EXHIBIT 10.52
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EXECUTION COPY
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CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT, dated as of October 2, 1998 (as amended or
otherwise modified from time to time, this "AGREEMENT"), among VARIABLE FUNDING
CAPITAL CORPORATION (the "LENDER"), NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association having an address at Sixth Street
and Marquette Avenue, Minneapolis, Minnesota 55479-0070 ("NORWEST"), in the
capacity of custodian (the "CUSTODIAN") and backup servicer (the "BACKUP
SERVICER") and AUTO LENDERS ACCEPTANCE CORPORATION, a Delaware corporation
having an address at 300 Interstate North Parkway, Atlanta, Georgia 30339 (the
"SERVICER").
The parties, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement or in the Loan and Security Agreement, the following terms shall have
the following meanings when used in this Agreement:
"Authorized Representatives" shall have the meaning set forth in
Section 19.
"Auto Loan" means automobile and light duty truck loans and
installment sale contracts delivered to the Custodian pursuant to the Loan and
Security Agreement.
"Auto Loan Schedule" means the schedule of Auto Loans to be
delivered to the Custodian on the date of delivery to the Custodian of the
Custodian's Auto Loan Files, in both hard copy and floppy disk, to be annexed
hereto as Exhibit 9, such schedule setting forth the following information with
respect to each Auto Loan:
(i) the loan number and name of the related Obligor;
(ii) the original principal amount;
(iii) the Cut-Off Date;
(iv) the principal outstanding as of the related Cut-Off Date;
(v) the interest rate (APR);
(vi) the original term to maturity;
(vii) the remaining term to maturity as of the Cut-Off Date;
(viii) the day of the month on which the scheduled monthly payment
of principal and interest are required to be made;
(ix) [reserved];
(x) the contractual delinquency of the loan; and
(xi) any assumption, consolidation, extension, modification or
waiver of the loan.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in New York City or Minneapolis, Minnesota are
authorized or obligated by law or executive order to be closed.
"Certification" shall have the meaning set forth in Section 3.
"Collateral" shall have the meaning set forth in the Recitals
hereto.
"Contract" shall have the meaning set forth in Section 2(a).
"Custodian's Auto Loan Files" means, with respect to an Auto Loan,
those documents listed in Section 2 of this Agreement that are delivered to the
Custodian and all documents subsequently delivered to the Custodian pursuant to
the last sentence of Section 2.
"Cut-Off Date" means, as of any date, the date as of which
information is effective, which date shall be the close of business on the date
set forth on the related Auto Loan Schedule. In no event shall the Cut-Off Date
precede by more than two weeks the date on which the related Auto Loan Schedule
is delivered.
"Deficiency" means a failure of a document to correspond to the
information on the Auto Loan Schedule or the absence of a required document from
a Custodian's Auto Loan File pursuant to Section 2.
"Deposit Account" means the account of the Servicer with First Union
National Bank, as described in the Deposit Account Agreement.
"Deposit Account Agreement" means the Deposit Account Agreement
among the Servicer, the Lender and First Union National Bank dated the date
hereof.
"Financed Vehicle" means the automobile or light-duty truck financed
under an Auto Loan.
"Insurance Policy" means with respect to a Financed Vehicle, any
insurance policy required to be maintained by the Obligor pursuant to the
related Auto Loan that covers
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physical damage to and theft of the Financed Vehicle (including policies
procured by the Servicer on behalf of the Obligor) or any liability arising out
of the use of such Financed Vehicle.
"Loan and Security Agreement" means, the Loan and Security
Agreement, dated as of October 2, 1998, among FIFS Acquisition Funding, L.L.C.,
as borrower, Auto Lenders Acceptance Corporation, as a servicer and a seller,
ALAC Receivables Corp. as a seller, VFCC, FCM, as deal agent and as
documentation agent, and First Union as liquidity agent, as such agreement may
be amended or supplemented from time to time.
"Maturity Date" means the date specified as the maturity date in the
Loan and Security Agreement, as such Maturity Date may be extended by the
Lender, pursuant to the terms thereof (with a copy thereof to be delivered to
the Custodian).
"Obligor" means the obligor on an Auto Loan.
"Person" means any association, business trust, company,
corporation, estate, governmental authority, joint venture, natural person,
trust or other entity.
2. DELIVERY OF CUSTODIAN'S AUTO LOAN FILES. The Servicer hereby
certifies that it shall deliver and release to the Custodian as custodian for,
and bailee of, the Lender the following documents pertaining to each of the Auto
Loans identified in an Auto Loan Schedule, a copy of which Auto Loan Schedule
shall be provided to the Custodian, in a form reasonably acceptable to the
Custodian, on computer readable disk or via electronic transfer by the Servicer.
(a) The executed original counterpart of the installment sale
contract loan and security agreement or promissory note, as applicable (the
"CONTRACT"), relating to such Auto Loan; and
(b) The original certificate of title or, if not yet received,
evidence that an application therefor has been submitted with the appropriate
authority, a guaranty of title from a dealer or such other document (as used in
the applicable jurisdiction) that the Servicer shall keep on File as listed on
Exhibit 10 hereto, evidencing the security interest of the Servicer in the
Financed Vehicle.
The Custodian shall be entitled to rely upon each Auto Loan Schedule
provided by the Servicer as the conclusive schedule in its review, pursuant to
Sections 3 and 17(b) hereof, of the Custodians Auto Loan Files delivered to it
by the Servicer.
