy proceeding.
(x) No Repossessions. No Financed Vehicle securing any Standard
Receivable or Fixed Value Receivable is in repossession status.
(y) Chattel Paper. Each Standard Receivable and Fixed Value
Receivable constitutes "chattel paper" as defined in the UCC.
(z) Agreement. The representations of the Seller in Section 6.01 are
true and correct.
(aa) Financing. As of the Cutoff Date, approximately 81.85% of the
aggregate principal balance of the Receivables, constituting
approximately 76.02% of the number of Receivables, represents new
vehicles; approximately all of the Receivables are Simple Interest
Receivables; and none of the Receivables are Fixed Value Receivables. The
aggregate principal balance of the Receivables, as of the Cutoff Date is
$1,910,004,660.84.
Section 3.02 Repurchase upon Breach. The Seller, the Servicer or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery
of any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such breach shall have been cured by the last
day of the second Collection Period following the discovery thereof by the
Owner Trustee or receipt by the Owner Trustee of written notice from the
Seller or the Servicer of such breach, the Seller shall be obligated to
repurchase any Receivable materially and adversely affected by any such breach
as of such last day (or, at the Seller's option, the last day of the first
Collection Period following the discovery). In consideration of the repurchase
of any such
19
Receivable, the Seller shall remit the Purchase Amount, in the manner
specified in Section 5.04. Subject to the provisions of Section 6.03, the sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Seller to repurchase
Receivables pursuant to this Section, subject to the conditions contained
herein.
Section 3.03 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original of the Standard Receivable or Fixed
Value Receivable;
(b) the original credit application fully executed by the Obligor;
(c) the original certificate of title or such documents that the
Servicer or the Seller shall keep on file, in accordance with its
customary procedures, evidencing the security interest of the Seller in
the Financed Vehicle; and
(d) any and all other documents that the Servicer or the Seller
shall keep on file, in accordance with its customary procedures, relating
to a Standard Receivable or Fixed Value Receivable, an Obligor or a
Financed Vehicle.
Section 3.04 Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer 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 Indenture Trustee to verify the accuracy of the Servicer's
record keeping. The Servicer shall promptly report to the Issuer and the
Indenture Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records and computer systems as herein provided and
shall promptly take appropriate action to remedy any such failure. Nothing
herein shall be deemed to require an initial review or any periodic review by
the Issuer or the Indenture Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B or at such
other office as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Issuer and the Indenture Trustee or
20
their respective duly authorized representatives, attorneys or auditors a list
of locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal
business hours as the Issuer or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Indenture Trustee,
the Servicer shall release any Receivable File to the Indenture Trustee, the
Indenture Trustee's agent or the Indenture Trustee's designee, as the case may
be, at such place or places as the Indenture Trustee may designate, as soon as
practicable.
Section 3.05 Instructions; Authority To Act. The Servicer shall be deemed
to have received proper instructions with respect to the Receivable Files upon
its receipt of written instructions signed by a Trust Officer of the Indenture
Trustee.
Section 3.06 Custodian's Indemnification. The Servicer as custodian shall
indemnify the Trust, the Owner Trustee and the Indenture Trustee and each of
their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or
asserted against the Trust, the Owner Trustee or the Indenture Trustee or any
of their respective 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; provided,
however, that the Servicer shall not be liable to 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 Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.
Section 3.07 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 DCS
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 8.01, the appointment of such Servicer as custodian
shall be terminated by the Indenture 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, in the same manner as
the Indenture Trustee or such Holders may terminate the rights and obligations
of the Servicer under Section 8.01. The Indenture Trustee or, with the consent
of the Indenture 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. As soon as practicable after any termination of such
appointment, the Servicer shall deliver the Receivable Files to the Indenture
Trustee or the Indenture Trustee's agent at such place or places as the
Indenture Trustee may reasonably designate.
Section 3.08 Representations and Warranties as to the Security Interest
of the Issuer in the Receivables. The Seller makes the following
representations and warranties to the Issuer.
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The representations and warranties speak as of the execution and delivery of
this Agreement and as of the Closing Date, and shall survive the sale of the
Trust Estate to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) This Agreement creates a valid and continuing security interest (as
defined in the UCC) in the Receivables in favor of the Trust, which security
interest is prior to all other Liens, and is enforceable as such as against
creditors of and purchasers from the Seller.
(b) The Receivables constitute "chattel paper" within the meaning of
Article 9 of the UCC.
(c) The Seller owns and has good and marketable title to the Receivables
free and clear of any lien, claim or encumbrance of any Person.
(d) The Seller has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Receivables granted to the Issuer hereunder.
(e) Other than the security interest granted to the Issuer pursuant to
this Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The Seller has not
authorized the filing of and is not aware of any financing statements against
the Seller that include a description of collateral covering the Receivables
other than any financing statement relating to the security interest granted
to the Seller hereunder or that has been terminated. The Seller is not aware
of any judgment or tax lien filings against it.
(f) The Servicer as custodian for the Issuer has in its possession all
original copies of the contracts that constitute or evidence the Receivables.
The contracts that constitute or evidence the Receivables do not have any
marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Issuer.
ARTICLE IV
Administration and Servicing of Receivables
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Section 4.01 Duties of Servicer. The Servicer, for the benefit of 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 to Obligors,
reporting tax information to Obligors, accounting for collections and
furnishing monthly and annual statements to the Owner Trustee and the
Indenture Trustee with respect to distributions. Subject to the provisions of
Section 4.02, 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
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Indenture 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
Indenture 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 to enable the Servicer to carry out its servicing and
administrative duties hereunder.
Section 4.02 Collection and Allocation of Receivable Payments. 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. The Servicer may grant extensions, rebates or adjustments on a
Standard Receivable or Fixed Value Receivable; provided, however, that if the
Servicer extends the date for final payment by the Obligor of any Receivable
beyond the Final Scheduled Maturity Date, it shall promptly repurchase the
Standard Receivable or Fixed Value Receivable from the Issuer in accordance
with the terms of Section 4.07. 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 Standard Receivable or Fixed Value Receivable. The
Servicer shall not agree to any alteration of the interest rate or the
originally scheduled payments on any Standard Receivable or Fixed Value
Receivable.
