EXHIBIT 4.2.1
TRUST SALE AND SERVICING AGREEMENT
AMONG
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SERVICER
ACE SECURITIES CORP.
SELLER
AND
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ISSUER
DATED AS OF ______, 20__
TABLE OF CONTENTS
PAGE
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 Definitions.................................................5
ARTICLE II
CONVEYANCE OF ELIGIBLE RECEIVABLES; ISSUANCE OF INITIAL SECURITIES
SECTION 2.1 Conveyance of Eligible Receivables..........................6
SECTION 2.2 Custody of Documentation....................................7
SECTION 2.3 Acceptance by the Issuer; Other Acknowledgments.............7
SECTION 2.4 Representations and Warranties under the Pooling and
Servicing Agreement.........................................8
SECTION 2.5 Repurchase of Receivables Upon Breach of Warranty;
Administrative Receivables..................................8
SECTION 2.6 Covenants...................................................9
SECTION 2.7 Addition of Accounts.......................................10
SECTION 2.8 Optional Removal of Accounts...............................11
SECTION 2.9 Removal of Ineligible Accounts.............................12
ARTICLE III
THE SELLER
SECTION 3.1 Representations of the Seller..............................13
SECTION 3.2 Liability of Seller........................................16
SECTION 3.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller; Amendment of Certificate of
Incorporation..............................................16
SECTION 3.4 Limitation on Liability of Seller and Others...............17
SECTION 3.5 Seller May Own Notes or Certificates.......................17
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE FUNDS;
STATEMENTS TO SECURITYHOLDERS
SECTION 4.1 Annual Statement as to Compliance; Notice of Servicing
Default....................................................18
SECTION 4.2 Annual Independent Accountants' Report.....................18
SECTION 4.3 Access to Certain Documentation and Information
Regarding Accounts and Receivables.........................19
SECTION 4.4 Enforcement of Receivables.................................19
SECTION 4.5 Allocations; Distributions.................................19
SECTION 4.6 ______________________ Reserve Funds and the
Reserve Fund...............................................27
SECTION 4.7 Net Deposits...............................................28
SECTION 4.8 Statements to Securityholders..............................29
SECTION 4.9 New Issuances; Changes in Specified Maximum
Revolver Balance...........................................30
ARTICLE V
SERVICING FEE
SECTION 5.1 Servicing Compensation.....................................32
ARTICLE VI
SECURITYHOLDER ACCOUNTS; COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 6.1 Establishment of Accounts; Deposits; Investments...........32
SECTION 6.2 Collections................................................37
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.1 Liability of Servicer; Indemnities.........................38
SECTION 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer...............................39
SECTION 7.3 Limitation on Liability of Servicer and Others.............39
SECTION 7.4 Delegation of Duties.......................................40
SECTION 7.5 Servicer Not to Resign.....................................40
ARTICLE VIII
DEFAULT
SECTION 8.1 Servicing Defaults.........................................41
SECTION 8.2 Consequences of a Servicing Default........................42
SECTION 8.3 Indenture Trustee to Act; Appointment of Successor.........43
SECTION 8.4 Notification to Securityholders............................44
SECTION 8.5 Waiver of Past Defaults....................................44
SECTION 8.6 Repayment of Advances......................................44
ARTICLE IX
EARLY AMORTIZATION EVENTS; TERMINATION
SECTION 9.1 Early Amortization Events..................................44
SECTION 9.2 Insolvency Events..........................................47
SECTION 9.3 Optional Purchase by the Servicer..........................47
SECTION 9.4 Termination................................................48
SECTION 9.5 Recommencement of Revolving Period.........................48
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment..................................................50
SECTION 10.2 Protection of Title to the Owner Trust Estate..............52
SECTION 10.3 Notices....................................................54
SECTION 10.4 GOVERNING LAW..............................................54
SECTION 10.5 Severability of Provisions.................................54
SECTION 10.6 Assignment.................................................54
SECTION 10.7 Third-Party Beneficiaries..................................54
SECTION 10.8 Counterparts...............................................55
SECTION 10.9 Headings...................................................55
SECTION 10.10 Assignment to Indenture Trustee............................55
SECTION 10.11 No Petition Covenants......................................55
SECTION 10.12 Further Assurances.........................................55
SECTION 10.13 No Waiver; Cumulative Remedies.............................55
SECTION 10.14 Merger and Integration.....................................55
SECTION 10.15 Limitation of Liability of Indenture Trustee and
Owner Trustee..............................................56
EXHIBIT A Form of Assignment for this Initial Closing Date
EXHIBIT B Locations of Schedule of Accounts
EXHIBIT C Form of Assignment for Each Addition Date
EXHIBIT D Form of Opinion of Counsel with Respect to Addition
of Accounts
APPENDIX A Definitions and Rules of Construction
APPENDIX B Notices and Addresses
THIS TRUST SALE AND SERVICING AGREEMENT is made as of ____, 20__, by
and among ____________________, a __________ corporation ("________") and in its
capacity as Servicer under the Pooling and Servicing Agreement and hereunder
(the "Servicer"), ACE SECURITIES CORP., a Delaware corporation (the "Seller"),
and ______________________, a Delaware business trust (the "Issuer" or the
"Trust").
WHEREAS, on the Initial Closing Date, the Original Seller has sold the
Eligible Receivables in the Accounts in the Pool of Accounts to the Seller and,
as Servicer, has agreed to service all Receivables in such Accounts pursuant to
the Pooling and Servicing Agreement;
WHEREAS, the Seller desires to sell the Eligible Receivables in the
Accounts in the Pool of Accounts to the Issuer on the Initial Closing Date in
exchange for the Initial Securities pursuant to the terms of this Agreement and
to sell to the Issuer any Eligible Receivables thereafter arising in such
Accounts, and the Issuer desires to purchase all such Eligible Receivables;
WHEREAS, the Servicer desires to perform the servicing obligations set
forth herein for and in consideration of the fees and other benefits set forth
in this Agreement and in the Pooling and Servicing Agreement; and
WHEREAS, the Seller and the Issuer wish to set forth the terms
pursuant to which the Eligible Receivables in the Accounts in the Pool of
Accounts and all related Collateral Security are to be sold by the Seller to the
Issuer on the Initial Closing Date and thereafter and all Receivables in such
Accounts serviced by the Servicer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 Definitions. Certain capitalized terms used in the above
recitals and in this Agreement are defined in and shall have the respective
meanings assigned to them in Part I of Appendix A to this Agreement. All
references herein to "the Agreement" or "this Agreement" are to this Trust Sale
and Servicing Agreement as it may be amended, supplemented or modified from time
to time, the exhibits hereto and the capitalized terms used herein which are
defined in Appendix A, and all references herein to Articles, Sections and
subsections are to Articles, Sections or subsections of this Agreement unless
otherwise specified. The rules of construction set forth in Part II of Appendix
A shall be applicable to this Agreement.
ARTICLE II
CONVEYANCE OF ELIGIBLE RECEIVABLES;
ISSUANCE OF INITIAL SECURITIES
SECTION 2.1 Conveyance of Eligible Receivables.
(a) In consideration of the Issuer's delivery on the Initial Closing
Date of the ______ Term Notes and the _____ Certificates with an initial
Certificate Balance of $__________ to, or upon the order of, the Seller, the
Seller does hereby enter into this Agreement and agree to fulfill all of its
obligations hereunder and does hereby sell, transfer, assign and otherwise
convey to the Issuer, without recourse (except as expressly provided herein),
pursuant to an assignment in the form of Exhibit A hereto, on the Initial
Closing Date, (i) all of its right, title and interest in, to and under all of
the Eligible Receivables existing in the Accounts listed on the Schedule of
Accounts (which is on file at the locations set forth in Exhibit B hereto) as of
the close of business on the Initial Cut-Off Date and all monies due or to
become due thereon after the Initial Cut-Off Date, all Collateral Security with
respect thereto and all amounts received with respect thereto (including all
Interest Collections received in the calendar month in which the Initial Cut-Off
Date occurs, whether or not received prior to the Initial Cut-Off Date), (ii)
all of its right, title and interest in, to and under Article IV and Sections
3.04(c) and 6.03 of the Pooling and Servicing Agreement with respect to such
Receivables, including the right of the Seller to cause the Original Seller or
the Servicer to repurchase Receivables under certain circumstances, (iii) all of
its right, title and interest in, to and under the Custodian Agreement with
respect to such Receivables and (iv) all of its right, title and interest in all
proceeds of the foregoing (including "proceeds" as defined in Section 9-306 of
the UCC and Recoveries).
(b) As of each Receivables Purchase Date, the Seller does hereby sell,
transfer, assign and otherwise convey to the Trust, without recourse (except as
expressly provided herein), (i) all of its right, title and interest in, to and
under all Eligible Receivables created or deemed created in the Accounts in the
Pool of Accounts on such date and all monies due or to become due thereon after
such Receivables Purchase Date, all Collateral Security with respect thereto and
all amounts received with respect thereto, (ii) all of its right, title and
interest in, to and under Article IV and Sections 3.04(c) and 6.03 of the
Pooling and Servicing Agreement, including the right of the Seller to cause the
Original Seller or the Servicer to repurchase Receivables under certain
circumstances, (iii) all of its right, title and interest in, to and under the
Custodian Agreement with respect to such Receivables and (iv) all of its right,
title and interest in all proceeds of the foregoing (including "proceeds" as
defined in Section 9-306 of the UCC and Recoveries). The Trust shall pay for the
property purchased on any Receivables Purchase Date as set forth in Section
4.5(d)(i), with the purchase price equal to the principal balance of the
Receivables so purchased on such date.
(c) It is the intention of the Seller and the Issuer that the
transfers and assignments contemplated by this Agreement shall constitute sales
of the property described in Sections 2.1(a) and (b) from the Seller to the
Issuer and that the beneficial interest in and title to such property shall not
be part of the Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any Insolvency Law. Notwithstanding the
foregoing, in the event a court of competent jurisdiction determines that such
transfers and assignments did not constitute such sales or that such beneficial
interest is a part of the Seller's estate, then the Seller shall be deemed to
have granted to the Issuer a first priority perfected security interest in all
of the Seller's right, title and interest in, to and under such property, and
the Seller hereby grants such security interest. For purposes of such grant,
this Agreement shall constitute a security agreement under the UCC. The
foregoing sales, transfers, assignments and conveyances and any subsequent
sales, transfers, assignments and conveyances do not constitute, and are not
intended to result in, the creation or an assumption by the Issuer of any
obligation of the Seller or any other Person in connection with the Receivables
described above or under any agreement or instrument relating thereto, including
any obligation to any Dealers.
(d) Within two Business Days after the Initial Closing Date (or such
later date as may be permitted pursuant to Section 6.2), the Original Seller as
directed by the Seller pursuant to Section 3.06 of the Pooling and Servicing
Agreement, shall cause to be deposited into the Collection Account the
collections with respect to the Receivables described in Section 3.06 of the
Pooling and Servicing Agreement.
SECTION 2.2 Custody of Documentation. In connection with the sale,
transfer, assignment and conveyance of the Receivables in the Accounts in the
Pool of Accounts and related Collateral Security to the Issuer hereunder,
_______, as Custodian under the Custodian Agreement, agrees to act as Custodian
thereunder for the benefit of the Issuer. The Issuer hereby accepts and agrees
to the terms and provisions of the Custodian Agreement and designates _____ as
custodian with respect to the documents and instruments (as more fully described
in the Custodian Agreement) associated with the Receivables related to the
Accounts in the Pool of Accounts.
SECTION 2.3 Acceptance by the Issuer; Other Acknowledgments.
(a) The Issuer hereby acknowledges its acceptance of all right, title
and interest previously held by the Seller to the property, now existing and
hereafter created, conveyed by the Seller pursuant to Section 2.1, and declares
that it shall hold such consideration upon the trust set forth in the Trust
Agreement for the benefit of the Securityholders, subject to the terms and
conditions of the Indenture, the Trust Agreement and this Agreement. The Issuer
hereby agrees and accepts the appointment and authorization of ______ as
Servicer hereunder and under the Pooling and Servicing Agreement. The Issuer
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Agreement, the Seller delivered to the Owner Trustee the
Schedule of Accounts. The parties agree that the rights, duties and obligations
of _____ as Servicer under the Pooling and Servicing Agreement are subject to
the provisions hereof, including Sections 7.2, 7.4, 7.5 and 10.2 and Article
VIII. The Trust and the Indenture Trustee hereby confirm the authorization and
empowerment of the Servicer under Section 3.02 of the Pooling and Servicing
Agreement.
(b) The Issuer acknowledges and agrees to the provisions of Collateral
and accepts the interests and rights in Collateral Security sold and Section
6.03 of the Pooling and Servicing Agreement relating to Common assigned to it
hereunder subject to the terms and conditions set forth in such Section 6.03.
SECTION 2.4 Representations and Warranties under the Pooling and
Servicing Agreement. The Seller hereby represents and warrants to the Issuer
that the Seller has taken no action which would cause the representations and
warranties of the Original Seller in Section 4.01(a) of the Pooling and
Servicing Agreement to be false in any material respect. The foregoing
representation and warranty speaks as of the Initial Cut-Off Date (as to
Sections 4.01(a)(i) and (ii)), as of the related Additional Cut-Off Date with
respect to each Additional Account (as to Section 4.01(a)(iii)) and as of the
related Receivables Purchase Date with respect to Receivables purchased and sold
after the Initial Closing Date (as to Section 4.01(a)(iv)), and shall survive
the sales, transfers and assignments under Section 2.1 to the Issuer and the
pledge of the Issuer's assets to the Indenture Trustee pursuant to the
Indenture. The Seller further acknowledges that the Issuer relies on the
representations and warranties of the Seller under this Agreement and of the
Original Seller under the Pooling and Servicing Agreement in accepting the
Receivables hereunder and delivering the Securities. The Servicer acknowledges
that the Issuer is relying on the representations, warranties and covenants of
the Servicer in Section 3.04 of the Pooling and Servicing Agreement in acquiring
and holding Receivables and the related Collateral Security hereunder and in
issuing the Securities.
SECTION 2.5 Repurchase of Receivables Upon Breach of Warranty;
Administrative Receivables.
(a) Upon discovery by the Seller, the Servicer, the Owner Trustee or
the Indenture Trustee (i) of a breach of any of the representations and
warranties in Section 4.01(a) of the Pooling and Servicing Agreement or in
Section 2.4 or Section 3.1 of this Agreement that materially and adversely
affects the interests of the Trust in any Receivable or (ii) that the payment of
all or any portion of the principal amount of any Receivable held by the Trust
is deferred pursuant to [DPP] or any other installment sales program or similar
arrangement, the party discovering such breach shall give prompt written notice
thereof to the others. No later than the second Business Day following discovery
or receipt of notice of breach or deferral by the Seller and the Servicer,
unless and to the extent, in the case of breach, such breach shall have been
cured in all material respects, in the event of a breach of the representations
and warranties made by the Seller in Section 2.4 or Section 3.1(b), the Seller
shall repurchase such Receivable, or in the event of a breach of a
representation and warranty under Section 4.01(a) of the Pooling and Servicing
Agreement or a deferral, the Seller and the Servicer shall use reasonable
efforts to enforce the obligation of the Original Seller under Section 4.01 of
the Pooling and Servicing Agreement to repurchase such Receivable from the
Issuer on such date; provided, however, that with respect to any breach of a
representation or warranty or a deferral that affects less than the entire
principal amount of any Receivable, although the Warranty Payment shall be paid
promptly as described below, no repurchase and assignment shall be required
until the remaining principal amount of such Receivable is collected in full or
written off as uncollectible. The purchase price to be paid by the Seller or the
Original Seller shall be an amount equal to the principal amount of such
Receivable (in the case of a breach or a deferral affecting less than the entire
principal amount of a Receivable, to the extent of the breach or deferral) plus
all accrued and unpaid interest thereon through the date of purchase (the
"Warranty Payment") to the extent of such breach of a representation or warranty
or deferral (a "Warranty Receivable"), and shall be deposited into the
Collection Account on such date of purchase. Without limiting the generality of
the foregoing, a Receivable shall not be an Eligible Receivable, and thus shall
be a Warranty Receivable and subject to repurchase, if and to the extent that
(A) the Servicer adjusts downward the principal amount of such Receivable
because of a rebate, refund, credit adjustment or billing error to the related
Dealer or (B) such Receivable was credited in respect of a Vehicle which was
refunded or returned by the related Dealer. It is understood and agreed that the
obligation of the Original Seller or the Seller, as applicable, to repurchase
any Receivable as to which a breach of a representation or warranty made in
Section 2.4 or Section 3.1 hereof or Section 4.01(a) of the Pooling and
Servicing Agreement has occurred and is continuing or as to which any such
deferral occurs, and the obligation of the Seller and the Servicer to enforce
the Original Seller's obligation to repurchase such Receivable pursuant to the
Pooling and Servicing Agreement shall constitute the sole remedy against the
Seller, the Servicer or the Original Seller for such breach or deferral
available to the Issuer, the Securityholders, the Owner Trustee or the Indenture
Trustee.
(b) The Servicer also acknowledges its obligations to repurchase from
the Issuer Administrative Receivables pursuant to Section 3.04(c) of the Pooling
and Servicing Agreement. Upon discovery by the Indenture Trustee or the Owner
Trustee of a breach of any of the covenants of the Servicer in Sections
3.04(a)(viii), (ix) or (x) of the Pooling and Servicing Agreement, such party
shall give prompt written notice to the other, the Servicer and the Seller.
(c) Upon each payment of the Administrative Purchase Payment or the
Warranty Payment with respect to a Receivable, except as provided in Section
2.5(a), the Trust shall automatically and without further action be deemed to
have sold, transferred, assigned and otherwise conveyed to the Seller or
Servicer, as appropriate, without recourse, representation or warranty, as of
the date of such payment, all right, title and interest of the Trust in, to and
under such Receivable, all monies due or to become due with respect thereto on
and after such payment date and all proceeds thereof and, if such repurchase is
made in connection with the repurchase hereunder of all other Receivables in the
related Account held by the Trust, the related Collateral Security. The Owner
Trustee and the Indenture Trustee shall execute such documents and instruments
of transfer or assignment and take such other actions as shall be reasonably
requested by the Seller or the Servicer, as the case may be, to evidence such
conveyance.
SECTION 2.6 Covenants. The Seller hereby covenants that:
(a) Negative Pledge. Except for the conveyances hereunder and the
pledge of the Trust Estate to the Indenture Trustee pursuant to the Indenture,
and as provided in Section 6.03 of the Pooling and Servicing Agreement, the
Seller shall not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist, any Lien on any Eligible Receivable in
any Account in the Pool of Accounts (and any related Vehicle Collateral
Security), whether now existing or hereafter created, or any interest therein,
or the Seller's rights, remedies, powers or privileges under the Pooling and
Servicing Agreement conveyed to the Trust hereunder and the Seller shall defend
the right, title and interest of the Trust and any Interested Party in, to and
under such property, whether now existing or hereafter created against all
claims of third parties claiming through or under the Seller. The Seller shall
notify the Issuer promptly after becoming aware of any Lien on such property
other than the conveyances contemplated hereunder.
(b) Delivery of Collections. If the Seller or the Original Seller
receives payments by or on behalf of a Dealer in respect of Receivables in any
Account in the Pool of Accounts or any Collateral Security (except as
contemplated in Section 6.03 of the Pooling and Servicing Agreement with respect
to any property constituting Common Collateral that is not Vehicle Collateral
Security in connection with Other Indebtedness), the Seller and the Original
Seller shall deliver such payments to the Servicer as soon as practicable after
receipt thereof, but in no event later than two Business Days after the receipt
thereof.
(c) Pooling and Servicing Agreement Matters. If the Original Seller
breaches any of its covenants in Sections 3.01, 3.02, 3.03, 3.05, 5.01, 6.01(a),
7.01 or 7.03 of the Pooling and Servicing Agreement and such breach has a
material adverse effect on the interests of the Securityholders, the Seller
shall enforce its rights under the Pooling and Servicing Agreement arising from
such breach.
SECTION 2.7 Addition of Accounts.
(a) Voluntary Addition. The Seller may from time to time, in its sole
discretion, subject to the conditions specified in Section 2.7(b) below,
designate one or more Accounts as Additional Accounts to be included in the Pool
of Accounts by giving (or causing the Servicer to give on its behalf) a written
notice to the Indenture Trustee, the Owner Trustee and the Rating Agencies
specifying the Additional Cut-Off Date and the Addition Date (the "Addition
Notice"). An Addition Notice shall be provided on or before the fifth Business
Day but not more than the thirtieth day prior to the related Addition Date. If
Additional Accounts are to be included in the Pool of Accounts, effective as of
the related Addition Date, the Seller shall sell and assign to the Trust, and
the Trust shall purchase from the Seller, all of the Seller's right, title and
interest in, to and under the Eligible Receivables in the Additional Accounts
and the related Collateral Security, as more fully described in the assignment
referred to in subsection (b)(ii) below.
(b) Conditions. The Seller may convey to the Trust all Eligible
Receivables and the related Collateral Security in any Additional Accounts in
accordance with Section 2.7(a) only upon satisfaction of each of the following
conditions on or prior to the related Addition Date:
(i) the Seller shall represent and warrant that as of the related
Additional Cut-Off Date each such Additional Account is an Eligible
Account and that each Receivable arising thereunder identified as an
Eligible Receivable and conveyed to the Trust on such Addition Date is
an Eligible Receivable;
(ii) the Seller shall have delivered to the Owner Trustee a duly
executed written assignment in substantially the form of Exhibit C
hereto and the list required to be delivered pursuant to Section
10.2(e);
(iii) the Seller shall have agreed to deposit in the Collection
Account all Collections with respect to Eligible Receivables arising
in such Additional Accounts since the Additional Cut-Off Date within
two Business Days after such Addition Date (or such later date as may
be permitted pursuant to Section 6.2(b);
(iv) as of the Addition Date, neither the Original Seller nor the
Seller is insolvent nor shall any of them have been made insolvent by
such transfer nor is either of them aware of any pending insolvency;
(v) the Rating Agency Condition shall have been satisfied with
respect to such addition for each series or class of Securities then
outstanding;
(vi) the Seller shall represent and warrant that the designation
of such Additional Accounts, the inclusion of such Additional Accounts
in the Pool of Accounts and the purchase of the related Receivables
shall not, in the reasonable belief of the Seller, result in the
occurrence of an Early Amortization Event;
(vii) the Schedule of Accounts shall have been amended to reflect
such Additional Accounts and the Schedule of Accounts as so amended
shall be true and correct as of the Addition Date;
(viii) the Seller shall have delivered to the Indenture Trustee
and the Owner Trustee a certificate of an Authorized Officer of the
Seller confirming the items set forth in clauses (i) through (vii)
above; and
(ix) the Seller shall have delivered to the Owner Trustee an
Opinion of Counsel substantially in the form of Exhibit D hereto.
SECTION 2.8 Optional Removal of Accounts.
(a) The Seller shall have the right from time to time as described in
this Section 2.8 to require the removal of Accounts from the Pool of Accounts.
To so remove Accounts, the Seller (or the Servicer on its behalf) shall take the
following actions and make the following determinations:
(i) not less than five Business Days but not more than 30 days
prior to the Removal Commencement Date, furnish to the Indenture
Trustee, the Owner Trustee and the Rating Agencies a written notice
(the "Removal Notice") specifying the date (the "Removal Commencement
Date") on which removal of one or more Accounts will commence (the
"Selected Accounts"); and
(ii) determine on the Removal Commencement Date with respect to
such Selected Accounts the aggregate principal balance of Eligible
Receivables in respect of each such Selected Account (the "Removal
Balance") and amend the Schedule of Accounts by delivering to the
Owner Trustee a true and complete list of the Selected Accounts,
specifying for each Selected Account as of the Removal Commencement
Date its account number and the Removal Balance.
(b) The removal of any of such Accounts shall be subject to the
following conditions:
(i) the Seller shall represent and warrant that such removal
shall not, in the reasonable belief of the Seller, result in the
occurrence of an Early Amortization Event;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such removal for each series or class of Securities then
outstanding; and
(iii) on or before the related Removal Commencement Date, the
Seller shall have delivered to the Owner Trustee a certificate of an
Authorized Officer confirming the items set forth in clauses (i) and
(ii) above.
(c) Subject to the satisfaction of the conditions set forth in Section
2.8(b), from and after the Removal Commencement Date with respect to a Selected
Account, (i) the Seller shall not transfer Receivables with respect to such
Selected Account to the Trust, and (ii) until the Removal Balance has been
reduced to zero all Principal Collections with respect to such Selected Account
shall be allocated to the oldest outstanding principal balance of Receivables
arising under such Selected Accounts and amounts so allocated to Receivables
owned by the Trust shall constitute Trust Principal Collections and shall reduce
the Removal Balance. The Removal Balance shall also be reduced to the extent
Receivables in the Selected Accounts held by the Trust on the Removal
Commencement Date become Defaulted Receivables.
(d) After the Removal Balance with respect to any such Selected
Account is reduced to zero, Collections thereon shall cease to be allocated in
accordance with Section 2.8(c) and such Selected Account shall be deemed removed
from the Pool of Accounts for all purposes (a "Removed Account") and the
Servicer shall amend the Schedule of Accounts accordingly. At any time after the
date (the "Removal Date") on which the Removal Balance is reduced to zero with
respect to a Removed Account, the Owner Trustee shall assign to the Seller,
without recourse, representation or warranty, effective as of the Removal Date
all of the Trust's right, title and interest in, to and under the Receivables
arising in such Account and related Collateral Security.
SECTION 2.9 Removal of Ineligible Accounts.
(a) On or before the fifth Business Day after the date on which an
Account becomes an Ineligible Account (which Business Day shall be deemed to be
the Removal Commencement Date with respect to such Account) such Account shall
be deemed a Selected Account. Within five Business Days after the Removal
Commencement Date with respect to any Account that became a Selected Account
pursuant to this Section 2.9, the Seller shall furnish a Removal Notice to the
Owner Trustee stating that the Removal Commencement Date for such Ineligible
Account has occurred and specifying for each such Selected Account as of the
Removal Commencement Date its account number and the Removal Balance. The
Schedule of Accounts shall be amended to reflect such designation as of the
Removal Commencement Date.
(b) From and after the Removal Commencement Date with respect to a
Selected Account subject to this Section 2.9, the Seller shall not transfer
Receivables with respect to such Selected Account to the Trust and, until the
Removal Balance has been reduced to zero, all Principal Collections with respect
to such Selected Account shall be allocated to the oldest outstanding principal
balance of Receivables arising under such Selected Account and amounts so
allocated to Receivables owned by the Trust shall constitute Trust Principal
Collections. After the Removal Balance with respect to any such Selected Account
has been reduced to zero, Collections thereon shall cease to be allocated in
accordance with the preceding sentence and such Selected Account shall be a
Removed Account and the Servicer shall amend the Schedule of Accounts
accordingly. At any time after the Removal Date with respect to such Removed
Account, the Owner Trustee shall assign to the Seller, without recourse,
representation or warranty, effective as of the Removal Date, all of the Trust's
right, title and interest in, to and under the Receivables arising in such
Account and related Collateral Security.
