EXECUTION COPY
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SALE AND SERVICING AGREEMENT
among
ACE RV AND MARINE TRUST 2001-RV1
as Issuer
ACE SECURITIES CORP.
as Seller
WELLS FARGO BANK, N.A.
as Servicer and Custodian
WELLS FARGO BANK NORTHWEST, N.A.
WELLS FARGO BANK NEW MEXICO, N.A.
and
THE CHASE MANHATTAN BANK
as Indenture Trustee
Dated as of June 1, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions............................................1
SECTION 1.2. Other Interpretive Provisions..........................1
ARTICLE II.
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables..............................2
ARTICLE III.
THE RECEIVABLES
SECTION 3.1. Representations and Warranties with respect to
the Receivables.........................................3
SECTION 3.2. Repurchase upon Breach..................................8
SECTION 3.3. Custodian of Receivable Files...........................9
SECTION 3.4. Representations and Warranties with respect to
Revised Article 9......................................12
ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer.....................................13
SECTION 4.2. Collection of Receivable Payments......................14
SECTION 4.3. Realization upon Receivables...........................14
SECTION 4.4. Physical Damage Insurance..............................15
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.16
SECTION 4.6. Covenants of Servicer..................................16
SECTION 4.7. Purchase of Receivables by Servicer upon Breach........16
SECTION 4.8. Servicing Fee..........................................17
SECTION 4.9. Servicer's Report......................................17
SECTION 4.10. Annual Statement as to Compliance; Notice of Default...18
SECTION 4.11. Annual Independent Certified Public Accountants'
Report.................................................18
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables...............................18
SECTION 4.13. Reports to the Commission..............................19
SECTION 4.14. Reports to the Rating Agencies.........................19
SECTION 4.15. Servicer Expenses......................................19
ARTICLE V.
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.1. Establishment of Collection Account....................20
SECTION 5.2. Collections............................................22
SECTION 5.3. [Reserved].............................................23
SECTION 5.4. Additional Deposits....................................23
SECTION 5.5. Distributions..........................................23
SECTION 5.6. Statements to Certificateholders and Noteholders.......25
SECTION 5.7. Net Deposits...........................................26
SECTION 5.8. Reserve Account........................................26
ARTICLE VI.
SELLER
SECTION 6.1. Representations of Seller..............................27
SECTION 6.2. Continued Existence....................................28
SECTION 6.3. Liability of Seller; Indemnities.......................29
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller..............................29
SECTION 6.5. Limitation on Liability of Seller and Others...........30
SECTION 6.6. Seller May Own Certificates or Notes...................30
SECTION 6.7. Security Interest......................................30
SECTION 6.8. Indebtedness of Seller.................................30
ARTICLE VII.
SERVICER
SECTION 7.1. Representations of Servicer............................30
SECTION 7.2. Indemnities of Servicer................................32
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer.............................33
SECTION 7.4. Limitation on Liability of Servicer and Others.........33
SECTION 7.5. Wells Fargo Bank, N.A. Not To Resign as Servicer.......34
SECTION 7.6. Existence..............................................34
SECTION 7.7. Servicer May Own Notes or Certificates.................34
ARTICLE VIII.
SERVICER TERMINATION EVENTS
SECTION 8.1. Servicer Termination Event.............................35
SECTION 8.2. Appointment of Successor...............................36
SECTION 8.3. Payment of Servicing Fee...............................37
SECTION 8.4. Notification to Noteholders and Certificateholders.....37
SECTION 8.5. Waiver of Past Defaults................................37
ARTICLE IX.
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables; Termination
Notice..............................................37
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment..............................................38
SECTION 10.2. Protection of Title to Trust Property..................39
SECTION 10.3. Notices................................................41
SECTION 10.4. Assignment.............................................42
SECTION 10.5. Litigation and Indemnities.............................42
SECTION 10.6. Limitations on Rights of Others........................42
SECTION 10.7. Severability...........................................42
SECTION 10.8. Separate Counterparts..................................43
SECTION 10.9. Headings...............................................43
SECTION 10.10. Governing Law..........................................43
SECTION 10.11. Assignment to Indenture Trustee........................43
SECTION 10.12. Nonpetition Covenant...................................43
SECTION 10.13. Limitation of Liability of Owner Trustee and
Indenture Trustee...................................43
SECTION 10.14. Further Assurances.....................................44
SECTION 10.15. No Waiver; Cumulative Remedies.........................44
SCHEDULES
SCHEDULE A -- Schedule of Receivables
SCHEDULE B -- Location of Receivables
SCHEDULE C -- Permitted Exceptions in Receivable Files
SCHEDULE D -- FreedomNation Receivables Subject to Ship Mortgage Act
EXHIBITS
EXHIBIT A -- Form of Servicer's Report
EXHIBIT B -- Form of Monthly Noteholder and Certificateholder Statement
APPENDIX
APPENDIX X -- Definitions
SALE AND SERVICING AGREEMENT dated as of June 1, 2001 (this
"Agreement") among ACE RV AND MARINE TRUST 2001-RV1, a New York common law trust
("Issuer"), ACE SECURITIES CORP., a Delaware corporation (in its capacity as
seller, "Seller"), WELLS FARGO BANK, N.A., a national banking association
organized under the laws of the United States of America (in its capacity as
servicer, "Servicer" and in its capacity as custodian, "Custodian"), WELLS FARGO
BANK NORTHWEST, N.A., WELLS FARGO BANK NEW MEXICO, N.A. and THE CHASE MANHATTAN
BANK, a New York banking corporation (in its capacity as indenture trustee,
"Indenture Trustee").