3. CERTIFICATION. Within four (4) Business Days of receipt by the
Custodian of a list of Contracts from the Servicer, the Custodian shall certify
to the Servicer whether such Contracts constitute a portion of the Custodian's
Auto Loan Files. Within (i) two (2) Business Days, in the case of the delivery
of loan files relating to less than 400 Auto Loans, (ii) three (3) Business
Days, in the case of the delivery of loan files relating to greater than or
equal to 400 and less than 1000 Auto Loans or (iii) four (4) Business Days, in
the case of the delivery of loan files relating to greater than or equal to 1000
Auto Loans, after the delivery to the Custodian of the
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Custodian's Auto Loan Files (or within such shorter period of time as the
Custodian shall agree), the Custodian shall deliver to the Lender (and a copy to
the Servicer) a certification (the "CERTIFICATION") in substantially the form
annexed as Exhibit 1, to the effect that (except as described on the attached
exception report) the Custodian has received a Custodian's Auto Loan File for
each Auto Loan listed on the related Auto Loan Schedule and it has received (i)
all documents required to be delivered to it pursuant to Sections 2(a) and (b)
of this Agreement are in its possession, (ii) such documents have been reviewed
by it and have not been mutilated, damaged, torn or otherwise physically altered
and relate to such Auto Loan identified on the Auto Loan Schedule, (iii) based
on its examination and only as to the foregoing documents, (A) the information
set forth in item (i) of the definition of Auto Loan Schedule respecting such
Auto Loan accurately reflects the information on the Auto Loan Schedule and (B)
the information set forth in items (ii), (v) and (vi) of the definition of Auto
Loan Schedule respecting such Auto Loan accurately reflects the information on
the Auto Loan Schedule and (iv) based on its examination, the Contract is an
executed original counterpart. The Custodian shall include in the Certification
any Deficiencies revealed in such review attached as an exception report to the
Certification. For purposes of this Section 3, (i) both the Custodian's Auto
Loan Files and the electronic transmission of the Auto Loan Schedule must be
received by the Custodian by 2:30 p.m. in order to be deemed to be delivered on
such Business Day and (ii) the Custodian shall have until 12:01 p.m. of the
applicable Business Day to deliver the Certification to the Lender. The
Custodian shall not be required to review the content (except to the extent
necessary to certify to its presence or absence) of any such document in order
to deliver the Certification. The Custodian shall be under no duty or obligation
to inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they are other than what they purport to be on
their face.
4. DEFICIENCIES IN CUSTODIAN'S AUTO LOAN FILES. (a) If the
Certification discloses that any of the documents enumerated in Section 2 are
missing or discloses any Deficiencies in the documents included in any
Custodian's Auto Loan Files delivered to the Custodian, then the Deal Agent, if
the Lender has funded against such deficient Auto Loans, shall promptly notify
the Custodian (with a copy to the Servicer), in the form of Exhibit 7, that (1)
the Servicer shall deliver the missing documents noted in the Certification to
the Custodian within five (5) Business Days of the date of such notice, (2) the
Lender has waived the Deficiencies noted in the Certification, or (3) the
Servicer shall cure the Deficiencies within five (5) Business Days of the date
of such notice.
(b) If the Lender's notice pursuant to Section 4(a) above states
that the Servicer shall take either of the actions specified in clauses (1) or
(3) of subsection (a) above and the Servicer fails to take such actions within
five (5) Business Days of the date of such notice, then the Custodian shall
notify the Lender and the Servicer of such failure and release or retain the
deficient Custodian's Auto Loan File in accordance with the written instructions
of the Lender in the form of Exhibit 7.
(c) [reserved].
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(d) Within five (5) Business Days after receipt by the Custodian of
any additional documents pursuant to Section 4(a), the Custodian shall review
such documents and deliver to the Lender and the Servicer an exception report
listing any Deficiencies with respect to such documents. If the notification
shall indicate any remaining Deficiencies with respect to such additional
documents, the provisions of this Section 4 shall again be followed.
(e) Within two (2) Business Days of the last Business Day of each
calendar month, the Custodian shall deliver to the Lender and the Servicer a
revised cumulative exception report with respect to all of the Custodian's Auto
Loan Files. If the revised cumulative exception report shall indicate any
remaining Deficiencies in any of the Custodian's Auto Loan Files, the provisions
of this Section 4 shall again be followed.
5A. DEFAULT; SUCCESSOR SERVICER. (a) If an Event of Default under
the Loan and Security Agreement shall occur and be continuing (a "DEFAULT")
then, and in each and every case, so long as the Default shall not have been
remedied, the Lender, by notice then given in writing to the Servicer may cause
the servicing of the Auto Loans to be transferred to the Backup Servicer
("Servicing Termination Notice"). The duties and obligations set forth in this
Agreement relating to the successor Servicer shall only be effective on and
after a Servicing Termination Notice is given to the Servicer. The Lender will
notify the Backup Servicer promptly upon the occurrence of any Servicer Default.
The Servicer shall cooperate with the Backup Servicer in effecting the transfer
of servicing to the Backup Servicer. The Servicer will deposit all cash amounts
that shall at the time be held by the Servicer, or shall thereafter be received
by it with respect to any Auto Loan in the Deposit Account. At such times as the
Backup Servicer is the successor Servicer, the Lender will provide the Backup
Servicer with all collection information, on a daily basis. All reasonable costs
and expenses (including attorneys' fees) incurred in connection with
transferring the Auto Loan Files to the Backup Servicer and amending this
Agreement to reflect such succession as successor Servicer pursuant to this
Section shall be paid by the Servicer upon presentation of reasonable
documentation of such costs and expenses. If the Servicer fails to so pay, the
Lender shall direct that any such amounts shall be payable from the Deposit
Account prior to any distributions to the Lender or otherwise.
(b) Upon the Servicer's receipt of a Servicing Termination Notice,
the Servicer shall continue to service the Auto Loans, only until the date
specified in such Servicing Termination Notice or, if no such date is specified,
until receipt of such notice. In the event of the Servicer's replacement as
servicer of the Auto Loans hereunder, the Lender shall appoint the Backup
Servicer or such other entity acceptable to the Lender as successor Servicer,
and the Backup Servicer or such other entity acceptable to the Lender shall
accept its appointment by a written assumption in form acceptable to the Lender;
PROVIDED, HOWEVER, that the Backup Servicer shall not be required to assume the
duties of the Servicer if the Servicer has not complied with Section 9.15 of the
Loan and Security Agreement as of the date that the Backup Servicer is required
to assume the obligations of the Servicer. Notwithstanding the above, if the
Backup Servicer is legally unable to act as successor Servicer, the Lender will
appoint a successor Servicer to act as successor Servicer. Upon acceptance of
its appointment in accordance with the second preceding sentence, the successor
Servicer shall service the Auto Loans in accordance with the provisions of this
Agreement.
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(c) The successor Servicer shall be liable only for the obligations
of the successor Servicer set forth in Section 5B hereof following receipt by
the successor Servicer of a Servicer Termination Notice.
(d) The Deal Agent, on behalf of the Lender, in its sole and
unreviewable discretion may terminate the appointment of any successor Servicer
as successor Servicer and appoint a different entity as successor Servicer
hereunder.
(e) The successor Servicer undertakes to perform only such duties
and obligations as are specifically set forth in this Agreement, it being
expressly understood by the Lender and the Servicer that there are no implied
duties or obligations under this Agreement.