ARTICLE III
THE SELLER
SECTION 3.1 Representations of the Seller. The Seller hereby makes,
and any successor to the Seller under this Agreement or under the Pooling and
Servicing Agreement shall make, as of each Closing Date (and as of the date of
such succession) the following representations and warranties on which the
Issuer relies in acquiring and holding the Receivables hereunder and the related
Collateral Security and issuing the Securities. The following representations
and warranties shall survive the sale, transfer and assignment of the Eligible
Receivables in the Accounts in the Pool of Accounts to the Issuer and the pledge
thereof to the Indenture Trustee.
(a) Representations and Warranties as to the Seller.
(i) Organization and Good Standing. The Seller has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties are
presently owned and such business is presently conducted, and had at
all relevant times, and now has, power, authority and legal right to
acquire and own the Eligible Receivables in the Accounts in the Pool
of Accounts and the Collateral Security related thereto.
(ii) Due Qualification. The Seller is duly qualified to do
business and, where necessary, is in good standing as a foreign
corporation (or is exempt from such requirement) 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 requires
such qualifications, except where the failure to so qualify or obtain
licenses or approvals would not have a material adverse effect on its
ability to perform its obligations under this Agreement.
(iii) Power and Authority. The Seller has the power and authority
to execute and deliver this Agreement, to carry out its terms and to
consummate the transactions contemplated herein, and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by the
Seller by all necessary corporate action on the part of the Seller.
(iv) Valid Sale; Binding Obligations. With respect to the Initial
Accounts and the related assignment to be delivered on the Initial
Closing Date, this Agreement constitutes or, in the case of Additional
Accounts, the related assignment as described in Section 2.7(b), when
duly executed and delivered, shall constitute a valid sale, transfer
and assignment to the Issuer of all right, title and interest of the
Seller in, to and under the related Eligible Receivables and the
related Collateral Security, whether then existing or thereafter
created, and the proceeds thereof, enforceable against creditors of
and purchasers from the Seller; and this Agreement when duly executed
and delivered, shall constitute a legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights in general and by
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and,
upon the filing of the financing statements described in Section
10.2(a) (and, in the case of Eligible Receivables hereafter created in
the Accounts in the Pool of Accounts and the proceeds thereof, upon
the creation thereof) the Trust shall have a first priority perfected
ownership interest in such property, except for Liens permitted under
Section 2.6(a). Except as otherwise provided in this Agreement or the
Pooling and Servicing Agreement, neither the Seller nor any Person
claiming through or under the Seller has any claim to or interest in
the Trust Estate.
(v) No Violation. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement by the
Seller and the fulfillment of the terms of this Agreement by the
Seller 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 certificate of incorporation or by-laws
of the Seller, or any indenture, agreement, mortgage, deed of trust 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,
mortgage, deed of trust or other instrument (other than pursuant to
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 Governmental Authority having jurisdiction over the
Seller or any of its properties, except where any such conflict or
violation would not have a material adverse effect on its ability to
perform its obligations with respect to the Issuer or any Interested
Party under this Agreement or the Pooling and Servicing Agreement.
(vi) No Proceedings. To the Seller's knowledge, there are no
Proceedings or investigations pending, or threatened, against the
Seller before any Governmental Authority having jurisdiction over the
Seller or its properties (A) asserting the invalidity of this
Agreement, the Securities, the Indenture, the Trust Agreement, the
Custodian Agreement, the Administration Agreement or any Specified
Support Arrangement, (B) seeking to prevent the issuance of the
Securities, the execution of this Agreement or the consummation of any
of the transactions contemplated by this Agreement, the Indenture, the
Trust Agreement, the Custodian Agreement, the Administration Agreement
or any Specified Support Arrangement, (C) 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 Notes, the Certificates, the Indenture, the
Trust Agreement, the Custodian Agreement, the Administration Agreement
or any Specified Support Arrangement or (D) seeking to adversely
affect the federal income tax attributes of the Notes or the
Certificates.
(b) Representations and Warranties as to the Eligible Receivables.
(i) Good Title. No Eligible Receivables included in the Accounts
in the Pool of Accounts have been sold, transferred, assigned or
pledged by the Seller to any Person other than the Issuer; immediately
prior to the conveyance of the Eligible Receivables in the Accounts
included in the Pool of Accounts pursuant to this Agreement the Seller
had good and marketable title to such Receivables, free of any Lien;
and, upon execution and delivery of this Agreement by the Seller, the
Issuer shall have all of the right, title and interest of the Seller
in, to and under the Eligible Receivables in the Accounts included in
the Pool of Accounts, free of any Lien.
(ii) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Issuer a first priority perfected ownership interest in the Eligible
Receivables in the Accounts in the Pool of Accounts shall have been
made.
(c) Reassignment of All Receivables.
(i) If any representation or warranty under Section 3.1(a) or (b)
is not true and correct as of the date specified therein and such
breach has a material adverse effect on the interests of the
Securityholders, then any of the Indenture Trustee, the Owner Trustee
and the holders of outstanding Securities evidencing not less than a
majority of the Outstanding Amount and a majority of the Voting
Interests of all outstanding Certificates, by written notice to the
Seller with a copy to the Servicer, the Indenture Trustee and the
Owner Trustee, may direct the Seller to accept the reassignment of all
Receivables held by the Trust and the related Collateral Security
pursuant to this Section 3.1(c) within 60 days of such notice, or
within such longer period specified in such notice and pay the
Reassignment Amount on any Monthly Distribution Date within such
period; provided, however, that no such reassignment shall be made if,
prior to the time such reassignment is to occur, the breached
representation or warranty shall then be true and correct in all
material respects and any material adverse effect caused thereby shall
have been cured.
(ii) Upon the reassignment of all Receivables held by the Trust
and the related Collateral Security, subject to the payment to the
Trust of the Reassignment Amount, the Trust shall automatically and
without further action be deemed to sell, transfer, assign and
otherwise convey to the Seller, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to
such Receivables and such related Collateral Security. Each of the
Indenture Trustee and the Owner Trustee shall execute such documents
and instruments of transfer or assignment and take such other actions
as they shall reasonably be requested by the Seller to effect the
conveyance pursuant to this Section 3.1(c).
(iii) It is understood and agreed that the obligation of the
Seller to repurchase the Receivables (and the related Collateral
Security) in the event of a breach of a representation or warranty
made in Section 3.1(a) or (b) has occurred and is continuing and the
obligation of the Seller to pay the Reassignment Amount therefor
shall, if such obligations are fulfilled, constitute the sole remedy
against the Seller for such breach available to the Issuer, the
Securityholders, the Owner Trustee or the Indenture Trustee.
SECTION 3.2 Liability of Seller. The Seller shall be liable in
accordance with this Agreement only to the extent of the obligations in this
Agreement specifically undertaken by the Seller.
SECTION 3.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller; Amendment of Certificate of Incorporation.
(a) Any Person (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Seller shall be a party, (iii) succeeding to the business of the Seller or (iv)
more than 50% of the voting interests of which is owned directly or indirectly
by ______________________, which Person in any of the foregoing cases (other
than the Seller as the surviving entity of such merger or consolidation)
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement shall be the successor to the Seller under this Agreement
without the execution or filing of any document or any further act on the part
of any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding. The Seller shall provide 10 days' prior notice of any
merger, consolidation or succession pursuant to this Section 3.3 to the Rating
Agencies.
(b) The Seller hereby agrees that during the term of this Agreement it
shall not (i) take any action prohibited by Article Fourth of its certificate of
incorporation, (ii) without the prior written consent of the Indenture Trustee
and the Owner Trustee and without giving prior written notice to the Rating
Agencies, amend Article Third or Fourth of its certificate of incorporation or
(iii) incur any indebtedness, or assume or guaranty indebtedness of any other
entity, other than as contemplated by the Basic Documents or pursuant to the
Intercompany Advance Agreement (without giving effect to any amendment to the
Intercompany Advance Agreement after the date hereof, unless the Rating Agency
Condition for each series or class of Securities then outstanding was satisfied
in connection therewith) if such action would result in a downgrading of the
then current rating of any outstanding series or class of Securities by a Rating
Agency for such series or class.
SECTION 3.4 Limitation on Liability of Seller and Others.
(a) Neither the Seller nor any of the directors, officers, employees
or agents of the Seller in its capacity as such shall be under any liability to
the Issuer, the Indenture Trustee, the Owner Trustee, the Securityholders or any
other Person, except as specifically provided in this Agreement, for any action
taken or for refraining from the taking of any action pursuant to the Basic
Documents or for errors in judgment; provided, however, that this provision
shall not protect the Seller or any such Person against any liability that would
otherwise be imposed by reason of wilful misfeasance, bad faith or negligence
(except errors in judgment) in the performance of duties or by reason of
reckless disregard of obligations and duties under the Basic Documents. The
Seller and any director or officer or 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 under the Basic Documents.
(b) The Seller and any director, officer or employee of the Seller
shall be reimbursed by the Owner Trustee for any contractual damages, liability
or expense incurred by reason of such trustee's wilful misfeasance, bad faith or
negligence (except errors in judgment) in the performance of such trustee's
duties under such agreement or the Trust Agreement or by reason of reckless
disregard of its obligations and duties under such agreements. The Seller shall
not be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its obligations as Seller of the Receivables and
related Collateral Security under this Agreement and that in its opinion may
involve it in any expense or liability.
SECTION 3.5 Seller May Own Notes or Certificates. Each of the Seller
and any Affiliate of the Seller may in its individual or any other capacity
become the owner or pledgee of Notes or Certificates with the same rights
(except as otherwise specifically provided in the Basic Documents) as it would
have if it were not the Seller or an Affiliate thereof. Except as otherwise
specifically provided in the Basic Documents, Notes or Certificates so owned by
or pledged to the Seller or such Affiliate shall have an equal and proportionate
benefit under the provisions of this Agreement, without preference, priority or
distinction as among all of such Notes or Certificates, respectively.
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE FUNDS;
STATEMENTS TO SECURITYHOLDERS
SECTION 4.1 Annual Statement as to Compliance; Notice of Servicing
Default.
(a) The Servicer shall deliver to the Indenture Trustee and the Owner
Trustee, on or before ______________ of each year, beginning ________, an
officer's certificate signed by the President or any Vice President of the
Servicer, dated as of ________ of such year, stating that (i) a review of the
activities of the Servicer during the preceding 12-month period (or, with
respect to the first such certificate, such period as shall have elapsed from
the Initial Closing Date to the date of such certificate) and of its performance
under this Agreement and under the Pooling and Servicing Agreement has been made
under such officer's supervision and (ii) to such officer's knowledge, based on
such review, the Servicer has fulfilled all its obligations under such
agreements throughout such period, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Securityholder by a request in writing to the Issuer addressed
to the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, as
applicable.
(b) The Servicer shall deliver to the Indenture Trustee, the Owner
Trustee and the Rating Agencies promptly after having obtained knowledge
thereof, but in no event later than five 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 Servicing Default under Section 8.1.
The Seller shall deliver to the Indenture Trustee, the Owner Trustee, the
Servicer and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five 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 Servicing Default under clause (b) of
Section 8.1.
SECTION 4.2 Annual Independent Accountants' Report.
(a) The Servicer shall cause a firm of Independent accountants, who
may also render other services to the Servicer or the Seller, to deliver to the
Indenture Trustee, the Owner Trustee and the Rating Agencies on or before
___________ of each year, beginning _____________ with respect to the twelve
months ended on the immediately preceding _____________ (or, with respect to the
first such report, such period as shall have elapsed from the Initial Closing
Date to the date of such certificate), a report (the "Accountants' Report")
addressed to the Board of Directors of the Servicer and to the Indenture Trustee
and the Owner Trustee, to the effect that such firm has audited the financial
statements of the Servicer and issued its report thereon and that such audit (i)
was made in accordance with generally accepted auditing standards, (ii) included
tests relating to wholesale receivables (including financing arrangements with
automobile dealers to finance their automobile and light-duty truck inventory)
serviced for others in accordance with the requirements of the Uniform Single
Audit Program for Mortgage Bankers (the "Program"), to the extent the procedures
in the Program are applicable to the servicing obligations set forth in this
Agreement and the Pooling and Servicing Agreement and (iii) except as described
in the report, disclosed no exceptions or errors in the records relating to
wholesale receivables (including financing arrangements with automobile dealers
to finance their automobile and light-duty truck inventory) serviced for others
that, in the firm's opinion, paragraph four of the Program requires such firm to
report.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Seller and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
(c) A copy of the Accountants' Report may be obtained by any
Securityholder by a request in writing to the Issuer addressed to the Corporate
Trust Office of the Indenture Trustee or the Owner Trustee.
SECTION 4.3 Access to Certain Documentation and Information Regarding
Accounts and Receivables. The Servicer shall provide to the Indenture Trustee
and the Owner Trustee reasonable access to the documentation regarding the
Accounts in the Pool of Accounts and the Receivables arising thereunder. The
Servicer shall provide such access to any Securityholder only in such cases
where a Securityholder is required by applicable statutes or regulations to
review such documentation. In each case, such access shall be afforded without
charge but only upon reasonable request and during normal business hours at
offices of the Servicer designated by the Servicer. Nothing in this Section 4.3
shall derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding any Dealer, and the failure of
the Servicer to provide access as provided in this Section 4.3 as a result of
such obligation shall not constitute a breach of this Section 4.3.
SECTION 4.4 Enforcement of Receivables. If in any Proceeding it is
held that the Servicer may not enforce a Receivable that has been transferred to
the Trust on the ground that it is not a real party in interest or a holder
entitled to enforce such Receivable, the Indenture Trustee or the Owner Trustee,
as applicable, shall, at the Servicer's expense, take such steps as the Servicer
deems necessary to enforce such Receivable, including bringing suit in the name
of such Person or the names of the Securityholders. The Indenture Trustee and
the Owner Trustee agree to the provisions of Section 3.02 of the Pooling and
Servicing Agreement as such provisions apply to Interested Parties (as used
therein).
SECTION 4.5 Allocations; Distributions.
(a) Trust's Share of Collections. The Trust, as the holder of the
Receivables transferred hereunder, shall be entitled to Principal Collections
and Interest Collections to the extent of Trust Principal Collections and Trust
Interest Collections and the Original Seller, as the holder of the Retained
Property, shall be entitled to such Principal Collections and Interest
Collections in excess thereof. Any Principal Collections or Interest Collections
on deposit in the Collection Account which do not represent Trust Principal
Collections or Trust Interest Collections shall be paid to the Original Seller
as holder of the Retained Property.
(b) Servicer Calculations. The Servicer shall calculate, in a manner
consistent with the Indenture (including all Officer's Issuance Certificates)
and the Trust Agreement, (i) no later than each Determination Date, Available
Trust Interest, the Monthly Servicing Fee, Aggregate Noteholders' Interest,
Aggregate Revolver Interest, Aggregate Certificateholders' Interest, any payment
due under any Specified Support Arrangement and, for a specific number of
Determination Dates immediately preceding the Determination Date preceding the
Targeted Final Payment Date for any series of Term Notes (which specific number
shall be set forth in the Officer's Issuance Certificate of such series), the
Required Payment Period Length and, (ii) no later than each Determination Date
for the Wind Down Period, an Early Amortization Period, the Payment Period for
any series of Notes or, if principal payments are then required to be made (or
set aside) under any series of Notes, the Revolving Period, Available Trust
Principal, Aggregate Noteholders' Principal, Aggregate Revolver Principal,
Aggregate Certificateholders' Principal, the Required Revolver Payment,
unreimbursed Trust Charge-Offs, the Trust Defaulted Amount and the Principal
Allocation Percentage for each series of Notes, and in each case, all other
amounts required to determine the amounts to be deposited in or paid from each
of the Collection Account, the Accumulation Accounts, the Term Note Distribution
Account, the Revolver Distribution Account, the Certificate Distribution
Account, the ______________________ Reserve Funds and any other Designated
Account on the next succeeding Monthly Distribution Date and (iii) on each
Business Day that any series of Notes requires Available Trust Principal to be
retained or set aside with respect to such series of Notes, the Principal
Allocation Percentage and the maximum amount required to be set aside for such
series of Notes. The Servicer shall calculate on a daily basis the Daily Trust
Balance, the Daily Trust Invested Amount and all related amounts to the extent
necessary to determine the Cash Collateral Amount for such date as described in
Section 4.5(d).
(c) Application of Interest Collections.
(i) Basic Interest Waterfall. With respect to each Monthly
Distribution Date and the related Collection Period, the Indenture
Trustee (based on the information contained in the Servicer's
Accounting delivered on the related Determination Date pursuant to
Section 3.05 of the Pooling and Servicing Agreement) shall apply
Available Trust Interest and other funds specified below to pay
interest and other amounts in the priority specified in clauses (1),
(2) and (3) below:
CLAUSE (1) For each Collection Period, the Indenture Trustee will
apply Trust Interest Collections together with the other amounts comprising
Available Trust Interest for the related Monthly Distribution Date in the
following order of priority:
(a) an amount equal to the Monthly Servicing Fee for such Monthly
Distribution Date will be paid to the Servicer; and
(b) an amount equal to the Trust Interest Allocation for each series
of Notes will be made available to that series and applied in clause (2) below.
CLAUSE (2) On each Monthly Distribution Date, for each series of Notes
in accordance with the terms of such series, the Indenture Trustee will apply
the Trust Interest Allocation together with the other amounts comprising the
Monthly Available Amount for such series to pay the Monthly Carrying Costs for
such series of Term Notes. Shortfalls in such applications will be treated as a
Series Shortfall for such series and excess amounts will be treated as Remaining
Interest Amounts.
CLAUSE (3) On each Monthly Distribution Date, the Indenture Trustee
will aggregate the Remaining Interest Amounts from all series of Notes and apply
such amounts in the following order of priority:
(a) with respect to any series of Notes which has a Series Shortfall,
pro rata on the basis of the respective Series Shortfalls, an amount equal to
the Series Shortfall for that series of Notes for that Monthly Distribution Date
will be transferred to (i) the account specified in the Officer's Issuance
Certificate applicable to such series;
(b) an amount equal to the net payment, if any, due from the Trust
under the ______________________ Certificates Basis Swap and under any Basis
Swap with respect to any other class of Certificates will be paid in accordance
with each such Basis Swap;
(c) an amount equal to the Aggregate Certificateholders' Interest for
such Monthly Distribution Date will be transferred to the Certificate
Distribution Account;
(d) an amount equal to any Servicer Advances not previously reimbursed
will be paid to the Servicer, except as otherwise provided in this Trust Sale
and Servicing Agreement and the Pooling and Servicing Agreement;
(e) an amount equal to any Reserve Fund Deposit Amount for such
Monthly Distribution Date will be deposited into the Reserve Fund;
(f) an amount equal to the Cash Accumulation Reserve Fund Deposit
Amount with respect to any series of Term Notes for such Monthly Distribution
Date will be deposited into the Cash Accumulation Reserve Fund and any other
deposit required under the terms of any other Specified Support Arrangements
will be deposited into the Cash Accumulation Reserve Fund of such series or the
account designated by the terms of such Specified Support Arrangement, as
applicable, pro rata among all such amounts;
(g) an amount equal to any Trust Defaulted Amount will be treated as
Additional Trust Principal on such Monthly Distribution Date;
(h) an amount equal to the aggregate amount of unreimbursed Trust
Charge-Offs will be treated as Additional Trust Principal on such Monthly
Distribution Date.
(ii) Liquidity and Credit Enhancement; Trust Charge-Offs. To the
extent that Available Trust Interest and the other funds comprising
the Monthly Available Amount are not sufficient to make all payments
required by clauses (1), (2) and (3) of Section 4.5(c)(i), then the
funds described below will be applied in the following order:
First, if any Monthly Carrying Costs or any amounts specified in
Section 4.5(c)(i) clause 1(a) and clauses 3(a), (b) and (c) remain
unpaid, then a "Deficiency Amount" will exist for such Monthly
Distribution Date, and the Servicer shall make a Servicer Advance
equal to such Deficiency Amount to complete the applications pursuant
to such Section (but only to the extent that the Servicer, in its sole
discretion, expects to recover such Servicer Advance from Remaining
Interest Amounts, applied as described above on subsequent Monthly
Distribution Dates, and from amounts applied to reimburse Servicer
Advances pursuant to the terms of any Officer's Issuance Certificate
and such Servicer Advances will be applied to reduce such Deficiency
Amount in the priorities set forth above in Section 4.5(c)(i) clauses
(1), (2) and (3); and
Second, if any Monthly Carrying Costs or any amounts specified in
Section 4.5(c)(i) clauses (3)(a), (b), (c), (d), (g) and (h) for such
Monthly Distribution Date (calculated after the adjustment, if any, to
Trust Interest Collections described in subsection (v) below) remain
unpaid after the application described in the preceding clause First,
then an "Unsatisfied Deficiency Amount" will exist for such Monthly
Distribution Date, and the Servicer shall instruct the Indenture
Trustee to withdraw funds from the Reserve Fund and apply such funds
to reduce such Unsatisfied Deficiency Amount in the priorities set
forth in Section 4.5 (c)(i) clauses (1), (2) and (3); provided that no
amount shall be withdrawn from the Reserve Fund and paid to the
Servicer pursuant to Section 4.5(c)(i)clause (3)(c) in order to
reimburse the Servicer for Servicer Advances with respect to
Receivables that are not Eligible Receivables (as determined by the
Servicer in accordance with its servicing procedures) and no amount
shall be applied to clauses (3)(e) or (f) of Section 4.5(c)(i).
To the extent that, after application of the funds in the Reserve
Fund, the full amount of the Trust Defaulted Amount has not been treated as
Additional Trust Principal pursuant to Section 4.5(c)(i) clause (3)(g), the
amount of such deficiency shall be added to unreimbursed Trust Charge- Offs.
(iii) To the extent any Available Trust Interest (calculated
after the adjustment, if any, to Trust Interest Collections described
in subsection (v) below) is available on any Monthly Distribution Date
after making the applications described in Section 4.5(c)(i), such
amount shall be allocated and paid to the Seller as compensation for
making the initial and any other deposits into the
______________________ Reserve Funds.
(iv) On each Monthly Distribution Date, the Servicer shall pay to
the Original Seller, as the holder of the Retained Property, any
Interest Collections for the related Collection Period that do not
constitute Trust Interest Collections (calculated after the
adjustment, if any, described in subsection (v) below) to the extent
not previously so paid to the Original Seller.
(v) If the Servicer does not make a Servicer Advance in the
amount of the full Deficiency Amount for a Monthly Distribution Date,
the Servicer shall calculate for each Account in the Pool of Accounts
in which the full amount of interest due for the related Collection
Period was not collected, the product of (i) the amount of interest
collected with respect to such Collection Period and (ii) the
difference between (A) the percentage equivalent (which shall never
exceed 100%) of a fraction, the numerator of which is the average
daily aggregate principal balance of the Eligible Receivables in such
Account during the related Collection Period and the denominator of
which is the average daily aggregate principal balance of all
Receivables (including Receivables included in the Retained Property)
in such Account during the related Collection Period and (B) the Trust
Percentage for such Monthly Distribution Date. With respect to each
such Account, the absolute value of such amount so calculated shall be
(1) added to Trust Interest Collections for such Monthly Distribution
Date to the extent such amount is greater than zero or (2) subtracted
from Trust Interest Collections for such Monthly Distribution Date to
the extent such amount is less than zero. No adjustment to Trust
Interest Collections shall be made with respect to the other Accounts
in the Pool of Accounts.
(i) Application of Principal Collections. The Indenture Trustee (based
on the information contained in the Servicer's Accounting delivered on any such
date or the related Determination Date pursuant to Section 3.05 of the Pooling
and Servicing Agreement, as applicable) shall apply Trust Principal Collections
and Available Trust Principal in the following manner:
(i) On each Business Day during the Revolving Period, all Trust
Principal Collections and Additional Trust Principal shall be applied
as follows:
(A) if no series of Notes is then in a Payment Period or a
Rapid Amortization Period which is not an Early Amortization
Period during which Available Trust Principal is required to be
retained or set aside or paid to fund principal payments, then
(1) if any Servicer Liquidity Advance for any series of
Term Notes is outstanding, an amount not to exceed the
product of Trust Principal Collections and a fraction, the
numerator of which is the outstanding principal balance of
such series of Term Notes and the denominator of which is
the outstanding principal balance of all Notes as of such
Business Day, shall be paid to the Servicer in reimbursement
of such Servicer Liquidity Advance and
(2) all remaining Trust Principal Collections shall be
applied as provided in Section 4.5(d)(iii);
(B) if one or more series of Notes is then in a Payment
Period or a Rapid Amortization Period which is not an Early
Amortization Period during which Available Trust Principal is
required to be retained or set aside or paid to fund principal
payments, then
(1) if any Servicer Liquidity Advance is outstanding
for any series of Term Notes that does not then require
Available Trust Principal to be retained or set aside to
fund principal payments with respect thereto, an amount not
to exceed the product of Trust Principal Collections and a
fraction, the numerator of which is the outstanding
principal balance of such series of Term Notes, and the
denominator of which is the outstanding principal balance of
all Notes as of such Business Day, shall be paid to the
Servicer in reimbursement of such Servicer Liquidity
Advance, and
(2) each such series that requires Available Trust
Principal to be retained or set aside shall be allocated its
Principal Allocation Percentage of the Available Trust
Principal (prior to giving effect to any reimbursement of
Servicer Liquidity Advances with respect to such series for
such Business Day) and such amounts shall,
first, be applied to reimburse the Servicer for any
outstanding Servicer Liquidity Advances, if any, related to
such series and,
second, to the extent specified in the Officer's
Issuance Certificate with respect to such series, be
retained or set aside in the account specified in the
Officer's Issuance Certificate with respect to such series,
and
(3) any amounts in excess of the amount required to be
reimbursed, retained or set aside in the foregoing clauses
(1) and (2) shall be applied as provided in Section
4.5(d)(iii);
(ii) On each Business Day during the Revolving Period, proceeds
from the issuance of Securities and additional borrowings under any
Revolving Notes shall be applied
(A) first, if so directed by the Seller, to the payment of
principal of any series of Notes then in a Payment Period,
(B) second, if so directed by the Seller, to the
reimbursement of Servicer Liquidity Advances and
(C) thereafter, as provided in Section 4.5(d)(iii);
(iii) On each Business Day during the Revolving Period, after
making the applications specified in Sections 4.5(d)(i) and
4.5(d)(ii), the Indenture Trustee shall apply the amounts in the
Collection Account in respect of Trust Principal Collections for such
Business Day, the Cash Collateral Amount from the prior Business Day,
proceeds from the issuance of Securities and additional borrowings
under the Revolving Notes, and (if such Business Day is a Monthly
Distribution Date) Additional Trust Principal as follows:
(A) if the Business Day on which the Trust Principal
Collections occurred is on or after the Fully Funded Date for
each series of Notes, then the Indenture Trustee shall transfer
to the Certificate Distribution Account for allocation in
accordance with the Trust Agreement an amount not to exceed the
Aggregate Certificateholders' Principal,
(B) the Indenture Trustee shall set aside in the Collection
Account as the Cash Collateral Amount such amount of remaining
funds as is necessary to maintain Trust Equilibrium, and
(C) the Indenture Trustee shall apply any remaining such
funds, if so directed by the Seller in its sole discretion, to
Trust Receivables Purchases or to make payments of principal on
any series of Revolving Notes (to the extent permitted under the
Officer's Issuance Certificate with respect to such Revolving
Notes);
(iv) On each Business Day during the Wind Down Period or an Early
Amortization Period, the Indenture Trustee shall
(A) with respect to each series of Notes,
(1) allocate to such series its Principal Allocation
Percentage of Available Trust Principal for such Business
Day,
(2) unless otherwise set forth in the Officer's
Issuance Certificate with respect to such series, after the
reimbursement of any Servicer Liquidity Advance with respect
to such series, set aside in the account specified in the
Officer's Issuance Certificate for such series its Principal
Allocation Percentage of Available Trust Principal, and
(3) on each related Monthly Distribution Date pay or
set aside the amounts set aside along with the Principal
Allocation Percentage for such series of Available Trust
Principal for such Monthly Distribution Date as provided in
the Officer's Issuance Certificate with respect to such
series of Notes;
(B) to the extent of any Available Trust Principal remaining
after the applications described in the preceding clause (A),
allocate such amounts to Priority Payment Amounts and distribute
them as specified in the applicable Officer's Issuance
Certificate or Certificate Issuance Order;
(C) to the extent of any Available Trust Principal remaining
after the applications described in the preceding clauses (A) and
(B), allocate to the Certificates any remaining amounts up to the
Aggregate Certificateholders' Principal for the related Monthly
Distribution Date and pay to the Certificateholders on the date
specified in the Trust Agreement or the Certificate Issuance
Order, as applicable, the amounts set aside along with any
unallocated Available Trust Principal for such Monthly
Distribution Date; and
(D) to the extent of any Available Trust Principal remaining
after the applications described in the preceding clauses (A)
through (C), pay such amounts to the Seller.
