EXHIBIT 4.2.3
POOLING AND SERVICING AGREEMENT
BETWEEN
-------------------------
SELLER AND SERVICER
AND
ACE SECURITIES CORP.
PURCHASER
DATED AS OF _____________
__________________ TRUST __
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions................................................5
ARTICLE II
PURCHASE AND SALE OF ELIGIBLE RECEIVABLES
SECTION 2.01. Purchase and Sale of Eligible Receivables..................6
SECTION 2.02. Purchase Price.............................................7
SECTION 2.03. Addition of Accounts.......................................7
SECTION 2.04. Optional Removal of Accounts...............................8
SECTION 2.05. Removal of Ineligible Accounts.............................9
SECTION 2.06. Custody of Documentation...................................9
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Appointment of Servicer and Acceptance of Appointment......9
SECTION 3.02. Rights and Duties of the Servicer..........................9
SECTION 3.03. Servicing Compensation; Payment of Certain Expenses
by the Servicer............................................11
SECTION 3.04. Representations, Warranties and Covenants of the Servicer..12
SECTION 3.05. Servicer's Accounting and Reports..........................15
SECTION 3.06. Pre-Closing Collections....................................15
SECTION 3.07. Collections Received by the Original Seller................16
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.01. Representations and Warranties of the Original Seller
Relating to the Accounts and the Receivables...............16
SECTION 4.02. Representations and Warranties of the Original Seller
Relating to the Original Seller and the Agreement..........17
SECTION 4.03. Representations and Warranties of the Purchaser............19
SECTION 4.04. Covenants of the Original Seller...........................21
ARTICLE V
CERTAIN MATTERS RELATING TO ORIGINAL SELLER
SECTION 5.01. Merger or Consolidation of, or Assumption of the
Obligations of, the Original Seller........................22
SECTION 5.02. the Original Seller Indemnification of the Purchaser.......22
SECTION 5.03. the Original Seller Acknowledgment of Transfers to
the Issuer.................................................22
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Additional Obligations of the Original Seller
and the Purchaser..........................................22
SECTION 6.02. Effect of Involuntary Case Involving the
Original Seller............................................23
SECTION 6.03. Intercreditor Agreements...................................24
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. Amendment..................................................25
SECTION 7.02. Protection of Right, Title and Interest in and to
Receivables................................................25
SECTION 7.03. Costs and Expenses.........................................26
SECTION 7.04. GOVERNING LAW..............................................26
SECTION 7.05. Notices....................................................26
SECTION 7.06. Severability of Provisions.................................26
SECTION 7.07. Assignment.................................................27
SECTION 7.08. Further Assurances.........................................27
SECTION 7.09. No Waiver; Cumulative Remedies.............................27
SECTION 7.10. Counterparts...............................................27
SECTION 7.11. Third-Party Beneficiaries..................................27
SECTION 7.12. Merger and Integration.....................................27
SECTION 7.13. Confidential Information...................................27
SECTION 7.14. Headings...................................................28
SECTION 7.15. Termination................................................28
SECTION 7.16. No Petition Covenants......................................28
SECTION 7.17. Jurisdiction...............................................28
EXHIBIT A List of Locations of the Schedule of Accounts
EXHIBIT B Form of Assignment for the Initial Closing Date
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
THIS POOLING AND SERVICING AGREEMENT is made as of _____________,
between _____________________________________, a ____________ corporation
(referred to herein as the "Original Seller" in its capacity as seller of the
Receivables specified herein and as the "Servicer" in its capacity as servicer
of the Receivables), and ACE Securities Corp., a Delaware corporation (the
"Purchaser").
WHEREAS, the Original Seller, in the ordinary course of its business,
generates certain payment obligations by financing the floor plan inventory of
motor vehicle dealers;
WHEREAS, the Original Seller desires to sell and assign to the
Purchaser, and the Purchaser desires to purchase from the Original Seller,
certain of such existing and future payment obligations arising or acquired from
time to time;
WHEREAS, the Purchaser desires to transfer and assign its interest in
such payment obligations to __________________ Trust __ (the "Issuer") pursuant
to the Trust Sale and Servicing Agreement;
WHEREAS, the Issuer desires to issue the Initial Securities to fund
its acquisition of such payment obligations;
WHEREAS, the Purchaser, the Issuer and the Original Seller (as the
holder of such payment obligations not sold to the Purchaser hereunder) desire
that the Servicer shall service such payment obligations; and
WHEREAS, the Servicer is willing to service such payment obligations
and related payment obligations in accordance with the terms hereof and of the
Trust Sale and Servicing Agreement for the benefit of the Purchaser, the
Original Seller, the Issuer and each other party identified or described herein
or in the Trust Sale and Servicing Agreement as having an interest therein as
owner, trustee, secured party or holder of the Securities (all such parties
being collectively referred to herein as "Interested Parties").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Certain capitalized terms used in the above
recitals and in this Agreement are defined in and shall have the respective
meanings assigned them in Part I of Appendix A to this Agreement. All references
herein to "the Agreement" or "this Agreement" are to this Pooling and Servicing
Agreement as it may be amended, supplemented or modified from time to time, 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 such Appendix A shall be applicable to
this Agreement.
ARTICLE II
PURCHASE AND SALE OF ELIGIBLE RECEIVABLES
SECTION 2.01. Purchase and Sale of Eligible Receivables.
(a) By execution of this Agreement, on the Initial Closing Date, the
Original Seller does hereby sell, transfer, assign and otherwise convey to the
Purchaser, without recourse, 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 kept at locations listed in Exhibit A) 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) and all
proceeds thereof (including "proceeds" as defined in Section 9-306 of the UCC
and Recoveries).
(b) Subject to Section 6.02, as of each Receivables Purchase Date,
the Original Seller does hereby sell, transfer, assign and otherwise convey to
the Purchaser, without recourse, 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 date, all Collateral Security with respect thereto and all amounts received
with respect thereto and all proceeds thereof (including "proceeds" as defined
in Section 9-306 of the UCC and Recoveries).
(c) It is the intention of the Original Seller and the Purchaser that
the transfers and assignments contemplated by this Agreement shall constitute
sales of the property described in Sections 2.01(a) and (b) from the Original
Seller to the Purchaser and that the beneficial interest in and title to such
property shall not be part of the Original Seller's estate in the event of the
filing of a bankruptcy petition by or against the Original Seller under any
Insolvency Law. The foregoing sales, transfers, assignments and conveyances and
any subsequent sales, transfers, assignments and conveyances contemplated hereby
do not constitute, and are not intended to result in, the creation or an
assumption by the Purchaser of any obligation of the Servicer, the Original
Seller (if the Original Seller is not the Servicer), _______________ 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) Subject to Section 2.06 and Article III hereof, the Original
Seller shall retain all right, title and interest in, to and under the
Receivables in the Accounts in the Pool of Accounts that the Original Seller has
not transferred to the Purchaser hereunder. Such Receivables, together with any
Receivables repurchased by the Original Seller or (so long as the Original
Seller is the Servicer) the Servicer from the Purchaser or the Trust pursuant to
this Agreement or the Trust Sale and Servicing Agreement, all monies due or to
become due on such Receivables, all amounts received with respect thereto and
all proceeds thereof (including "proceeds" as defined in Section 9-306 of the
UCC and Recoveries) are collectively referred to herein as the "Retained
Property".