(f) Neither the successor Servicer nor any of its officers,
directors, employees or agents shall be under any liability for any action taken
or for refraining from the taking of any action in its capacity as successor
Servicer, PROVIDED, HOWEVER, that this provision will not protect the successor
Servicer against any liability which would otherwise be imposed by reason of
willful misconduct, bad faith or negligence in the performance of its duties
hereunder.
(g) As compensation for acting as successor Servicer, the successor
Servicer will be entitled to receive the Servicing Fee. The "Servicing Fee"
shall equal the sum of for each calendar month the greater of (i) the product of
(a) one-twelfth of 2.50% (such percentage, the "BACK UP SERVICER FEE RATE") and
(b) the outstanding principal balance of the Auto Loans as of the first day of
such calendar month and (ii) the then current "market rate" for servicing
comparable assets. The determination of the "market rate" for servicing as set
forth in the preceding sentence shall be determined based on the average of
three, servicing bids received from three independent servicers selected by the
Backup Servicer and approved by the Deal Agent for the Lender. The successor
Servicer shall also be entitled to any late fees, prepayment charges and other
administrative fees or similar charges allowed by applicable law with respect to
the Auto Loans, collected (from whatever source) on the Auto Loans. The Lender
shall direct that the Servicing Fee shall be paid from the Deposit Account prior
to any other distributions to the Lender or otherwise.
5B. DUTIES OF THE SUCCESSOR SERVICER. (a) The successor Servicer,
for the benefit of the Lender and the Servicer (to the extent provided herein)
shall manage, service, administer and make collections on the Auto Loans using
that degree of skill and attention that the successor Servicer ordinarily
exercises with respect to all comparable automotive receivables that it services
for itself or others. The successor Servicer's duties shall include collection
and posting of all payments (which posting shall be delegated to the Deposit
Account), responding to inquiries of Obligors on such Auto Loans, investigating
delinquencies, sending billing statements to Obligors, accounting for
collections, and furnishing monthly statements to the Servicer and the Lender
with respect to distributions and the Auto Loans. Subject to the provisions of
Section 5B(b), the successor Servicer shall follow its customary standards,
policies and procedures in performing its duties as successor Servicer. Subject
to the terms hereof, the successor Servicer shall have full power and authority,
acting in its sole discretion, to take any and all actions in
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connection with such managing, servicing, administration, enforcement,
collection and such sale of the Auto Loans that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the successor
Servicer is authorized and empowered to execute and deliver, on behalf of
itself, the Servicer and the Lender 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 Auto Loan or to the Financed
Vehicles securing such Auto Loans. If the successor Servicer shall commence a
legal proceeding to enforce an Auto Loan, the Servicer and the Lender shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Auto Loan to the successor Servicer. If in any enforcement suit
or legal proceeding it shall be held that the successor Servicer may not enforce
an Auto Loan on the ground that it shall not be a real party in interest or a
holder entitled to enforce such Auto Loan, the Lender shall, at the successor
Servicer's expense and written direction, take steps to enforce such Auto Loan,
including bringing suit in its name. The Servicer and the Lender shall upon the
written request of the successor Servicer furnish the successor Servicer with
any powers of attorney and other documents reasonably necessary or appropriate
to enable the successor Servicer to carry out its servicing and administrative
duties hereunder.
(b) The successor Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Auto Loans 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 successor Servicer may grant extensions, rebates or
adjustments on an Auto Loan or arrange with the Obligor to extend or modify the
payment schedule, which actions shall not, for the purposes of this Agreement,
modify the original due dates or the amounts of the originally scheduled
payments of interest on the Auto Loans. To the extent that the successor
Servicer modifies the payment schedule of an Auto Loan, the successor Servicer
shall first collect one full scheduled payment from the Obligor. The successor
Servicer may in its discretion waive any late payment charge or any other fees
that may be collected in the ordinary course of servicing an Auto Loan. The
successor Servicer shall not agree to any alteration of the original scheduled
payments on the Auto Loan.
(c) On behalf of the Borrower and the Lender the successor Servicer
shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of and liquidate the
Financed Vehicle securing any Auto Loan as to which the successor Servicer shall
have determined eventual payment in full is unlikely. The successor 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 successor 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.
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(d) The successor 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 Auto Loan in the related Financed Vehicle.
The successor Servicer is hereby authorized to take such steps as are necessary
to reperfect such security interest on behalf of the Servicer in the event of
the relocation of a Financed Vehicle or for any other reason.
(e) The successor Servicer shall not release the Financed Vehicle
securing any Auto Loan from the security interest granted by such Auto Loan in
whole or in part except in the event of payment in full by the Obligor
thereunder or repossession, nor shall the successor Servicer impair the rights
of the Lender or the Servicer in such Auto Loan, nor shall the successor
Servicer increase the number of scheduled payments due under an Auto Loan.
(f) The successor Servicer shall not have any authority to amend the
Deposit Account Agreement.
(g) [reserved]
(h) The successor Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder, including licensing
fees of the successor Servicer, fees and disbursements of independent
accountants, income taxes imposed on the successor Servicer and expenses
incurred in connection with distributions and reports to the Lender and the
Servicer.
(i) The successor Servicer may at any time appoint a subservicer to
perform all or any portion of its obligations as successor Servicer hereunder,
PROVIDED, HOWEVER, that the subservicer is acceptable to the Lender and
PROVIDED, FURTHER that the successor Servicer shall remain obligated and be
liable to the Lender and the Servicer for the servicing and administering of the
Auto Loans 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 successor
Servicer alone were servicing and administering the Auto Loans. The fees and
expenses of the subservicer shall be as agreed between the successor Servicer
and its subservicer from time to time, and none of the Lender or the Servicer
shall have any responsibility therefor.
(j) The Backup Servicer shall accept and store, but shall not be
required to examine, the information delivered to the Backup Servicer by the
Servicer pursuant to Section 5C(a). The Backup Servicer will not be responsible
for delays attributable to the Servicer's failure to deliver information,
defects in the information supplied by the Servicer or other circumstances
beyond the control of the Backup Servicer. The Backup Servicer shall remain
solely liable for any delays caused by the Backup Servicer.
(k) The Backup Servicer shall perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Backup Servicer.
The Backup Servicer shall be entitled to
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receive and rely upon instructions from the Lender in connection with its duties
as successor Servicer.
(l) The Backup Servicer shall have no obligation to supervise,
verify, monitor or administer the performance of the Servicer, as servicer of
the Auto Loans. The Backup Servicer shall have no liability for any actions
taken or omitted by the Servicer, as servicer of the Auto Loans.