(v) Except as set forth in Section 4.5(d)(iii)(A), the Indenture
Trustee shall not make payments of principal with respect to the
Certificate Balance on any Certificates until all Term Notes and all
Revolving Notes are paid in full (or otherwise fully provided for) and
any Priority Payment Amount, if any, has been paid in full.
(j) Servicer Liquidity Advances. Unless otherwise set forth in the
Officer's Issuance Certificate with respect to a series of Term Notes, if the
terms of any series of Term Notes provide for a Servicer Liquidity Advance in
the event a Required Payment on such series cannot be made from other available
funds, then to the extent that a Required Payment for any Monthly Distribution
Date during a Payment Period for such series cannot be made as provided by the
terms of such series (after giving effect to all issuances of securities and
additional borrowings under the Revolving Notes on such Monthly Distribution
Date), the Servicer shall make a Servicer Liquidity Advance in an amount
sufficient to complete such series' Required Payment, to the extent that the
Servicer, in its sole discretion, expects to recover such Servicer Liquidity
Advance from subsequent Trust Principal Collections allocated as provided in
subsection 4.5(d)(i), and such Servicer Liquidity Advance shall be used to make
such Required Payment.
(k) On each Monthly Distribution Date for the Wind Down Period or an
Early Amortization Period, the Seller shall (or shall use reasonable efforts to
cause the Original Seller on its behalf to) deposit in the Collection Account an
amount equal to the Supplemental Principal Allocation for such Monthly
Distribution Date. The Seller shall be entitled to reimbursement of the
aggregate amount of Supplemental Principal Allocations for all Monthly
Distribution Dates following the payment in full of all Securities. The Trust's
obligation to so reimburse the Seller shall be limited to collections on
Receivables (as and when such amounts are received) and amounts on deposit in
the Reserve Fund.
(l) To the extent unreimbursed Trust Charge-Offs for any Monthly
Distribution Date exceed the Certificate Balance (calculated without reduction
for Trust Charge-Offs), such excess shall be applied to reduce the Outstanding
Amount attributable to each series of Notes, pro rata on the basis of the
Outstanding Amount attributable to each such series (calculated without
reduction for Trust Charge-Offs after giving effect to any amounts to be paid on
such Monthly Distribution Date).
SECTION 4.6 ______________________ Reserve Funds and the Reserve Fund.
(a) Each of the ______________________ Reserve Funds shall include the
money and other property deposited and held therein pursuant to this Section 4.6
and Section 4.5. The Seller shall make such deposits into any of the
______________________ Reserve Funds on the Initial Closing Date and from time
to time thereafter in connection with the issuance of Additional Securities or
an increase in the Specified Maximum Revolver Balance (at which time the formula
for the Reserve Fund Required Amount or the required amount for any other
______________________ Reserve Fund may be adjusted) as are specified herein or
in any Officer's Issuance Certificate or Certificate Issuance Order. None of the
______________________ Reserve Funds shall under any circumstances be deemed to
be part of or otherwise included in the Trust.
(b) On the Initial Closing Date, the Seller shall deposit the Reserve
Fund Initial Deposit into the Reserve Fund. In addition, the Seller, in its sole
discretion, may at any time make an additional deposit into the Reserve Fund in
an amount up to 1% of the Maximum Pool Balance as of the date such additional
deposit is to be made. If the amount on deposit in the Reserve Fund on any
Monthly Distribution Date (after giving effect to all deposits therein or
withdrawals therefrom on such Monthly Distribution Date) exceeds the Reserve
Fund Required Amount for such Monthly Distribution Date, the Servicer shall
instruct the Indenture Trustee to distribute an amount equal to any such excess
to the Seller, unless otherwise agreed to by the Seller.
(c) In order to provide for timely payments in accordance with Section
4.5 and the terms of any Securities, to assure availability of the amounts
maintained in the Reserve Fund for the benefit of the Noteholders and the
Servicer, and as security for the performance by the Seller of its obligations
hereunder, the Seller on behalf of itself and its successors and assigns, hereby
pledges to the Indenture Trustee and its successors and assigns, all its right,
title and interest in and to (i) the Reserve Fund and all proceeds of the
foregoing, including, without limitation, all other amounts and investments held
from time to time in the Reserve Fund (whether in the form of deposit accounts,
Physical Property, book-entry securities, uncertificated securities or
otherwise) and (ii) the Reserve Fund Initial Deposit and all proceeds thereon
((i) and (ii), collectively, the "Reserve Fund Property"), to have and to hold
all the aforesaid property, rights and privileges unto the Indenture Trustee,
its successors and assigns, in trust for the uses and purposes, and subject to
the terms and provisions, set forth in this Section 4.6. The Indenture Trustee
hereby acknowledges such transfer and accepts the trust hereunder and shall hold
and distribute the Reserve Fund Property in accordance with the terms and
provisions of this Agreement. By its authentication of any series of Notes
issued pursuant to an Officer's Issuance Certificate, the Indenture Trustee
shall acknowledge and accept such trusts as are specified therein with respect
to any ______________________ Reserve Fund established thereunder.
(d) Each of the Seller and the Servicer agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments (including,
without limitation, any UCC financing statements or this Agreement) as may be
determined to be necessary, in an Opinion of Counsel to the Seller delivered to
the Indenture Trustee, in order to perfect the interests created by this Section
4.6 and any Officers' Issuance Certificate in any ______________________ Reserve
Fund and otherwise fully to effectuate the purposes, terms and conditions of
this Section 4.6 and any Officer's Issuance Certificate. The Seller shall:
(i) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certificates and
other documents with respect to such interests and perform all such
other acts as may be necessary in order to perfect or to maintain the
perfection of the Indenture Trustee's security interest; and
(ii) make the necessary filings of financing statements or
amendments thereto within sixty days after the occurrence of any of
the following: (A) any change in their respective corporate names or
any trade names, (B) any change in the location of their respective
chief executive offices or principal places of business and (C) any
merger or consolidation or other change in their respective identities
or corporate structures; and shall promptly notify the Indenture
Trustee of any such filings.
SECTION 4.7 Net Deposits.
(a) The Servicer, the Seller, the Indenture Trustee and the Owner
Trustee may make any remittances pursuant to this Article IV net of amounts to
be distributed by the applicable recipient to such remitting party. Nonetheless,
each such party shall account for all of the above described remittances and
distributions as if the amounts were deposited and/or transferred separately.
(b) Notwithstanding anything in this Agreement or the Indenture
(including all Officer's Issuance Certificates) to the contrary, for so long as
the conditions specified in the first sentence of Section 6.2(b) are satisfied,
the Servicer, the Seller, the Indenture Trustee and the Owner Trustee shall not
be required to make any distributions, deposits or other remittances in respect
of any Notes or to the related Distribution Account pursuant to this Article IV
(including deposits by the Servicer into the Collection Account) which are to be
made on an Exempt Deposit Date with respect to such Notes. Distributions,
deposits and other remittances on Exempt Deposit Dates which are not required to
be made by virtue of the preceding sentence shall nonetheless be accounted for
as having been distributed, deposited or remitted for purposes of determining
other amounts required to be distributed, deposited or otherwise remitted on
such Exempt Deposit Date or the Monthly Distribution Date preceding the next
succeeding Payment Date. On the Monthly Distribution Date preceding the Payment
Date next succeeding any Exempt Deposit Date on which any of the Servicer, the
Seller, the Indenture Trustee or the Owner Trustee did not make distributions,
deposits and other remittances in reliance upon the second preceding sentence,
each such Person shall be required to distribute, deposit or otherwise remit the
cumulative amount of all such distributions, deposits and other remittances for
such Payment Date and the immediately preceding Exempt Deposit Date or Dates in
respect of such Notes and the related Distribution Account.
SECTION 4.8 Statements to Securityholders.
(a) On or before each Payment Date, the Owner Trustee shall (except as
otherwise provided in the Trust Agreement) include with each distribution to
each Certificateholder to be made on such date and the Indenture Trustee shall
include with each distribution to each Term Noteholder and each Revolving
Noteholder to be made on such date, a statement (which statement shall also be
provided to the Rating Agencies) prepared by the Servicer based on information
in the Servicer's Accounting furnished pursuant to Section 3.05 of the Pooling
and Servicing Agreement. Except as otherwise set forth in the Officer's Issuance
Certificate with respect to any series of Notes, each such statement to be
delivered to Securityholders shall set forth the following information
concerning the Term Notes, the Revolving Notes or the Certificates, as
appropriate, with respect to such Payment Date or the preceding Collection
Period:
(i) the amount, if any, of the distribution allocable to
principal on each series of Term Notes and Revolving Notes and to the
Certificate Balance;
(ii) the amount, if any, of the distribution allocable to
interest on or with respect to each series or class of Securities;
(iii) the aggregate Outstanding Amount for each series of Term
Notes, the Outstanding Amount of the Revolving Notes and the
Certificate Balance, each as of such date and after giving effect to
all payments reported under clause (i) above (or, in the case of any
Revolving Notes during the Revolving Period, unless principal payments
thereon are required on such Payment Date, as of the last day of such
Collection Period);
(iv) the amount of outstanding Servicer Advances on such date;
(v) the amount of the Monthly Servicing Fee paid to the Servicer
with respect to the related Collection Period or Periods, as the case
may be;
(vi) the per annum interest rate for the next Payment Date, for
any series or class of Securities with a variable or adjustable
interest rate;
(vii) the amount, if any, withdrawn from or credited to each of
the ______________________ Reserve Funds;
(viii) the accumulated interest and principal shortfalls, if any,
on each series or class of Securities and the change in each of such
amounts from the preceding Payment Date;
(ix) the Trust Charge-Offs allocated to each series or class of
Securities and the change in such amounts from the preceding Payment
Date; and
(x) the balance of each of the ______________________ Reserve
Funds, if any, on such date after giving effect to changes therein or
any distributions therefrom on such date.
Each amount set forth pursuant to clauses (i), (ii) and (viii) above with
respect to the Term Notes or the Certificates shall be expressed as a dollar
amount per $1,000 of initial principal amount of the Term Notes or of
Certificate Balance, as applicable.
(b) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of this Agreement, the
Indenture Trustee and the Owner Trustee shall furnish (or cause to be
furnished), to each Person who at any time during such calendar year shall have
been a holder of record of Notes or Certificates, respectively, and received any
payment thereon, a statement containing such information as may be required by
the Code and applicable Treasury Regulations to enable such Securityholder to
prepare its federal income tax returns.
(c) A copy of each statement provided pursuant to Section 4.8(a) shall
be made available for inspection at the Corporate Trust Office.
SECTION 4.9 New Issuances; Changes in Specified Maximum Revolver
Balance.
(a) The Seller may from time to time after the Initial Closing Date
direct the Indenture Trustee or the Owner Trustee, as applicable, on behalf of
the Trust, to issue one or more series of Term Notes or Revolving Notes, or
Revolving Notes of any series outstanding pursuant to the Indenture or increase
or decrease the Specified Maximum Revolver Balance or issue additional
Certificates (including Certificates of a different class) pursuant to the Trust
Agreement. Except as otherwise provided in any supplement hereto or any
Officer's Issuance Certificate or Certificate Issuance Order, the Term Notes of
all outstanding series, the Revolving Notes of all outstanding series and the
Certificates of all outstanding classes shall be equally and ratably entitled as
and to the extent provided herein to the benefits of this Agreement, the
Indenture and the Pooling and Servicing Agreement without preference, priority
or distinction.
(b) The obligation of the Indenture Trustee or the Owner Trustee, as
applicable, to issue Term Notes or Revolving Notes of a new series, to increase
or decrease the Specified Maximum Revolver Balance (including any Series
Specified Maximum Revolver Balance) or to issue any additional Certificates and
to execute and deliver any related documents, including a supplement hereto or
to the Indenture, is subject to the following conditions:
(i) on or before the fifth Business Day immediately preceding the
related Closing Date, the Seller shall have given the Indenture
Trustee, the Owner Trustee, the Servicer and each Rating Agency notice
of such issuance or of such increase or decrease in the Specified
Maximum Revolver Balance and the Closing Date;
(ii) with respect to the issuance of a new series of Term Notes
or Revolving Notes, the Seller shall have delivered to the Indenture
Trustee and the Owner Trustee the related supplement and/or Officer's
Issuance Certificate, in form reasonably satisfactory to such
Trustees;
(iii) with respect to the issuance of Certificates, the Seller
shall have delivered to the Owner Trustee the related Certificate
Issuance Order, in form reasonably satisfactory to the Owner Trustee;
(iv) the Seller shall have delivered to the Indenture Trustee or
the Owner Trustee, as applicable, any related Specified Support
Arrangement executed by each of the parties thereto, other than such
Trustee;
(v) the Rating Agency Condition shall have been satisfied with
respect to such issuance of any additional Series of Notes or increase
in the Specified Maximum Revolver Balance; provided that any decrease
in the Specified Maximum Revolver Balance shall not be subject to such
condition;
(vi) the Seller shall have delivered to the Indenture Trustee and
the Owner Trustee a certificate of a Vice President or more senior
officer, dated the Closing Date, to the effect that the Seller
reasonably believes that such issuance or increase or decrease shall
not result in the occurrence of an Early Amortization Event;
(vii) after giving effect to all issuances of Securities and all
changes in the Specified Maximum Revolver Balance on the Closing Date,
the quotient of (A) the outstanding Certificate Balance of all then
outstanding Certificates over (B) the Maximum Pool Balance shall equal
or exceed the Specified Certificate Percentage; and
(viii) with respect to the issuance of additional Certificates
(unless otherwise agreed by the holders of all outstanding
Certificates or unless the Rating Agency Condition is satisfied) the
initial Certificate Balance of the Certificates to be issued on the
Closing Date shall be less than or equal to the lowest Certificate
Balance outstanding at all times during the twelve-month period
preceding such issuance.
Upon satisfaction of the above conditions with respect to the issuance of
additional Term Notes or Revolving Notes, the Indenture Trustee shall, to the
extent necessary, execute a supplement to the Indenture and execute and
authenticate such Term Notes or Revolving Notes pursuant to the Indenture. Upon
satisfaction of the above conditions with respect to the increase or decrease of
the Specified Maximum Revolver Balance, the Indenture Trustee shall, to the
extent necessary, amend the Revolving Notes or the Indenture. Upon satisfaction
of the above conditions with respect to the issuance of additional Certificates,
the Owner Trustee shall execute and authenticate such additional Certificates
pursuant to the Trust Agreement. In any such case, upon satisfaction of the
above conditions, and upon payment in full of any series of Term Notes, the
Owner Trustee shall, to the extent necessary, terminate, amend or modify the
terms of any Specified Support Arrangements (including the Basis Swaps) and
enter into additional Specified Support Arrangements.
ARTICLE V
SERVICING FEE
SECTION 5.1 Servicing Compensation. The Monthly Servicing Fee shall be
payable to the Servicer, in arrears, on each Monthly Distribution Date through
and including the Monthly Distribution Date on which the final distribution on
the Securities is made, in an amount equal to the product of (a) one-twelfth of
the Servicing Fee Rate and (b) the average daily balance of the Daily Trust
Invested Amount for the related Collection Period; provided, however, that with
respect to the first Monthly Distribution Date, the Monthly Servicing Fee shall
be equal to the product of (a) 14/360 of the Servicing Fee Rate and (b) the
average daily balance of the Daily Trust Invested Amount during the period from
and including the Initial Cut-Off Date through and including the last day of the
Collection Period in which the Initial Cut-Off Date occurs.
ARTICLE VI
SECURITYHOLDER ACCOUNTS; COLLECTIONS,
DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 6.1 Establishment of Accounts; Deposits; Investments.
(a) (i) The Servicer, for the benefit of the Securityholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the ______________________ Collection Account (the "Collection
Account"), bearing an additional designation clearly indicating that the funds
deposited therein are held for the benefit of the Securityholders.
(ii) The Servicer, for the benefit of the holders of each series
of Term Notes separately shall establish and maintain in the name of
the Indenture Trustee an Eligible Deposit Account known as the
______________________ Term Note Distribution Account (the "Term Note
Distribution Account"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit
of the holders of the Term Notes of the relevant series. Upon the
commencement of a Payment Period for a series of Term Notes, the
Servicer, for the benefit of the Term Noteholders, shall establish a
subaccount of the Term Note Distribution Account (a "Term Note
Distribution Subaccount") (which account may be kept only on the books
of the Trust) in which to maintain all the funds deposited in the Term
Note Distribution Account in respect of principal for the series of
Term Notes beginning its Payment Period.
(iii) In connection with the first issuance by the Trust of
Revolving Notes, the Servicer, for the benefit of the Revolving
Noteholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account known as the
______________________ Revolver Distribution Account (the "Revolver
Distribution Account"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit
of the Revolving Noteholders.
(iv) Pursuant to the Trust Agreement, the Servicer, for the
benefit of the Certificateholders, shall establish and maintain at
____________________ in the name of the Issuer an Eligible Deposit
Account known as the ______________________ Certificate Distribution
Account (the "Certificate Distribution Account") bearing an additional
designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders.
(v) The Servicer, for the benefit of the Securityholders, shall
establish and maintain in the name of the Indenture Trustee an
Eligible Deposit Account known as the ______________________ Reserve
Fund (the "Reserve Fund") bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit
of the Securityholders.
(vi) The Servicer, for the benefit of the respective Noteholders,
shall establish and maintain in the name of the Indenture Trustee any
Eligible Deposit Accounts and subaccounts as set forth in the
Officer's Issuance Certificates with respect to such series of Notes
(each, an "Accumulation Account", and together with the Cash
Accumulation Account, the "Accumulation Accounts"), each bearing an
additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders of such series of
Notes.
(b) (i) Each of the Designated Accounts shall be initially established
with the Indenture Trustee and shall be maintained with the Indenture Trustee so
long as (A) the short-term unsecured debt obligations of the Indenture Trustee
have the Required Deposit Rating or (B) each of the Designated Accounts are
maintained in the corporate trust department of the Indenture Trustee and any
securities of the Indenture Trustee have a credit rating from each Rating Agency
then rating such securities in one of its generic rating categories that
signifies investment grade. All amounts held in the Designated Accounts (other
than the Cash Accumulation Account and any other Designated Account with respect
to a series of Notes specified otherwise in the Officer's Issuance Certificate
with respect to such Series of Notes) (including amounts, if any, which the
Servicer is required to remit daily to the Collection Account pursuant to
Section 6.2) shall, to the extent permitted by applicable laws, rules and
regulations, be invested, at the written direction of the Servicer (provided,
however, with respect to a series of Term Notes, the Officer's Issuance
Certificate with respect to such series of Term Notes may provide that under
specified conditions a person other than the Servicer shall direct the
investment of funds in deposit in the Designated Accounts with respect to such
series of Term Notes on the terms set forth in such Officer's Issuance
Certificate), by such bank or trust company in Eligible Investments (in the name
of the Indenture Trustee or its nominee). Such written direction shall
constitute certification by the Servicer (or such other Person) that any such
investment is authorized by this Section 6.1. Funds deposited in each of the
______________________ Reserve Funds shall be invested in Eligible Investments
and except, and then only to the extent, as shall be otherwise permitted by the
Rating Agencies, such investments shall not be sold or disposed of prior to
their maturity. Should the short-term unsecured debt obligations of the
Indenture Trustee (or any other bank or trust company with which the Designated
Accounts are maintained) no longer have the Required Deposit Rating, then the
Servicer shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency shall consent), with the Indenture
Trustee's assistance as necessary, cause the Designated Accounts (A) to be moved
to a bank or trust company, the short-term unsecured debt obligations of which
shall have the Required Deposit Rating, or (B) so long as any securities of the
Indenture Trustee have a credit rating from each Rating Agency then rating such
securities in one of its generic rating categories that signifies investment
grade, to be moved to the corporate trust department of the Indenture Trustee.
On each Monthly Distribution Date, Shared Investment Proceeds shall be included
in Available Trust Interest and applied as set forth in Section 4.5(c). The
Indenture Trustee or the other Person holding the Designated Accounts as
provided in this Section 6.1(b)(i) shall be the "Securities Intermediary." If
the Securities Intermediary shall be a Person other than the Indenture Trustee,
the Servicer shall obtain the express agreement of such Person to the
obligations of the Securities Intermediary set forth in this Section 6.1 and an
Opinion of Counsel that such Person can perform such Obligations.
(ii) With respect to the Designated Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) Any Designated Account Property that is held in
deposit accounts shall be held solely in Eligible Deposit
Accounts. The Designated Accounts are accounts to which
Financial Assets will be credited.
(B) All securities or other property underlying any
Financial Assets credited to the Designated Accounts shall
be registered in the name of the Securities Intermediary,
indorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the
name of the Securities Intermediary and in no case will any
Financial Asset credited to any of the Designated Accounts
be registered in the name of the Issuer, the Servicer or the
Seller, payable to the order of the Issuer, the Servicer or
the Seller or specially indorsed to the Issuer, the Servicer
or the Seller except to the extent the foregoing have been
specially indorsed to the Securities Intermediary or in
blank.
(C) All property delivered to the Securities
Intermediary pursuant to this Agreement will be credited
upon receipt of such property to the appropriate Designated
Account.
(D) Each item of property (whether investments,
investment property, Financial Asset, security, instrument
or cash) credited to a Designated Account shall be treated
as a "financial asset" within the meaning of Section
8-102(a)(9) of the New York UCC.
(E) If at any time the Securities Intermediary shall
receive any order from the Indenture Trustee directing
transfer or redemption of any Financial Asset relating to
the Designated Accounts, the Securities Intermediary shall
comply with such order without further consent by the Trust,
the Servicer, the Seller or any other Person.
(F) The Designated Accounts shall be governed by the
laws of the State of New York, regardless of any provision
in any other agreement. For purposes of the UCC, New York
shall be deemed to be the Securities Intermediary's
jurisdiction and the Designated Accounts (as well as the
Security Entitlements related thereto) shall be governed by
the laws of the State of New York.
(G) The Securities Intermediary has not entered into,
and until the termination of this Agreement will not enter
into, any agreement with any other Person relating to the
Designated Accounts and/or any Financial Assets or other
property credited thereto pursuant to which it has agreed to
comply with entitlement orders (as defined in Section
8-102(a)(8) of the New York UCC) of such other Person and
the Securities Intermediary has not entered into, and until
the termination of this Agreement will not enter into, any
agreement with the Issuer, the Seller, the Servicer or the
Indenture Trustee purporting to limit or condition the
obligation of the Securities Intermediary to comply with
entitlement orders as set forth in Section 6.1(b)(ii)(E)
hereof.
(H) Except for the claims and interest of the Indenture
Trustee in the Designated Accounts, the Securities
Intermediary has no knowledge of claims to, or interests in,
the Designated Accounts or in any Financial Asset credited
thereto. If any other Person asserts any Lien, encumbrance
or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against
the Designated Accounts or in any Financial Asset carried
therein, the Securities Intermediary will promptly notify
the Indenture Trustee, the Servicer and the Issuer thereof.
(I) The Securities Intermediary will promptly send
copies of all statements, confirmations and other
correspondence concerning the Designated Accounts and/or any
Designated Account Property simultaneously to each of the
Servicer and the Indenture Trustee, at the addresses set
forth in Appendix B to this Agreement.
(J) The Indenture Trustee shall maintain each item of
Designated Account Property in the particular Designated
Account to which such item originated and shall not
commingle items from different Designated Accounts.
(K) The Servicer or other Person directing the
investment of funds in the Designated Accounts shall not
direct the Indenture Trustee to:
(1) invest in any Physical Property, any
Uncertificated Security that is not a Federal
Book-Entry Security or any Certificated Security unless
the Indenture Trustee takes Delivery of such item; or
(2) invest in any Security Entitlement or Federal
Book-Entry Security unless the Indenture Trustee
obtains Control over such investment.
(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 Designated Accounts for the purpose
of permitting the Servicer or the Owner Trustee to carry out its
respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
(iv) The Indenture Trustee shall possess all right, title and
interest in and to all funds on deposit from time to time in the
Designated Accounts and in all proceeds thereof (except Investment
Proceeds). Except as otherwise provided herein or in the Indenture,
the Designated Accounts shall be under the exclusive dominion and
control of the Indenture Trustee for the benefit of the
Securityholders and the Indenture Trustee shall have sole signature
power and authority with respect thereto.
(v) The Servicer shall not direct the Indenture Trustee to make
any investment of any funds or to sell any investment held in any of
the Designated Accounts unless the security interest granted and
perfected in such account shall continue to be perfected in such
investment or the proceeds of such sale, in either case without any
further action by any Person, and, in connection with any direction to
the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Servicer shall deliver to the
Indenture Trustee an Opinion of Counsel, acceptable to the Indenture
Trustee, to such effect.