SECTION 2.02. Purchase Price. On the Initial Closing Date, in
consideration for the sale of the property described in Section 2.01(a) to the
Purchaser, the Purchaser shall pay to the Original Seller $_____________
(representing the aggregate principal balance of the Eligible Receivables as of
the close of business on the Initial Cut-Off Date so sold on the Initial Closing
Date) in immediately available funds, and the Original Seller shall deliver to
the Purchaser an executed assignment substantially in the form of Exhibit B
hereto. The Purchaser shall pay, subject to Section 6.02, for property described
in Section 2.03 sold by the Original Seller to the Purchaser on each Addition
Date and property described in Section 2.01(b) sold by the Original Seller to
the Purchaser on each Receivables Purchase Date, a price equal to the principal
balance of the Eligible Receivables to be purchased on each such date. Such
purchase price shall be payable by the Purchaser on each such date in
immediately available funds.
SECTION 2.03. Addition of Accounts.
(a) Offers to Designate Additional Accounts. From time to time, the
Original Seller may, at its option, offer to designate and the Purchaser may, at
its option, request the designation of, one or more Accounts (each, an
"Additional Account") to be included as Accounts in the Pool of Accounts,
subject to the conditions specified in Section 2.03(b) below. If the Purchaser,
at its option, elects to accept any such offer by the Original Seller or if the
Original Seller, at its option, agrees to any such request of the Purchaser, the
Original Seller shall sell and assign to the Purchaser, and the Purchaser shall
purchase from the Original Seller, all of the Original Seller's right, title and
interest in, to and under all of the Eligible Receivables in each such
Additional Account as of the related Additional Cut-Off Date and all monies due
or to become due thereon after such date, all Collateral Security with respect
thereto, all amounts received with respect thereto and all proceeds thereof
(including "proceeds" as defined in Section 9-306 of the UCC and Recoveries),
effective as of the Addition Date specified in a written notice provided by the
Servicer, on behalf of the Original Seller, to the Purchaser (the "the Original
Seller Addition Notice"). Effective as of each such Addition Date, such
Additional Account shall be included in the Pool of Accounts and Eligible
Receivables arising therein from and after the Additional Cut-Off Date shall be
subject to purchase under Section 2.01(b) above. Each the Original Seller
Addition Notice shall specify the related Additional Cut-Off Date and shall be
given (with a copy to the Rating Agencies) on or before the fifth Business Day
but not more than 30 days prior to the related Addition Date.
(b) Conditions. the Original Seller shall be permitted to designate,
and the Purchaser shall be permitted to accept the designation of, Additional
Accounts, in accordance with Section 2.03(a) only upon satisfaction of each of
the following conditions on or prior to the related Addition Date:
(i) the Original Seller shall represent 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 Purchaser on
such Addition Date is an Eligible Receivable;
(ii) the Original Seller shall have delivered to the
Purchaser a duly executed written assignment in substantially the form
of Exhibit C and the list required to be delivered pursuant to Section
7.02(d);
(iii) the Original Seller shall have agreed to deliver to
the Purchaser, for deposit in the Collection Account, to the extent
required by the Trust Sale and Servicing Agreement, all Collections
with respect to the Eligible Receivables arising in such Additional
Accounts since the Additional Cut-Off Date within two Business Days
after such Addition Date;
(iv) as of the Addition Date, neither the Original Seller
nor the Purchaser 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 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;
(vi) the Original Seller shall have delivered to the
Purchaser a certificate of an Authorized Officer of the Original
Seller confirming the items set forth in clauses (i) through (v)
above;
(vii) the conditions set forth in Section 2.7(b) of the
Trust Sale and Servicing Agreement shall have been satisfied; and
(viii) the Original Seller shall have delivered to the
Purchaser an Opinion of Counsel of the Original Seller substantially
in the form of Exhibit D.
SECTION 2.04. Optional Removal of Accounts. From time to time, the
Original Seller may, at its option, request from the Purchaser, and the
Purchaser may, at its option, offer to the Original Seller, the right to
designate an Account for removal from the Pool of Accounts. Subject to the
satisfaction by the Purchaser of the conditions set forth in Section 2.8 of the
Trust Sale and Servicing Agreement, the Original Seller, at its option, may
accept offers to designate an Account for removal or request from the Purchaser
the right to designate an Account for removal by furnishing a written notice
(the "the Original Seller Removal Notice") to the Purchaser not less than five
Business Days but not more than 30 days prior to the Removal Commencement Date.
On and after the Removal Commencement Date with respect to a Selected Account,
the Original Seller shall not transfer Receivables with respect to such Selected
Account to the Purchaser. The Schedule of Accounts shall be amended to reflect
such designation as of the Removal Commencement Date and to reflect such Account
becoming a Removed Account as of the Removal Date. At any time after the Removal
Date, at the written request of the Original Seller, the Purchaser shall assign
to the Original Seller, without recourse, representation or warranty, effective
as of the Removal Date, all of the Purchaser's right, title and interest in, to
and under the Receivables arising in such Account and related Collateral
Security.
SECTION 2.05. Removal of Ineligible Accounts. If at any time an
Account shall be deemed a Selected Account as described in Section 2.9 of the
Trust Sale and Servicing Agreement, the Purchaser shall give notice thereof to
the Original Seller at the time it gives notice to the parties identified in
such Section 2.9. From and after the Removal Commencement Date with respect to a
Selected Account pursuant to such Section 2.9, the Original Seller shall not
transfer Receivables with respect to such Selected Account to the Purchaser. The
Schedule of Accounts shall be amended to reflect such designation as of the
Removal Commencement Date and to reflect such Account becoming a Removed Account
as of the Removal Date. At any time after such removal, at the written request
of the Original Seller, the Purchaser shall assign to the Original Seller,
without recourse, representation or warranty, effective as of the Removal Date,
all of the Purchaser's right, title and interest in, to and under the
Receivables in such Account and related Collateral Security.
SECTION 2.06. Custody of Documentation. In connection with the sale,
transfer, assignment and conveyance of the Receivables and related Collateral
Security in the Accounts in the Pool of Accounts to the Purchaser hereunder, the
Purchaser is executing simultaneously herewith the Custodian Agreement with the
Custodian, pursuant to which the Purchaser shall revocably appoint the Custodian
to act as agent of the Purchaser to maintain custody of the documents and
instruments (as more fully described in the Custodian Agreement) associated with
such Receivables, which shall be constructively delivered to the Purchaser. the
Original Seller, as the holder of the Retained Property, hereby consents to the
appointment of the Custodian to act as agent of the Original Seller to maintain
custody of the documents and contracts (as more fully described in the Custodian
Agreement) associated with the Receivables included therein and is
simultaneously herewith executing the Custodian Agreement. The Custodian has
accepted such appointment by the Purchaser and the Original Seller under the
Custodian Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Appointment of Servicer and Acceptance of Appointment.