(m) In the absence of bad faith or negligence on its part, the
Backup Servicer may conclusively rely as to the truth of the statements and the
correctness of the opinions expressed in certificates or opinions furnished to
the Backup Servicer, conforming to the requirements of this Agreement.
(n) The Backup Servicer shall not be required to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the expenditure or
risk of such funds or incurrence of financial liability.
5C. OBLIGATIONS OF THE SERVICER (a) Commencing on the date of
execution of this Agreement and continuing until the earlier of (i) the
termination or expiration of the Loan and Security Agreement and (ii) the
appointment of the Backup Servicer as successor Servicer under this Agreement,
the Servicer shall, on the last day of each calendar month, deliver to the
Backup Servicer in the electronic format acceptable to the Backup Servicer, the
information required to be delivered to the Lender pursuant to Section 9 of the
Loan and Security Agreement.
(b) At its own expense, the Servicer will, within 30 days of the end
of each of its fiscal years, provide the Backup Servicer with proof of its fully
paid errors and omissions insurance policy.
(c) The Servicer, at its own expense, will deliver to the Backup
Servicer, on or before the end of each calendar quarter, beginning October 2,
1998, an officer's certificate stating that to the best of such officer's
knowledge, the Servicer his fulfilled all its obligations under the Loan and
Security Agreement, or, if there has been a default in the fulfillment of any
such obligations, specifying each such default known to such officer and the
nature and status thereof including the steps being taken by the Servicer to
remedy such default.
(d) The Servicer, at its own expense, shall deliver to the Backup
Servicer its (or for any period during which the Servicer is required under GAAP
to be consolidated with any other entities, such consolidated group's) annual
audited balance sheet, income statement and cash flow statement within 90 days
of the end of its fiscal year, beginning with the fiscal year ending April 30,
1999. The Servicer, at its own expense, shall deliver to the Backup Servicer
within 45 days after the end of each of the fiscal quarters of each fiscal year,
its (or for any period during which the Servicer is required under GAAP to be
consolidated with any other entities,
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such consolidated group's) unaudited balance sheets and income statements (or
Form 10-Q) using generally accepted accounting principles, beginning October 31,
1998.
(e) If a Servicer Termination Event has occurred, from time to time
upon reasonable notice, the Servicer shall give the Backup Servicer and its
counsel, accountants, agents, examiners and other representatives reasonable
access, during normal business hours and without charge, to all of the
Servicer's files, books and records (including computer records) relating solely
to the servicing of the Auto Loans; provided however, that the Backup Servicer
and its representatives shall not be denied access to such information in the
event that such information is commingled with other information not relating to
the servicing of the Auto Loans.
(f) After the delivery of a Servicing Termination Notice pursuant to
Section 5A(a), the Servicer shall deliver to the Backup Servicer (i) within one
Business Day of demand therefor a computer tape containing as of the close of
business on the date of demand all of the data maintained by the Servicer in
computer format in connection with servicing the Auto Loans and (ii) within
three Business Days of demand therefor a copy of its records relating to
collections on the Auto Loans.
5D. REPRESENTATIONS AND COVENANTS OF NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION. (a) Subject to the provisions of Section 5D(c), Norwest
Bank Minnesota, National Association shall not resign from the obligations and
duties hereby imposed on it as Backup 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. Notice of any such determination
permitting the resignation of Norwest Bank Minnesota, National Association shall
be communicated to the Lender and the Servicer at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination shall be evidenced by
an opinion of counsel to such effect delivered to the Lender and the Servicer
concurrently with or promptly after such notice. Such resignation shall become
effective unless the Lender advises the Backup Servicer to perform its duties
other than those duties not permissible under applicable law.
(b) The Backup Servicer makes the following representations and
covenants. The representations and covenants speak as of the execution and
delivery of this Agreement and shall survive the pledge of the Auto Loans to the
Lender pursuant to the Loan and Security Agreement.
(i) ORGANIZATION AND GOOD STANDING. The Backup Servicer is
duly organized and validly existing as a national banking association in
good standing under the laws of the jurisdiction of its formation, with
the corporate power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire, own, sell and service the
Auto Loans.
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(ii) DUE QUALIFICATION. The Backup Servicer will be duly
qualified to do business as a foreign corporation in good standing, and
will have obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the conduct
of its business (including the servicing of the Auto Loans as required by
this Agreement) shall require such qualifications within sixty days of a
Servicing Termination Notice or will appoint a subservicer with respect to
the Auto Loans in any jurisdiction in which it is not so qualified.
(iii) POWER AND AUTHORITY. The Backup Servicer has the
corporate power and authority to execute and deliver this Agreement and to
carry out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Backup Servicer by all
necessary corporate action.
(iv) BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Backup Servicer enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws now or
hereafter in effect relating to creditors' rights generally and subject to
general principles of equity (whether applied in a proceeding at law or in
equity).
(c) Any Person (a) into which the Backup Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Backup Servicer shall be a party, (c) which may succeed to the properties and
assets of the Backup Servicer substantially as a whole or (d) with respect to
the Backup Servicer's obligations hereunder, shall be the successor to the
Backup Servicer under this Agreement without further action on the part of any
of the parties to this Agreement
6. OBLIGATIONS OF THE CUSTODIAN. (a) The Custodian shall segregate
and maintain continuous custody of all items constituting the Custodian's Auto
Loan Files in secure, fireproof facilities in accordance with its customary
standards for such custody. The Custodian makes no representations as to and
shall not be responsible to verify (i) the validity, legality, enforceability,
sufficiency, due authorization or genuineness of any document in each
Custodian's Auto Loan File or of any of the Auto Loans or (ii) the
collectability, insurability, effectiveness or suitability of any Auto Loan.
(b) With respect to the documents constituting each Custodian's Auto
Loan File that are delivered to the Custodian, the Custodian shall act
exclusively as the custodian for, and the bailee of, the Lender, (ii) hold all
documents constituting such Custodian's Auto Loan File received by it for the
exclusive use and benefit of the Lender, and (iii) make disposition thereof only
in accordance with the terms of this Agreement or with written instructions
finished by the Lender.
(c) The Deal Agent, upon the release of the Auto Loans from the lien
of the Loan and Security Agreement, shall, upon written request of the Borrower,
notify the Custodian (with a copy to the Servicer) in writing in the form of
Exhibit 8 with respect to such release, and
11
the Custodian shall then deliver the Custodian's Auto Loan Files relating to the
released Auto Loans to the Servicer or the Servicer's designee.