(c) Pursuant to the Trust Agreement, the Owner Trustee shall possess
all right, title and interest in and to all funds on deposit from time to time
in the Certificate Distribution Account and in all proceeds thereof (except
Investment Proceeds). Except as otherwise provided herein or in the Trust
Agreement, the Certificate Distribution Account shall be under the sole dominion
and control of the Owner Trustee for the benefit of the Certificateholders. All
amounts in the Certificate Distribution Account shall, to the extent permitted
by applicable laws, rules and regulations, be invested, at the written direction
of the Servicer, by the bank or trust company at which the Certificate
Distribution Account is maintained in Eligible Investments. Such written
direction shall constitute certification by the Servicer that any such
investment is authorized by this Section 6.1(c). Investments in Eligible
Investments shall be made in the name of the Owner Trustee or its nominee. If,
at any time, the Certificate Distribution Account ceases to be an Eligible
Deposit Account, the Servicer 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 Certificate Distribution Account as an Eligible Deposit
Account and shall cause the Owner Trustee to transfer any cash and/or any
investments in the old Certificate Distribution Account to such new Certificate
Distribution Account.
(d) The Indenture Trustee, the Owner Trustee, the Securities
Intermediary and each other Eligible Deposit Institution with whom a Designated
Account or the Certificate Distribution Account is maintained waives any right
of set-off, counterclaim, security interest or bankers' lien to which it might
otherwise be entitled.
SECTION 6.2 Collections.
(a) Except as otherwise provided in Section 6.2(b), the Servicer shall
deposit Collections into the Collection Account as promptly as possible after
the date such Collections are processed by the Servicer, but in no event later
than the second Business Day after such processing date.
(b) Notwithstanding anything in this Agreement to the contrary, for so
long as
(i) ______________________ is the Servicer,
(ii) no Servicing Default has occurred and is continuing,
(iii) (A) ______________________ maintains a short-term rating of
at least A-1 by Standard & Poor's and P-1 by Moody's,
(B) ______________________ arranges for and maintains a
letter of credit or other form of Specified Support Arrangement
in respect of the Servicer's obligations to make deposits of
Collections in the Collection Account that is acceptable in form
and substance to each Rating Agency or
(C) ______________________ otherwise obtains the written
confirmation from each Rating Agency that the failure by
______________________ to make daily deposits shall not result in
a downgrade, suspension or withdrawal of the rating of any
outstanding series or class of Securities with respect to which
it is a Rating Agency, and
(iv) no Daily Remittance Period specified in the Officer's
Issuance Certificate of any series of Notes is in effect
(each of clause (i), (ii), (iii) and (iv), a "Monthly Remittance Condition"),
then, subject to any limitations in the confirmations described in (C) above, if
then applicable, the Servicer need not deposit Trust Principal Collections and
Trust Interest Collections into the Collection Account on a daily basis during a
Collection Period or make the deposits on any dates during such Collection
Period otherwise specified in Sections 2.1(d), 2.6(b) and 2.7(b)(iii), but may
make a single deposit into the Collection Account in same-day or next-day funds
not later than 12:00 noon, New York City time, on the Business Day immediately
preceding the related Monthly Distribution Date (or, with the consent of the
Indenture Trustee, in same-day funds not later than 10:00 a.m., New York City
time, on a Monthly Distribution Date) in a net amount equal to the amount which
would have been on deposit in the Collection Account on such Monthly
Distribution Date; provided that the amount of the Cash Collateral Amount for
the last day of any Collection Period shall be deposited into the Collection
Account (to the extent not already on deposit therein) no later than the second
Business Day of the following Collection Period. If and so long as a Monthly
Remittance Condition ceases to be satisfied, the Servicer shall commence, if not
already doing so, making deposits in accordance with Section 6.2(a) no later
than the first day of the first Collection Period that begins at least two
Business Days after the day on which such Monthly Remittance Condition ceases to
be satisfied.
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.1 Liability of Servicer; Indemnities.
(a) The Servicer shall be liable in accordance with this Agreement
only to the extent of the obligations in this Agreement and the Pooling and
Servicing Agreement specifically undertaken by the Servicer in its capacity as
Servicer. Such obligations shall include the following:
(i) The Servicer shall indemnify, defend and hold harmless the
Indenture Trustee, the Owner Trustee, the Issuer and the Securityholders
from and against any taxes that may at any time be asserted against any
such Person with respect to the transactions contemplated in this
Agreement, including, without limitation, any sales, gross receipts,
general corporation, tangible personal property, privilege or license taxes
(but not including any taxes asserted with respect to, and as of the date
of, the sale of any Eligible Receivables to the Issuer hereunder or the
issuance and original sale of any Securities, or asserted with respect to
ownership or sale of any Eligible Receivables in the Accounts in the Pool
of Accounts or the Securities, or federal or other income taxes arising out
of distributions or receipt of payment on the Securities, or any fees or
other compensation payable to any such Person) and costs and expenses in
defending against the same;
(ii) The Servicer shall indemnify, defend and hold harmless the
Indenture Trustee, the Owner Trustee, the Issuer and the Securityholders
from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon the Indenture Trustee, the
Owner Trustee, the Issuer or the Securityholders through the negligence,
wilful misfeasance or bad faith of the Servicer in the performance of its
duties under this Agreement, the Pooling and Servicing Agreement, the
Indenture or the Trust Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement, the Pooling and Servicing
Agreement, the Indenture or the Trust Agreement; and
(iii) The Servicer shall indemnify, defend and hold harmless the
Indenture Trustee and the Owner Trustee, and their respective agents and
servants, from and against all costs, expenses, losses, claims, damages and
liabilities arising out of or incurred in connection with (x) in the case
of the Owner Trustee, the Indenture Trustee's performance of its duties
under the Indenture, (y) in the case of the Indenture Trustee, the Owner
Trustee's performance of its duties under the Trust Agreement or (z) the
acceptance, administration or performance by, or action or inaction of, the
Indenture Trustee or the Owner Trustee, as applicable, of the trusts and
duties contained in this Agreement, the Basic Documents, the Indenture (in
the case of the Indenture Trustee), including the administration of the
Owner Trust Estate, and the Trust Agreement (in case of the Owner Trustee),
including the administration of the Trust Estate, except in each case to
the extent that such cost, expense, loss, claim, damage or liability: (A)
is due to the wilful misfeasance, bad faith or negligence (except for
errors in judgment) of the Person seeking to be indemnified, (B) to the
extent otherwise payable to the Indenture Trustee, arises from the
Indenture Trustee's breach of any of its representations or warranties in
Section 6.13 of the Indenture, (C) to the extent otherwise payable to the
Owner Trustee, arises from the Owner Trustee's breach of any of its
representations or warranties set forth in Section 6.6 of the Trust
Agreement or (D) shall arise out of or be incurred in connection with the
performance by the Indenture Trustee of the duties of successor Servicer
hereunder.
(b) Indemnification under this Section 7.1 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer has made any indemnity payments pursuant to this Section 7.1 and
the recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, without interest.
SECTION 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, (c) succeeding to the
business of the Servicer or (d) more than 50% of the voting interests of which
is owned, directly or indirectly, by ______________________ and which is
otherwise servicing dealer receivables, which Person in any of the foregoing
cases (other than the Servicer as the surviving entity of any such merger or
consolidation) executes an agreement of assumption to perform every obligation
of the Servicer under this Agreement and the Pooling and Servicing Agreement,
shall be the successor to the Servicer under this Agreement and the Pooling and
Servicing Agreement without the execution or filing of any document or any
further act on the part of any of the parties to this Agreement, anything in
this Agreement or in the Pooling and Servicing Agreement to the contrary
notwithstanding. The Servicer shall provide notice of any merger, consolidation
or succession pursuant to this Section 7.2 to the Rating Agencies.
SECTION 7.3 Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of the directors, officers, employees
or agents of the Servicer in its capacity as such shall be under any liability
to the Issuer, the Indenture Trustee, the Owner Trustee, the Securityholders or
any other Person, except as specifically provided in this Agreement and in the
Pooling and Servicing Agreement, for any action taken or for refraining from the
taking of any action pursuant to the Basic Documents 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
wilful misfeasance, bad faith or negligence (except errors in judgment) in the
performance of duties or by reason of reckless disregard of obligations and
duties under the Basic Documents. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on the advice of
counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under the Basic
Documents.
(b) The Servicer and any director, officer or employee of the Servicer
shall be reimbursed by the Owner Trustee for any contractual damages, liability
or expense (including, without limitation, any obligation of the Servicer to the
Indenture Trustee pursuant to subsection 7.1(a)(iii)(y) or (z)) incurred by
reason of the Owner Trustee's wilful misfeasance, bad faith or negligence
(except errors in judgment) in the performance of such trustee's duties under
this Agreement or the Trust Agreement or by reason of reckless disregard of its
obligations and duties under such agreements.
(c) Except as provided in this Agreement or in the Pooling and
Servicing Agreement, the Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties to
service the Receivables arising under the Accounts in the Pool of Accounts in
accordance with this Agreement and the Pooling and Servicing Agreement and that
in its opinion may cause it to incur any expense or liability; provided,
however, that the Servicer may undertake any reasonable action that it may deem
necessary or desirable in respect of the Basic Documents and the rights and
duties of the parties to the Basic Documents and the interests of the
Securityholders under the Basic Documents. In such event, the legal expenses and
costs for such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to be
reimbursed therefor.
(d) The Applicable Trustee shall distribute out of the Collection
Account on a Monthly Distribution Date any amounts permitted for reimbursement
pursuant to subsection 7.3(c) not therefor reimbursed; provided, however, that
the Applicable Trustee shall not distribute such amounts if the amount on
deposit in the Reserve Fund (after giving effect to all withdrawals pursuant to
Section 4.5, on such Monthly Distribution Date) is less than the Reserve Fund
Required Amount.
SECTION 7.4 Delegation of Duties. So long as ______________________
acts as Servicer, the Servicer may, at any time without notice or consent,
delegate any duties under this Agreement or under the Pooling and Servicing
Agreement to any Person more than 50% of the voting interests of which is owned,
directly or indirectly, by ______________________. The Servicer may at any time
perform specific duties as Servicer through sub-contractors who are in the
business of servicing dealer floor plan automotive or similar receivables;
provided, however, that no such delegation shall relieve the Servicer of its
responsibility with respect to such duties.
SECTION 7.5 Servicer Not to Resign. Subject to the provisions of
Section 7.2, the Servicer shall not resign from the obligations and duties
imposed on it by this Agreement and the Pooling and Servicing Agreement as
Servicer except upon determination that the performance of its duties under this
Agreement or under the Pooling and Servicing Agreement, as the case may be, is
no longer permissible under applicable law. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Indenture Trustee and the Owner Trustee. No such
resignation shall become effective until the Indenture Trustee or a successor
servicer shall have assumed the responsibilities and obligations of the Servicer
under the Basic Documents in accordance with Section 7.2.
ARTICLE VIII
DEFAULT
SECTION 8.1 Servicing Defaults. Each of the following shall constitute
a "Servicing Default":
(a) any failure by the Servicer to deliver to the Indenture Trustee
for deposit in any of the Designated Accounts or to the Owner Trustee for
deposit in the Certificate Distribution Account any required payment or to
direct the Indenture Trustee or the Owner Trustee to make any required
distribution therefrom, which failure continues unremedied for a period of five
Business Days after written notice is received by the Servicer from the
Indenture Trustee or the Owner Trustee or after discovery of such failure by an
officer of the Servicer;
(b) any failure on the part of the Servicer duly to observe or perform
in any material respect any other covenant or agreement of the Servicer set
forth in this Agreement, the Pooling and Servicing Agreement, the Indenture or
the Trust Agreement, which failure (i) materially and adversely affects the
rights of Securityholders and (ii) continues unremedied for a period of 90 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Indenture Trustee or the
Owner Trustee, or to the Servicer, the Indenture Trustee and the Owner Trustee
by Noteholders whose Notes evidence not less than 25% of the Outstanding Amount
of the Notes as of the close of the preceding Monthly Distribution Date or by
Certificateholders whose Certificates evidence not less than 25% of the Voting
Interests as of the close of the preceding Monthly Distribution Date or after
discovery of such failure by an officer of the Servicer;
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant to this Agreement
proves to have been incorrect when made and such inaccuracy has a material
adverse effect on the rights of the Securityholders and such material adverse
effect continues for a period of 60 days after the date on which written notice
thereof, requiring the same to be remedied, shall have been given to the
Servicer by the Indenture Trustee or the Owner Trustee; or
(d) the entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver or liquidator for the Servicer, in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of their respective affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 90 consecutive days; or
(e) the consent by the Servicer to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities, or similar proceedings of or relating to the Seller or
the Servicer or of or relating to substantially all of their respective
property; or the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of all or
substantially all of its obligations.
Notwithstanding the foregoing, there shall be no Servicing Default
where a Servicing Default would otherwise exist due to a delay in or failure of
performance under Section 8.1(a) for a period of 10 Business Days, or under
Section 8.1(b) or (c) for a period of 60 days, if the delay or failure giving
rise to such Servicing Default was caused by an act of God or the public enemy,
acts of declared or undeclared war, public disorder, rebellion or sabotage,
epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or
similar causes. The preceding sentence shall not relieve the Servicer from using
its best efforts to perform its obligations in a timely manner in accordance
with the terms of this Agreement and the Pooling and Servicing Agreement and the
Servicer shall provide the Indenture Trustee, the Owner Trustee, the Seller and
the Securityholders with prompt notice of such failure or delay by it, together
with a description of its efforts so to perform its obligations. The Servicer
shall immediately notify the Indenture Trustee and the Owner Trustee in writing
of any Servicing Default.
SECTION 8.2 Consequences of a Servicing Default. If a Servicing
Default shall occur and be continuing, either the Indenture Trustee or the
Noteholders whose Notes evidence not less than a majority of the Outstanding
Amount attributable to such Notes as of the close of the preceding Monthly
Distribution Date (or, if the Notes have been paid in full and the Indenture has
been discharged with respect thereto, the Owner Trustee or Certificateholders
whose Certificates evidence not less than a majority of the Voting Interests as
of the close of the preceding Monthly Distribution Date), by notice then given
in writing to the Servicer and the Owner Trustee and to the Indenture Trustee if
given by the Noteholders or the Certificateholders) may terminate all, but not
less than all, of the rights and obligations (other than its obligations that
have accrued up to the time of such termination) of the Servicer under this
Agreement and the Pooling and Servicing Agreement. On or after the receipt by
the Servicer of such written notice, all authority and power of the Servicer
under this Agreement and the Pooling and Servicing Agreement, whether with
respect to the Notes, the Certificates, the Accounts in the Pool of Accounts,
the related Receivables (including those held by the Trust and those retained by
the Original Seller) or otherwise, shall pass to and be vested in the Indenture
Trustee pursuant to and under this Section 8.2. The Indenture Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the 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 arising under the Accounts in the Pool of Accounts and related
documents, or otherwise. The Servicer agrees to cooperate with the Indenture
Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the Servicer under this Agreement and the Pooling
and Servicing Agreement, including, without limitation, the transfer to the
Indenture Trustee or the Owner Trustee for administration by it of all
Collections that shall at the time be held by the Servicer for deposit, or that
shall have been deposited by the Servicer in the Collection Account, the Term
Note Distribution Account, the Revolver Distribution Account, the Certificate
Distribution Account or any other Designated Account or thereafter received with
respect to the Receivables in the Accounts in the Pool of Accounts that shall at
that time be held by the Servicer. In addition to any other amounts that are
then payable to the Servicer under this Agreement, the Servicer shall be
entitled to receive from the successor Servicer, as described in Section 8.6,
reimbursements for any outstanding Servicer Advances made during the period
prior to the notice pursuant to this Section 8.2 which terminates the obligation
and rights of the Servicer under this Agreement. To the extent that compliance
with this Section 8.2 shall require the Servicer to disclose to the successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interest.
SECTION 8.3 Indenture Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.2, the Indenture Trustee shall be the
successor in all respects to the Servicer in its capacity as servicer under this
Agreement and the Pooling and Servicing Agreement and the transactions set forth
or provided for in this Agreement and the Pooling and Servicing Agreement, and
shall be subject to all the responsibilities, restrictions, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
of this Agreement and the Pooling and Servicing Agreement. As compensation
therefor, the Indenture Trustee shall be entitled to such compensation (whether
payable out of the Collection Account or otherwise) as the Servicer would have
been entitled to under this Agreement if no such notice of termination had been
given. Notwithstanding the above, the Indenture Trustee may, if it is unwilling
to so act, or shall, if it is legally unable so to act, appoint, or petition a
court of competent jurisdiction for the appointment of, a successor (i) having a
net worth of not less than $100,000,000, (ii) a long-term unsecured debt rating
from Moody's of at least Baa3 (unless such requirement is expressly waived by
Moody's) and (iii) whose regular business includes the servicing of dealer floor
plan automotive receivables, as the successor to the Servicer under this
Agreement and the Pooling and Servicing Agreement in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer under
this Agreement and the Pooling and Servicing Agreement (except that such
successor shall not be liable for any liabilities incurred by any predecessor
Servicer). Any successor to the Servicer shall automatically agree to be bound
by the terms and provisions of any Specified Support Arrangement. In connection
with such appointment and assumption, the Indenture Trustee may make such
arrangements for the compensation of such successor out of Collections as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Servicer under this Agreement and the Pooling
and Servicing Agreement. The Indenture Trustee and such successor shall take
such action, consistent with this Agreement and the Pooling and Servicing
Agreement, as shall be necessary to effectuate any such succession.
(b) All authority and power granted to any successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 7.1 of the Trust Agreement, and shall pass to and be
vested in the Seller and, without limitation, the Seller is hereby authorized
and empowered to execute and deliver, on behalf of the successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The successor Servicer agrees to
cooperate with the Seller in effecting the termination of the responsibilities
and rights of the successor Servicer under this Agreement and the Pooling and
Servicing Agreement. The successor Servicer shall transfer to the Seller its
electronic records relating to the Accounts and the Receivables serviced
hereunder in such electronic form as the Seller may reasonably request and shall
transfer to the Seller all other records, correspondence and documents in the
manner and at such times as the Seller shall reasonably request. To the extent
that compliance with this Section 8.3 shall require the successor Servicer to
disclose to the Seller information of any kind which the successor Servicer
deems to be confidential, the Seller shall be required to enter into such
customary licensing and confidentiality agreements as the successor Servicer
shall deem necessary to protect its interests.
SECTION 8.4 Notification to Securityholders. Upon any termination of,
or appointment of a successor to, the Servicer pursuant to this Article VIII,
the Indenture Trustee shall give prompt written notice thereof to the Term
Noteholders, the Revolving Noteholders, the Rating Agencies and the Owner
Trustee shall give prompt written notice thereof to the Certificateholders.
SECTION 8.5 Waiver of Past Defaults. Noteholders whose Notes evidence
not less than a majority of the Outstanding Amount of the Notes as of the close
of the preceding Monthly Distribution Date (or, if all of the Notes have been
paid in full and the Indenture has been discharged in accordance with its terms,
Certificateholders whose Certificates evidence not less than a majority of the
Voting Interests as of the close of the preceding Monthly Distribution Date)
voting as a single class, may, on behalf of all Securityholders, waive any
default by the Servicer in the performance of its obligations hereunder and
under the Pooling and Servicing Agreement and its consequences, except a
Servicing Default under Section 8.1(a) of this Agreement. Upon any such waiver
of a past default, such default shall cease to exist, and any Servicing Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement and the Pooling and Servicing Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 8.6 Repayment of Advances. If the identity of the Servicer
shall change, the predecessor Servicer shall be entitled to receive, to the
extent of available funds, reimbursement for Servicer Advances in the manner
specified in Section 4.5, with respect to all previously unreimbursed Servicer
Advances made by such predecessor Servicer prior to the reimbursement of any
Servicer Advances made by the successor Servicer.
ARTICLE IX
EARLY AMORTIZATION EVENTS; TERMINATION
SECTION 9.1 Early Amortization Events. If any one of the following
events shall occur:
(a) an Insolvency Event with respect to the Seller or the Servicer (or
the Original Seller, if it is not the Servicer);
(b) ______________________ shall file a petition commencing a
voluntary case under any chapter of the Federal bankruptcy laws; or
______________________ shall file a petition or answer or consent seeking
reorganization, arrangement, adjustment or composition under any other similar
applicable Federal law, or shall consent to the filing of any such petition,
answer or consent; or ______________________ shall appoint, or consent to the
appointment of, a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or insolvency of it or of
any substantial part of its property; or ______________________ shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due;
(c) any order for relief against ______________________ shall have
been entered by a court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws, and such order shall have continued undischarged or
unstayed for a period of 60 days; or a decree or order by a court having
jurisdiction in the premises shall have been entered approving as properly filed
a petition seeking reorganization, arrangement, adjustment or composition of
______________________ under any other similar applicable Federal law, and such
decree or order shall have continued undischarged or unstayed for period of 120
days; or a decree or order of a court having jurisdiction in the premises for
the appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or insolvency of
______________________ or of any substantial part of its property, or for the
winding up or liquidation of its affairs, shall have been entered, and such
decree or order shall have remained in force undischarged or unstayed for a
period of 120 days;
(d) failure on the part of the Seller, the Servicer or the Original
Seller, as applicable, (i) to pay (or set aside for payment) pursuant to Section
4.5(d)(ii), (iii) and (iv) all amounts required to be paid as principal on any
Notes or distributed as Certificate Balance on any Certificates on the
applicable Stated Final Payment Date;
(e) failure on the part of the Seller, the Servicer or the Original
Seller, as applicable, to duly observe or perform in any material respect any
other covenants or agreements of the Seller, the Servicer or the Original
Seller, as the case may be, set forth in this Agreement or the Pooling and
Servicing Agreement, which failure continues 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 by the Indenture Trustee or the Owner Trustee to
the Seller, provided, however, that no Early Amortization Event shall be deemed
to occur if the Receivables affected by such failure are repurchased by the
Seller or the Servicer or the Original Seller (if the Original Seller is not the
Servicer), as applicable, in accordance with the Basic Documents;
(f) any representation or warranty made by the Original Seller in the
Pooling and Servicing Agreement or the Seller in this Agreement or any
information contained on the Schedule of Accounts, (i) shall prove to have been
incorrect in any material respect when made or when delivered, and shall
continue to be incorrect in any material respect 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 to the Seller by the Indenture Trustee or the
Owner Trustee and (ii) as a result of such incorrectness the interests of the
Securityholders are materially and adversely affected, provided, however, that
no Early Amortization Event shall be deemed to occur if the Receivables relating
to such representation or warranty are repurchased by the Original Seller or the
Seller, as applicable, in accordance with the Basic Documents;
(g) on any Monthly Distribution Date, the average of the Monthly
Payment Rates for the three preceding Collection Periods is less than 25%;
(h) on any three consecutive Monthly Distribution Dates, the amount on
deposit in the Reserve Fund is less than the Reserve Fund Required Amount;
(i) on any Monthly Distribution Date, as of the last day of the
related Collection Period, the aggregate principal balance of Receivables owned
by the Trust which were advanced against Used Vehicles exceeded 20% of the Daily
Trust Balance (for purposes of this clause (i), ______________________ vehicles
that are sold to daily rental car operations, repurchased pursuant to
______________________ repurchase agreements and subsequently sold at auction to
a ______________________-franchised dealer shall not be considered to be Used
Vehicles);
(j) a notice setting forth one or more Events of Default under the
Indenture and declaring the unpaid principal amount of Outstanding Notes
(together with accrued and unpaid interest thereon) immediately due and payable
has been given pursuant to Section 5.2(a) of the Indenture; provided, however,
that if no other Early Amortization Event has occurred and is continuing and so
long as the Scheduled Revolving Period Termination Date has not occurred, if the
Seller so elects, the Early Amortization Period resulting from such occurrence
shall terminate and the Revolving Period (and, if the Seller so elects, any then
occurring Payment Periods if and to the extent set forth in the related
Officer's Issuance Certificate) shall recommence if a notice rescinding and
annulling such declaration has been given pursuant to the Indenture;
(k) on any Monthly Distribution Date, the Reserve Fund Required Amount
for such Monthly Distribution Date exceeds the amount on deposit in the Reserve
Fund by more than the Reserve Fund Trigger Amount;
(l) on any Monthly Distribution Date, the average Daily Trust Balance
is less than 75% of the sum of the average Outstanding Amount of the Term Notes
and the average Certificate Balance (in each case, such average being determined
over the six Collection Periods immediately preceding such Monthly Distribution
Date (or, if shorter, the period from the Initial Closing Date through and
including the last day of the immediately preceding Collection Period));
(m) except for a termination, amendment or modification of the terms
of any Basis Swap or entry into any other Specified Support Arrangement in
connection with the issuance of additional Securities, the payment in full of
any series of Term Notes or a change in the Specified Maximum Revolver Balance
or any Series Specified Maximum Revolver Balance so long as the conditions set
forth in Section 4.9 for such issuance or change are satisfied, any Basis Swap
or Specified Support Arrangement related to any Securities is terminated,
revoked, withdrawn, rescinded or found by a court of competent jurisdiction to
be unenforceable or an Insolvency Event with respect to a Basis Swap
Counterparty;
(n) on any Monthly Distribution Date, as of the last day of each of
the two immediately preceding Collection Periods, the aggregate principal
balance of all Available Receivables is less than 70% of the aggregate principal
balance of all Receivables (including Receivables included in the Retained
Property) in the Accounts in the Pool of Accounts; or
(o) any other Early Amortization Event set forth in the Officer's
Issuance Certificate related to any series of Notes;
then, subject to applicable law, and after the applicable grace period, if any,
an amortization event (an "Early Amortization Event") shall occur without any
notice or other action on the part of any party immediately upon the occurrence
of such event.
SECTION 9.2 Insolvency Events.
(a) Upon any sale, disposition or other liquidation of the assets of
the Trust pursuant to Article V of the Indenture, the Servicer shall instruct
the Indenture Trustee to deposit into the Collection Account the amounts
specified in Section 5.4(b) of the Indenture (the "Insolvency Proceeds"). The
Servicer shall determine conclusively the amount of the Insolvency Proceeds
which are deemed to be Trust Interest Collections and Trust Principal
Collections. The Insolvency Proceeds shall be allocated and distributed to the
Securityholders in accordance with Article IV on the next Monthly Distribution
Date and the Trust (if not already so terminated) and the Trust Agreement shall
terminate as provided in Section 7.1 of the Trust Agreement.
(b) Subject to Section 6.1(b), any investments on deposit in any of
the ______________________ Reserve Funds which shall not mature on or before
such Monthly Distribution Date shall be sold by the Indenture Trustee at such
time as shall result in the Indenture Trustee receiving the proceeds from such
sale not later than the day immediately preceding such Monthly Distribution
Date. Any Insolvency Proceeds remaining after the deposits described above shall
be paid to the Seller.