WHEREAS, Issuer desires to purchase from Seller a portfolio of
receivables arising in connection with Loans, secured primarily by new and used
recreational vehicles and marine products, originated or purchased from dealers
by an Originator, sold by the Originators to the Transferor under the Sale
Agreements and sold by the Transferor to the Seller under the Purchase
Agreement;
WHEREAS, Seller is willing to sell such receivables to Issuer; and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. Capitalized terms are used in this Agreement
as defined in Appendix X to this Agreement.
SECTION 1.2. OTHER INTERPRETIVE PROVISIONS. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under GAAP; (b) terms defined in Article 9 of the UCC as in effect in the
relevant jurisdiction and not otherwise defined in this Agreement are used as
defined in that Article; (c) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular provision of this Agreement; (d) references to any Article, Section,
Schedule, Appendix or Exhibit are references to Articles, Sections, Schedules,
Appendices and Exhibits in or to this Agreement and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (e) the term "including" means "including without limitation"; (f)
except as otherwise expressly provided herein, references to any law or
regulation refer to that law or regulation as amended from time to time and
include any successor law or regulation; (g) references to any Person include
that Person's successors and assigns; and (h) headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
ARTICLE II.
CONVEYANCE OF RECEIVABLES
SECTION 2.1. CONVEYANCE OF RECEIVABLES. In consideration of Issuer's
delivery to, or upon the order of, Seller of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amounts of the Notes
and the initial Certificate Percentage Interests, respectively, Seller does
hereby sell, transfer, assign, set over and otherwise convey to Issuer, without
recourse, subject to the obligations herein (collectively, the "TRUST
PROPERTY"):
(a) all right, title and interest of Seller in and to the Receivables,
and all moneys received thereon on or after the Cutoff Date;
(b) all right, title and interest of Seller in the security interests
in the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of Seller in the Financed Vehicles and any other property that
shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the
Receivables from claims on any Insurance Policies covering Financed Vehicles or
the Obligors or from claims under any lender's single interest insurance policy
naming any Originator as an insured;
(d) the interest of Seller in any proceeds from (i) any Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement, (ii) a default by
an Obligor resulting in the repossession of the Financed Vehicle under the
applicable Loan or (iii) any Dealer Recourse or other rights relating to the
Receivables under Dealer Agreements;
(e) all right, title and interest in all funds on deposit from time to
time in the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);
(f) all right, title and interest of Seller under the Purchase
Agreement;
(g) all right, title and interest of Seller in any instrument or
document relating to the Receivables; and
(h) the proceeds of any and all of the foregoing.
The sale, transfer, assignment, setting over and conveyance made
hereunder shall not constitute and is not intended to result in an assumption by
Issuer of any obligation of any Originators to the Obligors, the Dealers or any
other Person in connection with the Receivables and the other assets and
properties conveyed hereunder or any agreement, document or instrument related
thereto.
ARTICLE III.
THE RECEIVABLES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
RECEIVABLES.
(a) Each First Security Originator has made the representations and
warranties set forth in SECTION 7(A) and SECTION 7(B) of the First Security Sale
Agreement, each First Security Originator hereby makes each of such
representations and warranties as of the Closing Date (or the Cutoff Date with
respect to representations previously given as of a cutoff date) and consents to
the assignment to Issuer of the Transferor's rights with respect to the
Receivables under the First Security Sale Agreement; provided that the First
Security Originators are not remaking the representations set forth in SECTION
7(B)(14), (18) or (19) with respect to the Receivables set forth on Schedule C
hereto to the extent of the exceptions listed on such Schedule C, (26) or (29)
of the First Security Sale Agreement. Pursuant to the Purchase Agreement,
Transferor has transferred to Seller all of Transferor's right, title and
interest in, to and under the First Security Sale Agreement with respect to the
Receivables to Seller and pursuant to SECTION 2.1 of this Agreement, Seller has
transferred to Issuer all of Seller's right, title and interest in, to and under
the Purchase Agreement, including the representations and warranties of the
First Security Originators therein, upon which Issuer relies in accepting the
First Security Receivables, together with all rights of Seller with respect to
any breach thereof, including the right to require the First Security
Originators to purchase Receivables in accordance with the First Security Sale
Agreement.
(b) Seller hereby makes the following representations and warranties
as to each First Security Receivable conveyed by it to Issuer hereunder on which
Issuer shall rely in acquiring the Receivables. Unless otherwise indicated, such
representations and warranties shall speak as of the Closing Date, but shall
survive the transfer and assignment of the Receivables to Issuer and the pledge
thereof to Indenture Trustee pursuant to the Indenture.
(i) GOOD TITLE. It is the intention of Seller that the transfer
and assignment herein contemplated constitute a sale of the First
Security Receivables from Seller to Issuer and that the beneficial
interest in and title to the First Security Receivables not be part of
Seller's estate in the event of the filing of a bankruptcy petition by
or against Seller under any bankruptcy law. No First Security
Receivable has been sold, transferred, assigned, or pledged by Seller
to any Person other than Issuer. Immediately prior to the transfer and
assignment herein contemplated, Seller had good and marketable title
to the First Security Receivable free and clear of any Lien and had
full right and power to transfer and assign the First Security
Receivable to Issuer and immediately upon the transfer and assignment
of the First Security Receivable to Issuer, Issuer shall have good and
marketable title to the First Security Receivable, free and clear of
any Lien; and Issuer's interest in the First Security Receivable
resulting from the transfer has been perfected under the UCC.