(d) In the event that (i) the Lender, the Servicer or the Custodian
shall be served by a third party with any type of levy, attachment, writ or
court order with respect to any Custodian's Auto Loan File or a document
included within a Custodian's Auto Loan File or (ii) a third party shall
institute any court proceeding by which any Custodian's Auto Loan File or a
document included within a Custodian's Auto Loan File shall be required to be
delivered otherwise than in accordance with the provisions of this Agreement,
the party or parties receiving such service shall promptly deliver or cause to
be delivered to the other parties to this Agreement copies of all court papers,
orders, documents and other materials concerning such proceedings. The Custodian
shall continue to hold and maintain all the Custodian's Auto Loan Files that are
the subject of such proceedings pending a final order of a court of competent
jurisdiction permitting or directing disposition thereof. Upon final
determination of such court, the Custodian shall dispose of such Custodian's
Auto Loan File or a document included within such Custodian's Auto Loan File as
directed by such determination or, if no such determination is made, in
accordance with the provisions of this Agreement Expenses of the Custodian
incurred as a result of such proceedings shall be borne by the Servicer.
7. RELEASE OF CUSTODIAN'S AUTO LOAN FILE. From time to time and as
appropriate for the foreclosure or servicing of any of the Auto Loans, the
Custodian is hereby authorized, upon receipt by a responsible officer of the
Custodian of a written request and receipt of the Servicer (with a copy
delivered to the Deal Agent) in substantially the form annexed as Exhibit 2 (a
"REQUEST FOR RELEASE AND RECEIPT OF DOCUMENTS"), to release to the Servicer by
the close of Business on the Business Day following such request, the related
Custodian's Auto Loan File or the documents from a Custodian's Auto Loan File
set forth in such request and receipt. All documents so released to the Servicer
shall be held by the Servicer in trust for the benefit of the Lender in
accordance with the Loan and Security Agreement. The Servicer shall return to
the Custodian each and every document previously requested from the Custodian's
Auto Loan File when the Servicer's need therefore in connection with such
foreclosure or servicing no longer exists, unless the Auto Loan shall be
liquidated, in which case, upon receipt of a certification to this effect from
the Servicer to the Custodian acknowledged to by the Lender in substantially the
form annexed as Exhibit 2, the Servicer's prior receipt shall be returned by the
Custodian to the Servicer. The Lender agrees to acknowledge, within one Business
Day of receipt, any Request for Release and Receipt of Documents properly
completed and submitted by the Servicer, and not unreasonably to withhold any
such acknowledgment.
8. RELEASE UPON REDELIVERY OR PAYMENT. Upon the redelivery of any
Auto Loan pursuant to the Loan and Security Agreement or the payment in full of
any Auto Loan, which shall be evidenced by the delivery to the Custodian of a
Request for Release and Receipt of Documents executed by the Servicer and
acknowledged by the Lender, the Custodian shall promptly, but in no event in
more than two Business Days after such acknowledgment by the Lender, release the
Custodian's Auto Loan File to the Servicer.
12
9. FEES AND EXPENSES OF THE CUSTODIAN. It is understood that the
Custodian will charge the Servicer such fees for its services, and shall be
entitled to reimbursement from the Servicer for expenses, under this Agreement
as are set forth on Exhibit 11 attached hereto and made a part hereof.
10. EXAMINATION OF CUSTODIAN'S AUTO LOAN FILES. Upon reasonable
prior written notice to the Custodian (but no less than one Business Day), (a)
the Lender and its authorized representatives and (b) the Servicer and its
authorized representatives will be permitted during the Custodian's normal
business hours to examine the Custodian's Auto Loan Files, documents, records
and other papers in the possession, or under the control, of the Custodian
relating to any or all of the Auto Loans.
11. TRANSFER OF CUSTODIAN'S AUTO LOAN FILES UPON TERMINATION. (a) If
the Custodian is furnished with written notice and satisfactory evidence from
the Lender that the Loan and Security Agreement has been terminated, as to any
or all of the Auto Loans, and the Secured Note has been canceled, the Custodian
shall, upon written request of the Servicer release to such Persons as the
Lender shall designate such Custodian's Auto Loan Files relating to such Auto
Loan as the Servicer shall request and the Custodian shall endorse the notes
relating to the Auto Loans (the "Auto Notes") only as, and if, the Servicer
shall request in writing.
(b) If the Custodian is finished with written notice and
satisfactory evidence from the Lender that the Loan and Security Agreement has
been terminated, but has not received notice from the Lender that the Secured
Note has been canceled, as to any or all of the Auto Loans, the Custodian shall,
upon written request of the Lender release to such Persons as the Lender shall
designate such Custodian's Auto Loan Files relating to such Auto Loans as the
Lender shall request and the Custodian shall endorse the related Auto Notes only
as, and if, the Lender shall request in writing.
12. INSURANCE OF THE CUSTODIAN. The Custodian shall, at its own
expense, maintain at all times during the term of this Agreement and keep in
full force and effect (a) fidelity insurance (b) theft of documents insurance,
and (c) forgery insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for similar insurance
typically maintained by banks that act as custodian in similar transactions.
13. PERIODIC STATEMENTS. The Custodian shall provide monthly to the
Deal Agent and the Servicer a list of all the Auto Loans for which the Custodian
holds a Custodian's Auto Loan File pursuant to this Agreement. Such list shall
include the loan number and name of the related Obligor and may be in the form
of a copy of the Auto Loan Schedule with manual deletions to specifically denote
any Auto Loans redelivered since the date of this Agreement.
14. COPIES OF DOCUMENTS. Within ten days after the written request
and at the expense of the Lender, the Custodian shall provide the Deal Agent
with copies of the documents in the Custodian's Auto Loan Files.
13
15. RESIGNATION BY AND REMOVAL OF THE CUSTODIAN: SUCCESSOR
CUSTODIAN. (a) The Custodian may at any time resign and terminate its
obligations as custodian under this Agreement upon at least 45 days prior
written notice to the Servicer and Deal Agent. Promptly after receipt of notice
of the Custodian's resignation, the Servicer shall appoint, by written
instrument, a successor custodian, subject to prior written approval by the
Lender. If the Servicer fails to appoint a successor within 30 days, the Lender
shall appoint a successor custodian. If both the Servicer and the Lender fail to
appoint a successor custodian pursuant to the terms hereof, the Custodian may
petition a court of competent jurisdiction to appoint a successor custodian. One
original counterpart of such instrument of appointment shall be delivered to the
Servicer, the Custodian and the successor custodian.