SECTION 9.3 Optional Purchase by the Servicer. At any time from and
after the time that,
(a) the Daily Trust Balance is less than or equal to 10% of an amount
equal to the highest sum, on any date since the Initial Closing Date, of the
Daily Trust Balance plus the Cash Collateral Amount plus the total of amounts on
deposit in the Cash Accumulation Accounts and the Term Note Distribution Account
(all such amounts being calculated as of the close of business on such day), and
(b) either
(i) there are no Term Notes then outstanding or
(ii) the Wind Down Period is then in effect,
the Servicer shall have the option to purchase, as of the last day of any
Collection Period, the assets of the Trust other than the Designated Accounts
and the Certificate Distribution Account. To exercise such option, with respect
to any Collection Period, the Servicer shall deposit in the Collection Account
an amount equal to the aggregate Administrative Purchase Payments for the
Receivables (including Defaulted Receivables) held by the Trust on the last day
of such Collection Period, plus the appraised value of any such other property
held by the Trust, such value to be determined by an appraiser mutually agreed
upon by the Servicer, the Owner Trustee and the Indenture Trustee (such amount
will not be less than the outstanding principal balance and unpaid interest on
all Notes). Thereupon, the Servicer shall succeed to all interests in and to the
assets of the Trust (other than the Designated Accounts and the Certificate
Distribution Account) and the Trust shall assign all such interest to the
Servicer. The amount so paid to the Trust shall be treated as Trust Principal
Collections received during such Collection Period to the extent of the
principal portion of the aggregate Administrative Purchase Payment so paid, with
the remainder being treated as Trust Interest Collections received during such
Collection Period.
SECTION 9.4 Termination. Notice of any termination of the Trust and
the Trust Agreement shall be given by the Servicer to the Owner Trustee and the
Indenture Trustee as soon as practicable after the Servicer has received notice
thereof. Following the satisfaction and discharge of the Indenture and the
payment in full of principal and interest on the Term Notes and the Revolving
Notes, the Certificateholders shall succeed to the rights of the Term
Noteholders and the Revolving Noteholders hereunder and the Owner Trustee shall
succeed to the rights of, and assume the obligations of, the Indenture Trustee
pursuant to this Agreement (subject to the continuing obligations of the
Indenture Trustee set forth in Section 4.4 of the Indenture). After payment to
the Indenture Trustee, the Owner Trustee, the Securityholders (including any
deposit into the Distribution Accounts for the benefit of the Securityholders)
and the Servicer of all amounts required to be paid (or so deposited) under this
Agreement, the Indenture and the Trust Agreement, any amounts on deposit in each
of the ______________________ Reserve Funds and the Collection Account (after
all other distributions required to be made from each of the
______________________ Reserve Funds have been made and all distributions to the
Original Seller on account of the Retained Property have been made) and any
other assets of the Trust, including any Receivables held by the Trust, shall be
paid and delivered to the Seller and this Agreement (except for Section 7.1)
shall be terminated.
SECTION 9.5 Recommencement of Revolving Period.
(a) If an Early Amortization Event described in Section 9.1(i), (j) or
(l) has occurred with the result that the Revolving Period has terminated and
the Early Amortization Period has commenced, the Seller may nonetheless elect to
terminate the Early Amortization Period and recommence the Revolving Period, but
only if
(i) such recommencement begins no later than the first
anniversary of the termination of the Revolving Period;
(ii) as of the date of recommencement, if the event giving rise
to such Early Amortization Event was Section 9.1(i) or (l), such event was
not reoccurring on each of the three Monthly Distribution Dates immediately
preceding the date of recommencement or, if the event giving rise to such
Early Amortization Event was Section 9.1(j), the provisions of the proviso
thereof have been satisfied;
(iii) the Final Revolving Period Termination Date has not
occurred;
(iv) the long term debt obligations of the Original Seller are
rated at least "Baa3" by Moody's;
(v) the Reserve Fund Funding Condition is satisfied; and
(vi) after giving effect to all issuances of Securities and all
changes in the Specified Maximum Revolver Balance on the date of the
recommencement, the quotient of
(A) the outstanding Certificate Balance of all outstanding
Certificates over
(B) the Maximum Pool Balance shall equal or exceed the
Specified Certificate Percentage.
Written notice of such election to recommence the Revolving Period must be given
to the Servicer, the Owner Trustee, the Indenture Trustee and the Rating
Agencies at least ten Business Days prior to the proposed date of
recommencement.
(b) If the Revolving Period has terminated and the Wind Down Period
has commenced prior to the Final Revolving Period Termination Date, the Seller
may nonetheless elect to terminate the Wind Down Period and recommence the
Revolving Period, but only if
(i) such recommencement begins no later than the first
anniversary of the termination of the Revolving Period;
(ii) if an Early Amortization Event has occurred, the Revolving
Period was or on or before the recommencement date will be recommenced in
accordance with Section 9.5(a);
(iii) the Final Revolving Period Termination Date has not
occurred;
(iv) the Reserve Fund Funding Condition is satisfied; and
(v) after giving effect to all issuances of securities and all
changes in the Specified Maximum Revolver Balance on the date of the
recommencement, the quotient of
(A) the outstanding Certificate Balance of all outstanding
______________________ Certificates over
(B) the Maximum Pool Balance shall equal or exceed the
Specified Certificate Percentage.
Written notice of such election to recommence the Revolving Period must be given
to the Servicer, the Owner Trustee, the Indenture Trustee and the Rating
Agencies at least ten Business Days prior to the proposed date of
recommencement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment.
(a) This Agreement may be amended by the Seller, the Servicer and the
Owner Trustee with the consent of the Indenture Trustee, but without the consent
of any of the Securityholders,
(i) to cure any ambiguity,
(ii) to correct or supplement any provision in this Agreement
that may be defective or inconsistent with any other provision in this
Agreement or any other Basic Documents,
(iii) to add or supplement any Specified Support Arrangement for
the benefit of any Securityholders (provided that if any such addition
shall affect any series or class of Securityholders differently than any
other series or class of Securityholders, then such addition shall not, as
evidenced by an Opinion of Counsel, materially and adversely affect in any
material respect the interests of any series or class of Securityholders),
(iv) to add to the covenants, restrictions or obligations of the
Seller, the Servicer, the Owner Trustee or the Indenture Trustee for the
benefit of the Securityholders,
(v) to add provisions to or delete or modify the existing
provisions of this Trust Sale and Servicing Agreement as appropriate to
allow the Trust to issue foreign currency-denominated Notes, including
without limitation adding provisions granting rights under this Trust Sale
and Servicing Agreement to counterparties of the currency swaps that may be
entered into in connection with the issuance of such foreign
currency-denominated Notes, or
(vi) to add, change or eliminate any other provision of this
Agreement in any manner that shall not, as evidenced by an Opinion of
Counsel, materially and adversely affect the interests of the
Securityholders.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Owner Trustee with the consent of the Indenture
Trustee, the consent of Noteholders whose Notes evidence not less than a
majority of the Outstanding Amount of the Notes as of the close of the preceding
Monthly Distribution Date and the consent of Certificateholders whose
Certificates evidence not less than a majority of the Voting Interests as of the
close of the preceding Monthly Distribution Date (which consent, whether given
pursuant to this Section 10.1 or pursuant to any other provision of this
Agreement, shall be conclusive and binding on such Person and on all future
holders of such Security and of any Security issued upon the transfer thereof or
in exchange thereof or in lieu thereof whether or not notation of such consent
is made upon the Security) 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 Securityholders; provided,
however, that no such amendment shall
(i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, distributions or payments that shall be required to
be made on any Security without the consent of the holder thereof (it being
understood that the issuance of any Securities after the Initial Closing
Date as contemplated by this Agreement, the Indenture and the Trust
Agreement and the specification of the terms and provisions thereof
pursuant to an Officer's Issuance Certificate (with respect to any Notes)
or a Certificate Issuance Order (with respect to any Certificates) shall
not be deemed to have such effect for purposes hereof),
(ii) adversely affect the rating of any series or class of
Securities by any Rating Agency without the consent of the holders of
two-thirds of the Outstanding Amount of such series of Notes or the Voting
Interests of such class of Certificates, as appropriate, or
(iii) reduce the aforesaid percentage required to consent to any
such amendment, without the consent of such aforesaid percentage of
Securityholders.
(c) Prior to the execution of any such amendment, supplement or
consent, the Servicer shall furnish written notification of the substance of
such amendment or consent to the Rating Agencies.
(d) Promptly after the execution of any such amendment, supplement or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Securityholder.
(e) It shall not be necessary for the consent of Securityholders
pursuant to subsection 10.1(b) to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Securityholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Securityholders shall be subject to such reasonable requirements as the
Indenture Trustee or the Owner Trustee may prescribe, including the
establishment of record dates pursuant to paragraph number 2 of the Depository
Agreements.
(f) Prior to the execution of any amendment to this Agreement, the
Indenture Trustee and the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in subsection 10.2(i). The Indenture Trustee and the Owner Trustee may, but
shall not be obligated to, enter into any such amendment which affects such
trustee's own rights, duties or immunities under this Agreement or otherwise.
(g) Each of the Original Seller and the Seller agrees that such Person
shall not amend or agree to any amendment of the Pooling and Servicing Agreement
unless such amendment would be permissible under the terms of this Section 10.1
as if this Section 10.1 were contained in the Pooling and Servicing Agreement.
SECTION 10.2 Protection of Title to the Owner Trust Estate.
(a) The Seller or the Servicer or both shall execute and file such
financing statements and cause to be executed and filed such continuation
statements or other 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
Securityholders, the Indenture Trustee and the Owner Trustee hereunder in the
Receivables in the Accounts in the Pool of Accounts and the related Collateral
Security and in the proceeds thereof (including, without limitation, the filing
of UCC-1 financing statements on or prior to the Initial Closing Date). The
Seller or the Servicer or both shall deliver (or cause to be delivered) to the
Indenture Trustee and the Owner Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing. The Seller agrees to use reasonable efforts to cause the
Original Seller to comply with its obligations under Section 7.02 of the Pooling
and Servicing Agreement.
(b) Within 60 days after the Seller or the Servicer make any change in
its name, identity or corporate structure that would make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, the
Seller or the Servicer as applicable shall give the Indenture Trustee and the
Owner Trustee notice of any such change.
(c) Each of the Seller and the Servicer shall give the Indenture
Trustee and the Owner Trustee at least 60 days prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement. The Servicer shall at all times maintain each office from
which it services Receivables arising under the Accounts in the Pool of Accounts
and its principal executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Eligible Receivable arising under an Account in the Pool of Accounts accurately
and in sufficient detail to permit (i) the reader thereof to know at any time
the status of such Receivable, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each such Receivable and the amounts from
time to time deposited in the Collection Account.
(e) In connection with the sale and transfer hereunder of the
Receivables in the Accounts in the Pool of Accounts and the related Collateral
Security from the Seller to the Trust, the Seller shall, at its own expense, on
or prior to the Initial Closing Date, in the case of the Initial Accounts, and
on or prior to the applicable Addition Date, in the case of Additional Accounts,
(i) indicate in its computer files and cause the Original Seller to indicate in
its computer files as required by the Pooling and Servicing Agreement, that the
Eligible Receivables in the Accounts in the Pool of Accounts have been sold and
transferred, and the Collateral Security assigned, to the Seller pursuant to the
Pooling and Servicing Agreement and that such property has been sold and
transferred to the Trust pursuant to this Agreement for the benefit of the
Securityholders and (ii) deliver (or cause the Original Seller to deliver) a
true and complete list of all such Accounts to the Owner Trustee specifying for
each such Account, as of the Initial Cut-Off Date, in the case of the Initial
Accounts, and as of the applicable Additional Cut-Off Date, in the case of
Additional Accounts, its account number and the outstanding principal balance of
Eligible Receivables in such Account. Such list, as supplemented from time to
time to reflect Additional Accounts, Selected Accounts and Removed Accounts
(including Accounts removed as described in Section 2.9), shall be the Schedule
of Accounts to this Agreement and is hereby incorporated into and made a part of
this Agreement. The Owner Trustee shall be under no obligation whatsoever to
verify the accuracy or completeness of the information contained in the Schedule
of Accounts from time to time.
(f) If at any time the Seller or the Servicer proposes to sell, grant
a security interest in, or otherwise transfer any interest in dealer floor plan
automotive receivables to any prospective purchaser, lender or other transferee,
the Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or print-outs (including any restored from
back-up archives) that, if they refer in any manner whatsoever to any Eligible
Receivable arising under an Account in the Pool of Accounts indicate clearly
that an interest in such Receivable has been sold and is owned by the Issuer.
(g) The Servicer shall permit the Indenture Trustee and the Owner
Trustee and their respective agents at any time to inspect, audit and make
copies of and abstracts from the Servicer's records regarding any Receivable
then or previously included in the Owner Trust Estate.
(h) The Servicer shall furnish to the Indenture Trustee and the Owner
Trustee at any time upon request a list of all Accounts then included in the
Pool of Accounts, together with a reconciliation of such list to the Schedule of
Accounts as initially furnished hereunder and to each notice furnished before
such request indicating removal from or addition to the Accounts in the Pool of
Accounts. Upon request, the Servicer shall furnish a copy of any such list to
the Seller. The Indenture Trustee, the Owner Trustee and the Seller shall hold
any such list and the Schedule of Accounts and a copy of the Pooling and
Servicing Agreement, the Trust Sale and Servicing Agreement and the Indenture
for examination by interested parties during normal business hours at their
respective Corporate Trust Offices or, in the case of the Seller, at its office,
located at the addresses set forth in Section 10.3.
(i) The Servicer shall deliver to the Indenture Trustee and the Owner
Trustee promptly after the execution and delivery of this Agreement and of each
amendment or supplement hereto, an Opinion of Counsel either (a) stating that,
in the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to preserve and
protect the interest of the Indenture Trustee and the Owner Trustee in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b) stating that, in the
opinion of such counsel, no such action is necessary to preserve and protect
such interest.
(j) To the extent required by law, the Seller shall cause the Term
Notes (other than any Unregistered Notes) to be registered with the Securities
and Exchange Commission pursuant to Section 12(b) or Section 12(g) of the
Exchange Act within the time periods specified in such sections.
SECTION 10.3 Notices. All demands, notices and communications upon or
to the Seller, the Servicer, the Indenture Trustee, the Owner Trustee or the
Rating Agencies under this Agreement shall be delivered as specified in Appendix
B hereto.
SECTION 10.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF OR OF ANY OTHER
JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed enforceable to the fullest extent permitted, and if not so
permitted, shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any of the
Securities or rights of any Interested Parties.
SECTION 10.6 Assignment. Notwithstanding anything to the contrary
contained herein, this Agreement may not be assigned by the Seller without the
prior written consent of Noteholders whose Notes evidence not less than 66% of
the Outstanding Amount of the Notes as of the close of the preceding Monthly
Distribution Date and of Certificateholders whose Certificates evidence not less
than 66% of the Voting Interests as of the close of the preceding Monthly
Distribution Date. The Seller shall provide notice of any such assignment to the
Rating Agencies.
SECTION 10.7 Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Securityholders and
their respective successors and permitted assigns. Except as otherwise provided
in Section 7.1 or in this Article X, no other person shall have any right or
obligation hereunder.
SECTION 10.8 Counterparts. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 10.9 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 10.10 Assignment to Indenture Trustee. 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 and (only to the extent expressly
provided herein and in the Indenture) the Certificateholders 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 No Petition Covenants. 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 final distribution with respect
to the Securities to any of the Distribution Accounts, acquiesce, petition or
otherwise invoke or cause the Issuer to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Issuer under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer.
SECTION 10.12 Further Assurances. The Seller, the Owner Trustee and
the Indenture Trustee agree to do and perform from time to time, any and all
acts and to execute any and all further instruments required or reasonably
requested by the other more fully to effect the purposes of this Agreement,
including the execution of any financing statements or continuation statements
relating to the Accounts for filing under the provisions of the UCC of any
applicable jurisdiction and to evidence the repurchase of any interest in any
Receivable by the Original Seller, the Seller or the Servicer.
SECTION 10.13 No Waiver; Cumulative Remedies. No failure or delay on
the part of the Owner Trustee or the Indenture Trustee in exercising any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof nor shall any single or partial exercise of any right, remedy, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, power and privileges provided by law.
SECTION 10.14 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 10.15 Limitation of Liability of Indenture Trustee and Owner
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been acknowledged and accepted by _______________________ not in
its individual capacity but solely as Indenture Trustee and in no event shall
___________________have any liability for the representations, warranties,
covenants, agreements or other obligations of 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,
the Indenture Trustee shall be subject to, and entitled to the benefits of, the
terms and provisions of Article VI of the Indenture.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed by _______________________________ not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall ______________________ in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee 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 Article VI of the Trust Agreement.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Trust Sale and
Servicing Agreement to be duly executed by their respective officers hereunto
duly authorized as of the day and year first above written.
____________________________________, Issuer
By: __________________________________not in its
individual capacity but solely as
Owner Trustee on behalf of the Trust
By: __________________________________
Name: __________________________________
Title: __________________________________
ACE SECURITIES CORP., Seller
By: __________________________________
Name: __________________________________
Title: __________________________________
______________________________________________,
SERVICER
By: __________________________________
Name: __________________________________
Title: __________________________________
Acknowledged and Accepted:
____________________, not in its
individual capacity but solely
as Indenture Trustee,
By: __________________________________
Name: __________________________________
Title: __________________________________
_________________________________,
not in its individual capacity
but solely as Owner Trustee,
By: __________________________________
Name: __________________________________
Title: __________________________________
EXHIBIT A
FORM OF ASSIGNMENT FOR THE INITIAL CLOSING DATE
For value received, in accordance with the Trust Sale and Servicing
Agreement, dated as of _________ (the "Trust Sale and Servicing Agreement"),
between _____________________, a ________ corporation, as Servicer ("______"),
ACE Securities Corp., a Delaware corporation (the "Seller"), and
______________________ (the "Trust"), the Seller does hereby sell, assign,
transfer and otherwise convey unto the Trust, without recourse, all of its
right, title and interest in, to and under (i) all of the Eligible Receivables
existing in the Accounts listed in the Schedule of Accounts as of the close of
business on the Initial Cut-Off Date and, so long as each such Account is
included in the Pool of Accounts, all Eligible Receivables created or deemed
created thereunder on each Receivables Purchase Date, all monies due or to
become due thereon after the Initial Cut-Off Date or such Receivables Purchase
Date, as appropriate, all Collateral Security with respect thereto and all
amounts received with respect thereto, (ii) Article IV and Sections 3.04(c) and
6.03 of the Pooling and Servicing Agreement, dated as of _________, between the
Original Seller and the Seller, with respect to such Receivables, (iii) the
Custodian Agreement with respect to such Receivables and (iv) all proceeds of
the foregoing (including "proceeds" as defined in Section 9-306 of the UCC and
Recoveries), in each case, as more fully described in the Trust Sale and
Servicing Agreement.
The foregoing sale, transfer, assignment and conveyance and any sales,
transfers, assignments and conveyances subsequent to the date hereof do not
constitute, and are not intended to result in, the creation or an assumption by
the Trust of any obligation of the Seller, the Original Seller,
______________________ or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto, including any
obligation to any Dealers.
It is the intention of Seller and the Trust that the transfers and
assignments contemplated by this Assignment, including transfers and assignments
subsequent to the date hereof, shall constitute a sale of the property described
herein and in the Pooling and Servicing Agreement from the Seller to the Trust
and the beneficial interest in and title to such property shall not be part of
the Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Trust
Sale and Servicing Agreement and is to be governed by the Trust Sale and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Trust Sale and Servicing Agreement.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of _____________.
ACE SECURITIES CORP.
By: __________________________________
Name:
Title:
EXHIBIT B
LOCATIONS OF SCHEDULE OF ACCOUNTS
The Schedule of Accounts is on file
at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. The Original Seller
4. ACE Securities Corp.
EXHIBIT C
FORM OF ASSIGNMENT FOR EACH ADDITION DATE
For value received, in accordance with the Trust Sale and Servicing
Agreement, dated as of ___________ (the "Trust Sale and Servicing Agreement"),
between ____________________, a __________ corporation, as Servicer
("______________________"), ACE Securities Corp., a Delaware corporation (the
"Seller") and ______________________ (the "Trust"), the Seller does hereby sell,
assign, transfer and otherwise convey unto the Trust, without recourse, with
respect to the Additional Accounts to which this Assignment relates, all of its
right, title and interest in, to and under (i) all of the Eligible Receivables
as of the close of business on the related Additional Cut-Off Date in such
Additional Accounts and, so long as each such Account is included in the Pool of
Accounts, all Eligible Receivables created or deemed created thereunder on each
Receivables Purchase Date, all monies due or to become due thereon after such
Additional Cut-Off Date or such Receivables Purchase Date, as appropriate, all
Collateral Security with respect thereto and all amounts received with respect
thereto, (ii) Article IV and Sections 3.04(c) and 6.03 of the Pooling and
Servicing Agreement, dated as of ____________, between the Original Seller and
the Seller, with respect to such Receivables, including the right of the Seller
to cause the Original Seller to repurchase Receivables under certain
circumstances, (iii) the Custodian Agreement with respect to such Receivables
and (iv) all proceeds of the foregoing (including "proceeds" as defined in
Section 9-306 of the UCC and Recoveries), in each case as more fully described
in the Trust Sale and Servicing Agreement.
The foregoing sale, transfer, assignment and conveyance and any sales,
transfers, assignments and conveyances subsequent to the date hereof do not
constitute, and are not intended to result in, the creation or an assumption by
the Trust of any obligation of the Seller, the Original Seller,
______________________ or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto, including any
obligation to any Dealers.
It is the intention of the Seller and the Trust that the transfers and
assignments contemplated by this Assignment, including transfers and assignments
subsequent to the date hereof, shall constitute a sale of the property described
herein and the Pooling and Servicing Agreement from the Seller to the Trust and
the beneficial interest in and title to such property shall not be part of the
Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Trust
Sale and Servicing Agreement and is to be governed by the Trust Sale and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Trust Sale and Servicing Agreement.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of _______________, _____.
ACE SECURITIES CORP.
By: __________________________________
Name: __________________________________
Title: __________________________________
EXHIBIT D
FORM OF OPINION OF COUNSEL WITH RESPECT TO
ADDITION OF ACCOUNTS
Provision to be Included in Opinion of Counsel Delivered Pursuant to
Section 2.7(b)(ix) of the Trust Sale and Servicing Agreement
The opinion set forth below is subject to standard
qualifications, assumptions, limitations and exceptions. Capitalized terms used
but not defined herein are used as defined in the Trust Sale and Servicing
Agreement dated as of ______________ among _______________, as servicer, ACE
Securities Corp., as Seller (the "Seller"), and ______________________.
The Assignment delivered on the Addition Date has been duly
authorized, executed and delivered by the Seller, and constitutes the valid and
legally binding obligation of the Seller, enforceable against the Seller in
accordance with its terms.
APPENDIX A
PART I - DEFINITIONS
All terms defined in this Appendix shall have the defined meanings
when used in the Basic Documents, unless otherwise defined therein.
______________________ Certificate Basis Swap: The
______________________ Certificate Basis Swap dated as of the Initial Closing
Date between the Trust and ______________________, as the Basis Swap
Counterparty.
______________________ Certificates: The Floating Rate Asset Backed
Certificates, Class ______________________ described in the Trust Agreement.
Account: An individual line of credit or related lines of credit
represented by a Floor Plan Financing Agreement extended or maintained by the
Original Seller to a United States corporation or other Person located in the
United States engaged generally in the business of purchasing Vehicles from a
manufacturer or distributor thereof and holding such Vehicles for sale or lease
in the ordinary course of business.
Accountants' Report: The report described in Section 4.2 of the Trust
Sale and Servicing Agreement.
Accumulation Account: With respect to any series of Notes, an Eligible
Deposit Account established and maintained by the Servicer with the Indenture
Trustee, in the name of the Indenture Trustee, on behalf of the holders of such
series of Notes, which shall constitute a Designated Account, and which shall
have such additional terms and provisions as shall be set forth in the Officer's
Issuance Certificate with respect to such series of Notes.
ACE: ACE Securities Corp., a Delaware corporation.
Act: An Act as specified in Section 11.3(a) of the Indenture.
Actual/360 Day Count: (i) If applicable with respect to any series of
Notes, the calculation method set forth as such in the relevant Officer's
Issuance Certificate, and (ii) if applicable with respect to any class of
Certificates, the calculation method set forth as such in the Trust Agreement or
the relevant Certificate Issuance Order, as the case may be.
Addition Date: The date as of which an Additional Account is added to
the Pool of Accounts.
Addition Notice: The notice specified in Section 2.7(a) of the Trust
Sale and Servicing Agreement.
Additional Account: An Account as described in Section 2.03(a) of the
Pooling and Servicing Agreement to be included in the Pool of Accounts after the
Initial Cut-Off Date.
Additional Cut-Off Date: The date specified in the
______________________ Addition Notice described in Section 2.03(a) of the
Pooling and Servicing Agreement.
Additional Trust Principal: With respect to any Monthly Distribution
Date, the amount, if any, of Available Trust Interest and funds in the Reserve
Fund applied to cover the Trust Defaulted Amount or to cover unreimbursed Trust
Charge-Offs on such Monthly Distribution Date.
Administration Agreement: That certain Administration Agreement, dated
as of the Initial Closing Date, among ______________________, as Administrator,
the Issuer and the Indenture Trustee, as amended and supplemented from time to
time.
Administrative Purchase Payment: means:
(i) the payment described in Section 3.04(d) of the Pooling and
Servicing Agreement and
(ii) any payment by the Servicer pursuant to Section 9.3 of the Trust
Sale and Servicing Agreement (which payment, in the case of this
clause (ii), shall equal the greater of (A) the amount computed as
specified in Section 3.04 of the Pooling and Servicing Agreement with
respect to the Receivables and (B) the outstanding principal balance
and accrued and unpaid interest on all Notes on the related Monthly
Distribution Date).
Administrative Receivable: A Receivable described in Section 3.04(c)
of the Pooling and Servicing Agreement.
Administrator: ______________________ or any successor Administrator
under the Administration Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Office: The office of the Issuer maintained pursuant to Section
3.2 of the Indenture.
Aggregate Certificateholders' Interest: With respect to any Monthly
Distribution Date, an amount equal to the sum of (a) the Certificateholders'
Interest for all classes of Certificates for such Monthly Distribution Date and
(b) the Certificateholders' Interest Carryover Shortfall for the preceding
Monthly Distribution Date.
Aggregate Certificateholders' Principal: With respect to any Monthly
Distribution Date, the lesser of (i) the excess, if any, of Available Trust
Principal over the sum of the Aggregate Noteholders' Principal and the Required
Revolver Payment and (ii) the outstanding Certificate Balance. Aggregate
Certificateholders' Principal shall equal zero until the Outstanding Amount for
all Notes shall have been paid (or provided for) in full, the obligations of the
Trust to the Basis Swap Counterparty shall have been paid in full and either (x)
such Monthly Distribution Date relates to the Wind Down Period or an Early
Amortization Period or is the Targeted Final Distribution Date for the
______________________ Certificates or (y) the Servicer has exercised its option
under Section 9.3 of the Trust Sale and Servicing Agreement.
Aggregate Noteholders' Interest: With respect to any Monthly
Distribution Date, the sum of the Noteholders' Interest for all series of Term
Notes.
Aggregate Noteholders' Principal: With respect to any Monthly
Distribution Date, the sum of the amounts required to be paid (or set aside for
payment in an Accumulation Account, or in the Term Note Distribution Account or
otherwise) as principal on each series of Term Notes on such Monthly
Distribution Date pursuant to the Indenture and the Trust Sale and Servicing
Agreement.