Section 4.03 Realization upon Receivables. On behalf of the Issuer, the
Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. The Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable in
its servicing of automotive receivables, which may include reasonable efforts
to realize upon any recourse to Dealers and selling the Financed Vehicle at
public or private sale. The foregoing shall be subject to the provision that,
in any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses.
Section 4.04 Physical Damage Insurance. The Servicer shall, in accordance
with its customary servicing procedures, require that each Obligor shall have
obtained physical damage
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insurance covering the Financed Vehicle as of the execution of the Standard
Receivable or Fixed Value Receivable.
Section 4.05 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 the security interest
created by each Standard Receivable and Fixed Value Receivable in the related
Financed Vehicle. 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
Indenture Trustee in the event of the relocation of a Financed Vehicle or for
any other reason.
Section 4.06 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, nor shall the Servicer impair the
rights of the Issuer, the Indenture Trustee, the Certificateholders or the
Noteholders in such Receivable, nor shall the Servicer increase the number of
scheduled payments due under a Standard Receivable or Fixed Value Receivable.
Section 4.07 Purchase of Receivables upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee and the
Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the
last day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period),
the Servicer shall purchase any Receivable materially and adversely affected
by such breach as of such last day. If the Servicer takes any action during
any Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in
any Receivable or as otherwise provided in Section 4.02, the Servicer shall
purchase such Receivable as of the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of the
two preceding sentences, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.04. Subject to Section 7.02, the sole remedy of
the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders
or the Noteholders with respect to a breach pursuant to Section 4.02, 4.05 or
4.06 shall be to require the Servicer to purchase Receivables pursuant to this
Section. The Owner Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase
of any Receivable pursuant to this Section.
Section 4.08 Servicing Fee. The Servicing Fee for a Payment Date shall
equal the product of (a) the Servicing Fee Rate (or, in the case of the
initial Collection Period, the product of (i) a fraction, the numerator of
which is equal to the number of days (based on a 30-day month) elapsed from
the Cutoff Date through the last day of such initial Collection Period and the
denominator of which is 360 and (ii) 1.00%), and (b) the Pool Balance as of
the first day of the preceding Collection Period. The Servicer shall also be
entitled to all late fees, prepayment charges, and other administrative fees
or similar charges allowed by applicable law with respect to the Receivables,
collected (from whatever source) on the Receivables, plus any reimbursement
pursuant to the last paragraph of Section 7.02.
Section 4.09 Servicer's Certificate. Not later than 11:00 a.m. (New York
time) on each Payment Determination Date, the Servicer shall deliver to the
Owner Trustee, each Paying
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Agent, the Indenture Trustee and the Seller, with a copy to the Rating
Agencies, a Servicer's Certificate containing all information necessary to
make the distributions to be made on the related Payment Date pursuant to
Sections 5.05 and 5.06 for the related Collection Period. Receivables to be
purchased by the Servicer or to be repurchased by the Seller shall be
identified by the Servicer by account number with respect to such Receivable
(as specified in Schedule A).
Section 4.10 Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Owner Trustee and the Indenture Trustee, on
or before April 30 of each year beginning April 30, 2004, an Officer's
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 such longer period as shall have elapsed since the Closing Date) 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, 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 Indenture 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, Noteholder or Note Owner by a request in
writing to the Owner Trustee addressed to the Corporate Trust Office. Upon the
telephone request of the Owner Trustee, the Indenture 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 Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under
Section 8.01(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, the Seller or their
Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on or
before April 30 of each year beginning April 30, 2004, a report addressed to
the managers of the Servicer, to the effect that such firm has examined the
financial statements of DCS and issued its report thereon and that such
examination (a) was made in accordance with generally accepted auditing
standards and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances; (b) included tests relating to automotive loans serviced for
others in accordance with the requirements of the Uniform Single Attestation
Program for Mortgage Bankers (the "Program"), to the extent the procedures in
such Program are applicable to the servicing obligations set forth in this
Agreement; and (c) except as described in the report, disclosed no exceptions
or errors in the records relating to automobile and light-duty truck loans
serviced for others that, in the firm's opinion, paragraph four of such
Program requires such firm to report.
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.
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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 Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours
at the 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; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner
Trustee, the Indenture 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 Indenture Trustee, the
Certificateholders or the Noteholders shall have any responsibility therefor.
ARTICLE V
Distributions; Reserve Account;
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Statements to Certificateholders and Noteholders
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Section 5.01 Establishment of Deposit Account. (a) The Servicer, for the
benefit of the Noteholders and the Certificateholders, shall establish and
maintain in the name of the Indenture Trustee an Eligible Deposit Account (the
"Deposit Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders. The Servicer shall establish the Reserve Account as part
of the Deposit Account.
(b) Funds on deposit in the Deposit Account shall be invested (1) by the
Indenture Trustee in Eligible Investments selected in writing by the Servicer
or an investment manager selected by the Servicer or (2) by an investment
manager in Eligible Investments selected by such investment manager; provided
that (A) such investment manager shall be selected by the Servicer, (B) such
investment manager shall have agreed to comply with the terms of this
Agreement as it relates to investing such funds, (C) any investment so
selected by such
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investment manager shall be made in the name of the Indenture Trustee and
shall be settled by a Delivery to the Indenture Trustee that complies with the
terms of this Agreement as it relates to investing such funds, and (D) prior
to the settlement of any investment so selected by such investment manager the
Indenture Trustee shall affirm that such investment is an Eligible Investment.