The Purchaser and the Original Seller hereby appoint the Servicer to act as
Servicer with respect to the Eligible Receivables and the Receivables included
in the Retained Property, existing in or arising under the Accounts included in
the Pool of Accounts from time to time and authorize the Servicer to perform the
duties of Servicer under this Agreement and under the Trust Sale and Servicing
Agreement. The Servicer by execution of this Agreement and by execution of the
Trust Sale and Servicing Agreement hereby accepts such appointment and the terms
hereof and thereof.
SECTION 3.02. Rights and Duties of the Servicer.
(a) The Servicer shall manage, service and administer the Receivables
described in Section 3.01, including, without limitation, collecting payments
due under the Receivables and providing for charge-offs of uncollectible
Receivables, with reasonable care and all in accordance with the Servicer's
customary and usual servicing procedures for servicing wholesale receivables
comparable to the Receivables which the Servicer services for its own account,
including the Floor Plan Financing Guidelines, except insofar as any failure to
do so would not have a material adverse effect on the interests of
Securityholders. The Servicer shall have full power and authority, acting alone
or through any party properly designated by it hereunder or under the Trust Sale
and Servicing Agreement, to do any and all things in connection with such
servicing and administration which it may deem necessary or desirable, including
monitoring the insurance maintained by Dealers. The Servicer is hereby
authorized to commence, in its own name or in the name of any Interested Party,
a Proceeding to enforce any Receivable subject hereto, to enforce all
obligations of the Original Seller and the Purchaser under this Agreement and
under the Trust Sale and Servicing Agreement or to commence or participate in a
Proceeding (including without limitation a bankruptcy proceeding) relating to or
involving any such Receivable. If in any Proceeding it is held that the Servicer
may not enforce a Receivable arising under an Account in the Pool of Accounts on
the ground that it is not a real party in interest or a holder entitled to
enforce such Receivable, the Purchaser, the Original Seller and each other
Interested Party shall, at the Servicer's expense, take such steps as the
Servicer reasonably deems necessary or appropriate to enforce the Receivable,
including bringing suit in the name of such Person. If the Servicer commences or
participates in such a Proceeding in its own name, each Interested Party shall
thereupon be deemed to have automatically assigned such Receivable to the
Servicer for purposes of commencing or participating in any such Proceeding as a
party or claimant, and the Servicer is hereby authorized and empowered to
execute and deliver in the Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such Proceeding. Each Interested Party shall furnish the
Servicer with any powers of attorney and other documents and take any other
steps which the Servicer may reasonably deem necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties under this
Agreement and the Trust Sale and Servicing Agreement. Except to the extent
required by the preceding two sentences, the authority and rights granted to the
Servicer in this Section 3.02 shall be nonexclusive and shall not be construed
to be in derogation of the retention by any Interested Party (to the extent of
its rights in a Receivable) of equivalent authority and rights. Without limiting
the generality of the foregoing and subject to any Servicing Default, the
Servicer is hereby authorized and empowered, unless such power and authority is
revoked by any Interested Party on account of the occurrence of such a Servicing
Default, to:
(i) instruct the Issuer to make allocations, withdrawals and
payments to or from the Collection Account, the Distribution Accounts,
the Reserve Fund, the Cash Accumulation Reserve Funds and any other
related bank accounts or funds as set forth in the Trust Sale and
Servicing Agreement;
(ii) instruct the Issuer or any Interested Party to take any
action required or permitted under any Specified Support Arrangement;
(iii) execute and deliver, on behalf of the Issuer for the
benefit of any related Securityholders, any and all instruments of
satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the
extent permitted under and in compliance with applicable requirements
of law, to commence enforcement proceedings with respect to any such
Receivable; and
(iv) make any filings, reports, notices, applications,
registrations with, and seek any consents or authorizations from, the
U.S. Securities and Exchange Commission and any State securities
authority on behalf of the Issuer as may be necessary or advisable to
comply with any U.S. Federal or State securities law or reporting
requirement.
(b) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables in the
Accounts in the Pool of Accounts from the procedures, offices, employees and
accounts used by the Servicer in connection with servicing other receivables.
The Servicer 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, indicate in its computer files that
the Eligible Receivables in the Accounts in the Pool of Accounts have been sold
and transferred by the Original Seller to the Purchaser hereunder and by the
Purchaser to the Trust under the Trust Sale and Servicing Agreement.
(c) Except as otherwise required to comply with all Requirements of
Law, the Servicer may change the terms and provisions of the Floor Plan
Financing Agreements or the Floor Plan Financing Guidelines in any respect
(including the calculation of the amount or the timing of charge-offs and the
rate of the finance charge assessed thereon), only if:
(i) in the reasonable belief of the Servicer, no Early
Amortization Event shall occur as a result of such change;
(ii) such change is made applicable to the comparable
segment of any similar portfolio of accounts serviced by the Servicer
and not only to the Accounts in the Pool of Accounts; and
(iii) in the case of a reduction in the rate of such finance
charges, the Servicer (and, if the Original Seller is not then the
Servicer, the Original Seller) does not reasonably expect any such
reduction, after considering amounts due and amounts payable under any
Specified Support Agreements and Investment Proceeds for the related
period, to result in the Net Receivables Rate for any Collection
Period being less than the sum of (A) the weighted average of the
rates of interest payable to all holders of Securities and (B) the
Monthly Servicing Fee for the related period;
provided, however, that nothing herein shall prevent the Servicer from modifying
the terms of the Floor Plan Financing Agreement with any dealer on a
case-by-case basis in a manner consistent with the Floor Plan Financing
Guidelines.
SECTION 3.03. Servicing Compensation; Payment of Certain Expenses by
the Servicer. The Servicer is entitled to receive the Monthly Servicing Fee as
described in the Trust Sale and Servicing Agreement. The Monthly Servicing Fee
shall be payable to the Servicer solely to the extent amounts are available for
payment in accordance with the terms of the Trust Sale and Servicing Agreement.
Subject to any limitations on the Servicer's liability under the Trust Sale and
Servicing Agreement, the Servicer shall be required to pay all expenses incurred
by it in connection with its activities under this Agreement and the Trust Sale
and Servicing Agreement (including disbursements of the Issuer, fees and
disbursements of any trustees, accountants and outside auditors, taxes imposed
on the Servicer, expenses incurred in connection with distributions and reports
to Securityholders and all other fees and expenses not expressly stated under
this Agreement or the Trust Sale and Servicing Agreement to be for the account
of the Securityholders, but in no event including federal, state and local
income and franchise taxes, if any, of the Issuer or any holder of the
Securities).
SECTION 3.04. Representations, Warranties and Covenants of the
Servicer.
(a) The Servicer hereby makes, and any successor Servicer by its
appointment under this Agreement and under the Trust Sale and Servicing
Agreement shall make, on each Closing Date (and on the date of any such
appointment) the following representations, warranties and covenants on which
the Purchaser relies in accepting and holding the Receivables and the related
Collateral Security hereunder and the Issuer shall rely in acquiring and holding
such Receivables and the related Collateral Security under the Trust Sale and
Servicing Agreement and in issuing the Securities:
(i) Organization and Good Standing. The Servicer has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware (or, in the case of a
Servicer other than the Original Seller, other applicable law of its
jurisdiction of incorporation), with power and authority to own its
properties and to conduct its businesses as such properties are
presently owned and such businesses are presently conducted.