Aggregate Revolver Interest: With respect to any Monthly Distribution
Date, the sum of (a) the Revolver Interest for all series of Revolving Notes for
such Monthly Distribution Date and (b) the Revolver Interest Carryover Shortfall
for the preceding Monthly Distribution Date.
Aggregate Revolver Principal: With respect to any Monthly Distribution
Date, the sum of the amounts required to be paid (or set aside for payment in an
Accumulation Account, or in the Revolver Distribution Account or otherwise) as
principal on each series of Revolving Notes on such Monthly Distribution Date
pursuant to the Indenture and the Trust Sale and Servicing Agreement.
Applicable Trustee: So long as the Outstanding Amount for any series
of Term Notes or the Revolving Notes is greater than zero and the Indenture has
not been discharged in accordance with its terms, the Indenture Trustee, and
thereafter, the Owner Trustee.
Auction Vehicles: Under the Original Seller's current practices and
policies, Vehicles purchased at a closed auction conducted by
______________________ or others.
Authentication Agent: With respect to a series of Notes, the
authentication agent for such series of Notes acting on behalf of the Indenture
Trustee designated as such by or pursuant to Section 2.1 of the Indenture.
Authorized Officer: With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Initial Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President or more
senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Initial Closing Date (as such list may be modified or
supplemented from time to time thereafter). With respect to any other Person,
any Vice President or more senior officer of such Person who is authorized to
act for such Person with respect to such matters.
Available Receivable: A Receivable that is identified by the Original
Seller as satisfying the criteria set forth in clauses (a) through (p) of the
definition of Eligible Receivable.
Available Trust Interest: With respect to any Monthly Distribution
Date, the sum of:
(11) Trust Interest Collections,
(12) Shared Investment Proceeds, excluding the Cash Accumulation
Account Earnings,
(13) the net amounts, if any, paid to the Trust under any other
Specified Support Arrangements which have not been
designated as specific to any series or class of Securities,
(14) the net amounts, if any, paid to the Trust under all Basis
Swaps entered into with respect to a class of Certificates,
including the ______________________ Certificate Basis Swap,
and
(15) if the Servicer exercises its option to purchase the assets
of the Trust under Section 9.3 of the Trust Sale and
Servicing Agreement, the amount described in such section as
being treated as Available Trust Interest.
Available Trust Principal:
(i) With respect to any day during a Collection Period, Trust
Principal Collections for such day minus any amounts paid out of Trust Principal
Collections on such day to the Servicer as reimbursement for outstanding
Servicer Liquidity Advances, and
(ii) On the Monthly Distribution Date related to such Collection
Period, the sum of
(a) Additional Trust Principal, if any, for such Monthly
Distribution Date;
(b) The Cash Collateral Amount on such Monthly Distribution Date;
and
(c) or each Monthly Distribution Date related to the Wind Down
Period or an Early Amortization Period or the Payment Period for the
______________________ Term Notes, if the amount on deposit in the Reserve Fund
on such Monthly Distribution Date exceeds zero, the Supplemental Principal
Allocation for such current Monthly Distribution Date.
Bankruptcy Code: Title 11 of the United States Code, as the same may
be amended from time to time.
Basic Documents: The Certificate of Trust, the Trust Agreement, the
Pooling and Servicing Agreement, the Trust Sale and Servicing Agreement, the
Custodian Agreement, the Administration Agreement, the Indenture (including all
Officer's Issuance Certificates), any Note Depository Agreement, any paying
agent agreement, the Specified Support Arrangements and the other documents and
certificates delivered in connection therewith from time to time.
Basis Swap Counterparty: The Original Seller.
Basis Swaps: Each of the ______________________ Term Notes Basis Swap,
the ______________________ Certificate Basis Swap and any other basis swap for a
series of Notes or class of Certificates.
Benefit Plan: Any one of (a) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(b) a plan described in Section 4975(e)(1)(I) of the Code or (c) any entity
whose underlying assets include plan assets by reason of a plan's investment in
such entity.
Book-Entry Certificates: Certificates in which ownership and transfers
shall be made through book entries by a Clearing Agency as described in Section
3.11 of the Trust Agreement.
Book-Entry Notes: Term Notes in which ownership and transfers shall be
made through book entries by a Clearing Agency as described in Section 2.10 of
the Indenture.
Business Day: Unless otherwise defined in an Officer's Issuance
Certificate (with respect to the series of Notes issued thereunder) or a
Certificate Issuance Order (with respect to the class of Certificates issued
thereunder), any day other than a Saturday, a Sunday or any other day on which
banks in New York, New York or _______, _______, may, or are required to, be
closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss.3801 et seq., as the same may be amended from time to time.
Cash Accumulation Account: With respect to any series of Term Notes,
an Eligible Deposit Account designated as such in the Officer's Issuance
Certificate applicable to such series of Term Notes.
Cash Accumulation Account Earnings: With respect to any series of Term
Notes, the investment earnings on funds deposited in the Cash Accumulation
Account, with respect to such series designated as such in the Officer's
Issuance Certificate applicable to such series of Term Notes.
Cash Accumulation Event: With respect to any series of Term Notes, any
of the events designated as such in the Officer's Issuance Certificate
applicable to such series of Term Notes.
Cash Accumulation Period: With respect to any series of Term Notes,
the period designated as such in the Officer's Issuance Certificate applicable
to such series of Term Notes.
Cash Accumulation Reserve Fund: With respect to any series of Term
Notes, the fund designated as such in the Officer's Issuance Certificate
applicable to such series of Term Notes.
Cash Accumulation Reserve Fund Deposit Amount: For any Monthly
Distribution Date, the excess, if any, of the Cash Accumulation Reserve Fund
Required Amount over the amount on deposit in the Cash Accumulation Reserve
Fund.
Cash Accumulation Reserve Fund Initial Deposit: With respect to any
series of Term Notes, the amount designated as such in the Officer's Issuance
Certificate applicable to such series of Term Notes.
Cash Accumulation Reserve Fund Release Amount: With respect to any
series of Term Notes, the amount designated as such in the Officer's Issuance
Certificate applicable to such series of Term Notes.
Cash Accumulation Reserve Fund Required Amount: With respect to any
series of Term Notes, the amount designated as such in the Officer's Issuance
Certificate applicable to such series of Term Notes.
Cash Collateral Amount: As specified in Section 4.5(d)(iii) of the
Trust Sale and Servicing Agreement, with respect to any date, the amount that is
required to be held on behalf of the Trust in order to maintain Trust
Equilibrium.
Cede: CEDE & Co., as the nominee of DTC.
Certificate: Any one of the asset backed certificates executed by the
Owner Trustee and authenticated by the Owner Trustee (i) with respect to the
______________________ Certificates in substantially the form set forth in
Exhibit A to the Trust Agreement and (ii) with respect to any other class of
Certificates in substantially the form attached to the Certificate Issuance
Order applicable to such other class of Certificates, if any.
Certificate Balance: With respect to any Monthly Distribution Date or
a related Certificate Payment Date, (i) with respect to the __________________
Certificates (a) $____________, plus (b) the initial certificate balance of the
______________________ Certificates issued after the Initial Closing Date, minus
(c) all distributions in respect of Certificate Balance of the
______________________ Certificates actually made on or prior to such date,
minus (d) unreimbursed Trust Charge-Offs on such Monthly Distribution Date
(determined after giving effect to the application of Available Trust Interest
and other amounts available to reimburse Trust Charge-Offs on such date)
allocated to the ________ Certificates, up to the Certificate Balance of the
______________________ Certificates on such Monthly Distribution Date calculated
without regard to this clause (d); and (ii) with respect to any other class of
Certificates, the amount designated as such in the terms of such class of
Certificates. Any unreimbursed Trust Charge-Offs applied to reduce the
Certificate Balance shall be applied against each class of Certificates on such
Certificate Payment Date, pro rata on the basis of the Certificate Balance of
the Certificates of such class outstanding on the preceding Certificate Payment
Date (calculated without reduction for any unreimbursed Trust Charge-Offs).
Certificate Depository: With respect to any Book-Entry Certificates
for which Definitive Certificates have not been issued, any depository selected
from time to time by the Owner Trustee on behalf of the Trust in whose name the
relevant Certificates are registered.
Certificate Depository Agreement: With respect to any class of
Certificates originally issued as Book-Entry Certificates, the agreement, dated
as of the Closing Date for such class, among the Issuer, the Owner Trustee and
the Clearing Agency relating to such Certificates, as the same may be amended
and supplemented from time to time.
Certificate Distribution Account: The account designated as such,
established and maintained pursuant to Section 6.1(a)(v) of the Trust Agreement.
Certificate Issuance Order: An order establishing the terms of any
Certificates to be issued after the Initial Closing Date pursuant to Section
3.3(b) of the Trust Agreement.
Certificate of Trust: The certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement to be filed for
the Trust pursuant to Section 3810(a) of the Business Trust Statute.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book Entry Certificate, as reflected
on the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
Certificate Payment Date: With respect to a class of Certificates,
each date specified for payment of interest or distributions in respect of
Certificate Balance pursuant to the Trust Agreement or a Certificate Issuance
Order, as the case may be.
Certificate Rate: With respect to any Certificate Payment Date, the
amount designated as such pursuant to the Trust Agreement and in the related
Certificate Issuance Order.
Certificate Register: The register of Certificates specified in
Section 3.4(a) of the Trust Agreement.
Certificate Registrar: The registrar at any time of the Certificate
Register, appointed pursuant to Section 3.4(a) of the Trust Agreement.
Certificated Security: As of any date, has the meaning given to such
term under the applicable UCC in effect on such date.
Certificateholder: A Person in whose name a Certificate is registered
on the Certificate Register.
Certificateholders' Interest: With respect to any Monthly Distribution
Date, for any class of Certificates, the product of (a) the Certificate Balance
(without reduction for unreimbursed Trust Charge-Offs) for such class on the
prior Monthly Distribution Date (or, in the case of the first Monthly
Distribution Date following the issuance of such class of Certificates, on the
related Closing Date) plus the initial Certificate Balance (without reduction
for unreimbursed Trust Charge-Offs) of any Certificates of such class issued
since such prior Monthly Distribution Date and (b) the Certificate Rate for such
Monthly Distribution Date.
Certificateholders' Interest Carryover Shortfall: With respect to any
Monthly Distribution Date, the excess of (a) the Aggregate Certificateholders'
Interest for such Monthly Distribution Date over (b) the amount that was
actually deposited in the Certificate Distribution Account on such Monthly
Distribution Date in respect of Aggregate Certificateholders' Interest.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act. The Clearing Agency for the
______________________ Term Notes and the Class ______________________
Certificates shall be DTC. Unless otherwise specified in an Officer's Issuance
Certificate (with respect to the series of Notes issued thereunder) or a
Certificate Issuance Order (with respect to the class of Certificates issued
thereunder), the Clearing Agency for any other Security shall be DTC.
Clearing Agency Participant: A securities broker, dealer, bank, trust
company, clearing corporation or other financial institution or other Person for
whom from time to time a Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
Closing Date: Each of the Initial Closing Date and any subsequent date
on which Term Notes, Certificates or Revolving Notes are issued or the Specified
Maximum Revolver Balance is increased or decreased pursuant to Section 4.9 of
the Trust Sale and Servicing Agreement.
Code: The Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder.
Collateral: The collateral specified in the granting clause of the
Indenture.
Collateral Security: With respect to an Account included in the Pool
of Accounts and the Receivables arising in such Account, all collateral security
granted to secure the obligations of the related Dealer in connection therewith
and any proceeds therefrom, including all Vehicle Collateral Security, and, to
the extent applicable, other motor vehicles, parts inventory, equipment,
fixtures, service accounts, realty and guarantees.
Collection Account: The account designated as such, established and
maintained pursuant to Section 6.1(a)(i) of the Trust Sale and Servicing
Agreement.
Collection Period: With respect to any Monthly Distribution Date, the
calendar month preceding the month in which such Monthly Distribution Date
occurs; provided, however, that for the initial Monthly Distribution Date, the
related Collection Period shall include such preceding calendar month and that
portion of the second preceding calendar month occurring on and after the
Initial Cut-Off Date.
Collections: Interest Collections and Principal Collections.
Common Collateral: The property constituting Collateral Security
described as such in Section 6.03(a) of the Pooling and Servicing Agreement.
Control: (x) The Indenture Trustee shall have obtained "Control" over
a Security Entitlement if:
(i) (a) the Indenture Trustee is the Securities Intermediary for
the Designated Account in which such Security Entitlement is
held, or
(b) the Indenture Trustee
(1) is identified in the records of the Securities
Intermediary as the person having such a Security
Entitlement against the Securities Intermediary,
or
(2) has obtained the agreement, in writing, of the
Securities Intermediary for such Security
Entitlement that it will comply with orders of the
Indenture Trustee regarding the sale or redemption
of the Security Entitlement without further
consent of any other person, and
(ii) the Securities Intermediary for such Security Entitlement
(a) is the registered owner of the related Financial Asset,
(b) is the holder of the Security Certificate for the
related Financial Asset, or
(c) holds its interest in the related Financial Asset
directly through a clearing corporation (as defined in
Revised Article 8); and
(y) the Indenture Trustee shall have obtained "Control" over a Federal
Book- Entry Security if:
(i) (a) the Indenture Trustee is a participant in the book entry
system maintained by the Federal Reserve Bank that is acting
as fiscal agent for the issuer of such Federal Book-Entry
Security; and
(b) such Federal Reserve Bank has indicated by book entry
that such Federal Book-Entry Security has been credited
to the Indenture Trustee's securities account in such
book entry system; or
(ii) (a) the Indenture Trustee
(1) is identified in the records of a Securities
Intermediary as the Person having a Security
Entitlement in respect of such Federal Book-Entry
Security against such Securities Intermediary; or
(2) has obtained the agreement, in writing, of the
Securities Intermediary for such Security
Entitlement that it will comply with orders of the
Trustee regarding the sale or redemption of the
Security Entitlement without further consent of
any other Person; and
(b) the Securities Intermediary for such Security
Entitlement is a participant in the book entry system
maintained by the Federal Reserve Bank that is acting
as fiscal agent for the issuer of such Federal
Book-Entry Security; and
(c) such Federal Reserve Bank has indicated by book entry
that such Federal Book-Entry Security has been credited
to the Securities Intermediary's securities account in
such book entry system.
Controlled Deposit Amount: With respect to any series or class of
Securities, on any date, the amount provided by the terms of such Securities;
provided, however, that the Controlled Deposit Amount for any series of Term
Notes shall not exceed the then Outstanding Amount of such Notes.
Corporate Trust Office: With respect to the Indenture Trustee or the
Owner Trustee, the principal office at which at any particular time the
corporate trust business of the Indenture Trustee or Owner Trustee,
respectively, shall be administered, which offices at the Initial Closing Date
are located:
in the case of the Indenture Trustee, at:
_______________________
_______________________
_______________________
____________________________
and in the case of the Owner Trustee, at:
_______________________
_______________________
_______________________
____________________________
provided that, when the definition of "Corporate Trust Office" is used
in connection with providing notice to the Owner Trustee, a copy of
such notice shall also be sent to:
_______________________
_______________________
_______________________
____________________________
Custodian: ______________________, as Servicer, or another custodian
named from time to time pursuant to the Custodian Agreement.
Custodian Agreement: The Custodian Agreement, dated as of the Initial
Closing Date, between the Custodian, ________________ and _____, as amended and
supplemented from time to time.
Daily Remittance Period: The periods designated as such in the
Officer's Issuance Certificate of any series of Notes.
Daily Trust Balance: For any date, the aggregate principal balance of
all Receivables held by the Trust on such date (which shall not include the
Retained Property).
Daily Trust Invested Amount: For any date during a Collection Period,
an amount equal to (without duplication)
(a) the aggregate Outstanding Amount of the Term Notes on such date
plus
(b) the outstanding Certificate Balance on such date plus
(c) the Net Revolver Balance for such date minus
(d) the Cash Collateral Amount for such date minus
(e) any amounts held on such date in a related Distribution Account,
Cash Accumulation Account or other account for payment of principal on
the Notes or distribution of Certificate Balance on the Certificates.
Dealer: Any corporation, entity or other Person the Receivables of
which are included in the Trust.
Dealer Overconcentration Percentage: __%, or such higher percentage
not to exceed __% in any event as the Seller shall select upon satisfaction of
the Rating Agency Condition.
Dealer Overconcentration Receivables: With respect to any date, with
respect to any Dealer or group of affiliated Dealers (as determined in
accordance with the Servicer's standard procedures for identifying and tracking
accounts of affiliated Dealers), the outstanding Available Receivables with
respect to such Dealer or group of affiliated Dealers to the extent, if any, of
the excess of
(a) the aggregate principal balance of all such Available
Receivables on such date over
(b) the Dealer Overconcentration Percentage of the sum of
(i) the Specified Maximum Revolver Balance and
(ii) the aggregate Outstanding Amount for all Term Notes as
of such date or, if applicable, as of the commencement of
any then occurring Early Amortization Period, Wind Down
Period or Payment Period.
If, on any date, there exist Dealer Overconcentration Receivables with respect
to a Dealer or group of affiliated Dealers, those Receivables constituting
Eligible Receivables shall be those Available Receivables that were originated
on the earliest dates, with the more recently originated Receivables being
Dealer Overconcentration Receivables. If not all Available Receivables
originated on any date are Eligible Receivables, a Receivable related to a
Vehicle with a lower vehicle identification number shall constitute an Eligible
Receivable before a Receivable related to a Vehicle with a higher vehicle
identification number. All Available Receivables that are not Eligible
Receivables pursuant to the foregoing shall be Dealer Overconcentration
Receivables. If an Available Receivable that is a Dealer Overconcentration
Receivable on the date such Receivable is created subsequently ceases to be a
Dealer Overconcentration Receivable such that such Receivable becomes an
Eligible Receivable pursuant to the foregoing, such Eligible Receivable shall be
deemed created on the date it so becomes an Eligible Receivable.
Default: Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
Defaulted Receivables: For any Monthly Distribution Date, all
Receivables held by the Trust that were charged-off as uncollectible during the
related Collection Period, other than any such Receivables that are subject to
repurchase by the Seller or the Original Seller or purchase by the Servicer on
such Monthly Distribution Date (unless certain events of bankruptcy, insolvency
or receivership have occurred with respect to the Seller, the Original Seller or
the Servicer, as the case may be, in which event Defaulted Receivables shall
include the principal amount of such otherwise excluded Receivables).
Deficiency Amount: The amounts determined to be Deficiency Amounts in
Section 4.5(c)(ii) of the Trust Sale and Servicing Agreement.
Definitive Certificates: The Certificates issued pursuant to the Trust
Agreement in definitive form either upon original issuance or upon termination
of book-entry registration with respect to such Certificates pursuant to Section
3.13 of the Trust Agreement.
Definitive Notes: The Notes issued pursuant to the Indenture in
definitive form.
Definitive Term Notes: The Term Notes issued pursuant to the Indenture
in definitive form either upon original issuance or upon termination of
book-entry registration with respect to such Term Notes pursuant to Section 2.12
of the Indenture.
Delivery: When used with respect to Designated Account Property,
"Delivery" means:
(i) (a) with respect to Physical Property or any Certificated
Security, 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
(b) with respect to a Security Certificate or any other
Designated Account Property that constitutes Physical
Property and that is not a Security Entitlement
transfer of such Security Certificate or other
Designated Account Property 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
(ii) with respect to any Uncertificated Security that is not a
Federal Book-Entry Security:
(a) if the issuer of such Uncertificated Security is
organized under the laws of a jurisdiction that has not
adopted Revised Article 8, registration on the books
and records of the issuer thereof in the name of the
financial intermediary, the sending of a confirmation
by the financial intermediary of the transfer to the
Indenture Trustee or its nominee or custodian of such
Uncertificated Security and the making by such
financial intermediary of entries on its books and
records identifying such Uncertificated Securities as
belonging to the Indenture Trustee or its nominee or
custodian; and
(b) if the issuer of such Uncertificated Security is
organized under the laws of a jurisdiction that has
adopted Revised Article 8, (x) the issuer registers the
Indenture Trustee as the registered owner or (y) the
Indenture Trustee otherwise satisfies the requirements
for obtaining "control" under Section 8-106(c) of
Revised Article 8.
Depository Agreement: The Note Depository Agreement and any similar
agreement executed in connection with the issuance of any series of Securities
originally issued as Book-Entry Notes or Book-Entry Certificates.
Designated Account Property: The Designated Accounts, all amounts and
investments held from time to time in any Designated Account (whether in the
form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), including the Reserve Fund Initial
Deposit, and all proceeds of the foregoing.
Designated Accounts: The Collection Account, the Term Note
Distribution Account, the Revolver Distribution Account, the Accumulation
Accounts, the Reserve Fund, all Cash Accumulation Reserve Funds and any other
account so designated in an Officer's Issuance Certificate, collectively.
Determination Date: The tenth day of each calendar month, or if such
tenth day is not a Business Day, the next succeeding Business Day.
Distribution Accounts: The Term Note Distribution Account, Certificate
Distribution Account and Revolver Distribution Account.
DPP: Delayed Payment Privilege, a policy of the Original Seller under
which the Original Seller may agree with a dealer not to require payment of
principal promptly upon the sale or lease of the vehicle to a customer.
DTC: The Depository Trust Company, a limited-purpose trust company
certified under the New York Banking Law.
Early Amortization Event: An event described as such in Section 9.1 of
the Trust Sale and Servicing Agreement or any amendment or supplement.
Early Amortization Period: The period commencing on the day on which
an Early Amortization Event is deemed to have occurred, and ending on the first
to occur of (a) the payment in full of all outstanding Securities, (b) the
recommencement of the Revolving Period as described in Sections 9.1(j) and 9.5
of the Trust Sale and Servicing Agreement and (c) the Trust Termination Date. A
Monthly Distribution Date is related to an Early Amortization Period if the last
day of the related Collection Period occurred during an Early Amortization
Period.
Eligible Account: An Account which, as of the date of determination
thereof:
(a) is in favor of a Person that is not subject to voluntary or
involuntary liquidation, that is not classified in "programmed" or "no
credit" status and in which ______________________ or an Affiliate
does not have a more than 20% equity interest,
(b) has been established by the Original Seller or
______________________,
(c) is maintained and serviced by the Original Seller.
(d) is not a Fleet Account or a Marine Account,
(e) with respect to which, during the preceding 12 months, the
Original Seller has not charged off, without recovering, any amount in
excess of $25,000 and
(f) there has been no material breach by the related obligor of its
obligation to pay the related Receivable upon sale of the Vehicle
related thereto (a material breach, for these purposes, includes,
without limitation, any failure to pay such Receivable which the
Original Seller knows to be attributable in whole or in part to such
obligor's unwillingness or financial inability to pay).
Eligible Deposit Account: 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 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 has a credit rating from each Rating Agency then rating such
securities in one of its generic rating categories which signifies investment
grade.
Eligible Institution: Either
(a) the corporate trust department of the Indenture Trustee or the
Owner Trustee, as applicable, or
(b) a depository institution organized under the laws of the United
States of America or any one of the States thereof (or any domestic
branch of a foreign bank),
(i) which has either (A) a long-term unsecured debt rating
acceptable to the Rating Agencies or (B) a short-term unsecured
debt rating or certificate of deposit rating acceptable to the
Rating Agencies and
(ii) whose deposits are insured by the FDIC or any successor
thereto.
Eligible Investments: Book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form which (at the
time made) evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution 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 then rating such obligations in the highest investment category
granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies then rating such commercial paper in the highest investment
category granted thereby;
(d) investments in money market or common trust funds having a
rating from each of the Rating Agencies then rating such funds in the
highest investment category granted thereby for money market funds
(including funds for which the Indenture Trustee or the Owner Trustee or
any of their respective affiliates is investment manager or advisor, so
long as such fund shall have such rating, provided, however, that no funds
in the Cash Accumulation Account or the Term Note Distribution Subaccount
for the ______________________ Term Notes shall be invested in Eligible
Investments described in this clause (d));
(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 Person with the Required Deposit Rating or
otherwise approved by the Rating Agencies; and
(g) any other investment permitted by each of the Rating
Agencies;
in each case, other than as permitted by the Rating Agencies, maturing
(i) not later than the Business Day immediately preceding the next
Monthly Distribution Date or
(ii) on such next Monthly Distribution Date if either
(A) such investment is in the institution with which the Term Note
Distribution Account, the Certificate Distribution Account or the
Accumulation Accounts, as the case may be, is then maintained or
(B) the Indenture Trustee (so long as the short-term unsecured debt
obligations of the Indenture Trustee are rated at least P-1 by Moody's
and A-1 by Standard & Poor's on the date such investment is made)
shall advance funds on such Monthly Distribution Date to the Term Note
Distribution Account, the Certificate Distribution Account or the
Accumulation Accounts, as the case may be, in the amount payable on
such investment on such Monthly Distribution Date pending receipt
thereof to the extent necessary to make distributions on the Notes or
the Certificates, as the case may be, on such Monthly Distribution
Date. For purposes of the foregoing, unless the Indenture Trustee
objects at the time an investment is made, the Indenture Trustee shall
be deemed to have agreed to make such advance with respect to such
investment.
As used in this definition, a rating is in the "highest investment
category" of a rating category which has relative gradations within that
category only if it has the highest rating within that category (so that, for
example, commercial paper with a rating of A-1 is not considered to be in the
"highest investment category," but a rating of A-1+ is within the "highest
investment category").
Eligible Receivable: With respect to any date, a Receivable:
(a) which was originated by the Original Seller in the ordinary
course of business or which was originated by ______________________ in the
ordinary course of business and acquired by the Original Seller;
(b) which arose under an Account that was an Eligible Account
(and not a Selected Account) at the time of the transfer of such Receivable
from the Original Seller to the Seller;
(c) which is payable in United States dollars;
(d) to which the Original Seller had good and marketable title
immediately prior to the transfer thereof by the Original Seller to the
Seller and which has been the subject of a valid transfer and assignment
from the Original Seller to the Seller of all of the Original Seller's
right, title and interest therein and the related Vehicle Collateral
Security (including any proceeds thereof);
(e) which is advanced against a Vehicle;
(f) which at the time of transfer thereof by the Original Seller
to the Seller is secured by a first priority perfected security interest in
the Vehicle related thereto;
(g) with respect to which all consents, licenses and approvals of
any Governmental Authority in connection with the transfer thereof to the
Seller and to the Trust have been obtained and are in full force and
effect;
(h) which was created in compliance in all material respects with
all Requirements of Law applicable thereto;
(i) as to which, at all times following the transfer of such
Receivable to the Trust, the Trust has either a first priority perfected
security interest or good and marketable title thereto, free and clear of
all Liens (other than Liens permitted pursuant to the Trust Sale and
Servicing Agreement);
(j) which has been the subject of a valid transfer and assignment
from the Seller to the Trust of all the Seller's right, title and interest
therein and the related Vehicle Collateral Security (including any proceeds
thereof);
(k) which is the legal, valid, binding and assignable payment
obligation of the Dealer relating thereto, enforceable against such Dealer
in accordance with its terms, except as such enforceability may be limited
by the Insolvency Laws;
(l) which at the time of transfer thereof by the Original Seller
to the Seller is not subject to any valid right of rescission, setoff or
any other defense (including defenses arising out of violations of usury
laws) of the related Dealer;
(m) as to which, at the time of transfer thereof to the Trust,
the Original Seller and the Seller have satisfied in all material respects
all their respective obligations with respect to such Receivable required
to be satisfied at such time;
(n) as to which, at the time of transfer thereof to the Trust,
neither the Original Seller nor the Seller has taken or failed to take any
action that would impair the rights of the Trust or the Securityholders
therein;
(o) which constitutes "chattel paper", an "account" or a "general
intangible" as defined in Article 9 of the UCC as then in effect in the
State of Michigan;
(p) with respect to which the related Dealer has not postponed
principal payment pursuant to DPP (or any similar arrangement) or any other
installment payment program;
(q) which, at the time of transfer thereof to the Trust, does not
constitute a Dealer Overconcentration Receivable and
(r) which, at the time of transfer thereof to the Trust, does not
constitute an Excess Available Receivable.