The Servicer will direct all investments through written approval. In the
event the Indenture Trustee must invest funds on deposit in the Deposit
Account, the Indenture Trustee will follow the most recent written direction
of the Servicer. It is understood and agreed that the Indenture Trustee shall
not be liable for any loss arising from an investment in Eligible Investments
made in accordance with this Section 5.01(b). All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders and
the Certificateholders, as applicable; provided, that on each Payment
Determination Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit in the Deposit Account (to the extent
such interest and income is on deposit in the Deposit Account at the end of
the related Collection Period) shall be deemed to constitute a portion of the
Total Distribution Amount for the related Payment Date. Other than as
permitted by the Rating Agencies, funds on deposit in the Deposit Account
shall be invested in Eligible Investments that will mature on or before the
next Payment Date.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Deposit Account and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The
Deposit Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders, as
applicable. If, at any time, the Deposit Account ceases to be an Eligible
Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Deposit
Account as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts, subject to
the last sentence of Section 5.01(c)(i); and each such Eligible
Deposit Account shall be subject to the exclusive custody and
control of the Indenture Trustee, and the Indenture Trustee shall
have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance
with paragraph (a) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by the Indenture
Trustee or a securities intermediary (as such term is defined in
Section 8-102 of the UCC) acting solely for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery"
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and shall be maintained by the Indenture 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 VIII of the UCC and that is not governed by
clause (C) above shall be delivered to the Indenture Trustee in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the Indenture
Trustee's (or its nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture
Trustee, to instruct the Indenture Trustee to make withdrawals and
payments from the Deposit Account for the purpose of permitting the
Servicer to carry out its respective duties hereunder or permitting the
Indenture Trustee to carry out its duties under the Indenture.
Section 5.02 Collections. Subject to the continued satisfaction of the
commingling conditions described below, the Servicer shall remit to the
Deposit Account all payments by or on behalf of the Obligors with respect to
the Receivables (other than Purchased Receivables and not including Fixed
Value Payments), all Liquidation Proceeds collected during the related
Collection Period, prior to 11:00 a.m. (New York time) on the related Payment
Date. Notwithstanding the foregoing, if any of the commingling conditions
ceases to be met, the Servicer shall remit to the Deposit Account all payments
by or on behalf of the Obligors with respect to the Receivables (other than
Purchased Receivables and not including Fixed Value Payments), all Liquidation
Proceeds within two Business Days of receipt thereof. The commingling
conditions are as follows: (i) DCS must be the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii) (x) DCS must maintain
a short-term rating of at least "A-1" by Standard & Poor's and "P-1" by
Moody's or (y) if daily remittances occur hereunder, prior to ceasing daily
remittances, the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with). Notwithstanding anything herein to the contrary,
so long as DCS is the Servicer, DCS may withhold from the deposit into the
Deposit Account any amounts indicated on the related Servicer's Certificate as
being due and payable to DCS or the Seller and pay such amounts directly to
DCS or the Seller, as applicable. 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 or the Seller. In the
event the commingling conditions cease to be met, the Servicer shall make
daily remittance of collections to the Deposit Account within two Business
Days of receipt thereof; provided however, daily remittance may commence no
later than five Business Days following a reduction of DCS's short-term
ratings below "A-1" by Standard & Poor's or "P-1" by Moody's.
Section 5.03 Application of Collections. (a) All collections for the
Collection Period shall be applied by the Servicer as follows:
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With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor shall be applied to interest and
principal in accordance with the Simple Interest Method.
(b) All collections of finance charges on a Fixed Value Receivable (as
determined in accordance with the Servicer's customary procedures) shall be
applied, first, to the Amortizing Payment Finance Charges due and unpaid on
the related Principal Balance and then to the Fixed Value Finance Charges due
and unpaid on the related Fixed Value Payment. The Servicer shall release to
the Company the Collections allocated to Fixed Value Finance Charges pursuant
to the preceding sentence. All Liquidation Proceeds with respect to any Fixed
Value Receivable shall be applied first to the related Receivable and only
after the payment in full of the Principal Balance thereof plus accrued but
unpaid interest thereon shall any such Liquidation Proceeds be applied to, or
constitute, the related Fixed Value Payment.
Section 5.04 Additional Deposits. The Servicer and the Seller shall
deposit or cause to be deposited in the Deposit Account the aggregate Purchase
Amount with respect to Purchased Receivables and the Servicer shall deposit
therein all amounts to be paid under Section 9.01. The Servicer will deposit
the aggregate Purchase Amount with respect to Purchased Receivables when such
obligations are due, unless the Servicer shall not be required to make daily
deposits pursuant to Section 5.02. All such other deposits shall be made on
the Payment Determination Date for the related Collection Period.
Section 5.05 Distributions.
(a) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be distributed to the Noteholders and the
Certificateholders and all amounts to be allocated within the Deposit Account
as described below. For purposes of this Section, the Servicing Fee for the
related Payment Date and any previously unpaid Servicing Fees shall be
deducted from the Total Distribution Amount at any time on or prior to the
Payment Date. If the Total Distribution Amount during a Collection Period has
reached a level which covers the payments due pursuant to clauses (A), (B) and
(C) of Section 5.05(a)(ii), then for the remainder of the Collection Period
the Servicer may net the amounts, if any, distributable pursuant to clauses
(D) and (E) of Section 5.05(a)(ii) out of the Total Distribution Amount before
depositing the Total Distribution Amount into the Deposit Account and pay such
amounts directly to the related recipient.
(ii) On each Payment Date, the Servicer shall instruct the Indenture
Trustee (based on the information contained in the Servicer's Certificate
delivered on the related Payment Determination Date pursuant to Section
4.09) to make the following allocations and distributions by 11:00 a.m.