(ii) Due Qualification. The Servicer 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 each jurisdiction in which the
conduct of its businesses requires such qualification, except where
the failure to so qualify or obtain licenses or approvals would not
have material adverse effect on its ability to perform its obligations
under this Agreement.
(iii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and the Trust Sale and
Servicing Agreement, to carry out the terms of each such agreement and
to service the Accounts in the Pool of Accounts and the Receivables
arising therein as provided herein and in the Trust Sale and Servicing
Agreement, and the execution, delivery and performance of this
Agreement and the Trust Sale and Servicing Agreement have been duly
authorized by the Servicer by all necessary corporate action on the
part of the Servicer.
(iv) Binding Obligation. This Agreement constitutes, and the
Trust Sale and Servicing Agreement, when duly executed and delivered
by the Servicer, shall constitute, the legal, valid and binding
obligation of the Servicer enforceable in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereinafter in effect, 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.
(v) No Violation. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement and
the Trust Sale and Servicing Agreement by the Servicer and the
fulfillment of the terms of this Agreement and the Trust Sale and
Servicing Agreement by the Servicer, shall not conflict with, result
in any breach of any of the terms and provisions of or constitute
(with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Servicer, or any
indenture, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed
of trust or other instrument (other than pursuant to the Basic
Documents), or violate any law or, to the best of the Servicer's
knowledge, any order, rule or regulation applicable to the Servicer of
any Governmental Authority having jurisdiction over the Servicer 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 under this Agreement or the Trust Sale and Servicing
Agreement.
(vi) No Proceedings. To the Servicer's knowledge, there are
no Proceedings or investigations pending, or threatened, against the
Servicer before any Governmental Authority having jurisdiction over
the Servicer or its properties (A) asserting the invalidity of this
Agreement or the Trust Sale and Servicing Agreement or any Securities
issued thereunder, (B) seeking to prevent the issuance of the such
Securities, the execution of this Agreement or the consummation of any
of the transactions contemplated by this Agreement or the Trust Sale
and Servicing Agreement or (C) seeking any determination or ruling
that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity and enforceability
of, this Agreement or the Trust Sale and Servicing Agreement.
(vii) Compliance with Requirements of Law. The Servicer
shall duly satisfy all obligations on its part to be fulfilled under
or in connection with the Receivables and the Accounts to be serviced
under this Agreement and the Trust Sale and Servicing Agreement, shall
maintain in effect all qualifications required under Requirements of
Law in order to service properly such Receivables and such Accounts
and shall comply in all material respects with all Requirements of Law
in connection with servicing such Receivables and such Accounts,
except, in each case, where a failure to do so would not have a
material adverse effect on the interests of the Securityholders.
(viii) No Rescission or Cancellation. Except pursuant to the
Floor Plan Financing Guidelines, the Servicer shall not permit any
rescission or cancellation of any Receivable sold and assigned to the
Purchaser hereunder that the Servicer services under this Agreement
and the Trust Sale and Servicing Agreement, except as ordered by a
court of competent jurisdiction or other Governmental Authority.
(ix) Protection of Interested Party Rights. The Servicer
shall take no action, nor omit to take any action, which would impair
the rights or interests of Interested Parties in the Receivables sold
and assigned to the Purchaser hereunder that the Servicer services
under this Agreement and the Trust Sale and Servicing Agreement or in
the related Vehicle Collateral Security nor shall it reschedule,
revise or defer payments due on any such Receivable except, in each
case, in a manner consistent with the Floor Plan Financing Guidelines
or as otherwise contemplated herein or in the Trust Sale and Servicing
Agreement. The Servicer shall not permit any such Receivable to become
subject to any right of set-off or any offsetting balance.
(x) Negative Pledge. Except for the conveyances hereunder to
the Issuer pursuant to the Trust Sale and Servicing Agreement and the
pledge of the Trust Estate to the Indenture Trustee pursuant to the
Indenture, and as provided in Section 6.03, the Servicer shall not
sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist, any Lien on any Receivable
sold and assigned to the Purchaser hereunder (and any related
Collateral Security), whether now existing or hereafter created, or
any interest therein, and the Servicer shall defend the right, title
and interest of the Purchaser, the Issuer 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
Purchaser or the Servicer. The Servicer shall notify the Purchaser
promptly after becoming aware of any Lien on such property other than
the conveyances hereunder or under the Trust Sale and Servicing
Agreement or the Indenture.
(b) Notice of Breach. Upon discovery by the Purchaser or the Servicer
of a breach of any of the representations, warranties and covenants set forth in
this Section 3.04, the party discovering such breach shall give prompt written
notice to the other party.
(c) Purchase of Receivables. If any covenants of the Servicer under
Section 3.04(a)(viii), (ix) or (x) has not been complied with in all material
respects with respect to any Eligible Receivable or Account in the Pool of
Accounts and such noncompliance has a material adverse effect on the interests
of Securityholders or any other Interested Parties in such Receivable or such
Account, the Servicer shall purchase such Receivable (or, in the case of a
breach affecting less than the entire principal amount of a Receivable, to the
extent of the breach) or all Eligible Receivables under such Account (each, an
"Administrative Receivable") from the Issuer, on the terms and conditions set
forth in this Section 3.04.
(d) Payment of Purchase Price. The Servicer shall purchase each
Administrative Receivable no later than two Business Days (or such other period
as may be agreed by the Applicable Trustee) following discovery by the Servicer
(including through the receipt of notice thereof) of the event giving rise to
such Administrative Receivable by depositing in the Collection Account, on the
date on which such purchase is deemed to occur, an amount (in immediately
available funds) equal to the principal amount of such Receivable plus accrued
and unpaid interest thereon through the date of purchase. The amount so
deposited with respect to a Receivable (an "Administrative Purchase Payment")
shall be included in Trust Principal Collections (to the extent of the principal
amount of such Receivable) and Interest Collections (as to the remainder of such
amount) on such date and shall be applied in accordance with the terms of this
Agreement and the Trust Sale and Servicing Agreement.
(e) Sole Remedy. The obligation of the Servicer to purchase
Receivables as described in this Section 3.04, and to make the deposits required
to be made to the Collection Account as provided in the preceding paragraph,
shall constitute the sole remedy respecting the event giving rise to such
obligation available to any Securityholders, the Purchaser, the Owner Trustee,
the Indenture Trustee or the Issuer.
SECTION 3.05. Servicer's Accounting and Reports.
(a) On or before each Determination Date, the Servicer shall deliver
to the Purchaser, the Owner Trustee, the Indenture Trustee and the Rating
Agencies a Servicer's Accounting with respect to the immediately preceding
Collection Period executed by an Authorized Officer of the Servicer containing
all information necessary for making the allocations, deposits and distributions
required by the Trust Sale and Servicing Agreement, the Trust Agreement and the
Indenture on the related Distribution Date, and all information necessary to
each such party for sending any statements required to be sent to
Securityholders with respect to such Distribution Date under the Trust Sale and
Servicing Agreement.
(b) On each Business Day, the Servicer shall deliver to the Indenture
Trustee a Servicer's Accounting executed by an Authorized Officer of the
Servicer (i) containing 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) of the Trust Sale and
Servicing Agreement and (ii) if any series or class of Securities is then in a
Payment Period, Cash Accumulation Period or Rapid Amortization Period, or if the
Trust is then in an Early Amortization Period or a Wind-Down period, containing
such instructions and computations as are necessary to effect the allocation and
application of Principal Collections and other Available Trust Principal on such
day.