Notwithstanding the foregoing, any other Receivable identified by the Original
Seller as an Eligible Receivable shall also be deemed an Eligible Receivable
unless and until such Receivable is thereafter determined not to satisfy the
eligibility criteria set forth above and reassigned by the Trust to the Original
Seller or the Seller pursuant to the Trust Sale and Servicing Agreement and the
Pooling and Servicing Agreement (it being understood that any such subsequent
determinations shall not affect any prior transfers of such Receivable and such
Receivable shall be reassigned to the Original Seller and the Seller only as
specifically provided in the Trust Sale and Servicing Agreement and the Pooling
and Servicing Agreement). An Eligible Receivable shall be deemed created or
originated on the date it is identified by the Original Seller as an Eligible
Receivable. With respect to any Dealer, Eligible Receivables shall be determined
net of any funds held by the Original Seller for such Dealer for cash
management, liquidity and working capital purposes. Within any such Account,
Eligible Receivables shall be those Available Receivables originated on the
earliest dates. If not all Available Receivables originated on any date are
Eligible Receivables, a Receivable relating to a Vehicle with a lower vehicle
identification number shall constitute an Eligible Receivable before a
Receivable relating to a Vehicle with a higher vehicle identification number. If
there is a reduction on any date of the amount so held for such Dealer, a
Receivable or Receivables shall be deemed created on such date to the extent of
such reduction and such Receivable(s) shall be Eligible Receivable(s) if the
eligibility criteria set forth above are satisfied and based on such date of
origination and the vehicle identification number of the related Vehicle as
described above.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: An event described in Section 5.1 of the Indenture.
Excess Available Receivables: For any date, Available Receivables to
the extent, if any, of the excess of:
(a) the aggregate principal balance of Available Receivables less
the aggregate principal balance of Dealer Overconcentration Receivables
over
(b) the Maximum Pool Balance.
If, on any date, there exist Excess Available Receivables, a pro rata portion of
the Receivables in each Account in the Pool of Accounts shall constitute Excess
Available Receivables (based on the aggregate principal balance of the
Receivables in each such Account). Within each such Account, Eligible
Receivables shall be those Available Receivables that were originated on the
earliest dates, with the more recently originated Receivables being Excess
Available Receivables. If not all Available Receivables originated on any date
within an Account are Eligible Receivables, a Receivable related to a Vehicle
with a lower vehicle identification number shall constitute an Eligible
Receivable before a Receivable related to a Vehicle with a higher vehicle
identification number. All Available Receivables that are not Eligible
Receivables pursuant to the foregoing shall be Excess Available Receivables. If
an Available Receivable that is an Excess Available Receivable on the date such
Receivable is originated or created subsequently ceases to be an Excess
Available Receivable such that such Receivable becomes an Eligible Receivable
pursuant to the foregoing, such Eligible Receivable shall be deemed originated
or created on the date it so becomes an Eligible Receivable.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Executive Officer: With respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
Exempt Deposit Date: With respect to any Notes, a Monthly Distribution
Date which is not a Payment Date for such Notes.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
Federal Book-Entry Security: An obligation issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or the Federal National
Mortgage Association, or any other direct obligation of, or obligation fully
guaranteed as to timely payment of principal and interest by, the United States
of America, that is a book-entry security held through the Federal Reserve
System pursuant to Federal Book-entry regulations.
Final Revolving Period Termination Date: _________________
Financial Asset: Has the meaning given such term in Article 8 of the
New York UCC. As used herein, the Financial Asset "related to" a Security
Entitlement is the Financial Asset in which the entitlement holder (as defined
in Article 8 of the New York UCC) holding such Security Entitlement has the
rights and property interest specified in Article 8 of the New York UCC.
Fitch: Fitch
Fleet Accounts: Credit lines or accounts pursuant to which advances
may be made to finance Vehicles intended for sale to fleet customers, generally
in lots of more than 10.
Floor Plan Financing Agreement: Collectively, the Wholesale Security
Agreement, and the related agreements between the Original Seller and a Dealer
or the Wholesale Installment Sales Finance Agreement and related agreements
between the Original Seller and a Dealer, or, in each case, any successor
agreements, pursuant to which the Original Seller or ______________________, as
the case may be, agrees to extend credit to such Dealer to purchase or finance
Vehicles and other vehicles and related items, and pursuant to which such Dealer
grants to the Original Seller or to ______________________, as the case may be,
a security interest in the specific Vehicles financed by the Original Seller or
by ______________________, certain other vehicles, certain other collateral and
the proceeds thereof.
Floor Plan Financing Guidelines: The Servicer's written policies and
procedures, as such policies and procedures may be amended from time to time,
relating to (a) the operation of its floor plan financing business, including
the policies and procedures for determining the interest rates charged to
Dealers and other terms and conditions relating to the Servicer's wholesale
financing accounts, the creditworthiness of Dealers and the extension of credit
to Dealers, and (b) the maintenance of accounts and collection of receivables.
Fully Funded Date: With respect to any series of Notes, the date
designated as such in the Officer's Issuance Certificate applicable to such
series of Notes.
Governmental Authority: The United States of America, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Holder: The Person in whose name a Note or Certificate, as the case
may be, is registered on the Note Register or the Certificate Register, as
applicable.
Indenture: The Indenture, dated as of the Initial Closing Date,
between the Issuer and the Indenture Trustee, as amended and supplemented from
time to time, including all Officer's Issuance Certificates.
Indenture Trustee: _______________, a _________ banking corporation,
not in its individual capacity but solely as trustee under the Indenture, or any
successor trustee under the Indenture.
Independent: When used with respect to any specified Person, that the
Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" and that the signer is Independent within the meaning thereof.
Indirect Participant: A securities broker, dealer, bank, trust company
or other Person that clears through or maintains a custodial relationship with a
Clearing Agency Participant, either directly or indirectly.
Ineligible Account: An Account that does not satisfy the criteria to
be an Eligible Account.
Initial Account: An Account identified on the Schedule of Accounts as
in the Pool of Accounts as of the Initial Cut-Off Date.
Initial Closing Date: ____________
Initial Cut-Off Date: ____________
Initial Quarterly Distribution Date: ______________
Initial Securities: The ______________________ Term Notes and the
______________________ Certificates.
Insolvency Event: With respect to a specified Person, (a) the entry of
a decree or order by a court, agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver,
trustee or liquidator for such Person, in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of such Person's affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 90 consecutive
days,(b) the consent by such Person to the appointment of a conservator,
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
such Person or of or relating to substantially all of such Person's property or
(c) such Person shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency, bankruptcy or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations.
Insolvency Laws: The Bankruptcy Code and any other applicable federal
or State bankruptcy, insolvency or other similar law.
Insolvency Proceeds: The proceeds described in Section 9.2(a) of the
Trust Sale and Servicing Agreement.
Intercompany Advance Agreement: The Intercompany Advance Agreement
dated as of _______________ between ______________ and the Original Seller, as
amended and supplemented from time to time.
Interest Collections: For any Collection Period, collections received
during such Collection Period on the Receivables existing under the Accounts in
the Pool of Accounts that the Servicer attributes to interest and other
non-principal charges pursuant to the Floor Plan Financing Guidelines, including
Administrative Purchase Payments and Warranty Payments in excess of the
principal portion thereof.
Interest Rate: With respect to any series of Notes the rate or rates
designated as such in the Officer's Issuance Certificate applicable to such
series of Notes.
Interested Party: The Original Seller, the Seller, the Issuer and each
other party identified or described in the Pooling and Servicing Agreement or in
the Trust Sale and Servicing Agreement as having an interest in Receivables as
owner, trustee, secured party or holder of the Securities.
Investment Company Act: The Investment Company Act of 1940, as
amended.
Investment Proceeds: With respect to any Monthly Distribution Date,
investment earnings on funds deposited in the Designated Accounts and the
Certificate Distribution Account net of losses and investment expenses during
the related Collection Period.
Involuntary Case: Any Proceeding provided for any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to any Person or relating to all or substantially all
of its property.
Issuer: The party named as such in the Pooling and Servicing
Agreement, the Trust Sale and Servicing Agreement and the Indenture until a
successor replaces it and, thereafter, the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
Issuer Order and Issuer Request: A written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
LIBOR Business Day: Any day on which commercial banks in London are
open for business (including dealings in foreign exchange and foreign currency
deposits).
Lien: Any security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach by operation of law.
Marine Accounts: Credit lines or accounts pursuant to which advances
are made to finance new and used boats and related items.
Maximum Pool Balance: The sum of
(a) the Maximum Revolver Balance,
(b) the aggregate outstanding principal balance of all Term Notes
(after giving effect to any amounts on deposit in the Term Note
Distribution Accounts and any Accumulation Accounts for payments of
principal), and
(c) the aggregate outstanding Certificate Balance of all
Certificates (after giving effect to any amounts on deposit in the
Certificate Distribution Account for distributions with respect to
Certificate Balance).
Maximum Revolver Balance: At any time, the Specified Maximum Revolver
Balance, as such amount may be increased or decreased from time to time in
accordance with the Trust Sale and Servicing Agreement; provided, however, that
at any time additional borrowings may not be made under a Revolving Note
(including, if applicable, during the Wind Down Period or an Early Amortization
Period), the Maximum Revolver Balance shall include the Specified Maximum
Revolver Balance attributable to such Note only to the extent of the Net
Revolver Balance with respect to such Note. For purposes of the foregoing, if
and so long as the holder of any Revolving Notes has determined not to make any
further advances thereunder but additional borrowings are otherwise then
permitted thereunder, the proviso to the previous sentence shall be applicable
in determining Excess Available Receivables but shall otherwise be inapplicable.
Monthly Available Amount: With respect to a Monthly Distribution Date,
the aggregate of the amounts designated as such for each series of Notes
separately in the Officer's Issuance Certificate applicable to each such series
of Notes.
Monthly Carrying Costs: With respect to a Monthly Distribution Date,
the aggregate of the costs designated as such for each series of Notes
separately in the Officer's Issuance Certificate applicable to each such series
of Notes.
Monthly Distribution Date: The fifteenth day of each calendar month
or, if such fifteenth day is not a Business Day, the next succeeding Business
Day, commencing ____________. A Monthly Distribution Date is related to the
Collection Period prior to the Collection Period in which such Monthly
Distribution Date occurs.
Monthly Payment Rate: For any Collection Period, the percentage
obtained by dividing Principal Collections for such Collection Period by the
average daily aggregate principal balance of all Receivables (including
Receivables included in the Retained Property) included in the Accounts in the
Pool of Accounts during such Collection Period.
Monthly Remittance Condition: Any of the conditions specified in
Section 6.2(b) of the Trust Sale and Servicing Agreement.
Monthly Servicing Fee: The fee described in Section 5.1 of the Trust
Sale and Servicing Agreement.
Moody's: Moody's Investors Service, Inc.
Net Revolver Balance: For any date, the aggregate outstanding
principal balance under the Revolving Notes minus any amounts on deposit in the
Revolver Distribution Account on such date for the payment of principal.
New Vehicles: Under the Original Seller's current practices and
policies, Vehicles of any model year that are not Auction Vehicles, that
generally have been driven less than 200 miles and that are either (a) untitled
or (b) titled solely for purposes of State laws requiring demonstration vehicles
to be titled.
New York UCC: The UCC as in effect in the State of New York.
Note Depository: With respect to any Book-Entry Notes for which
Definitive Term Notes have not been issued, any depository selected from time to
time by the Indenture Trustee on behalf of the Trust in whose name a series of
Notes is registered. The Note Depository for the ______________________ Term
Notes shall be Cede & Co., the nominee of the Clearing Agency for such series.
Note Depository Agreement: With respect to any series of Term Notes
originally issued as Book-Entry Notes, the agreement, dated as of the Closing
Date for such series, among the Issuer, the Indenture Trustee and the Clearing
Agency relating to such Term Notes, as the same may be amended and supplemented
from time to time.
Note Owner: With respect to any Term Note issued as a Book Entry Note,
the Person who is the beneficial owner of such Book Entry Note, as reflected on
the books of the related Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an Indirect Participant, in each case in accordance with the
rules of such Clearing Agency).
Note Register: With respect to any series of Notes, the register of
such Notes specified in Section 2.4 of the Indenture.
Note Registrar: The registrar at any time of the Note Register,
appointed pursuant to Section 2.4 of the Indenture.
Noteholders: Holders of record of the Notes pursuant to the Indenture
and, with respect to any series of Notes, holders of record of such series of
Notes pursuant to the Indenture.
Noteholders' Interest: With respect to a series of Notes, for any
Monthly Distribution Date, the amount specified as such in the Officer's
Issuance Certificate applicable to such series of Notes.
Notes: The Term Notes and the Revolving Notes.
Officer's Certificate: A certificate signed by any Authorized Officer
of the Issuer, under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture, and
delivered to the Indenture Trustee. Unless otherwise specified, any reference in
the Indenture to an officer's certificate shall be to an Officer's Certificate
of any Authorized Officer of the Issuer.
Officer's Issuance Certificate: An Officer's Certificate establishing
the terms of any series of Notes pursuant to Section 2.1 of the Indenture.
Opinion of Counsel: A written opinion of counsel, who may, except as
otherwise expressly provided, be an employee of the Seller, the Servicer or the
Original Seller. In addition, for purposes of the Indenture: (a) such counsel
shall be satisfactory to the Indenture Trustee, (b) the opinion shall be
addressed to the Indenture Trustee as Trustee and (c) the opinion shall comply
with any applicable requirements of Section 11.1 of the Indenture and shall be
in form and substance satisfactory to the Indenture Trustee.
Original Seller: The Person executing the Pooling and Servicing
Agreement as the seller, or its successor in interest pursuant to Section 5.01
of the Pooling and Servicing Agreement.
Original Seller Addition Notice: The notice described in Section
2.03(a) of the Pooling and Servicing Agreement.
Original Seller Removal Notice: The notice described in Section 2.04
of the Pooling and Servicing Agreement.
Other Indebtedness: The indebtedness of Dealers to the Original Seller
defined in Section 6.03(a) of the Pooling and Servicing Agreement.
Outstanding: With respect to any Notes, as of the date of
determination, subject to Section 4.5(g) of the Trust Sale and Servicing
Agreement, all such Notes theretofore authenticated and delivered under the
Indenture except:
(a) Notes theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes; provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to the Indenture or provision therefore,
satisfactory to the Indenture Trustee, has been made; and
(c) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser; provided, however, that in determining
whether the Holders of the requisite Outstanding Amount of the Notes have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder or under any Basic Document, Notes owned by the Issuer,
any other obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that the Indenture Trustee
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgor's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller or any Affiliate of
any of the foregoing Persons.
Outstanding Amount: As of any date, with respect to any series of Term
Notes or Revolving Notes, the aggregate principal amount of such Notes
Outstanding at such date.
Owner Trust Estate: All right, title and interest of the Trust in and
to the property and rights assigned to the Trust pursuant to Article II of the
Trust Sale and Servicing Agreement, all funds on deposit from time to time in
the Designated Accounts and the Certificate Distribution Account, the Specified
Support Arrangements and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Trust
Sale and Servicing Agreement and the Administration Agreement.
Owner Trustee:____________________, a [ ] or any successor trustee
under the Trust Agreement.
Paying Agent: With respect to the Indenture, the Indenture Trustee or
any other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 of the Indenture and is authorized by the Issuer to
make the payments to and distributions from the Collection Account, the Term
Note Distribution Account and the Revolver Distribution Account, including
payment of principal of or interest on the Notes on behalf of the Issuer. With
respect to the Trust Agreement, any paying agent or co-paying agent appointed
pursuant to Section 3.9 of the Trust Agreement that meets the eligibility
standards for the Owner Trustee specified in Section 6.13 of the Trust
Agreement, and initially [ ].
Payment Date: With respect to a series of Notes, each date specified
for payment of interest or principal on the Notes pursuant to the Indenture.
With respect to a series of Notes providing for monthly payment of interest or
principal, Payment Date means a Monthly Distribution Date.
Payment Period: With respect to a series of Term Notes or Revolving
Notes, the period, if any, described in the related Officer's Issuance
Certificate during which amounts are required to be set aside and/or paid as
principal on such Term Notes or Revolving Notes prior to the Wind Down Period or
an Early Amortization Period.
Person: Any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or Governmental Authority.
Physical Property: Means 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.
Pool of Accounts: At any time, all Accounts identified on the Schedule
of Accounts as amended and supplemented from time to time pursuant to the
Pooling and Servicing Agreement and the Trust Sale and Servicing Agreement. From
and after the related Removal Date, an Account shall no longer be deemed
included in the Pool of Accounts.
Pooling and Servicing Agreement: The Pooling and Servicing Agreement,
dated as of the Initial Closing Date, between the Original Seller and the
Purchaser, as amended and supplemented from time to time.
Predecessor Note: With respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 2.5 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
Principal Allocation Percentage: for a series of Notes that has
reached its Fully Funded Date, zero, and for any other series of Notes (the
"Referent Series") which requires Available Trust Principal to be retained or
set aside during any period to fund swap payments, if any, or principal payments
with respect to the Referent Series on any date, is the percentage equivalent to
the following:
(1) if such date does not relate to a Wind Down Period or an Early
Amortization Period for the Trust:
(Principal Allocation (Aggregate Principal Balance of Referent Series)
Percentage for a Referent = -----------------------------------------------
Series) (Sum of Aggregate Principal Balance for all
Referent Series)
where, for purposes of this equation only:
"Aggregate Principal Balance of Referent Series" is
(ii with respect to any Referent Series of Term Notes, the aggregate
initial principal balance with respect to such Referent Series or
(ii with respect to any Referent Series of Revolving Notes, the
outstanding principal balance of such Referent Series as of the
close of business on the day preceding the first day of the
Payment Period with respect to such series
"Sum of Aggregate Principal Balance for all Referent Series" is the
sum of the "Aggregate Principal Balance of Referent Series" for each
series of Notes which is on that date a Referent Series
(2) if such date relates to a Wind Down Period or an Early
Amortization Period for the Trust:
Principal Allocation (Aggregate Principal Balance of Referent Series)
Percentage for a Referent = -------------------------------------------------
Series (Sum of Aggregate Principal Balance for each
Series of Notes)
where, for purposes of this equation only:
"Aggregate Principal Balance of Referent Series" is the aggregate
outstanding principal balance of the Referent Series then outstanding
on the last day of the Revolving Period
"Sum of Aggregate Principal Balance for each Series of Notes" is the
sum of the "Aggregate Principal Balance of Referent Series" for all
series then outstanding on the last day of the Revolving Period,
except for any series the principal balance of which has been fully
paid or provided for (calculated for this purpose as though each
outstanding series is a Referent Series on that date)
Principal Collections: For any day or any period, collections received
on such date or during such period, as applicable, on the Receivables existing
under the Accounts in the Pool of Accounts that the Servicer attributes to
principal pursuant to the Floor Plan Financing Guidelines, including the
principal portion of Warranty Payments and Administrative Purchase Payments.
Priority Payment Amount: Any make-whole payment, payment to an
interest rate swap counterparty, or other payment or deposit obligation
specified in an Officers' Issuance Certificate for a series of Notes or a
Certificate Issuance Order as constituting a "Priority Payment Amount," which
designates such amount as having priority of payment over the principal balance
of the Certificates; provided, that no amount shall constitute a Priority
Payment Amount unless either (x) each holder of a Certificate has consented to
the designation of such amount as a Priority Payment Amount or (y) the Rating
Agency Condition has been satisfied with respect to such designation.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Program: The program described in Section 4.2 of the Trust Sale and
Servicing Agreement.
Purchaser: ACE Securities Corp., a Delaware corporation, or its
successor in interest pursuant to the Pooling and Servicing Agreement.
Quarterly Distribution Date: Each Monthly Distribution Date occurring
in the months of _______, _______, _______ and _______, commencing
______________.
Quarterly Interest Accrual Date: The 15th day of each ________,
_______, ______ and _________, or if such day is not a Business Day, the next
following day which is a Business Day, commencing _____________.
Rapid Amortization Events: With respect to a series of Term Notes, the
events designated as such in the Officer's Issuance Certificate for such series
of Term Notes.
Rapid Amortization Payment Date: With respect to a series of Term
Notes, the meaning given to such term in the Officer's Issuance Certificate
applicable to such series of Term Notes.
Rapid Amortization Period: With respect to a series of Term Notes, the
meaning given to such term in the Officer's Issuance Certificate for such series
of Term Notes.
Rating Agencies: As of any date, with respect to any series or class
of Securities, the nationally recognized statistical rating organizations that
are requested by the Seller to provide ratings on such Securities and that are
rating such Securities on such date.
Rating Agency Condition: With respect to any action, with respect to
any series or class of Securities that are then rated, the condition that each
of the Rating Agencies with respect to such Securities shall have notified the
Seller, the Servicer and the Issuer in writing that such action shall not result
in a downgrade, suspension or withdrawal of the then current rating of such
Securities.
Reassignment Amount: For any Monthly Distribution Date, after giving
effect to any allocations, withdrawals and deposits otherwise to be made on such
Monthly Distribution Date, the sum of the Daily Trust Invested Amount (which,
for such purpose, shall be calculated without reduction for the Cash Collateral
Amount) and accrued but unpaid interest on all outstanding Securities to the
extent not previously distributed to Securityholders.
Receivable: At any time, the right to receive payment on a loan made
under an Account included in the Pool of Accounts.
Receivables Purchase Date: Each Business Day during the Revolving
Period on which Eligible Receivables are created in any Account then included in
the Pool of Accounts, subject to Section 6.02 of the Pooling and Servicing
Agreement.
Record Date: (a) With respect to any series of Term Notes that are
Book-Entry Notes and with respect to any Payment Date, the close of business on
the day immediately preceding such Payment Date, or if Definitive Term Notes are
issued therefor, the last day of the preceding Collection Period, (b) with
respect to any series of Notes other than those described in clause (a) and with
respect to any Payment Date, the last day of the preceding Collection Period and
(c) with respect to the Certificates and with respect to any Certificate Payment
Date, the close of business on the last day of the preceding Collection Period.
Recoveries: For any Monthly Distribution Date, all amounts received,
including insurance proceeds, by the Servicer during the related Collection
Period with respect to Eligible Receivables that have previously become
Defaulted Receivables.
Redemption Date: For a series of Term Notes, the date, if any,
specified as such in the Officer's Issuance Certificate applicable to such
series.
Redemption Price: For a series of Term Notes, the price, if any,
specified as such in the Officer's Issuance Certificate applicable to such
series.
Registered Holder: The Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
Remaining Interest Amounts: The amounts designated as Remaining
Interest Amounts in Section 4.5(c) of the Trust Sale and Servicing Agreement.
Removal Balance: The balance described in Section 2.8 of the Trust
Sale and Servicing Agreement.
Removal Commencement Date: The date described as such in Section 2.8
of the Trust Sale and Servicing Agreement.
Removal Date: The date described as such in Section 2.8 of the Trust
Sale and Servicing Agreement.
Removal Notice: The notice described in Section 2.8 of the Trust Sale
and Servicing Agreement.
Removed Account: An Account that has been removed from the Pool of
Accounts pursuant to Sections 2.04 or 2.05 of the Pooling and Servicing
Agreement and/or Sections 2.8 or 2.9 of the Trust Sale and Servicing Agreement.
Required Deposit Rating: A rating on short-term unsecured debt
obligations of P-1 by Moody's and A-1+ by Standard & Poor's. Any requirement
that short-term unsecured debt obligations have the "Required Deposit Rating"
shall mean that such short-term unsecured debt obligations have the foregoing
required ratings from each of such rating agencies.
Required Payment: With respect to any series of Term Notes, the amount
provided by the Officer's Issuance Certificate with respect to such Term Notes.
Required Payment Period Length: With respect to a series of Notes, the
period length specified as such in the Officer's Issuance Certificate applicable
to such series of Notes.
Required Revolver Payment: With respect to any Monthly Distribution
Date, the aggregate amount required to be paid (or set aside for payment) as
principal on all Revolving Notes on such Monthly Distribution Date pursuant to
the Indenture and the Trust Sale and Servicing Agreement.
Requirement of Law: With respect to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or Governmental Authority, in each case applicable to or binding upon
such Person or to which such Person is subject, whether Federal, State or local
(including usury laws and the Federal Truth in Lending Act). Reserve Fund: The
account designated as such, established and maintained pursuant to Section
6.1(a)(v) of the Trust Sale and Servicing Agreement.
Reserve Fund Deposit Amount: With respect to any Monthly Distribution
Date, the excess, if any, of the Reserve Fund Required Amount over the amount on
deposit in the Reserve Fund (after taking into account any withdrawals from the
Reserve Fund on such Monthly Distribution Date).
Reserve Fund Funding Condition: Will be satisfied on the date of
recommencement of the Revolving Period if:
(a) the amount on deposit in the Reserve Fund equals or exceeds
the Reserve Fund Required Amount as of such date of recommencement;
(b) the amount on deposit in each Cash Accumulation Reserve Fund
equals or exceeds the Cash Accumulation Reserve Fund Required Amount
thereof as of such date of recommencement; and
(c) the amount on deposit in the Certificate Reserve Fund equals
or exceeds the amount required to be on deposit in the Certificate Reserve
Fund, if any.
Reserve Fund Initial Deposit: $_______________.
Reserve Fund Property: The property described in Section 4.6(c) of the
Trust Sale and Servicing Agreement.
Reserve Fund Required Amount: With respect to any Monthly Distribution
Date,
(a) for any Monthly Distribution Date related to the Revolving
Period or Wind Down Period, ___% of the Maximum Pool Balance minus the
amounts on deposit in all Cash Accumulation Accounts as of such Monthly
Distribution Date (or if, as of such Monthly Distribution Date, the
long-term debt obligations of ______________________ are rated less than
"BBB-" by Standard & Poor's, then ___%), and
(b) for any Monthly Distribution Date during any Early
Amortization Period, ___% of the result of the Maximum Pool Balance minus
the amounts on deposit in all Cash Accumulation Accounts as of the last day
of the Revolving Period (or if, as of the last day of the Revolving Period
the long-term debt obligations of ______________________ are rated less
than "BBB-" by Standard & Poor's, then ___%).