(ii) NO ASSIGNMENT. As of the Closing Date, Seller shall not have
taken any action to convey any right to any Person that would result
in such Person having a right to payments received under the Insurance
Policies or Dealer Agreements, or payments due under the Receivable,
that is senior to, or equal with, that of Issuer.
(iii) PAST DUE. At the Cutoff Date, no First Security Receivable
was more than 59 days past due.
(c) Seller hereby makes the following representations and warranties
as to each FreedomNation Receivable conveyed by it to Issuer hereunder on which
Issuer shall rely in acquiring the Receivables. Unless otherwise indicated, such
representations and warranties shall speak as of the Closing Date, but shall
survive the transfer and assignment of the Receivables to Issuer and the pledge
thereof to Indenture Trustee pursuant to the Indenture.
(i) CHARACTERISTICS OF LOANS. Each FreedomNation Receivable (A)
was originated by (i) a Dealer in the ordinary course of such Dealer's
business and such Dealer had all necessary licenses and permits to
originate FreedomNation Receivables in the state where such Dealer was
located or (ii) directly by the FreedomNation Originator, (B) was duly
and properly executed by the parties thereto, was (i) purchased by the
FreedomNation Originator from a Dealer under an existing agreement
with a Dealer pursuant to which the FreedomNation Originator acquired
FreedomNation Receivables in the ordinary course of business with the
FreedomNation Originator and was validly assigned by such Dealer to
the FreedomNation Originator or (ii) originated directly by the
FreedomNation Originator, (C) contains customary and enforceable
provisions such as to render the rights and remedies of the holder
thereof adequate for realization against the collateral security, (D)
is fully amortizing and provides for level monthly payments (provided
that the payment in the first monthly period and the final monthly
period of the life of the FreedomNation Receivable may be minimally
different from the level payment) which, if made when due shall fully
amortize the amount financed over the original term and yield interest
at the Contract Rate, (E) is a fixed rate, simple interest loan and
(F) shall provide for, in the event that such FreedomNation Receivable
is prepaid, a prepayment that fully pays the principal balance and
includes any accrued and unpaid interest due pursuant to the related
contract through the date of prepayment in an amount at least equal to
the Contract Rate.
(ii) NO FRAUD OR MISREPRESENTATION. Each FreedomNation Receivable
that was originated by a Dealer was sold by the Dealer to the
FreedomNation Originator without any fraud or misrepresentation on the
part of such Dealer in either case.
(iii) COMPLIANCE WITH LAW. All requirements of applicable
federal, state and local laws, and regulations thereunder (including,
without limitation, usury laws, the Federal Truth-in-Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the
Federal Reserve Board's Regulations "B", "M" and "Z", state unfair and
deceptive practices and state adaptations of the National Consumer Act
and of the Uniform Consumer Credit Code and other consumer credit laws
and equal credit opportunity and disclosure laws) in respect of all of
the FreedomNation Receivables, have been complied with in all material
respects, and each FreedomNation Receivable complied at the time it
was originated or made and now complies in all material respects with
all applicable legal requirements.
(iv) ORIGINATION. Each FreedomNation Receivable was originated in
the United States.
(v) BINDING OBLIGATION. Each FreedomNation Receivable represents
the genuine, legal, valid and binding payment obligation of the
Obligor, enforceable by the holder thereof in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(vi) NO GOVERNMENT OBLIGOR. No Obligor is the United States of
America or any State or any agency, department, subdivision or
instrumentality thereof.
(vii) OBLIGOR BANKRUPTCY. No Obligor is identified on the records
of the Seller as being the subject of a current bankruptcy proceeding.
(viii) FREEDOMNATION RECEIVABLE SCHEDULE. The information
regarding the FreedomNation Receivables set forth in the Schedule of
Receivables is true and correct in all material respects as of the
close of business on the Cutoff Date.
(ix) MARKING RECORDS. By the Closing Date, the Seller will have
caused the portions of the electronic ledger relating to the
FreedomNation Receivables to be clearly and unambiguously marked to
show that the FreedomNation Receivables have been transferred to the
Trust.
(x) ADVERSE SELECTION. No selection procedures adverse to the
Trust were utilized in selecting the FreedomNation Receivables from
those receivables owned by Seller eligible for transfer to the
Purchaser pursuant to this Agreement.
(xi) CHATTEL PAPER. Each FreedomNation Receivable constitutes
"chattel paper" within the meaning of the UCC as in effect in the
State of New York.
(xii) ONE ORIGINAL. There is only one original executed copy of
each FreedomNation Receivable.
(xiii) FREEDOMNATION RECEIVABLE FILES COMPLETE. There exists a
Receivable File pertaining to each FreedomNation Receivable and such
Receivable File contains each of the documents referred to in Section
3.3. Each of such documents which is required to be signed by the
Obligor has been signed by the Obligor in the appropriate spaces. All
applicable blanks on any form have been properly filled in and each
form has otherwise been correctly prepared. The Receivable File for
each FreedomNation Receivable currently is in the possession of the
Custodian.
(xiv) FREEDOMNATION RECEIVABLES IN FORCE. As of the Cutoff Date,
no FreedomNation Receivable has been satisfied, subordinated or
rescinded, and the Vehicle securing each such FreedomNation Receivable
has not been released from the lien of the related FreedomNation
Receivable in whole or in part; no provisions of any FreedomNation
Receivable have been waived, altered or modified in any respect since
its origination, except by instruments or documents identified in the
Receivable File; and no FreedomNation Receivable has been modified as
a result of application of the Soldiers and Sailors Civil Relief Act
of 1940, as amended.
(xv) LAWFUL ASSIGNMENT. No FreedomNation Receivable was
originated in, or is subject to the laws of, any jurisdiction the laws
of which would make unlawful, void or voidable the sale, transfer and
assignment of such FreedomNation Receivable under this Agreement to be
entered into by the Purchaser.