(c) At any time that the Original Seller does not have a long-term
rating of at least BBB- from Standard & Poor's and at least Baa3 from Moody's,
the Servicer shall identify on a daily basis all Eligible Receivables and, on or
before each Determination Date, the Servicer shall deliver to the Owner Trustee
a list identifying all Eligible Receivables as of the last day of the related
Collection Period.
SECTION 3.06. Pre-Closing Collections. Within two Business Days after
the Initial Closing Date, the Original Seller shall deliver to the Purchaser all
collections on the Receivables in the Accounts in the Pool of Accounts held by
the Original Seller on the Initial Closing Date to the extent such collections
would be required to be on deposit on such date if this Agreement and the Trust
Sale and Servicing Agreement had been in effect from and after the Initial
Cut-Off Date and the Revolving Period had commenced on such date. The Purchaser
hereby directs the Original Seller to deposit such amount on its behalf into the
Collection Account.
SECTION 3.07. Collections Received by the Original Seller. the
Original Seller hereby agrees to deliver all Collections on the Receivables in
the Accounts in the Pool of Accounts received by the Original Seller from or on
behalf of Dealers to the Servicer and consents to the application, allocation
and distribution thereof in accordance with the terms and provisions of this
Agreement and the Trust Sale and Servicing Agreement.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.01. Representations and Warranties of the Original Seller
Relating to the Accounts and the Receivables.
(a) Representations and Warranties. As of the dates set forth below,
the Original Seller makes the following representations and warranties to the
Purchaser as to the Accounts in the Pool of Accounts and the Receivables sold to
the Purchaser hereunder, on which the Purchaser relies in accepting such
Receivables:
(i) as of the Initial Cut-Off Date, each Account included in
the Pool of Accounts is an Eligible Account;
(ii) as of the Initial Cut-Off Date, each Receivable that is
identified as an Eligible Receivable and conveyed to the Purchaser on
the Initial Closing Date is an Eligible Receivable;
(iii) as of each Additional Cut-Off Date, each related
Additional Account is an Eligible Account and each Receivable arising
thereunder that is identified as an Eligible Receivable and conveyed
to the Purchaser on the related Addition Date is an Eligible
Receivable; and
(iv) as of each date that Receivables are sold and
transferred hereunder pursuant to Section 2.01(b), each Receivable
that is identified as an Eligible Receivable and so conveyed to the
Purchaser on such date is an Eligible Receivable.
(b) Survival; Notice of Breach. The representations and warranties set
forth in this Section 4.01 shall survive the transfer and assignment of the
Eligible Receivables in the Accounts in the Pool of Accounts and related items
to the Purchaser from time to time and the subsequent assignment and transfer of
its interests therein to the Issuer pursuant to the Trust Sale and Servicing
Agreement. Upon discovery by the Original Seller or the Purchaser of a breach of
any of the representations and warranties set forth in this Section 4.01, the
party discovering such breach shall give prompt written notice to the other
party.
(c) Repurchase. the Original Seller acknowledges that the Purchaser
shall assign its rights and remedies hereunder with respect to the Eligible
Receivables arising in the Accounts in the Pool of Accounts to the Issuer under
the Trust Sale and Servicing Agreement. the Original Seller hereby covenants and
agrees with the Purchaser that (i) in the event of a breach of any of the
Original Seller's representations and warranties contained in Section 4.01(a)
with respect to any Receivable or with respect to any Account that materially
and adversely affects the interests of the Purchaser or the Trust in any
Receivable or (ii) in the event that the payment of all or a portion of the
principal amount of any Receivable held by the Purchaser or the Trust is
deferred pursuant to [DPP] or any other installment sales program or similar
arrangement, unless and to the extent such breach or deferral shall have been
cured in all material respects, the Original Seller shall repurchase the
interest of the Issuer in such Receivable (to the extent of such breach or
deferral) on the date and for the amount specified in Section 2.5 of the Trust
Sale and Servicing Agreement, without further notice from the Purchaser
hereunder and without any representation, warranty or recourse from the
Purchaser or the Issuer. Without limiting the generality of the foregoing, a
Receivable shall not be an Eligible Receivable, and thus shall be 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
created in respect of a Vehicle which was refused or returned by the related
Dealer.
(d) Sole Remedy. The obligation of the Original Seller to repurchase
any Receivable shall constitute the sole remedy respecting the event giving rise
to such obligation available to the Purchaser and to any Interested Party.
SECTION 4.02. Representations and Warranties of the Original Seller
Relating to the Original Seller and the Agreement.
(a) Representations and Warranties. the Original Seller, in its
capacity as seller, hereby makes as of each Closing Date the following
representations and warranties on which the Purchaser relies. The following
representations and warranties shall survive the sale, transfer and assignment
of the Receivables hereunder:
(i) Organization and Good Standing. the Original Seller has
been duly organized and is validly existing as a [ ] in good standing
under the laws of the State of [ ], with power and authority to own
its properties and to conduct its businesses as such properties are
presently owned and such businesses are presently conducted;
(ii) Due Qualification. the Original 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 each jurisdiction in
which the conduct of its businesses requires such qualification,
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 Original 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 Original Seller by all necessary corporate action on
the part of the Original Seller;
(iv) No Violation. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms of this Agreement by the Original 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 articles of incorporation or by-laws of the
Original Seller, or any indenture, agreement, mortgage, deed of trust
or other instrument to which the Original 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 Original Seller knowledge, any order, rule or
regulation applicable to the Original Seller of any Governmental
Authority having jurisdiction over the Original 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 Purchaser or any Interested Party under this
Agreement or the Trust Sale and Servicing Agreement;
(v) No Proceedings. To the Original Seller knowledge, there
are no Proceedings or investigations pending, or threatened, against
the Original Seller before any Governmental Authority having
jurisdiction over the Original Seller or its properties (A) asserting
the invalidity of this Agreement, the Trust Sale and Servicing
Agreement, the Custodian Agreement or the Administration Agreement,
(B) seeking to prevent the execution of this Agreement or the
consummation of any of the transactions contemplated by this
Agreement, the Trust Sale and Servicing Agreement, the Custodian
Agreement or the Administration Agreement or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Original Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Trust Sale and
Servicing Agreement, the Custodian Agreement or the Administration
Agreement;
(vi) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Original Seller, enforceable
against the Original Seller in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect 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;
(vii) Record of Accounts. The Schedule of Accounts is an
accurate and complete listing in all material respects of all of the
Accounts in the Pool of Accounts as of the Initial Cut-Off Date or the
applicable Additional Cut-Off Date, as the case may be, and the
information contained therein with respect to the identity of such
Accounts is true and correct in all material respects; and
(viii) Valid Sale. With respect to the Initial Accounts,
this Agreement and the related assignment to be delivered on the
Initial Closing Date or, in the case of Additional Accounts, the
related assignment as described in Section 2.03(b), when duly executed
and delivered, shall constitute a valid sale, transfer and assignment
to the Purchaser of all right, title and interest of the Original
Seller in, to and under the Eligible Receivables thereunder and the
related Vehicle Collateral Security, whether then existing or
thereafter created, and the proceeds thereof, enforceable against
creditors of and purchasers from the Original Seller. To the extent
such filings are required therefor, upon the filing of the financing
statements described in Section 7.02(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 Purchaser
shall have a first priority perfected ownership interest in such
property, except for Liens permitted under Section 4.04(a). Except as
otherwise provided in the Trust Sale and Servicing Agreement or this
Agreement, neither the Original Seller nor any Person claiming through
or under the Original Seller has any claim to or interest in the Trust
Estate.