(b) The Lender, with or without cause, upon at least 30 days'
written notice to the Custodian and with the prior written consent of the
Servicer, which consent shall not be unreasonably withheld, may remove and
discharge the Custodian (or any successor custodian thereafter appointed) from
the performance of its obligations under this Agreement. A copy of such notice
shall be delivered to the Servicer. Promptly after the giving of notice of
removal of the Custodian, the Lender shall appoint, by written instrument, a
successor custodian which shall be reasonably acceptable to the Servicer. The
compensation payable to such successor custodian shall be on terms not more
favorable to such successor custodian than pursuant to Section 9 hereof. One
original counterpart of such instrument of appointment shall be delivered to
each of the Servicer, and to each of the Custodian and the successor custodian.
(c) No resignation or removal of the Custodian and no appointment of
a successor custodian under this Section 15 shall become effective until the
acceptance of a successor custodian hereunder.
(d) In the event of any such resignation or removal, the Custodian
shall promptly transfer to the successor custodian, as directed in writing by
the Lender, all of the Custodian's Auto Loan Files being administered pursuant
to this Agreement and, to the extent (if any, required by the Loan and Security
Agreement) and in the manner directed by the Lender, the Custodian shall
complete the endorsements on the Auto Notes at the expense of the Servicer.
16. INDEMNITY. The Servicer agrees to indemnify and hold harmless
Norwest against any and all claims, losses, liabilities, damages or reasonable
expenses (including, but not limited to, attorneys' fees, court costs and costs
of investigation) of any kind or nature whatsoever arising out of or in
connection with this Agreement that may be imposed upon, incurred by or asserted
against the Norwest; PROVIDED, HOWEVER, that this Section shall not relieve
Norwest from liability for its willful misfeasance, bad faith or gross
negligence. The provisions of this Section 16 shall survive the resignation or
removal of Norwest and the termination of this Agreement. Promptly after receipt
by Norwest of written notice of the commencement of any action arising out of or
in connection with this Agreement, Norwest will notify the Servicer of the
commencement thereof. In case any such action is brought against Norwest, the
Servicer will be entitled to participate therein.
14
17. LIMITATION OF LIABILITY. (a) Norwest shall not be liable to the
Servicer, the Lender, or any other Person with respect to any action taken or
not taken by it in good faith in the performance of its obligations under this
Agreement. The obligations of Norwest shall be determined solely by the express
provisions of this Agreement. No representation, warranty, covenant, agreement,
obligation or duty of Norwest shall be implied with respect to this Agreement or
Norwest's services hereunder.
(b) In the Custodian's review of documents pursuant to Section 3 of
this Agreement, the Custodian shall be under no duty or obligation to inspect,
review or examine the Custodian's Auto Loan Files to determine that the contents
thereof are genuine, enforceable or appropriate for the represented purpose or
that they have been actually recorded or that they are other than what they
purport to be on their face.
(c) The Custodian may rely, and shall be protected in acting or
refraining to act, upon and need not verify the accuracy of, any (i) written
instructions from any Persons the Custodian reasonably believes to be authorized
to give such instructions, who shall only be, with respect to the Servicer and
to the Lender, Persons the Custodian reasonably believes in good faith to be
Authorized Representatives, and (ii) any written instruction, notice, order,
request, direction, certificate, opinion or other instrument or document
believed by the Custodian to be genuine and to have been signed and presented by
the proper party or parties, which, with respect to the Servicer and to the
Lender, shall mean signature and presentation by Authorized Representatives
whether such presentation is by personal delivery, express delivery or
facsimile.
(d) The Custodian may consult with counsel nationally recognized in
the area of commercial transactions acceptable to the Lender, which acceptance
shall not be unreasonably withheld, with regard to legal questions arising out
of or in connection with this Agreement, and the advice or opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, omitted or suffered by the Custodian in reasonable reliance,
in good faith, and in accordance therewith.
(e) No provision of this Agreement shall require the Custodian to
expend or risk its own funds or otherwise incur financial liability in the
performance of its duties under this Agreement if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity is not
reasonably assured to it.
(f) The Custodian shall not be responsible or liable for, and makes
no representation or warranty with respect to, the validity, adequacy or
perfection of any lien upon, or security interest in, any Auto Loans or
Custodian's Auto Loan Files purported to be granted at any time to the Lender.
18. TERM OF AGREEMENT. This Agreement shall be terminated upon (a)
the final payment or other liquidation (or advance with respect thereto) of the
last Auto Loan in the Custodian's Auto Loan Files or (b) the disposition of all
property acquired upon foreclosure of any Auto Loan in the Custodian's Auto Loan
Files, and the final remittance of all funds due the Lender under all Loan and
Security Agreements.
15
If either of the circumstances described in clause (a) or clause (b)
of this Section 18 shall occur, promptly after written notice from the Servicer
and the Lender to the Custodian to such effect, all documents remaining in the
Custodian's Auto Loan Files shall be delivered to, or at the direction of, the
Servicer.
19. AUTHORIZED REPRESENTATIVES. The names of the officers of the
Servicer and of the Lender who are authorized to give and receive notices,
requests and instructions and to deliver certificates and documents in
connection with this Agreement on behalf of the Servicer and on behalf of the
Lender ("AUTHORIZED REPRESENTATIVES") are set forth on Exhibit 3, along with the
specimen signature of each such officer. From time to time, the Servicer and the
Lender may, by delivering to the Custodian a revised exhibit, change the
information previously given, but the Custodian shall be entitled to rely
conclusively on the last exhibit until receipt of a superseding exhibit.
20. NOTICES. All demands, notices and communications relating to
this Agreement shall be in writing and shall be deemed to have been duly given
if mailed, by registered or certified mail, return receipt requested, or by
overnight courier, or, if by other means, when received by the other party or
parties at the address shown below, or such other address as may hereafter be
furnished to the other party or parties by like notice. Any such demand, notice
or communication hereunder shall be deemed to have been received on the date
delivered to or received at the premises of the addressee (as evidenced, in the
case of registered or certified mail, by the date noted on the return receipt).
If to the Servicer:
Auto Lenders Acceptance Corporation
300 Interstate North Parkway, 8th Floor
Atlanta, Georgia 30339
Attention: Bennie H. Duck
Phone Number: (770) 956-3800
Fax Number: (770) 956-3825
With a copy to (other than with respect to notices pursuant to
Section 4(e) or Section 13):
First Investors Financial Services, Inc.