(xvi) GOOD TITLE. No FreedomNation Receivable has been sold,
transferred, assigned or pledged by a Dealer to any Person other than
the FreedomNation Originator or by the FreedomNation Originator to any
Person other than the Trust; immediately prior to the conveyance of
the FreedomNation Receivables pursuant to this Agreement, the Seller
was the sole owner of and had good and indefeasible title thereto,
free and clear of any Lien. No Dealer has a participation in, or other
right to receive, proceeds of any FreedomNation Receivable. The Seller
has not taken any action to convey any right to any Person that would
result in such Person having a right to payments received under the
related insurance policies or the related Dealer agreements or the
assignments of the FreedomNation Receivables to the Trust or to
payments due under such FreedomNation Receivables.
(xvii) SECURITY INTEREST IN VEHICLE. The FreedomNation Originator
has a first priority perfected security interest in all of the
Vehicles securing the FreedomNation Receivables. There are no Liens or
claims for taxes, work, labor or materials affecting a Vehicle which
are or may be Liens prior or equal to the lien of the FreedomNation
Receivable.
(xviii) NOTATIONS OF SECURITY INTEREST IN VEHICLE. With respect
to each Vehicle that is subject to the Ship Mortgage Act of 1920, a
filed and fully effective Preferred Mortgage has been placed in favor
of the FreedomNation Originator with respect to such Vehicle. The only
FreedomNation Receivables subject to the Ship Mortgage Act are the
FreedomNation Receivables listed on Schedule D hereto. With respect to
each FreedomNation Receivable, if the related Vehicle is located in a
state in which notation of a security interest on the title document
is required or permitted to perfect such security interest, the title
document shows, or if a new or replacement title document is being
applied for with respect to such Vehicle the title document will be
received within 180 days of the Closing Date and will show the
FreedomNation Originator named as the original secured party under
each FreedomNation Receivable as the holder of a first priority
security interest in such Vehicle. With respect to each such
FreedomNation Receivable for which the title document has not yet been
returned from the applicable registrar of titles, the FreedomNation
Originator has (i) received written evidence from the related Dealer
that such title document showing the FreedomNation Originator as first
lienholder has been applied for or (ii) applied for such title
document showing the FreedomNation Originator as first lienholder and
if such FreedomNation Receivable was originated by a Dealer, the
FreedomNation Originator has a title guaranty from the related Dealer.
With respect to each FreedomNation Receivable, if the related Vehicle
is located in a state in which the filing of a financing statement
under the Uniform Commercial Code is required or permitted to perfect
such security interest, such filings have been duly made and show the
FreedomNation Originator named as the secured party.
(xix) ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) required to be made by any Person and actions
required to be taken or performed by any Person in any jurisdiction to
give the Trust a first priority perfected lien on, or ownership
interest in, the FreedomNation Receivables and the proceeds thereof
have been made, taken or performed.
(xx) NO IMPAIRMENT. The Seller has not done anything to convey
any right to any Person that would result in such Person having a
right to payments due under the FreedomNation Receivable or otherwise
to impair the rights of the Trust in any FreedomNation Receivable or
the proceeds thereof.
(xxi) FREEDOMNATION RECEIVABLE NOT ASSUMABLE. No FreedomNation
Receivable is assumable by another Person in a manner which would
release the Obligor thereof from such Obligor's obligations with
respect to such FreedomNation Receivable.
(xxii) NO DEFENSES. No FreedomNation Receivable is subject to any
right of rescission, setoff, counterclaim or defense and no such right
has been asserted or threatened with respect to any FreedomNation
Receivable.
(xxiii) NO DEFAULT. There has been no default, breach, violation
or event permitting acceleration under the terms of any FreedomNation
Receivable, and no condition exists or event has occurred and is
continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting
acceleration under the terms of any FreedomNation Receivable, and
there has been no waiver of any of the foregoing. As of the Cutoff
Date, no Vehicle has been repossessed.
(xxiv) INSURANCE. Each FreedomNation Receivable requires the
Obligor to maintain a comprehensive and collision insurance policy (i)
in an amount at least equal to the lesser of (a) its maximum insurable
value or (b) the principal balance due from the Obligor under the
related FreedomNation Receivable, (ii) naming the FreedomNation
Originator as loss payee and (iii) insuring against loss and damage
due to fire, theft, transportation, collision and other risks
generally covered by comprehensive and collision coverage. Each
FreedomNation Receivable requires the Obligor to maintain physical
loss and damage insurance, naming the FreedomNation Originator and its
successors and assigns as additional insured parties. No Vehicle is
insured under a policy of force-placed insurance. (xxv) PAST DUE. At
the Cutoff Date, no FreedomNation Receivable was more than 59 days
past due.
(xxvi) PAID-AHEAD. As of the Cutoff Date, any amounts paid ahead
on the FreedomNation Receivables have been applied to the unpaid
principal balance of the FreedomNation Receivables, as reflected in
the Schedule of Receivables.
(xxvii) INTEREST PAYABLE. With respect to each FreedomNation
Receivable, interest will be charged and payable on the unpaid
principal balance of the FreedomNation Receivable since the date of
the last payment on the FreedomNation Receivable (and in all cases
will be charged since the Cutoff Date).
(xxviii) UNDERWRITING GUIDELINES. Each FreedomNation Receivable
has been originated in accordance with the FreedomNation Originator 's
underwriting guidelines.