(b) Survival; Notice of Breach. The representations and warranties set
forth in this Section 4.02 shall survive the transfer and assignment of the
Receivables and related items to the Purchaser hereunder and the subsequent
assignment and transfer of its interests therein to the Issuer pursuant to the
Trust Sale and Servicing Agreement. Upon discovery by the Original Seller or the
Purchaser of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the other
party.
(c) Repurchase. If (i) the Purchaser is required to purchase
Receivables and related Collateral Security pursuant to Section 3.1(c) of the
Trust Sale and Servicing Agreement and (ii) the condition giving rise to such
purchase obligation shall also constitute a breach of a representation or
warranty pursuant to Section 4.02(a), the Original Seller shall repurchase such
Receivables and such Collateral Security and shall pay to the Purchaser, prior
to the time the Purchaser is required to pay such amount pursuant to the Trust
Sale and Servicing Agreement, an amount equal to the Reassignment Amount.
(d) Sole Remedy. The obligation of the Original Seller to purchase
such Receivables and such Collateral Security pursuant to this Section 4.02
shall constitute the sole remedy available to the Purchaser and to any
Interested Party against the Original Seller respecting the event giving rise to
such obligation.
SECTION 4.03. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Original Seller as of each
Closing Date that:
(a) Organization and Good Standing. The Purchaser has been duly
organized 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
arising in the Accounts in the Pool of Accounts and the Collateral Security
related thereto;
(b) Due Qualification. The Purchaser 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 qualification, 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;
(c) Power and Authority. The Purchaser 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 Purchaser by all necessary corporate action on the
part of the Purchaser;
(d) No Violation. The execution of this Agreement and the consummation
of the transactions contemplated by this Agreement by the Purchaser and the
fulfillment of the terms of this Agreement by the Purchaser 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 Purchaser, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Purchaser 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 Purchaser's knowledge, any
order, rule or regulation applicable to the Purchaser of any Governmental
Authority having jurisdiction over the Purchaser 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 Original
Seller or any Interested Party under this Agreement or the Trust Sale and
Servicing Agreement;
(e) No Proceedings. To the Purchaser's knowledge, there are no
Proceedings or investigations pending, or threatened, against the Purchaser
before any Governmental Authority having jurisdiction over the Purchaser or its
properties (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the execution of this Agreement or the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any determination
or ruling that might materially and adversely affect the performance by the
Purchaser of its obligations under, or the validity or enforceability of, this
Agreement; and
(f) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors' rights
in general and by general principles or equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
SECTION 4.04. Covenants of the Original Seller. The Original Seller
hereby covenants that:
(a) Negative Pledge. Except for the conveyances hereunder and under
the Trust Sale and Servicing Agreement and the pledge of the Trust Estate to the
Indenture Trustee under the Indenture and as provided in Section 6.03, the
Original 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, and the Original Seller shall defend the right, title and interest of
the Purchaser 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 Original Seller . The Original Seller shall notify the
Purchaser and the Issuer promptly after becoming aware of any Lien on any such
property other than the conveyances hereunder or under the Trust Sale and
Servicing Agreement or the Indenture. Nothing herein shall prohibit the Original
Seller from granting, creating, incurring or suffering to exist any Lien on all
or any portion of the Retained Property.
(b) Delivery of Collections. All payments received by the Original
Seller from or on behalf of a Dealer in respect of Receivables in any Accounts
in the Pool of Accounts or any Collateral Security (except as contemplated in
Section 6.03 with respect to any property constituting Common Collateral that is
not Vehicle Collateral Security in connection with any Other Indebtedness) shall
be received by the Original Seller in its capacity as Servicer, unless the
Original Seller is no longer the Servicer, in which case the Original Seller
shall deliver all such payments to the Servicer as soon as practicable after
receipt thereof, but in no event later than two Business Days after receipt
thereof.
(c) Compliance with Requirements of Law. The Original Seller shall
comply in all material respects with all Requirements of Law applicable to the
Original Seller, except where any such failure to comply would not have a
material adverse effect on its ability to perform its obligations under this
Agreement.
(d) No Petition. Neither the Servicer nor the Original Seller shall at
any time institute against the Purchaser any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law.
ARTICLE V
CERTAIN MATTERS RELATING TO ORIGINAL SELLER
SECTION 5.01. Merger or Consolidation of, or Assumption of the
Obligations of, the Original Seller.
(a) Notwithstanding anything to the contrary in this Agreement, any
Person (i) into which the Original Seller may be merged or consolidated, (ii)
resulting from any merger, conversion or consolidation to which the Original
Seller shall be a party, (iii) succeeding to the business of the Original Seller
or (iv) more than 50% of the voting interests of which is owned, directly or
indirectly, by _________________ and which is otherwise originating receivables,
which Person in any of the foregoing cases (other than the Original Seller as
the surviving entity of such merger or consolidation) executes an agreement of
assumption to perform every obligation of the Original Seller, as seller, under
this Agreement and the Trust Sale and Servicing Agreement, shall be the
successor to the Original Seller under this Agreement, as seller, without the
execution or filing of any document or any further act on the part of any of the
parties to this Agreement or the Trust Sale and Servicing Agreement, anything in
this Agreement to the contrary notwithstanding.
(b) The Original Seller shall provide notice of any merger,
consolidation or succession pursuant to this Section 5.01 to the Rating
Agencies.
SECTION 5.02. The Original Seller Indemnification of the Purchaser.
The Original Seller shall indemnify the Purchaser for any liability as a result
of the failure of an Eligible Receivable sold hereunder to be originated in
compliance with all Requirements of Law. This indemnity obligation shall be in
addition to any obligation that the Original Seller may otherwise have.
SECTION 5.03. The Original Seller Acknowledgment of Transfers to the
Issuer. By its execution of the Trust Sale and Servicing Agreement, the Original
Seller acknowledges that the Purchaser shall, pursuant to the Trust Sale and
Servicing Agreement, transfer the Receivables purchased hereunder and related
Collateral Security to the Issuer and assign its rights associated therewith
under this Agreement to the Issuer, subject to the terms and conditions of the
Trust Sale and Servicing Agreement, and that the Issuer shall in turn further
pledge, assign or transfer its rights in such property and this Agreement to the
Indenture Trustee under the Indenture. The Original Seller further acknowledges
that the Purchaser shall assign its rights under the Custodian Agreement to the
Issuer.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Additional Obligations of the Original Seller and the
Purchaser.
(a) Supplemental Principal Allocations. On or before the Business Day
prior to each Monthly Distribution Date for the Wind Down Period or an Early
Amortization Period or the Payment Period for the ______ Term Notes, the
Original Seller shall deposit into the Collection Account, on behalf of the
Purchaser, an amount equal to the Supplemental Principal Allocation for such
Monthly Distribution Date. Such amount shall be recorded as an advance under the
Intercompany Advance Agreement and shall bear interest and be payable as
provided therein.