(New York time), to the extent of the Total Distribution Amount (net of
the Servicing Fee for such Payment Date and any previously unpaid
Servicing Fees and any Cash Release Amount deducted pursuant to Section
5.05(a)(i)), in the following order of priority:
(A) allocate to the Noteholders for distribution pursuant to
Section 8.02 of the Indenture, from such net Total Distribution
Amount, an amount equal to the accrued and unpaid interest due on
the Notes on such Payment Date;
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(B) allocate to the Reserve Account, from such net Total
Distribution Amount remaining after the application of clause (A),
the amount required, if any, such that the amount therein is the
Specified Reserve Amount;
(C) allocate to the Noteholders for distribution as principal
pursuant to Section 8.02 of the Indenture, from such net Total
Distribution Amount remaining after the application of clauses (A)
and (B), the remaining amount until the Outstanding Amount of the
Notes is reduced to zero; provided, however, that on each Payment
Date on and after the First Release Payment Date, the amount
distributed pursuant to this clause (C) will be reduced by the Cash
Release Amount (which Cash Release Amount shall either be deducted
pursuant to Section 5.05(a)(i) or distributed pursuant to Section
5.05(a)(ii)(D));
(D) if the conditions set forth in Section 5.05(b) are
satisfied, distribute to the Holders of the Certificates, from such
net Total Distribution Amount remaining after the application of
clauses (A) through (C), the Cash Release Amount for such Payment
Date to the extent not already deducted pursuant to Section
5.05(a)(i); and
(E) distribute, to the Holders of the Certificates, such net
Total Distribution Amount remaining after the application of clauses
(A) through (D).
Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Deposit Account hereunder until the
Certificates are retired.
(b) The distribution of a Cash Release Amount pursuant to Section 5.05(a)
on a Payment Date shall be subject to the satisfaction of all of the following
conditions:
(i) no such distribution or release shall be made until the First
Release Payment Date; and
(ii) the amount allocated to the Reserve Account is equal to the
Specified Reserve Amount.
Section 5.06 Reserve Account. (a) On the Closing Date, the Owner Trustee
will deposit, on behalf of the Seller, the Reserve Account Initial Deposit
into the Deposit Account from the net proceeds of the sale of the Notes which
amount shall be allocated to the Reserve Account.
(b) [RESERVED]
(c) (i) In the event that the Total Distribution Amount (after the
payment of the Servicing Fee and any previously unpaid Servicing Fees) with
respect to any Collection Period is less than the accrued and unpaid interest
on the Notes on a Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Payment Date an amount
equal to such deficiency, to the extent of funds available therein, and
allocate such amount for distribution to the Noteholders.
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(ii) In the event that the amount allocated for distribution to the
Noteholders pursuant to Section 5.05(a)(ii)(C) is insufficient to make
payments of principal on (A) the Class A-1 Notes so that the Outstanding
Amount for the Class A-1 Notes equals zero on the Class A-1 Final
Scheduled Payment Date; (B) the Class A-2 Notes so that the Outstanding
Amount for the Class A-2 Notes equals zero on the Class A-2 Final
Scheduled Payment Date; (C) the Class A-3 Notes so that the Outstanding
Amount for the Class A-3 Notes equals zero on the Class A-3 Final
Scheduled Payment Date; and (D) the Class A-4 Notes so that the
Outstanding Amount for the Class A-4 Notes equals zero on the Class A-4
Final Scheduled Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Class Final
Scheduled Payment Date an amount equal to such deficiency, to the extent
of funds available therein, and allocate such amount for distribution to
the related Noteholders in accordance with this Sale and Servicing
Agreement.
(iii) In the event that the Outstanding Amount of the Notes exceeds
the Related Pool Balance, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on the related Payment Date
an amount equal to such excess, to the extent of funds available therein,
and allocate such amount for distribution to the Noteholders.
(d) Subject to Section 9.01, amounts will continue to be applied pursuant
to Section 5.05(a) following payment in full of both the Outstanding Amount of
the Notes and of the Certificate Balance of the Certificates until the Pool
Balance is reduced to zero. Following the payment in full of the aggregate
Outstanding Amount of the Notes and of the Certificate Balance of the
Certificates and of all other amounts owing or to be distributed hereunder or
under the Indenture or the Trust Agreement to Noteholders and the termination
of the Trust, any amount then allocated to the Reserve Account shall be
distributed to the Seller.
Section 5.07 Statements to Noteholders and Certificateholders. On each
Payment Date, the Servicer shall make available via its website to the Owner
Trustee, the Rating Agencies, the Noteholders and the Certificateholders and
provide to the Indenture Trustee and each Paying Agent a statement
substantially in the form of Exhibit A, setting forth at least the following
information as to the Notes, to the extent applicable:
(i) the amount of such distribution allocable to principal allocable
to each Class of Notes;
(ii) the amount of such distribution allocable to interest allocable
to each Class of Notes;
(iii) the outstanding principal balance of each Class of Notes 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
clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
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(v) the amount allocated to the Reserve Account on such Payment
Determination Date after giving effect to allocations thereto and
withdrawals therefrom to be made on the next following Payment Date, if
any; and
(vi) the Pool Balance as of the close of business on the last day of
the related Collection Period, after giving effect to payments allocated
to principal reported under clause (i) above.
Each amount set forth on the Payment Date statement under clauses (i),
(ii) or (iv) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Note.
Section 5.08 Net Deposits. As an administrative convenience, unless the
Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables and Purchase
Amounts for the Collection Period net of distributions to be made to the
Servicer with respect to the Collection Period. The Servicer, however, will
account to the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders as if all deposits, distributions and transfers were made
individually.
ARTICLE VI
The Seller
----------
Section 6.01 Representations of Seller. The Seller 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 as of the Closing Date, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly organized and
validly existing as a limited liability company in good standing under
the laws of the State of Michigan, with the power and authority as a
limited liability company 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 Standard Receivables and
the Fixed Value Receivables.
(b) Due Qualification. The Seller is duly qualified to do business
as a foreign limited liability company in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall
require such qualifications.