(xxix) BULK TRANSFER LAWS. The transfer, assignment and
conveyance of the FreedomNation Receivables and the related Receivable
Files from the Seller to the Trust are not subject to the bulk
transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
(xxx) GEOGRAPHIC. No FreedomNation Receivable was originated to
an Obligor with a billing address in any of Pennsylvania, Maryland,
Alabama or Louisiana.
SECTION 3.2. REPURCHASE UPON BREACH.
(a) Seller, Servicer, Indenture Trustee or Owner Trustee, as the case
may be, shall inform the other parties to this Agreement promptly, in writing,
upon the discovery (or, with respect to the Indenture Trustee or Owner Trustee,
upon actual knowledge of a Responsible Officer) of any breach or failure to be
true of the representations or warranties made by a First Security Originator in
SECTION 7(B) of the First Security Sale Agreement or in Section 3.1 or made by
Seller in SECTION 3.1, provided that the failure to give such notice shall not
affect any obligation of a First Security Originator or Seller, as applicable.
If the breach or failure shall not have been cured by the last day of the
Collection Period which includes the 60th day (or if Seller elects, the 30th
day) after the date on which Seller becomes aware of, or receives written notice
from Owner Trustee, Indenture Trustee or Servicer of, such breach or failure,
and such breach or failure materially and adversely affects the interests of
Issuer and the Holders in any Receivable, Seller shall repurchase (or cause
another entity to repurchase) each such affected Receivable from Issuer as of
such last day of such Collection Period at a purchase price equal to the
Purchase Amount for such Receivable as of such last day of such Collection
Period, which amount shall be deposited in the Collection Account.
Notwithstanding the foregoing, any such breach or failure with respect to the
representations and warranties contained in SECTION 3.1 will not be deemed to
have such a material and adverse effect with respect to a Receivable if the
facts resulting in such breach or failure do not affect the ability of Issuer to
receive and retain payment in full on such Receivable. Seller shall repurchase
any Receivable for which a loss resulted solely as a result of a missing
document in the Receivable File with respect to each Receivable listed on
Schedule C hereto. In consideration of the repurchase of a Receivable hereunder,
Seller shall remit (or cause to be remitted) the Purchase Amount of such
Receivable, no later than the close of business on the next Deposit Date, in the
manner specified in SECTION 5.4. The sole remedy (except as provided in SECTION
4.2 of the Purchase Agreement and SECTION 6.3 of this Agreement) of Issuer, the
Owner Trustee, the Indenture Trustee or the Holders with respect to a breach or
failure to be true of the representations or warranties made by a First Security
Originator in SECTION 7(B) of the First Security Sale Agreement or in Section
3.1 or made by Seller in SECTION 3.1 shall be to require Seller to repurchase
(or cause another entity to repurchase) Receivables pursuant to this Section;
PROVIDED, THAT this Section shall not limit the right of the Servicer, Owner
Trustee or Indenture Trustee to enforce (or cause Seller to enforce) the
obligation of a First Security Originator pursuant to the First Security Sale
Agreement.
(b) With respect to all Receivables repurchased pursuant to this
SECTION 3.2, Issuer shall assign to Seller (or the entity designated by Seller),
without recourse, all of Issuer's right, title and interest in and to such
Receivables and all security and documents relating thereto and Indenture
Trustee shall deliver an appropriate release of security interest or other claim
with respect to such Receivables and all security and documents relating
thereto.
(c) Each First Security Originator hereby acknowledges that a breach
of its representations and warranties in SECTION 3.1 shall subject it to the
repurchase obligations set forth in Section 7(d)(2) of the First Security Sale
Agreement.
SECTION 3.3. CUSTODIAN OF RECEIVABLE FILES.
(a) CUSTODY. To assure uniform quality in servicing the Receivables
and to reduce administrative costs, Issuer, upon the execution and delivery of
this Agreement, revocably appoints the Custodian, as agent, and the Custodian
accepts such appointment, to act as agent on behalf of the Indenture Trustee (or
if no Notes are outstanding, Issuer) to maintain custody of the following
documents or instruments (other than the documents listed in Schedule C hereto),
which are hereby constructively delivered to Issuer with respect to each
Receivable (with respect to each Receivable, a "RECEIVABLE FILE"):
(i) copies of (A) the original certificate of title or such other
similar document, as used in the applicable jurisdiction (including,
on and after the date that is 90 days after the Closing Date a
preferred mortgage and evidence of recordation in the name of the
Trust under the Ship Mortgage Act of 1920, as amended or other
applicable law with respect to a Vehicle with respect to which a Lien
is required to be documented thereunder) and/or (B) if the security
interest of the applicable Originator is evidenced with respect to a
Vehicle under the Uniform Commercial Code of a state, the applicable
financing statements evidencing the applicable Originator's security
interest;
(ii) the fully executed original counterpart of the installment
sale contract, or note and the security agreement, as applicable
relating to each Receivable and, in the case of promissory notes,
endorsements of such notes in blank;
(iii) a copy of the credit application of the Obligor; and
(iv) such other documents that the Seller causes to be delivered
to the Custodian.
(b) SAFEKEEPING. The Custodian, shall hold the applicable Receivable
Files as agent on behalf of Issuer and maintain such accurate and complete
accounts, records and computer systems pertaining to each Receivable as shall
enable Servicer and Issuer to comply with the terms and provisions of this
Agreement applicable to them. In performing its duties as Custodian hereunder,
Custodian shall act with reasonable care, exercising the degree of skill,
attention and care that Custodian exercises with respect to receivable files
relating to other similar loans owned and/or serviced by Custodian and that is
consistent with industry standards. In accordance with its customary practice
with respect to its retail installment sale contracts, Custodian shall conduct,
or cause to be conducted, periodic audits of the Receivable Files held by it
under this Agreement, and of the related accounts, records, and computer
systems, and shall maintain the Receivable Files in such a manner as shall
enable Owner Trustee and the Indenture Trustee to verify, if Owner Trustee or
Indenture Trustee so elects, the accuracy of the record keeping of Custodian.