(b) Removed Accounts. With respect to each Removed Account, if and to
the extent that any related Receivable held by the Trust on the related Removal
Commencement Date (determined without giving effect to the special allocation of
Principal Collections pursuant to Section 2.8(c) or Section 2.9(b), as
applicable, of the Trust Sale and Servicing Agreement) is charged-off as
uncollectible at any time following the related Removal Date, the Purchaser
shall pay the amount so charged-off to the Original Seller.
SECTION 6.02. Effect of Involuntary Case Involving the Original
Seller.
(a) Suspension of Purchases. The Purchaser shall suspend the purchase
(and the Original Seller shall suspend the sale) of Receivables hereunder if
either party shall receive notice at its principal corporate office that the
Original Seller has become an involuntary party to (or has been made the subject
of) any proceeding provided for by any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Original Seller or relating to all or substantially all of its property (an
"Involuntary Case").
(b) Resumption of Purchases. Notwithstanding any cessation or
suspension of purchases pursuant to Section 6.02(a), if the Original Seller or
the Purchaser has obtained an order from the court having jurisdiction over an
Involuntary Case approving the continuation of the sale of Receivables by the
Original Seller to the Purchaser and/or approving the sale of Receivables
originating in the Accounts in the Pool of Accounts since the date of the
suspension of such sales on the same terms (including Section 6.03 hereof) as,
or on terms that do not have a material adverse effect on Securityholders as
compared to, the terms in effect prior to the commencement of such Involuntary
Case, and further providing that the Purchaser and any of its transferees
(including the Issuer) may rely on such order for the validity and nonavoidance
of such transfer (the "Order"), the Purchaser may resume the purchase (and the
Original Seller may resume the sale) of Receivables pursuant to the terms
hereof; provided, however, that so long as such Involuntary Case shall continue,
notwithstanding anything in this Agreement to the contrary, the purchase price
of such Receivables (which shall not be less than reasonably equivalent value
therefor or greater than the principal balance thereof) shall be paid by the
Purchaser to the Original Seller in cash not later than the same Business Day of
any such sale, and such Receivables shall be considered transferred to the
Purchaser only to the extent that the purchase price therefor has been paid in
cash on the same Business Day.
(c) Cessation of Purchases. If an Order is obtained but subsequently
is reversed or rescinded or expires, the Purchaser shall immediately cease to
purchase (and the Original Seller shall immediately cease to sell) Receivables
hereunder. Notwithstanding anything contained in Section 6.02(b), if an
Involuntary Case has not been dismissed by the first Business Day following the
60 day period beginning on the day on which notice of an Involuntary Case was
received by either party, whether or not an Order was obtained, the Purchaser
shall not thereafter purchase Receivables from the Original Seller hereunder and
the Original Seller shall not thereafter designate Additional Accounts for
transfer to the Purchaser or sell Receivables hereunder.
SECTION 6.03. Intercreditor Agreements.
(a) Common Collateral. In connection with loans or advances made or to
be made by the Original Seller to a Dealer from time to time other than pursuant
to an Account (collectively, "Other Indebtedness"), the Original Seller may have
a security interest in property constituting Collateral Security (the "Common
Collateral").
(b) Agreements of the Original Seller with respect to Common
Collateral. The Original Seller agrees that with respect to the Receivables of
each Dealer:
(i) the Original Seller security interest in any Common
Collateral that is Vehicle Collateral Security (and the proceeds
thereof) in connection with any Other Indebtedness is subordinate to
the security interest therein in connection with such Receivables and
assigned to the Purchaser hereunder;
(ii) the Original Seller shall not apply the proceeds of any
such Common Collateral that is Vehicle Collateral Security in
connection with any Other Indebtedness in any manner that is
materially adverse to the Purchaser or the Issuer and the
Securityholders until all required payments in respect of such
Receivable have been made; and
(iii) in realizing upon any such Common Collateral that is
Vehicle Collateral Security in connection with any such Receivables,
neither the Purchaser nor the Issuer (nor the Servicer on behalf of
either) shall be obligated to protect or preserve the rights of the
Original Seller in such Common Collateral.
(c) Agreements of the Purchaser with respect to Common Collateral.
The Purchaser agrees that with respect to the Receivables of each Dealer:
(i) the Purchaser's security interest in any Common
Collateral that is not Vehicle Collateral Security (and the proceeds
thereof) in connection with such Receivables assigned to the Purchaser
hereunder is subordinate to the security interest therein in
connection with any Other Indebtedness;
(ii) the Purchaser (or the Servicer on its behalf) shall not
apply the proceeds of any such Common Collateral that is not Vehicle
Collateral Security in connection with any such Receivables in any
manner that is materially adverse to the Original Seller until all
required payments in respect of such Other Indebtedness have been
made; and
(iii) in realizing upon any such Common Collateral that is
not Vehicle Collateral Security in connection with such Other
Indebtedness, the Original Seller shall not be obligated to protect or
preserve the rights of the Purchaser or the Issuer in such Collateral
Security.
(d) Obligations of Issuer. The Trust Sale and Servicing Agreement
shall provide that the Issuer is subject to this Section 6.03.
(e) Obligations of Assignees and Transferees. If, other than pursuant
hereto, the Original Seller in any manner assigns or transfers any right or
obligation with respect to any Other Indebtedness or any property constituting
Common Collateral, the Original Seller shall make such assignment or transfer
subject to the provisions of this Section 6.03 and shall require such assignee
or transferee to acknowledge that it takes such assignment or transfer subject
to the provisions of this Section 6.03 and to agree that it shall require the
same acknowledgment from any subsequent assignee or transferee.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. Amendment. This Agreement may be amended from time to
time (subject to Section 10.1(g) of the Trust Sale and Servicing Agreement) by a
written amendment duly executed and delivered by the Original Seller and the
Purchaser.
SECTION 7.02. Protection of Right, Title and Interest in and to
Receivables.
(a) the Original Seller or the Purchaser 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 evidence, preserve, maintain and
protect the interest of the Purchaser hereunder in the Eligible Receivables
arising in the Accounts in the Pool of Accounts and the related Collateral
Security and in the proceeds thereof (including, without limitation, UCC-1
financing statements on or prior to the Initial Closing Date). The Original
Seller shall deliver (or cause to be delivered) to the Purchaser file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.
(b) Within 60 days after the Original Seller makes any change in its
name, identity or corporate structure that would make any financing statement or
continuation statement filed in accordance with Section 7.02(a) seriously
misleading within the meaning of Section 9-402(7) of the UCC, the Original
Seller shall give the Purchaser notice of any such change.
(c) The Original Seller shall give the Purchaser 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 Original Seller shall at all
times maintain its principal executive office within the United States of
America.
(d) 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 Original Seller to the Purchaser, the Original 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 that the Eligible
Receivables in the Accounts in the Pool of Accounts have been sold and
transferred, and the Collateral Security assigned, to the Purchaser pursuant to
this Agreement and that such property has been sold and transferred to the
Issuer pursuant to the Trust Sale and Servicing Agreement and (ii) deliver to
the Purchaser a true and complete list of all such Accounts 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 2.05), shall be the Schedule
of Accounts and is hereby incorporated into and made a part of this Agreement.