(c) Power and Authority. The Seller has the power and authority as a
limited liability company to execute and deliver this Agreement and to
carry out its terms; the Seller has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the
Issuer, and the Seller shall have duly authorized such sale and
assignment to the Issuer by all necessary action as a limited liability
company; and the
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execution, delivery and performance of this Agreement has been duly
authorized by the Seller by all necessary action as a limited liability
company.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Seller enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of organization or operating agreement of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party
or by which it is bound; or 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 this
Agreement and the Basic Documents); or violate any law or, to the best of
the Seller's knowledge, any order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(i) asserting the invalidity of this Agreement, the Indenture or any of
the other 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, the Indenture
or any of the other Basic Documents, (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforceability of,
this Agreement, the Indenture, any of the other Basic Documents, the
Notes or the Certificates or (iv) which might adversely affect the
federal or state income tax attributes of the Notes or the Certificates.
Section 6.02 Preservation of Existence. During the term of this
Agreement, the Seller will keep in full force and effect its existence and
rights as a limited liability company (or another legal entity) under the laws
of the jurisdiction of its organization 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. In addition, all transactions and
dealings between the Seller and its Affiliates (including the Company) will be
conducted on an arm's-length basis.
Section 6.03 Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Company and the Servicer
and any of the
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officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any taxes that may at
any time be asserted against any such Person with respect to the
transactions contemplated herein and in the Basic Documents, 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 or the Notes) and costs and expenses in
defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Company, the
Certificateholders and the Noteholders and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and the
Indenture Trustee from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Seller'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.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein and in the Trust Agreement contained, in the case of the Owner
Trustee, and in the Indenture contained, in the case of the Indenture
Trustee, except to the extent that such cost, expense, loss, claim,
damage or liability: (i) in the case of the Owner Trustee, shall be due
to the willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Owner Trustee or, in the case of the Indenture Trustee,
shall be due to the willful misfeasance, bad faith or negligence (except
for errors in judgment) of the Indenture Trustee; or (ii) in the case of
the Owner Trustee, shall arise from the breach by the Owner Trustee of
any of its representations or warranties set forth in Section 7.03 of the
Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
Section 6.04 Merger or Consolidation of, or Assumption of Obligations of,
Seller. Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller
shall be a party or (c) which may succeed to the
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properties and assets of the Seller substantially as a whole, which Person in
any of the foregoing cases executes an agreement of assumption to perform
every obligation of the Seller under this Agreement, shall be the successor to
the Seller hereunder without the execution or filing of any document or any
further act by any of the parties to this Agreement; provided, however, that
(i) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.01 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, (ii)
the Seller shall have delivered to the Owner Trustee and the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, (iii) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (iv) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully
to preserve and protect the interest of the Owner Trustee and Indenture
Trustee, respectively, in the Receivables and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall
be conditions to the consummation of the transactions referred to in clauses
(a) , (b) or (c) above.
Section 6.05 Limitation on Liability of Seller and Others. The Seller and
any director, officer, employee or agent of the Seller may rely in good faith
on the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall not be under any obligation to appear in, prosecute or defend
any legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
Section 6.06 Seller May Own Notes. The Seller and any Affiliate thereof
may in its individual or any other capacity become the owner or pledgee of
Notes with the same rights as it would have if it were not the Seller or an
Affiliate thereof, except as expressly provided herein or in any Basic
Document. The Seller shall not own any Certificates unless the Rating Agency
Condition is satisfied.
ARTICLE VII
The Servicer
------------
Section 7.01 Representations of Servicer. The Servicer 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 as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
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(a) Organization and Good Standing. The Servicer is duly organized
and validly existing as a limited liability company in good standing
under the laws of the state of its formation, with the power and
authority as a limited liability company to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has,
the power, authority and legal right to acquire, own, sell and service
the Standard Receivables and the Fixed Value Receivables and to hold the
Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do business
as a foreign limited liability company in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Standard Receivables and the Fixed Value Receivables
as required by this Agreement) shall require such qualifications.
(c) Power and Authority. The Servicer has the power and authority as
a limited liability company to execute and deliver this Agreement and to
carry out its terms; and the execution, delivery and performance of this
Agreement has been duly authorized by the Servicer by all necessary
action as a limited liability company.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the articles of organization or operating agreement of the
Servicer, or any indenture, agreement or other instrument to which the
Servicer is a party or by which it is bound; or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement or other instrument (other than this
Agreement); or violate any law or, to the best of the Servicer's
knowledge, any order, rule or regulation applicable to the Servicer of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Servicer or its properties.
(f) No Proceedings. To the Servicer's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, any of the
other 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, the Indenture
or any of the other Basic Documents, (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of,
this Agreement, the Indenture, any of the other Basic Documents, the
Notes or the Certificates or (iv) relating to the Servicer and which
might adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
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(g) No Insolvent Obligors. As of the related Cutoff Date, no Obligor
on a Standard Receivable or Fixed Value Receivable is shown on the
Receivable Files as the subject of a bankruptcy proceeding.
Section 7.02 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:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders, the Company and the Seller and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and the
Indenture Trustee from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from the use,
ownership or operation by the Servicer or any Affiliate thereof of a
Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
Company, the Certificateholders and the Noteholders and any of the
officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such
cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance
or bad faith of the Servicer in the performance of its duties under this
Agreement or by reason of reckless disregard of its obligations and
duties under this Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of DCS (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.
Section 7.03 Merger or Consolidation of, or Assumption of Obligations of,
Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a legal entity 50% or more of the
voting power of which is owned, directly or indirectly, by DaimlerChrysler AG
or an affiliate of or successor to DaimlerChrysler AG or an affiliate of such
successor, which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this
37
Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no Servicer Default and no event which, after notice or lapse of
time, or both, would become a Servicer Default shall have occurred and be
continuing, (ii) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to
such transaction, (iv) immediately after giving effect to such transaction,
the successor to the Servicer shall become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement and
(v) the Servicer shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel stating that, in the opinion of such counsel,
either (A) 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 the Indenture Trustee,
respectively, in the Receivables and reciting the details of such filings or
(B) no such action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii), (iv) and (v) above shall be conditions to the consummation of the
transactions referred to in clause (a) , (b) or (c) above.