Custodian shall promptly report to Owner Trustee any failure on its part to hold
the Receivable Files and maintain its accounts, records and computer systems as
herein provided, and promptly take appropriate action to remedy any such
failure. Custodian hereby acknowledges receipt of the Receivable File for each
Receivable listed on the Schedule of Receivables. Nothing herein shall be deemed
to require Issuer, Owner Trustee or Indenture Trustee to verify the accuracy of
the record keeping of the Custodian.
(c) MAINTENANCE OF AND ACCESS TO RECORDS. Custodian shall maintain
each Receivable File at the location specified in SCHEDULE B to this Agreement,
or at such other office of Custodian within the United States (or, in the case
of any successor Custodian, within the State in which its principal place of
business is located) as shall be specified to Issuer by 30 days' prior written
notice. Custodian shall make available to Owner Trustee, Indenture Trustee and
their respective agents (or, when requested in writing by Owner Trustee or
Indenture Trustee, their respective attorneys or auditors) the Receivable Files
and the related accounts, records and computer systems maintained by Custodian
at such times as Owner Trustee or Indenture Trustee shall instruct for purposes
of inspecting, auditing or making copies of abstracts of the same, but only upon
two (2) Business Days prior notice and during the normal business hours at the
respective offices of Custodian.
(d) RELEASE OF DOCUMENTS. Upon written instructions from Indenture
Trustee (or, if no Notes are then Outstanding, Owner Trustee), Custodian shall
release any document in the Receivable Files to Indenture Trustee or Owner
Trustee or its respective agent or designee, as the case may be, at such place
or places as Indenture Trustee or Owner Trustee may designate, as soon
thereafter as is practicable. Any document so released shall be handled by
Indenture Trustee or Owner Trustee with due care and returned to Custodian for
safekeeping as soon as Indenture Trustee or Owner Trustee or its respective
agent or designee, as the case may be, shall have no further need therefor.
(e) TITLE TO RECEIVABLES. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time have
or in any way attempt to assert any interest in such Receivable File or the
related Receivable, other than solely for the purpose of collecting or enforcing
the Receivable for the benefit of Issuer and that the entire equitable interest
in such Receivable and the related Receivable File shall at all times be vested
in Issuer.
(f) INSTRUCTIONS; AUTHORITY TO ACT. Custodian shall be deemed to have
received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer of Indenture
Trustee or Owner Trustee, as applicable. A certified copy of excerpts of certain
resolutions of the Board of Directors of Indenture Trustee or Owner Trustee, as
applicable, shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by Custodian of written notice to the contrary given by Indenture
Trustee or Owner Trustee, as applicable.
(g) CUSTODIAN'S INDEMNIFICATION. Subject to SECTION 10.5, Custodian
shall indemnify and hold harmless Issuer, Owner Trustee (individually and in its
capacity as such) and Indenture Trustee (individually and in its capacity as
such), and each of their respective officers, directors, employees and agents
and the Holders from and against any and all liabilities, obligations, losses,
compensatory damages, payments, costs or expenses (including reasonable legal
fees and expenses, if any) of any kind whatsoever that may be imposed on,
incurred or asserted against Issuer, Owner Trustee, Indenture Trustee or the
Holders as the result of the willful misfeasance, bad faith, breach of contract
or negligence of the Custodian in the performance of its duties under this
Agreement. Indemnification under this SUBSECTION (G) shall survive termination
of this Agreement and the resignation or removal of Owner Trustee or Indenture
Trustee, as the case may be. If Custodian shall have made any indemnity payments
to Owner Trustee or Indenture Trustee pursuant to this Section and Owner Trustee
or Indenture Trustee thereafter shall collect any of such amounts from Persons
other than Custodian, Owner Trustee or Indenture Trustee, as the case may be,
shall, as soon as practicable following such receipt thereof, repay such amounts
to Custodian, without interest.
(h) EFFECTIVE PERIOD AND TERMINATION. Servicer's appointment as
Custodian shall become effective as of the date of delivery of the Receivable
Files (which shall be a date on or before the Closing Date) and shall continue
in full force and effect until terminated pursuant to this SUBSECTION (H). If
Servicer shall resign as Servicer in accordance with SECTION 7.5 or if all of
the rights and obligations of Servicer shall have been terminated under SECTION
8.1, the appointment of Servicer as Custodian hereunder may be terminated by the
Owner Trustee or Indenture Trustee or by the Holders of Notes evidencing not
less than 25% of the aggregate Outstanding Amount of the Notes of the
Controlling Note Class (or, if no Notes are then Outstanding, the Holders of
Certificates representing not less than 50% of the Certificate Percentage
Interests), in each case in the same manner as Owner Trustee or Indenture
Trustee or such Holders may terminate the rights and obligations of Servicer
under SECTION 8.1. The Indenture Trustee, or, if no Notes are then Outstanding,
the Owner Trustee at the direction of Holders of Certificates evidencing not
less than 50% of the Certificate Percentage Interests, may terminate Servicer's
appointment as Custodian hereunder at any time with cause. As soon as
practicable after any termination of such appointment Servicer shall deliver, or
cause to be delivered, the Receivable Files to Indenture Trustee or Owner
Trustee, as applicable, or its respective agent or designee at such place or
places as Indenture Trustee or Owner Trustee, as applicable, may reasonably
designate. Notwithstanding any termination of Servicer as Custodian hereunder
(other than in connection with a termination resulting from the termination of
Servicer, as such, pursuant to SECTION 8.1), from and after the date of such
termination, and for so long as Servicer is acting as such pursuant to this
Agreement, Indenture Trustee shall provide, or cause the successor Custodian to
provide, access to the Receivable Files to Servicer, at such times as Servicer
shall reasonably request, for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
(i) DELEGATION. Custodian may, at any time without notice or consent,
delegate any or all of its duties under the Basic Documents to any Affiliate;
provided that no such delegation shall relieve Custodian of its responsibility
with respect to such duties and Custodian shall remain obligated and liable to
Issuer and the Holders for its duties hereunder as if Custodian alone were
performing such duties.