Attention: 675 Bering Drive, Suite 710
Houston, Texas 77057
Attention: Bennie H. Duck
Phone Number: (713) 977-2600
Fax Number: (713) 260-0028
16
If to the Custodian:
Norwest Bank Minnesota, National Association
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479-0070
Attention: Corporate Trust Services - Asset Backed
Administration
Phone Number: (612) 667 -1117
Fax Number: (612) 667-3539
If to the Lender:
Variable Funding Capital Corporation
c/o First Union Capital Markets
One First Union Center, TW-6
Charlotte, North Carolina 28288
Attention: John Foxgrover/Bennett Cole
Telephone: (704) 383-8437
Fax Number: (704) 374-3254
With a copy to (other than with respect to notices pursuant to
Section 4(e) or Section 13):
Lord Securities Corp.
2 Wall Street, 19th Floor
New York, New York 10005
Attention: Richard Taiano
21. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to conflict of laws applied in the State of New York.
22. ASSIGNMENT. No party to this Agreement may assign its rights or
delegate its obligations under this Assignment without the express written
consent of the other parties, except as otherwise set forth in this Agreement.
23. COUNTERPARTS. For the purpose of facilitating the execution of
this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed to
be an original and together shall constitute and be one and the same instrument.
24. HEADINGS. The Section headings are not part of this Agreement
and shall not be used in its interpretation.
25. USE OF WORDS. The definitions set forth in this Agreement
include both the singular and plural.
17
26. TRANSMISSION OF CUSTODIAN'S AUTO LOAN FILES. Written
instructions as to the method of shipment and shipper(s) the Custodian is
directed to utilize in connection with transmission of auto loan files and loan
documents in the performance of the Custodian's duties hereunder shall be
delivered by the Servicer to the Custodian prior to any shipment of any auto
loan files and loan documents hereunder. The Servicer will arrange for the
provision of such services at its sole cost and expense (or, at the Custodian's
option, reimburse the Custodian for all costs and expenses incurred by the
Custodian consistent with such instructions) and will maintain such insurance
against loss or damage to auto loan files and loan documents as the Servicer
deems appropriate. Without limiting the generality of the provisions of Sections
16 and 17 above, it is expressly agreed that in no event shall the Custodian
have any liability for any losses or damages to any Person, including, without
limitation, the Servicer or the Lender, arising out of actions of the Custodian
consistent with instructions of the Servicer or the Lender.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
AUTO LENDERS ACCEPTANCE CORPORATION,
as Servicer
By:_________________________________________
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Custodian and Back-Up Servicer
By:_________________________________________
Name:
Title:
VARIABLE FUNDING CAPITAL CORPORATION,
as Lender
By: First Union Capital Markets, a division
of Wheat First Securities, Inc., as
attorney-in-fact
By:_________________________________________
Name:
Title:
EXHIBIT 1
CERTIFICATION
___________, 1998
Variable Funding Capital Corporation
c/o First Union Capital Markets
One First Union Center, TW-6
Charlotte, NC 28202
Attn: Mr. Bennett Cole
Re: Custodial Agreement (the "Custodial Agreement") dated as of
October 2, 1998, among Variable Funding Capital Corporation
("LENDER"), Auto Lenders Acceptance Corporation ("SERVICER") and
Norwest Bank Minnesota, National Association ("CUSTODIAN" AND
`BACKUP
SERVICER")
Ladies and Gentlemen:
In accordance with the provisions of Section 3 of the
above-referenced Custodial Agreement, the undersigned, as the Custodian, hereby
certifies that as to each Auto Loan listed on the Auto Loan Schedule (other than
any Auto Loan paid in full or any Auto Loan listed on the exception report
attached hereto) it has reviewed the Custodian's Auto Loan Files and has
determined that (i) all documents required to be delivered to it pursuant to
Sections 2(a) and (b) of the Custodial Agreement are in its possession; (ii)
such documents have been reviewed by it and have not been mutilated, damaged,
tom or otherwise physically altered and relate to such Auto Loan identified on
the Auto Loan Schedule; (iii) (A) based on its examination and only as to the
foregoing documents, the information set forth in item (i) of the definition of
Auto Loan Schedule respecting such Auto Loan accurately reflects the information
on the Auto Loan Schedule and (B) the information set forth in items (ii), (v)
and (vi) of the definition of Auto Loan Schedule respecting such Auto Loan
accurately reflects the information on the Auto Loan Schedule; and (iv) based on
its examination, the Contract is an executed original counterpart. The Custodian
makes no representations as to and shall not be responsible to verify (i) the
validity, legality, enforceability, sufficiency, due authorization or
genuineness of any of the documents contained in each Custodian's Auto Loan File
or of any of the Auto Loans or (ii) the collectability, insurability,
effectiveness or suitability of any such Auto Loan.
Capitalized words used herein shall have the respective meanings
assigned to them in the above-captioned Custodial Agreement.
Norwest Bank Minnesota, National
Association, as Custodian
By:________________________________
Name:______________________________
Title:_____________________________
Exception Report
EXHIBIT 2
REQUEST FOR RELEASE AND RECEIPT OF DOCUMENTS
Norwest Bank Minnesota,
National Association
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479-0070
Attention: Corporate Trust Services - Asset Backed Administration
Re: Custodial Agreement (the "Custodial Agreement") dated as of October
2, 1998, among Variable Funding Capital Corporation ("Lender"), Auto
Lenders Acceptance Corporation ("Servicer") and Norwest Bank
Minnesota, National ASSOCIATION ("CUSTODIAN")
In connection with the administration of the Auto Loans held by you
as the Custodian for the Lender, we request the release of the (Custodian's Auto
Loan File/specify documents) for the Auto Loan described below, for the reason
indicated.
OBLIGOR'S NAME, ADDRESS & ZIP CODE:
AUTO LOAN NUMBER:
REASON FOR REQUESTING DOCUMENTS (check one)
____1. Auto Loan Paid in Full
____2. Auto Loan Redelivered Pursuant to Section 8 of the Custodial
Agreement
____3. Auto Loan Liquidated by ______________________________________
____4. Auto Loan in Foreclosure
____5. Auto Loan substituted with alternate Auto Loan to be delivered to
the Custodian with a revised Auto Schedule indicating
substitutions
____6. Other (explain)______________________________________________
If item 1, 2 or 3 above is checked, and if all or part of the
Custodian's Auto Loan File was previously released to us, please release to us
our previous receipt on file with you, as well as any additional documents in
your possession relating to the above specified Auto Loan.