Section 7.04 Limitation on Liability of Servicer and Others. Neither the
Servicer nor any of the managers, officers, employees or agents of the
Servicer 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 pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any manager,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that
it may deem necessary or desirable in respect of this Agreement and the Basic
Documents and the rights and duties of the parties to this Agreement and the
Basic Documents and the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture.
Section 7.05 DCS Not To Resign as Servicer. Subject to the provisions of
Section 7.03, DCS shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon a determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law and cannot be cured. Notice of any such
determination permitting the resignation of DCS shall be communicated to the
Owner Trustee and the Indenture Trustee at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination
38
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Owner Trustee and the Indenture Trustee concurrently with or promptly after
such notice. No such resignation shall become effective until the Indenture
Trustee or a successor Servicer shall (i) have assumed the responsibilities
and obligations of DCS in accordance with Section 8.02 and (ii) have become
the Administrator under the Administration Agreement in accordance with
Section 8 of such Agreement.
ARTICLE VIII
Default
-------
Section 8.01 Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Deposit Account
any required payment or to direct the Indenture Trustee to make any
required distributions therefrom, which failure continues 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 Indenture Trustee
or after discovery of such failure by an officer of the Servicer; or
(b) failure by the Servicer or the Seller, as the case may be, duly
to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth
in this Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of 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 or the Seller (as
the case may be) by the Owner Trustee or the Indenture Trustee or (B) to
the Servicer or the Seller (as the case may be), and to the Owner Trustee
and the Indenture Trustee by the Holders of Notes or Certificates, as
applicable, evidencing not less than 25% of the Outstanding Amount of the
Notes or evidencing Percentage Interests (as defined in the Trust
Agreement) aggregating at least 25%; or
(c) the occurrence of an Insolvency Event with respect to the
Seller, the Servicer or the Company;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture 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 to the Indenture Trustee and the
Owner Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.02 hereof) 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 Indenture Trustee or such successor Servicer as may be appointed under
Section 8.02; and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and
39
empowered to execute and deliver, for the benefit 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 Indenture 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 any Receivable. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the successor Servicer and amending this Agreement to reflect such
succession as Servicer pursuant to this Section 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 8.02 Appointment of Successor. (a) Upon the Servicer's receipt of
notice of termination pursuant to Section 8.01 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 later of (i) the date
45 days from the delivery to the Owner Trustee and the Indenture Trustee of
written notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (ii) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in
the notice of resignation and accompanying Opinion of Counsel. In the event of
the Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment
(including its appointment as Administrator under the Administration Agreement
as set forth in Section 8.02(b)) by a written assumption in form acceptable to
the Owner Trustee and the Indenture Trustee. In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section, the Indenture
Trustee without further action shall automatically be appointed the successor
Servicer and the Indenture Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be
unwilling or legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint any established institution, having a net
worth of not less than $100,000,000 and whose regular business shall include
the servicing of automotive receivables, as the successor to the Servicer
under this Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) 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 and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of the Administration
Agreement.
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(c) The Servicer may not resign unless it is prohibited from serving as
such by law.
Section 8.03 Notification to Noteholders and Certificateholders. Upon 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 Indenture Trustee shall give prompt written
notice thereof to Noteholders and the Rating Agencies.
Section 8.04 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 Percentage Interests (as defined in the Trust Agreement) may,
on behalf of all Noteholders or the Holders of the Certificates, as the case
may be, 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 allocations or distributions from the Deposit Account in accordance
with this Agreement. Upon any such waiver of a past default, such default
shall cease to exist, and any Servicer Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE IX
Termination
-----------
Section 9.01 Optional Purchase of All Receivables. (a) As of the last day
of any Collection Period as of which the then outstanding Pool Balance is 10%
or less of the Original Pool Balance and the Class A-1 Notes, Class A-2 Notes
and Class A-3 Notes have been paid in full or will be paid in full on the next
Payment Date, the Servicer shall have the option to purchase the Owner Trust
Estate, other than the Deposit Account; provided, however, that, unless
Moody's agrees otherwise, the Servicer may not effect any such purchase if the
rating of the Servicer's long-term debt obligations is less than Baa3 by
Moody's, unless the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such purchase would not
constitute a fraudulent conveyance. To exercise such option, the Servicer
shall deposit pursuant to Section 5.04 in the Deposit Account an amount equal
to the aggregate Purchase Amount for the Receivables (including defaulted
Receivables), plus the appraised value of any such other property held by the
Trust other than the Deposit Account, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee, and shall succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to exercise
such option unless the amount to be deposited in the Deposit Account pursuant
to the preceding sentence, together with any other funds in the Deposit
Account, is greater than or equal to the sum of the outstanding principal
balance of the Notes and the Certificate Balance of the Certificates and all
accrued but unpaid interest (including any overdue interest and premium)
thereon.
(b) Notice of the exercise of the option in Section 9.01(a) shall be
given by the Servicer to the Owner Trustee and the Indenture Trustee on or
prior to the last day of the Collection Period referred to in Section 9.01(a).
41
ARTICLE X
Miscellaneous
-------------
Section 10.01 Amendment. This Agreement may be amended by the Seller, the
Servicer and the Issuer, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, 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 (including for the
issuance of Fixed Value Securities pursuant to Section 2.03) 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 Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Issuer, with the consent of the Indenture 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 outstanding Certificates evidencing not less than a
majority of the Percentage Interests (as defined in the Trust Agreement) 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 or the Percentage Interests
(as defined in the Trust Agreement), 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.
Promptly after the execution of any such amendment or consent pursuant to
either of the two preceding paragraphs, the Owner Trustee shall furnish
written notification of the substance of such amendment or consent to each
Certificateholder, the Indenture Trustee and each of the Rating Agencies.
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 Indenture Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties
or immunities under this Agreement or otherwise.