SECTION 3.4. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO REVISED
ARTICLE 9. Seller hereby makes the following representations and warranties.
Such representations and warranties shall speak as of the Closing Date, but
shall survive the transfer and assignment of the Receivables to Issuer and the
pledge thereof to Indenture Trustee pursuant to the Indenture. These
representations and warranties are not waivable.
(a) This Agreement creates a valid and continuing security interest
(as defined in the applicable UCC) in the Receivables in favor of the Issuer,
which security interest is prior to all other Liens, and is enforceable as such
as against creditors of and purchasers from the Seller.
(b) The applicable Originator has taken all steps necessary to perfect
its security interest against each related Obligor in the Vehicles securing the
Receivables; provided that the applicable Originator may not be listed as
lienholder with respect to the Financed Vehicles relating to the Receivables
listed on Schedule C hereto.
(c) The Receivables constitute "tangible chattel paper" within the
meaning of the applicable UCC.
(d) The Seller owns and has good and marketable title to the
Receivables free and clear of any Lien, claim or encumbrance of any Person.
(e) Except as listed on Schedule C hereto, all original executed
copies of each agreement that constitutes or evidences the Receivables have been
delivered to the Custodian.
(f) Other than the security interest granted to the Issuer pursuant to
this Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The Seller has not
authorized the filing of and is not aware of any financing statements against
the Seller that include a description of collateral covering the Receivables
other than any financing statement relating to the security interest granted to
the Issuer hereunder or that has been terminated. The Seller is not aware of any
judgment or tax lien filings against the Seller. (g) None of the agreements that
constitute or evidence the Receivables has any marks or notations indicating
that it has been pledged, assigned or otherwise conveyed to any Person other
than the Issuer.
ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. DUTIES OF SERVICER.
(a) (i) Servicer is hereby authorized to act as agent for Issuer and
in such capacity shall manage, service, administer and make collections on the
Receivables (other than Purchased Receivables), and perform the other actions
required by Servicer under this Agreement, with reasonable care. Without
limiting the standard set forth in the preceding sentence, Servicer shall use a
degree of skill, attention and care that is not less than Servicer exercises
with respect to comparable Loans that it services for itself or others and that
is consistent with prudent industry standards. Servicer's duties shall include
the collection and posting of all payments, responding to inquiries by Obligors
on the Receivables, or by federal, state or local governmental authorities,
investigating delinquencies, sending payment coupons or monthly invoices to
Obligors, reporting required tax information to Obligors, accounting for
Collections, furnishing monthly and annual statements to Owner Trustee and
Indenture Trustee with respect to distributions, providing collection and
repossession services in the event of Obligor default and performing the other
duties specified herein.
(ii) Without limiting the generality of the foregoing, Servicer
is hereby authorized and empowered by Issuer to execute and deliver,
on behalf of itself, Indenture Trustee, Issuer and the Holders, 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 or to the Financed Vehicles, all in
accordance with this Agreement; provided that notwithstanding the
foregoing, Servicer shall not, except pursuant to an order from a
court of competent jurisdiction, release an Obligor from payment of
any unpaid amount under any Receivable or waive the right to collect
the unpaid balance of any Receivable from the Obligor, except in
connection with a de minimis deficiency which Servicer would not
attempt to collect in accordance with its customary procedures. If
Servicer shall commence a legal proceeding to enforce a Receivable,
Issuer shall thereupon be deemed to have automatically assigned such
Receivable to Servicer, which assignment shall be solely for purposes
of collection. The Issuer shall furnish Servicer with any powers of
attorney and other documents or instruments necessary or appropriate
to enable Servicer to carry out its servicing and administrative
duties hereunder.
(b) Servicer may, at any time without notice (except that Servicer
shall give written notice to each Rating Agency, the Indenture Trustee and the
Owner Trustee of any delegation outside the ordinary course of business or of a
substantial portion of its servicing business) or consent, (i) delegate any or
all duties under this Agreement to any Person that is an Affiliate of the
Servicer, so long as Wells Fargo Bank, N.A. acts as Servicer, (ii) delegate
specific duties to sub-contractors who are in the business of performing such
duties or (iii) in connection with the grant of necessary rights provided
hereinafter and in a letter agreement with CSC Logic/MSA LLP d/b/a Loan
Servicing Enterprises ("LSE") continue the initial servicing of the
FreedomNation Receivables by LSE under the LSE Servicing Agreement pending
transfer of the same to Servicer, as provided in the said letter agreement;
provided that no such delegation or consent to allow LSE's continued servicing
shall relieve Servicer of its responsibility with respect to such duties and
Servicer shall remain obligated and liable to Issuer, the Indenture Trustee, the
Owner Trustee and the Holders for servicing and administering the Receivables in
accordance with this Agreement as if Servicer alone were performing such duties.