If Item 4 or 6 above is checked, upon our return of all of the above
document to you as the Custodian, please acknowledge your receipt by signing the
space indicated below, and returning this form.
AUTO LENDERS ACCEPTANCE
CORPORATION
By:
Print Name:__________________________
Title:_______________________________
Date:________________________________
ACKNOWLEDGED:
VARIABLE FUNDING CAPITAL
CORPORATION, as Lender
By:___________________________________________
Print Name:___________________________________
Title:________________________________________
Date:_________________________________________
DOCUMENTS RETURNED TO THE CUSTODIAN
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Custodian
By:
Print Name:
Title:
Date:
EXHIBIT 3
Authorized Representatives
a) of Auto Lenders Acceptance Corporation
NAME SPECIMEN SIGNATURE
1. _______________ ____________________________________
2. _______________ ____________________________________
3. _______________ ____________________________________
4. _______________ ____________________________________
b) of First Union Capital Markets, as agent for Variable
Funding Capital Corporation
NAME SPECIMEN SIGNATURE
1. Bennett Cole ____________________________________
2. John Foxgrover ____________________________________
3. Darrell Baber ____________________________________
4. ____________________________________
CERTIFICATE AS TO AUTHORIZED SIGNATURES
Re:_____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Account Number(s) ______________________________________________________________
The specimen signatures shown below are the specimen signatures of the
individuals authorized to initiate and approve transactions of all types for the
above-mentioned bond issue:
Name/Title Specimen Signature
____________________________ _________________________________
(Name and Title) (Signature)
____________________________ _________________________________
(Name and Title) (Signature)
____________________________ _________________________________
(Name and Title) (Signature)
Dated:______________________
EXHIBIT 7
NOTIFICATION IN EVENT OF DEFICIENCY
IN CUSTODIAN'S AUTO LOAN FILES
TO: Norwest Bank Minnesota,
National Association
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479-0070
Attention: Corporate Trust Services Asset Backed Administration
Re: Custodial Agreement (the "Custodial Agreement") dated as of
October 2, 1998, among Variable Funding Capital Corporation
("Lender"), Auto Lenders Acceptance Corporation ("Servicer")
and Norwest Bank MINNESOTA, NATIONAL ASSOCIATION ("CUSTODIAN")
The undersigned, in accordance with Section 4 of the Custodial Agreement, hereby
notifies the Custodian that:
|_| The Servicer shall deliver the following documents to the Custodian within
five (5) Business Days from the date hereof.
[list of documents]
|_| The Lender has waived the Deficiencies noted in the Certification.
|_| The Servicer shall cure the Deficiencies within five (5) Business Days
from the date hereof.
|_| The Servicer shall substitute another Auto Loan for the deficient Auto
Loan and shall deliver to the Custodian the Custodian's Auto Loan File
with respect to the substituted Auto Loan within five (5) Business Days of
the date hereof
|_| The Custodian shall release the deficient Custodian's Auto Loan File to
the Servicer.
|_| The Custodian shall retain the deficient Custodian's Auto Loan File.
Capitalized words used herein shall have the respective meanings assigned
to them in the above-captioned Custodial Agreement.
VARIABLE FUNDING CAPITAL CORPORATION
By:_________________________________
Name:
Title:
Date:
EXHIBIT 8
RELEASE OF AUTO LOANS
TO: Norwest Bank Minnesota,
National Association
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479-0070
Attention: Corporate Trust Services - Asset Backed Administration
The undersigned, in accordance with Section 6(c) of the Custodial
Agreement dated as of October 2, 1998, among Variable Funding Capital
Corporation, Auto Lenders Acceptance Corporation and Norwest Bank Minnesota,
National Association, hereby releases all of its lien and interest in the Auto
Loans and related Custodian's Auto Loan Files identified in Schedule A to this
Release of Auto Loans.
VARIABLE FUNDING CAPITAL CORPORATION
By:_________________________________
Name:
Title:
Date:
EXHIBIT 9
AUTO LOAN SCHEDULE
EXHIBIT 10
CONTENTS OF CUSTODIAN AUTO LOAN FILE
Original Promissory Note, Installment Sales Contract, Loan and Security
Agreement, original credit application, title, or applicable document evidencing
Servicer's perfected security interest in the applicable motor vehicle
EXHIBIT 11
NORWEST BANK MINNESOTA, N.A.
Schedule of Fees
for
AUTO LENDERS ACCEPTANCE CORPORATION
Warehouse Facility
I. ACCOUNT ACCEPTANCE FEE: $___________
This fee covers all initial services including
the examination of the Warehouse Facility
documents, supporting documents, and
establishment of the necessary records. Fee
payable at closing.
II. MONTHLY ADMINISTRATION AND BACK-UP SERVICING FEE: __ BASIS POINTS
(MINIMUM $_______)
An annual fee for the ordinary administration of the
Warehouse facility will be charged monthly as indicated
above. It will be based on the average loan amount
funded per month. The minimum monthly fee is $1,000. The
Back-Up Servicer will establish preliminary procedures
for the transfer of servicing responsibilities to
Norwest should circumstances warrant.
III. COUNSEL FEE: $_____________
OUT OF POCKET
Fees for counsel are guaranteed not to exceed the above
amount and covers the review of both draft and final
documentation. Fee includes only an enforceability
opinion. Should other opinions be required, notice will
be given in advance concerning the billing of additional
amounts. Any out-of-pockets will be billed in addition
to the above.
IV. LOAN FILE CUSTODIAN: $___ PER FILE CHECK-IN
$___ QUARTERLY FILE
HOLDING CHARGE
Fee for Loan File Custodial services. Responsibilities
include loan file safekeeping and substitution services
for all loan files. In addition to the above, the
Servicer is responsible for all delivery fees pertaining
to the initial shipment of the loan files to Norwest
Bank.
V. MISCELLANEOUS:
The fees set forth above are subject to the review and
acceptance of final documentation and are subject to
change should circumstances warrant. Additional
out-of-pocket expenses may be billed in addition to the
above which can include, but are not limited to, travel
expenses for trust officers attending out-of-town
closings and due diligence visit. Any fees charged for
services not specifically covered in this proposal will
be assessed in amounts commensurate with the services
rendered.