42
Section 10.02 Protection of Title to Trust. (a) The Seller shall execute
and file such financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Servicer shall change its name, identity
or corporate structure in any manner that would, could or might make any
financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of ss. 9-402(7) of
the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least five days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Seller and the Servicer shall have an obligation to give
the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any change in the jurisdiction in which it is organized if, as a
result of such change, the applicable provisions of the UCC would require the
filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or new financing statement. The Servicer shall at all times maintain
each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each Standard
Receivable and each Fixed Value Receivable accurately and in sufficient detail
to permit (i) the reader thereof to know at any time the status of such
Standard Receivable or Fixed Value 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
Standard Receivable or Fixed Value Receivable and the amounts from time to
time deposited in the Deposit Account in respect of such Standard Receivable
or Fixed Value Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Standard Receivables and
the Fixed Value Receivables, the Servicer's master computer records (including
any backup archives) that refer to a Standard Receivable or Fixed Value
Receivable shall indicate clearly the interest of the Issuer and the Indenture
Trustee in such Standard Receivable or Fixed Value Receivable and that such
Standard Receivable or Fixed Value Receivable is owned by the Issuer and has
been pledged to the Indenture Trustee. Indication of the Issuer's and the
Indenture Trustee's interest in a Standard Receivable or Fixed Value
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.
(f) If at any time the Seller 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
43
archives) that, if they shall refer in any manner whatsoever to any Standard
Receivable or Fixed Value Receivable, shall indicate clearly that such
Standard Receivable or Fixed Value Receivable has been sold and is owned by
the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture 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 Standard Receivable or
Fixed Value Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or to
the Indenture 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 Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement and
of each amendment hereto, an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) 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
Indenture Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to preserve and
protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 90-day period, stating that, in the opinion of such counsel, either
(A) 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 Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no such
action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause the
Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
Section 10.03 Notices. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered 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 Seller or the Servicer, to DaimlerChrysler Services North America
LLC, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of
Assistant Secretary ((248) 427- 2565), (b) in the
44
case of the Issuer or the Owner Trustee, at the Corporate Trust Office (as
defined in the Trust Agreement), (c) in the case of the Indenture Trustee, at
the Corporate Trust Office, (d) in the case of Moody's, to ▇▇▇▇▇'▇ Investors
Service, Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, (e) in the case of Standard & Poor's, to Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance Department, and
(f) in the case of Fitch, to Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇.▇. ▇▇▇▇▇, Attention of Structured Finance Asset Backed Securities; or, as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
Section 10.04 Assignment by the Seller or the Servicer. Notwithstanding
anything to the contrary contained herein, except as provided in the remainder
of this Section, as provided in Sections 6.04 and 7.03 herein and as provided
in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Seller or the Servicer.
The Issuer and the Servicer hereby acknowledge and consent to the conveyance
and assignment (i) by the Seller to the Company pursuant to the Purchase
Agreement and (ii) by the Company to a limited liability company or other
Person (provided that conveyance and assignment is made in accordance with
Section 5.05 of the Purchase Agreement), of any and all of the Seller's rights
and interests (and corresponding obligations, if any) hereunder with respect
to receiving amounts from the Reserve Account and with respect to receiving
and conveying any Fixed Value Payments, and the Issuer and the Servicer hereby
agree that the Company, and any such assignee of the Company, shall be
entitled to enforce such rights and interests directly against the Issuer as
if the Company, or such assignee of the Company, were itself a party to this
Agreement.
Section 10.05 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Company (and any
assignee of the Company pursuant to Section 10.04), the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, 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 10.06 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 10.07 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 10.08 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.
45
Section 10.09 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 10.10 Assignment by Issuer. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest
by the Issuer to the Indenture 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 Indenture Trustee.
Section 10.11 Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Issuer or the Company, acquiesce, petition or otherwise
invoke or cause the Issuer or the Company (or any assignee of the Company
pursuant to Section 10.04) to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Issuer or the Company (or any assignee of the Company pursuant to Section
10.04) 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 the Company (or any assignee of the
Company pursuant to Section 10.04) or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer or the
Company (or any assignee of the Company pursuant to Section 10.04).
(b) Notwithstanding any prior termination of this Agreement, the Servicer
shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.
Section 10.12 Limitation of Liability of Owner Trustee and Indenture
Trustee. (a)Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chase Manhattan Bank USA, National
Association not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Chase Manhattan Bank USA, National
Association in its individual capacity or, except as expressly provided in the
Trust Agreement, as beneficial owner of the Issuer 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. 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.
46
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Citibank, N.A., not in its individual capacity
but solely as Indenture Trustee and in no event shall Citibank, N.A. 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.
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
DAIMLERCHRYSLER AUTO TRUST 2003-A
By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Owner Trustee on behalf of the Trust
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC,
Seller and Servicer
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: Assistant Controller
Acknowledged and accepted
as of the day and year
first above written:
CITIBANK, N.A.,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
SCHEDULE A
Schedule of Receivables
-----------------------
Delivered to the Owner Trustee and Indenture Trustee at Closing
Schedule A
SCHEDULE B
Location of Receivable Files
----------------------------
1. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.