(e) The Servicer shall furnish to the Purchaser 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 pursuant to the Trust Sale and Servicing Agreement and to each notice
furnished before such request indicating removal from or addition to the
Accounts in the Pool of Accounts.
SECTION 7.03. Costs and Expenses. The Original Seller agrees to pay
all reasonable out-of-pocket costs and expenses of the Purchaser, including fees
and expenses of counsel, in connection with the perfection as against third
parties of the Purchaser's right, title and interest in, to and under the
Receivables sold hereunder and the enforcement of any obligation of the Original
Seller hereunder.
SECTION 7.04. GOVERNING LAW. THIS AGREEMENT SHALL BE 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 7.05. Notices. All demands, notices and communications upon or
to the Original Seller, the Purchaser, or any other Person identified in Section
10.3 of the Trust Sale and Servicing Agreement under this Agreement shall be
delivered as specified in Appendix B to the Trust Sale and Servicing Agreement.
SECTION 7.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be 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
Securities or rights of any Interested Parties.
SECTION 7.07. Assignment. Notwithstanding anything to the contrary
contained herein, this Agreement may not be assigned by the Original Seller
without the prior written consent of the Purchaser and the Issuer. The Purchaser
may assign all or a portion of its rights, remedies, powers and privileges under
this Agreement to the Issuer pursuant to the Trust Sale and Servicing Agreement.
SECTION7.08. Further Assurances. The Original Seller and the Purchaser
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 party
to more fully effect the purposes of this Agreement, including the execution of
any financing statements or continuation statements relating to the Receivables
for filing under the provisions of the Uniform Commercial Code of any applicable
jurisdiction and to evidence the repurchase of any interest in any Receivable by
the Original Seller or the Servicer.
SECTION 7.09. No Waiver; Cumulative Remedies. No failure or delay on
the part of the Purchaser 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,
powers and privileges provided by law.
SECTION 7.10. 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 7.11. Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Interested Parties
and their respective successors and permitted assigns. Except as otherwise
expressly provided in this Agreement, no other Person shall have any right or
obligation hereunder.
SECTION 7.12. 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 7.13. Confidential Information. The Purchaser agrees that it
shall neither use nor disclose to any Person the names and addresses of Dealers,
except in connection with the enforcement of the Purchaser's rights hereunder,
under the Trust Sale and Servicing Agreement, under the Receivables or as
required by law.
SECTION 7.14. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 7.15. Termination. This Agreement (except for Section 5.02)
shall terminate immediately after the termination of the Trust Sale and
Servicing Agreement; provided, that if at the time of the termination of the
Trust Sale and Servicing Agreement, the Purchaser has not made all payments to
the Original Seller required to be made under Section 6.01, this Agreement
(except for Section 5.02) shall not terminate until immediately after all such
payments have been made.
SECTION 7.16. No Petition Covenants. Notwithstanding any prior
termination of this Agreement, the Original Seller shall not, prior to the date
which is one year and one day after the final distribution with respect to the
Securities to the Note Distribution Account, the Revolver Distribution Account
or the Certificate Distribution Account, as applicable, acquiesce, petition or
otherwise invoke or cause the Purchaser to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Purchaser 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 Purchaser or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of the
Purchaser.
SECTION 7.17. Jurisdiction. Any action or proceeding arising out of or
relating to this Agreement shall be submitted to the exclusive jurisdiction of
any United States Federal or New York State Court sitting in the Borough of
Manhattan, New York, New York.
* * * *
IN WITNESS WHEREOF, the parties hereby have caused this Pooling and
Servicing Agreement to be executed by their respective officers thereunto duly
authorized as of the date and year first above written.
-------------------------------------,
Seller and Servicer
By:
-----------------------------------
Name:
Title:
ACE SECURITIES CORP.,
Purchaser
By:
-------------------------------------
Name:
Title:
EXHIBIT A
LIST OF LOCATIONS OF THE
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. ______________________________________
EXHIBIT B
FORM OF ASSIGNMENT FOR INITIAL CLOSING DATE
For value received, in accordance with the Pooling and Servicing
Agreement, dated as of _____________ (the "Pooling and Servicing Agreement"),
between ______________________, a _____________ corporation ("the Original
Seller"), and ACE Securities Corp., a Delaware corporation (the "Purchaser"),
the Original Seller does hereby sell, assign, transfer and otherwise convey unto
the Purchaser, without recourse, all of its right, title and interest in, to and
under 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 and 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 and
all proceeds thereof (including "proceeds" as defined in Section 9-306 of the
UCC and Recoveries).
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 Purchaser of any obligation of the Servicer, the Original Seller (if the
Original Seller is not the Servicer), ______________ 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 Original Seller and the Purchaser 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
Original Seller to the Purchaser and the beneficial interest in and title to
such property shall not be part of the Original Seller's estate in the event of
the filing of a bankruptcy petition by or against the Original 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
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of _____________.
-------------------------------------
By:
----------------------------------
Name:
Title:
EXHIBIT C
FORM OF ASSIGNMENT FOR EACH ADDITION DATE
For value received, in accordance with the Pooling and Servicing
Agreement, dated as of _____________ (the "Pooling and Servicing Agreement"),
between ______________________, a ____________________ ("the Original Seller"),
and ACE Securities Corp., a Delaware corporation (the "Purchaser"), the Original
Seller does hereby sell, assign, transfer and otherwise convey unto the
Purchaser, without recourse, with respect to the Additional Accounts to which
this Assignment relates, all of its right, title and interest in, to and under
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 and 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 and all proceeds thereof (including
"proceeds" as defined in Section 9-306 of the UCC and Recoveries).
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 Purchaser of any obligation of the Servicer, the Original Seller (if the
Original Seller is not the Servicer), ______________ 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 Original Seller and the Purchaser 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
Original Seller to the Purchaser and the beneficial interest in and title to
such property shall not be part of the Original Seller's estate in the event of
the filing of a bankruptcy petition by or against the Original 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
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of _____________ ____,_______.
-------------------------------------
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 2.03(b)(viii) of the Pooling and Servicing Agreement
The opinion set forth below may be subject to standard qualifications,
assumptions, limitations and exceptions.
The Assignment delivered on the Addition Date has been duly
authorized, executed and delivered by ____, and constitutes the valid and
legally binding obligation of ____, enforceable against ____ in accordance with
its terms.
APPENDIX A
PART I
For ease of reference, capitalized terms defined herein have been
consolidated with and are contained in Appendix A to the Trust Sale and
Servicing Agreement of even date herewith among the Original Seller, ACE
Securities Corp. and ________________________.
PART II
For ease of reference, the rules of construction have been
consolidated with and are contained in Part II of Appendix A to the Trust Sale
and Servicing Agreement of even date herewith among the Original Seller, ACE
Securities Corp. and ____________________________________.
PART III
For ease of reference, the notice address and procedures have been
consolidated with and are contained in Part II of Appendix B to the Trust Sale
and Servicing Agreement of even date herewith among the Original Seller, ACE
Securities Corp. and _______________________________________________.