Reserve Fund Trigger Amount: $_____________
Responsible Officer: With respect to the Indenture Trustee or the
Owner Trustee, any officer within the Corporate Trust Office of such trustee,
and, with respect to the Servicer, the President, any Vice President, Assistant
Vice President, Secretary, Assistant Secretary or any other officer or assistant
officer of such Person 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.
Retained Property: The interest of the Original Seller described in
Section 2.01(d) of the Pooling and Servicing Agreement.
Revised Article 8: Revised Article 8 (1994 Version) (and corresponding
amendments to Article 9) as promulgated in 1994 by the National Conference of
Commissioners on Uniform State Laws, in the form in which it has been adopted in
the State of New York.
Revolver Distribution Account: The account designated as such,
established and maintained pursuant to Section 6.1(a)(iii) of the Trust Sale and
Servicing Agreement.
Revolver Interest: With respect to any Monthly Distribution Date, for
any series of Revolving Notes, except as otherwise provided in the related
Officer's Issuance Certificate, the product of (a) the average daily Series Net
Revolver Balance for such series during the related Collection Period and (b)
the Revolver Interest Rate for such series for such Monthly Distribution Date.
Revolver Interest Carryover Shortfall: For any Monthly Distribution
Date, the excess of (a) the Aggregate Revolver Interest for such Monthly
Distribution Date over (b) the amount that was actually deposited in the
Revolver Distribution Account on such Monthly Distribution Date in respect of
Aggregate Revolver Interest.
Revolver Interest Rate: For any series of Revolving Notes, the
interest rate specified as such in the applicable Officer's Issuance
Certificate.
Revolver Monthly Payment Date: Means the 15th day of each month, or if
such day is not a U.S. Business Day, the next U.S. Business Day.
Revolver Payment Date: Means a Revolver Monthly Payment Date or a
Revolver Quarterly Payment Date.
Revolver Quarterly Payment Date: Means the 15th day of each ______,
_____, ______ and _____, or if such day is not a U.S. Business Day, the next
U.S. Business Day.
Revolving Note: Any asset-backed revolving note executed by the Issuer
by any of its Authorized Officers and authenticated by the Indenture Trustee in
the form attached to the Officer's Issuance Certificate applicable to such
series of revolving notes.
Revolving Noteholder: Any Holder of a Revolving Note.
Revolving Period: The period commencing on the Initial Cut-Off Date
and continuing until the earlier of (a) the commencement of an Early
Amortization Period and (b) the occurrence of the Scheduled Revolving Period
Termination Date; provided that, at the option of the Seller, the Revolving
Period shall recommence (subject to termination upon the earlier to occur of an
event described in the preceding clauses (a) or (b)) as described in Sections
9.1(j) and 9.5 of the Trust Sale and Servicing Agreement.
Schedule of Accounts: The list of Accounts that is required to be kept
at the locations specified in the Pooling and Servicing Agreement and the Trust
Sale and Servicing Agreement, as such list may be amended and supplemented from
time to time.
Scheduled Revolving Period Termination Date: _________; provided that
the Scheduled Revolving Period Termination Date shall be automatically extended
to the last day of each succeeding month (but not beyond _____________) unless
the Seller, prior to the then Scheduled Revolving Period Termination Date,
elects to cause such extension not to occur by providing written notice to such
effect to the Servicer, the Owner Trustee (who shall provide notice to the
Certificateholders), the Indenture Trustee and the Rating Agencies. Unless such
notice is given, each such extension shall become effective as of the Business
Day prior to the then Scheduled Revolving Period Termination Date. In addition,
the Seller may, at any time prior to the then Scheduled Revolving Period
Termination Date, elect to extend the Scheduled Revolving Period Termination
Date to the last day of any specified month (but not beyond ____________),
subject thereafter to further automatic extensions beyond the last day of such
specified month as described in the preceding two sentences.
Secretary of State: The Secretary of State of the State of Delaware.
Securities: The Term Notes, the Revolving Notes and the Certificates.
Securities Act: The Securities Act of 1933, as amended.
Securities Distribution Accounts: The Term Note Distribution Accounts,
the Revolver Distribution Account and the Certificate Distribution Account.
Securities Intermediary: Has the meaning given to such term in Section
6.1(b)(i) of the Trust Sale and Servicing Agreement.
Security Certificate: Has the meaning given such term in Revised
Article 8.
Security Entitlement: Has the meaning given such term in Revised
Article 8.
Securityholders: The Noteholders and the Certificateholders.
Selected Account: An Account designated as such as described in
Section 2.8 or 2.9 of the Trust Sale and Servicing Agreement.
Seller: The Person executing the Trust Sale and Servicing Agreement as
the Seller, or its successor in interest pursuant to Section 3.3 of the Trust
Sale and Servicing Agreement.
Series Net Revolver Balance: With respect to any series of
Revolving Notes, for any date, the aggregate outstanding principal balance under
such series of Revolving Notes minus any amounts on deposit in the Revolver
Distribution Account on such date for the payment of principal on such series of
Revolving Notes.
Series Shortfall: With respect to a series of Notes, the amounts
designated as such in the Officer's Issuance Certificate applicable to such
series of Notes.
Series Specified Maximum Revolver Balance: For any series of Revolving
Notes, the maximum balance specified as such in the Officer's Issuance
Certificate applicable to such series of Revolving Notes.
Servicer: The Person executing the Trust Sale and Servicing Agreement
as the Servicer, or its successor in interest pursuant to Section 7.2 of the
Trust Sale and Servicing Agreement.
Servicer Advance: For any Monthly Distribution Date, the amount, if
any, advanced by the Servicer as described in Section 4.5(c) of the Trust Sale
and Servicing Agreement.
Servicer Liquidity Advance: For any series of Term Notes, if the
Officer's Issuance Certificate for such series provides for a Servicer Liquidity
Advance, an advance by the Servicer, stated in dollars, to the Trust made to the
extent a required principal payment for any series of Notes for any Monthly
Distribution Date cannot otherwise be made, after giving effect to all issuances
of Securities and additional borrowings under the Revolving Notes on such
Monthly Distribution Date, as they are available. However, the Servicer can only
make Servicer Liquidity Advances to the extent that the Servicer, in its sole
discretion, expects to recover such advances from subsequent Trust Principal
Collections. Servicer Liquidity Advances with respect to a series of Term Notes
will be reimbursed (a) if Available Trust Principal is being set aside for that
series of Term Notes, out of that series' share of Available Trust Principal and
(b) if Available Trust Principal is not being set aside for Term Notes, out of a
portion of Trust Principal Collections not to exceed a fraction, the numerator
of which is the outstanding principal balance of that series of Term Notes and
the denominator of which is the outstanding balance of all series of Notes as of
that date.
Servicer's Accounting: A certificate, completed by and executed on
behalf of the, in accordance with Section 3.05 of the Pooling and Servicing
Agreement.
Servicing Default: An event described as such in Section 8.1 of the
Trust Sale Servicing Agreement.
Servicing Fee Rate: ___.
Shared Investment Proceeds: Investment Proceeds other than:
(A) Cash Accumulation Account Earnings,
(B) Term Note Distribution Subaccount Earnings for the
______________________ Term Notes,
(C) Investment Proceeds from the Cash Accumulation Reserve Fund,
(D) Investment Proceeds from any other account established for other
series of Term Notes in which funds are accumulated to pay
principal on such Notes at designated times, and
(E) any other Investment Proceeds which are designated in an
Officer's Issuance Certificate as not constituting Shared
Investment Proceeds.
Specified Certificate Percentage: ___.
Specified Maximum Revolver Balance: The maximum aggregate amount of
borrowings that may be made under the Revolving Notes during the Revolving
Period, which shall initially be $__________________.
Specified Support Arrangement: Any letter of credit, security bond,
cash collateral account, spread account, guaranteed rate agreement, maturity or
liquidity facility, tax protection agreement, interest rate swap agreement,
interest rate cap agreement, other derivative product or other arrangement to
provide liquidity or credit support for the benefit of holder of one or more
series or classes of Securities (other than the Reserve Fund), whether or not
such arrangement is an asset of the Trust, designated as such. As of the Initial
Closing Date, the Specified Support Arrangements will consist of the Basis Swaps
and the Cash Accumulation Reserve Fund.
Specified Trust Termination Date: _______________.
Standard & Poor's: Standard & Poor's Ratings Services.
State: Any one of the fifty states of the United States of America or
the District of Columbia.
Stated Final Payment Date: (i) In respect of a series of Notes, the
date, specified as such in the related Officer's Issuance Certificate, on which
final payment of principal on such series of Notes shall be due and payable and
(ii) in respect of a class of Certificates, the date, specified as such in the
Trust Agreement or the related Certificate Issuance Order, on which final
payment of Certificate Balance on such class of Certificates shall be due and
payable.
Supplemental Principal Allocation: With respect to any Monthly
Distribution Date related to the Wind Down Period or an Early Amortization
Period or the Payment Period for the ______________________ Notes, an amount
(not less than zero) equal to the lesser of
(a) the excess, if any, of
(i) the product of
(A) the percentage equivalent of a fraction (which shall
never exceed 100%), the numerator of which is the Daily
Trust Balance and the denominator of which is the principal
balance of all Receivables (including Receivables included
in the Retained Property) in the Accounts included in the
Pool of Accounts, in each case, as of the termination of the
Ordinary Revolving Period, and
(B) the aggregate amount of Principal Collections on all
Receivables (including Receivables included in the Retained
Property) in the Accounts included in the Pool of Accounts
for each day during the related Collection Period over
(ii) the aggregate amount of Trust Principal Collections for
each day during the related Collection Period (provided,
that no amount shall be included pursuant to clause (i)(B)
or (ii) for any day in such Collection Period that
occurred during the Ordinary Revolving Period) and
(b) an amount equal to:
(i) the Daily Trust Balance as of the termination of the
Ordinary Revolving Period, plus
(ii) the Cash Collateral Amount on the last day of the Ordinary
Revolving Period, minus
(iii) the Available Trust Principal for each Monthly
Distribution Date from and after the final Monthly
Distribution Date for the Revolving Period through but
excluding such current Monthly Distribution Date, minus
(iv) the amount added to unreimbursed Trust Charge-Offs on each
Monthly Distribution Date from and after the final Monthly
Distribution Date for the Revolving Period through and
including such current Monthly Distribution Date, minus
(v) Available Trust Principal for such current Monthly
Distribution Date (assuming the Supplemental Principal
Allocation for such Monthly Distribution Date was zero).
For purposes of this definition, "Ordinary Revolving Period" means the
period ending on the Business Day preceding the commencement of the Wind Down
Period or the Early Amortization Period for the Trust or the Payment Period for
the ______________________ term notes.
______________________ Reserve Funds: The Reserve Fund, the Cash
Accumulation Reserve Funds, and any other fund designated as a
______________________ Reserve Fund in an Officer's Issuance Certificate or a
Certificate Issuance Order.
Targeted Final Payment Date: With respect to any series of Notes, the
date, if any, specified as such in the related Officer's Issuance Certificate,
on which all principal is scheduled to be paid as principal on such series of
Notes, to the extent not previously paid.
Temporary Notes: The Notes specified in Section 2.3 of the Indenture.
Term Note: Any asset-backed term note executed by the Issuer by any of
its Authorized Officers and authenticated by the Indenture Trustee in the form
attached to the Officer's Issuance Certificate applicable to such series of term
notes.
Term Note Distribution Account: The account designated as such,
established maintained pursuant to Section 6.1(a)(ii) of the Trust Sale and
Servicing Agreement.
Term Note Distribution Subaccount: With respect to any series of
Notes, a subaccount of the Term Note Distribution Account which is used as
specified in the Officer's Issuance Certificate for such series of Notes.
Term Note Distribution Subaccount Earnings: With respect to any series
of Notes, any Investment Proceeds in respect of funds in the Term Note
Distribution Subaccount for such series.
Term Noteholder: Any Holder of a Term Note.
Treasury Regulations: The regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust: ______________________, a Delaware business created pursuant to
the Trust Agreement.
Trust Agreement: The Trust Agreement, dated as of the Initial Closing
Date, between the Seller and the Owner Trustee, as amended and supplemented from
time to time, including all Certificate Issuance Orders.
Trust Charge-Offs: With respect to any Monthly Distribution Date, the
amount of the Trust Defaulted Amount for such Monthly Distribution Date that is
not covered through the application of Trust Interest Collections and funds in
the Reserve Fund or otherwise. As of any date, unreimbursed Trust Charge-Offs
shall equal the aggregate Trust Charge-Offs for all prior Monthly Distribution
Dates unless and to the extent such amounts are treated as Additional Trust
Principal pursuant to Section 4.5(c) of the Trust Sale and Servicing Agreement;
provided, however, that any Trust Charge-Offs allocated to any Notes as
described in Section 4.5(g) of the Trust Sale and Servicing Agreement at the
time of the final principal payment on such Notes shall reduce unreimbursed
Trust Charge-Offs.
Trust Defaulted Amount: With respect to any Monthly Distribution Date,
an amount (not less than zero) equal to the principal amount of all Defaulted
Receivables.
Trust Equilibrium: Is achieved when the Daily Trust Balance equals the
Daily Invested Amount.
Trust Estate: All money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of the
Indenture for the benefit of the Noteholders and (only to the extent expressly
provided in the Indenture) the Certificateholders (including, without
limitation, the Collateral described in the Granting Clause of the Indenture),
including the proceeds thereof, the Reserve Fund and the Reserve Fund Property
pledged to the Indenture Trustee pursuant to the Trust Sale and Servicing
Agreement and any other property and interests that are pledged to the Indenture
Trustee for the benefit of Securityholders pursuant to a supplement to the Trust
Sale and Servicing Agreement or otherwise.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as
amended.
Trust Interest Allocation: For any series of Notes, for any Monthly
Distribution Date, an amount equal to the product of (1) Available Trust
Interest less the amounts paid to the Servicer pursuant to clause (1) of Section
4.5(c)(i) of the Trust Sale and Servicing Agreement and (2) the Trust Interest
Allocation Percentage for such series.
Trust Interest Allocation Percentage: With respect to any series of
Notes, for any Distribution Date, a fraction calculated as set forth in the
following equation:
Trust Interest Allocation (UPB of Note Series)
Percentage = -----------------------------------------
(UPB of All Term Notes) + (UPB of All
Revolving Notes)
where, for purposes of this equation only:
"UPB of Note Series" is
(1) for a series of Term Notes, the Unaccumulated
Principal Balance for such series of Term Notes and
(3) for a series of Revolving Notes, the daily average
outstanding principal balance for such series of Revolving
Notes during the related Collection Period
"UPB of All Term Notes" is the Unaccumulated Principal
Balances of all series of Term Notes then outstanding; and
"UPB of All Revolving Notes" is the daily average of the
outstanding principal balance of all Revolving Notes during
the related Collection Period.
Trust Interest Collections: With respect to any Monthly Distribution
Date (subject to adjustment as described in Section 4.5(c)(v) of the Trust Sale
and Servicing Agreement), an amount equal to the sum of (a) the product of (i)
the Trust Percentage and (ii) Interest Collections for the related Collection
Period and (b) Recoveries.
Trust Percentage: With respect to any Monthly Distribution Date, the
percentage equivalent of a fraction (which shall never exceed 100%), (a) the
numerator of which is the average Daily Trust Balance during the related
Collection Period and (b) the denominator of which is the average daily
aggregate principal balance of all Receivables (including Receivables included
in the Retained Property) in the Accounts in the Pool of Accounts during the
related Collection Period.
Trust Principal Collections: With respect to any date, the sum of (a)
the amount of Principal Collections on Receivables held by the Trust and (b) the
principal portion of all Warranty Payments and Administrative Purchase Payments,
if any, on such date.
Trust Receivables Purchases: On any Business Day, the purchase by the
Trust from the Seller of additional Receivables pursuant to Section 2.1(b) of
the Trust Sale and Servicing Agreement.
Trust Sale and Servicing Agreement: The Trust Sale and Servicing
Agreement, dated as of the Initial Closing Date, between the Seller, the
Servicer and the Issuer, as amended and supplemented from time to time.
Trust Termination Date: The date specified in Section 7.1 of the Trust
Agreement.
UCC: The Uniform Commercial Code as in effect in the States of
Delaware, or New York, and as may be amended from time to time.
Unaccumulated Principal Balance: With respect to any series of Term
Notes as a Monthly Distribution Date,
(1) the daily average of the outstanding principal balance of
such Term Notes during the related Collection Period minus
(2) with respect to the ______________________ Term Notes, the
daily average during the related Collection Period of the sum of
(x) the amount of funds on deposit in the relevant Cash
Accumulation Account, and
(y) the amount of funds on deposit in the relevant Term Note
Distribution Account in respect of the outstanding principal
balance of Term Notes.
Uncertificated Security: As of any date, has the meaning given to such
term under the applicable UCC as in effect on such date.
Undertaking Letter: Any letter referred to in Sections 3.4 and 9.12 of
the Trust Agreement or Section 2.15 of the Indenture.
Unregistered Note: Any Note that has not been registered under the
Securities and is subject to the provisions of Section 2.15 of the Indenture.
Unsatisfied Deficiency Amount: The amounts determined to be
Unsatisfied Amounts in Section 4.5(c)(ii) of the Trust Sale and Servicing
Agreement.
Used Vehicles: Under the Original Seller's current practices and
policies, Auction Vehicles and Vehicles which have been previously titled;
provided, however, that vehicles that are titled solely for purposes of state
laws requiring demonstration vehicles to be titled shall not be considered Used
Vehicles.
USD One-Month LIBOR: With respect to each Monthly Distribution Date,
the rate for deposits in U.S. Dollars for a period of one month which appears on
the Bridge Information Systems Telerate Service Page 3750 as of 11:00 a.m.,
London time, for the ______________________ Term Notes and the
______________________ Certificates, on the day that is two LIBOR Business Days
prior to the Monthly Distribution Date (or, in the case of the Initial Monthly
Distribution Date, two LIBOR Business Days prior to the Initial Closing Date)
immediately preceding such Monthly Distribution Date.
If such rate does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer offered, such other
service for displaying LIBOR or comparable rates as may be selected by the
Indenture Trustee after consultation with the Seller), the rate will be the One
Month Reference Bank Rate. The "One Month Reference Bank Rate" will be
determined on the basis of the rates at which deposits in U.S. dollars are
offered by the reference banks (which will four major banks that are engaged in
transactions in the London interbank market, selected by the Indenture Trustee
after consultation with the seller) as of 11:00 a.m., London time, on the day
that is two LIBOR Business Days prior to the immediately preceding Monthly
Distribution Date to prime banks in the London interbank market for a period of
one month commencing on such preceding Monthly Distribution Date in amounts
approximately equal to the principal balance of the ______________________ Term
Notes or the Certificate Balance of the ______________________ Certificates then
outstanding, as applicable. The Indenture Trustee will request the principal
London office of each of the reference banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate will be the arithmetic
mean of the quotations, rounded upwards to the nearest one-sixteenth of one
percent. If on any such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean, rounded upwards to the nearest
one-sixteenth of one percent, of the rates quoted by one or more major banks in
New York, selected by the Indenture Trustee after consultation with the Seller,
as of 11:00 a.m., New York time, on such date to leading European banks for U.S.
dollar deposits for a period of one month commencing on such applicable date in
amounts approximately equal to the then outstanding principal balance of the
______________________ Term Notes or the Certificate Balance of the
______________________ Certificates then outstanding, as applicable. If no such
quotation can be obtained, the rate will be One-Month LIBOR for the prior
Monthly Distribution Date.
USD Three-Month LIBOR: With respect to each Monthly Distribution Date,
the rate for deposits in U.S. Dollars for a period of three months which appears
on the Bridge Information Systems Telerate Service Page 3750 as of 11:00 a.m.,
London time, for the ______________________ Term Notes and the
______________________ Certificates, on the day that is two LIBOR Business Days
prior to the Quarterly Distribution Date (or, in the case of the Initial
Quarterly Distribution Date, two LIBOR Business Days prior to the Initial
Closing Date) immediately preceding such Quarterly Distribution Date.
If such rate does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer offered, such other
service for displaying LIBOR or comparable rates as may be selected by the
Indenture Trustee after consultation with the Seller), the rate will be the
Three Month Reference Bank Rate. The "Three Month Reference Bank Rate" will be
determined on the basis of the rates at which deposits in U.S. dollars are
offered by the reference banks (which will be four major banks that are engaged
in transactions in the London interbank market, selected by the Indenture
Trustee after consultation with the seller) as of 11:00 a.m., London time, on
the day that is two LIBOR Business Days prior to the immediately preceding
Quarterly Distribution Date to prime banks in the London interbank market for a
period of three months commencing on such preceding Quarterly Distribution Date
in amounts approximately equal to the principal balance of the
______________________ Term Notes or the Certificate Balance of the
______________________ Certificates then outstanding, as applicable. The
Indenture Trustee will request the principal London office of each of the
reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations,
rounded upwards to the nearest one-sixteenth of one percent. If on any such date
fewer than two quotations are provided as requested, the rate will be the
arithmetic mean, rounded upwards to the nearest one-sixteenth of one percent, of
the rates quoted by one or more major banks in New York, selected by the
Indenture Trustee after consultation with the seller, as of 11:00 a.m., New York
time, on such date to leading European banks for U.S. dollar deposits for a
period of three months commencing on such applicable date in amounts
approximately equal to the then outstanding principal balance of the
______________________ Term Notes or the Certificate Balance of the
______________________ Certificates then outstanding, as applicable. If no such
quotation can be obtained, the rate will be Three-Month LIBOR for the prior
Quarterly Distribution Date.
Vehicle: An automobile or light truck.
Vehicle Collateral Security: With respect to an Account and the
Receivables arising under such Account, the security interest in the Vehicles of
the related Dealer granted to secure the obligations of such Dealer in
connection therewith and any proceeds therefrom.
Voting Interests: As of any date, the aggregate outstanding
Certificate Balance of all Certificates; provided, however, that if the Original
Seller and its affiliates own less than 100% of the Certificates, Certificates
owned by the Original Seller, the Trust or any Affiliate of the Original Seller
or the Trust (other than the Seller) shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Owner Trustee knows to be
so owned shall be so disregarded. Certificates so owned that have been pledged
in good faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Owner Trustee the pledgor's right so to act with respect to
such Certificates and that the pledgee is not the Original Seller or the Trust
or any Affiliate of the Original Seller or the Trust (other than the Seller).
Warranty Payment: The payment described in Section 2.5(a) of the Trust
Sale Servicing Agreement.
Warranty Receivable: A Receivable subject to repurchase as and to the
extent described in Section 2.5(a) of the Trust Sale and Servicing Agreement.
Wind Down Period: The period commencing on the day immediately after
the Scheduled Revolving Period Termination Date and continuing until the earlier
of (a) the commencement of an Early Amortization Period and (b) the date on
which all of the Securities have been paid in full. The first Monthly
Distribution Date for the Wind Down Period shall be the earlier of the Monthly
Distribution Date in ____________ and the Monthly Distribution Date related to
the first Collection Period included in the Wind Down Period.
PART II - RULES OF CONSTRUCTION
(A) Accounting Terms. As used in this Appendix or the Basic Documents,
accounting terms which are not defined, and accounting terms partly
defined, herein or therein shall have the respective meanings given to
them under generally accepted accounting principles. To the extent
that the definitions of accounting terms in this Appendix or the Basic
Documents are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in
this Appendix or the Basic Documents will control.
(B) "Hereof," etc. The words "hereof," "herein" and "hereunder" and words
of similar import when used in this Appendix or any Basic Document
will refer to this Appendix or such Basic Document as a whole and not
to any particular provision of this Appendix or such Basic Document;
and Section, Schedule and Exhibit references contained in this
Appendix or any Basic Document are references to Sections, Schedules
and Exhibits in or to this Appendix or such Basic Document unless
otherwise specified. The word "or" is not exclusive.
(C) Including. Whenever the term "including" (whether or not that term is
followed by the phrase "but not limited to" or "without limitation" or
words of similar effect) is used in this Appendix or the Basic
Documents in connection with a listing of items within a particular
classification, that listing will be interpreted to be illustrative
only and will not be interpreted as a limitation on, or exclusive
listing of, the items within that classification.
(D) Number and Gender. Each defined term used in this Appendix or the
Basic Documents has a comparable meaning when used in its plural or
singular form. Each gender-specific term used in this Appendix or the
Basic Documents has a comparable meaning whether used in a masculine,
feminine or gender-neutral form.
(E) Reference to Monthly Distribution Dates. With respect to any Monthly
Distribution Date, the "related Collection Period," and the "related
Record Date," will mean the Collection Period and Record Date,
respectively, immediately preceding such Monthly Distribution Date,
and the relationships among Collection Periods and Record Dates will
be correlative to the foregoing relationships.
APPENDIX B
NOTICE ADDRESSES AND PROCEDURES
All requests, demands, directions, consents, waivers, notices,
authorizations and communications provided or permitted under any Basic Document
to be made upon, given or furnished to or filed with the Seller, the Servicer,
the Administrator, the Indenture Trustee, the Issuer, the Owner Trustee, the
Custodian or the Rating Agencies shall be in writing, personally delivered, sent
by facsimile with a copy to follow via first class mail 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, at the following address:
ACE Securities Corp.
6525 Morrison Boulevard
Suite 318
Charlotte, North Carolina 28211
with a copy to:
______________________
______________________
______________________
______________________
(B) in the case of the Servicer, the Administrator or the Custodian,
at the following address:
______________________
______________________
______________________
______________________
(C) in the case of the Indenture Trustee, at its Corporate Trust
Office,
(D) in the case of the Issuer or the Owner Trustee, to the Owner
Trustee at its Corporate Trust Office,
with a copy to:
______________________
______________________
______________________
______________________
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall likewise
promptly transmit any notice received by it from the Noteholders to the Issuer.
(E) in the case of Moody's Investors Service, Inc., to:
Moody's Investors Service, Inc.
ABS Monitoring Department
99 Church Street
New York, New York 10007
(F) in the case of Standard & Poor's Ratings Services, to:
Standard & Poor's Ratings Services
55 Water Street
29th Floor
New York, New York 10041-0003
(G) in the case of Fitch, Inc., to:
Fitch, Inc.
One State Street Plaza
New York, New York 10004
Attention: Asset Backed Surveillance
or at such other address as shall be designated by such Person in a written
notice to the other parties to this Agreement.
Where any Basic Document provides for notice to Noteholders or
Certificateholders of any condition or event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if it is in writing and
mailed, first-class, postage prepaid to each Noteholder or Certificateholder
affected by such condition or event, at such Person's address as it appears on
the Note Register or Certificate Register, as applicable, not later than the
latest date, and not earlier than the earliest date, prescribed in such Basic
Document for the giving of such notice. If notice to Noteholders or
Certificateholders is given by mail, neither the failure to mail such notice nor
any defect in any notice so mailed to any particular Noteholders or
Certificateholders shall affect the sufficiency of such notice with respect to
other Noteholders or Certificateholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given
regardless of whether such notice is in fact actually received.