2. ▇▇▇▇ ▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Schedule B
SCHEDULE C
Schedule of YSOA
----------------
"YSOA" means, with respect to any Payment Date, the amount specified
below with respect to such Payment Date:
Closing Date................. $79,966,896.19 August 2006.................... $ 8,383,896.12
September 2003............... 76,870,945.81 September 2006................. 7,484,232.44
October 2003................. 73,838,407.08 October 2006................... 6,638,340.39
November 2003................ 70,869,627.47 November 2006.................. 5,846,282.27
December 2003................ 67,964,928.54 December 2006.................. 5,108,178.69
January 2004................. 65,124,634.33 January 2007................... 4,423,917.63
February 2004................ 62,349,034.91 February 2007.................. 3,793,340.82
March 2004................... 59,638,430.65 March 2007..................... 3,216,446.97
April 2004................... 56,993,117.11 April 2007..................... 2,693,314.32
May 2004..................... 54,413,380.55 May 2007....................... 2,224,075.07
June 2004.................... 51,899,353.80 June 2007...................... 1,808,818.31
July 2004.................... 49,451,226.93 July 2007...................... 1,447,487.87
August 2004.................. 47,069,197.61 August 2007.................... 1,139,927.86
September 2004............... 44,753,461.82 September 2007................. 885,953.90
October 2004................. 42,504,243.19 October 2007................... 681,758.49
November 2004................ 40,321,794.59 November 2007.................. 519,068.88
December 2004................ 38,206,293.70 December 2007.................. 386,789.53
January 2005................. 36,156,324.68 January 2008................... 279,982.15
February 2005................ 34,169,177.96 February 2008.................. 195,077.43
March 2005................... 32,242,517.25 March 2008..................... 128,420.79
April 2005................... 30,375,045.64 April 2008..................... 77,742.52
May 2005..................... 28,566,632.07 May 2008....................... 41,819.38
June 2005.................... 26,817,304.74 June 2008...................... 18,943.16
July 2005...................... 25,127,033.11 July 2008...................... 6,838.76
August 2005.................... 23,495,810.11 August 2008.................... 2,167.22
September 2005................. 21,923,623.12 September 2008................. 1,182.57
October 2005................... 20,409,919.27 October 2008................... 733.12
November 2005.................. 18,954,158.49 November 2008.................. 402.59
December 2005.................. 17,555,984.61 December 2008.................. 181.09
January 2006................... 16,214,691.74 January 2009................... 53.63
February 2006.................. 14,929,741.49 February 2009.................. 3.23
March 2006..................... 13,700,624.33 March 2009..................... 0.00
April 2006..................... 12,527,012.33 April 2009..................... 0.00
May 2006....................... 11,408,855.21 May 2009....................... 0.00
June 2006...................... 10,345,857.46 June 2009...................... 0.00
July 2006...................... $ 9,337,661.70 July 2009...................... $ 0.00
Schedule C
The YSOA has been calculated for each Payment Date as the sum of the
amount for each Receivable equal to the excess, if any, of
o the scheduled payments due on such Receivable for each future Collection
Period discounted to present value as of the end of the preceding
Collection Period at the APR of such Receivable, over
o the scheduled payments due on the Receivable for each future Collection
Period discounted to present value as of the end of the preceding
Collection Period at 6.0%.
For purposes of such calculation, future scheduled payments on the
Receivables are assumed to be made on their scheduled due dates without any
delays, defaults or prepayments.
Schedule C
EXHIBIT A
Form of Distribution Statement to Noteholders
---------------------------------------------
DaimlerChrysler Services North America LLC
DaimlerChrysler Auto Trust 2003-A Payment Date Statement to Noteholders
------------------------------------------------------------------------------
Amount of Principal Paid to:
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Amount of Interest Paid to:
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Total Distribution Amount:
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Servicing Fee
Servicing Fee Per $1,000 Note
Reserve Account Balance
Pool Balance
A-1
EXHIBIT B
Form of Servicer's Certificate
------------------------------
DaimlerChrysler Services North America LLC Distribution Date: [ ]
DaimlerChrysler Auto Trust 2003-A Monthly Servicer's Certificate Page 1 of 2
----------------------------------------------------------------------------------------------------------------------
Payment Determination Statement Number
Distribution Date
Dates Covered From and Including To and Including
------------- ------------------ ----------------
Collections Period
Accrual Period
30/360 Days
Actual/360 Days
Number of
Collateral Pool Balance Data Accounts $ Amount
---------------------------- -------- --------
Pool Balance - Beginning of Period
Collections of Installment Principal
Collections Attributable to Full Payoffs
Principal Amount of Repurchases
Principal Amount of Gross Losses
------------------
Pool Balance - End of Period
==================
Pool Statistics End of Period
--------------- ------------------
Initial Pool Balance (Pool Balance at the Purchase Date)
Pool Factor (Pool Balance as a Percent of Initial Pool
Balance)
Ending O/C Amount
Coverage Ratio (Ending Pool Balance as a Percent of
Ending Securities)
Cumulative Net Losses
Net Loss Ratio (3 mo. Weighted Avg.)
60+ Days Delinquency Amount
Delinquency Ratio (3 mo. Weighted Avg.)
Weighted Average APR
Weighted Average Remaining Term (months)
Weighted Average Seasoning (months)
B-1
EXHIBIT B
Form of Servicer's Certificate
------------------------------
DaimlerChrysler Services North America LLC Distribution Date: [ ]
DaimlerChrysler Auto Trust [ ] Monthly Servicer's Certificate Page 2 of 2
----------------------------------------------------------------------------------------------------------------------
Cash Sources
------------
Collections of Installment Principal
Collections Attributable to Full
Payoffs
Principal Amount of Repurchases O/C Release
-----------
Recoveries on Loss Accounts Original O/C Amount
Collections of Interest
Investment Earnings Cumulative O/C Release (beginning)
Reserve Account O/C Release
-------- --------
Total Sources Cumulative O/C Release (ending)
========
Cash Uses
---------
Servicer Fee
Note Interest
Reserve Fund
O/C Release to Certificateholder
Note Principal
--------
Total Cash Uses
========
Administrative Payment
----------------------
Total Principal and Interest Sources
Investment Earnings in Deposit Account
Cash Reserve in Deposit Account
Servicer Fee (withheld)
O/C Release to Certificateholder
--------
Payment Due to Deposit Account
========
Principal Interest
Beginning Ending Principal per $1000 Interest per $1000
Balance Balance Payment Face Payment Face
--------------------------------------------------------------------------
Notes & Certificates
--------------------
Class A-1 @ %
Class A-2 @ %
Class A-3 @ %
Class A-4 @ %
Certificates
------------------------------------- ------------
Total Securities
===================================== ============
* Class A-1 Interest is computed on an Actual/360 Basis. Days in current period.
B-2