The Seller and the Issuer, as assignees (as part of the Receivables) of the LSE
Servicing Agreement, acknowledge and agree, by requisite delegation and
assignment hereby effectuated, that as a result of such assignments and the
above-referenced letter agreement, the Servicer has and is entitled to exercise
all of their rights under the LSE Servicing Agreement. In addition, Seller and
Issuer, will provide full cooperation to the Servicer in Servicer's enforcement
of the LSE Servicing Agreement obligations of LSE, as modified by the
above-referenced letter agreement.
(c) Servicer shall pay the Administrator the fee pursuant to the
Administration Agreement.
SECTION 4.2. COLLECTION OF RECEIVABLE PAYMENTS.
(a) Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due, and otherwise act with respect to the Receivables, the
Physical Damage Insurance Policies, the Dealer Agreements and related property
in such manner as will, in the reasonable judgment of Servicer, maximize the
amount to be received by Issuer with respect thereto, in accordance with the
standard of care required by SECTION 4.1. Servicer shall be entitled to grant
extensions, rebates or adjustments on a Receivable, or amend or modify any
Receivable in accordance with its customary procedures if Servicer believes in
good faith that such amendment or modification is in Issuer's best interests;
provided that Servicer may not, unless ordered by a court of competent
jurisdiction or otherwise required by applicable law, (i) extend a Receivable
beyond the Collection Period preceding the latest final scheduled Payment Date
of any Notes issued under the Indenture or (ii) reduce the Principal Balance or
Contract Rate of any Receivable. If Servicer fails to comply with the provisions
of the preceding sentence, Servicer shall be required to purchase the Receivable
or Receivables affected thereby, for the Purchase Amount, in the manner
specified in SECTION 4.7 as of the last day of the Collection Period in which
such failure occurs. Servicer may, in its discretion (in accordance with its
customary standards, policies and procedures), waive any prepayment charge, late
payment charge, extension fee or any other fee that may be collected in the
ordinary course of servicing a Receivable.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor against
an amount payable by the Obligor with respect to such Receivable, Servicer shall
deposit the amount so set off in the Collection Account, no later than the close
of business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.
SECTION 4.3. REALIZATION UPON RECEIVABLES. On behalf of Issuer,
Servicer shall charge off a Receivable in accordance with its customary
standards (and, in no event later than the end of the Collection Period during
which any payment on a Receivable shall have become 120 days past due) and shall
use reasonable efforts, consistent with its customary standards, to repossess
and liquidate the Financed Vehicle securing any Defaulted Receivable as soon as
feasible after such Receivable becomes a Defaulted Receivable, in accordance
with the standard of care required by SECTION 4.1. In taking such action,
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of Loans, and as are
otherwise consistent with the standard of care required under SECTION 4.1, which
shall include exercising any rights under the Dealer Agreements and selling the
Financed Vehicle at public or private sale; provided that the Servicer shall
only be obligated to enforce the Dealer Agreements for the FreedomNation
Receivables to the extent it has copies of the related Dealer Agreements.
Servicer shall be entitled to recover all reasonable expenses incurred by it in
the course of repossessing and liquidating a Financed Vehicle into cash proceeds
or pursuing any deficiency claim against the related Obligor, but only out of
the cash proceeds of such Financed Vehicle or any deficiency obtained from the
Obligor. The foregoing shall be subject to the provision that, in any case in
which a Financed Vehicle shall have suffered damage, Servicer shall not expend
funds in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or repossession
will increase the Liquidation Proceeds of the related Receivable by an amount
equal to or greater than the amount of such expenses.
If Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement, the act of commencement shall be deemed to be an automatic assignment
from Issuer to Servicer of the rights under such Dealer Agreement. Such
assignment shall be solely for purposes of collection. If, however, in any
enforcement suit or legal proceeding, it is held that Servicer may not enforce a
Dealer Agreement on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement, Owner Trustee, on behalf of
Issuer and the Indenture Trustee, subject to the Indenture, at Servicer's
expense, or Seller, at Servicer's expense, shall take such steps as Servicer
deems necessary to enforce the Dealer Agreement, including bringing suit in
Issuer's name or the name of Owner Trustee or Indenture Trustee.
SECTION 4.4. PHYSICAL DAMAGE INSURANCE.
(a) The Receivables require that each Financed Vehicle be insured
under a Physical Damage Insurance Policy. If Servicer receives notice that an
Obligor has failed to obtain or maintain a Physical Damage Insurance Policy
covering the related Financed Vehicle, Servicer shall use reasonable efforts in
accordance with its customary servicing procedures to enforce the rights of the
holder of the Receivable under the Receivable to require the Obligor to obtain
such physical damage insurance, provided that Servicer shall not be required to
take such actions if there is in place a lender's single interest policy with
respect to the related Financed Vehicle that complies with Servicer's customary
requirements; provided that Servicer shall not be so obligated with respect to
the FreedomNation Receivables prior to the date that the servicing thereof is
transferred to the Servicer from CSC Logic/MSA LLP d/b/a Loan Servicing
Enterprise.
(b) Servicer may sue to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Issuer. If
Servicer elects to commence a legal proceeding to enforce a Physical Damage
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of Issuer under such Physical Damage Insurance Policy
to Servicer for purposes of collection only. If, however, in any enforcement
suit or legal proceeding it is held that Servicer may not enforce a Physical
Damage Insurance Policy on the grounds that it is not a real party in interest
or a holder entitled to enforce the Physical Damage Insurance Policy, Issuer and
the Indenture Trustee, subject to the Indenture, at Servicer's expense and
written direction, or Seller, at Servicer's expense, shall take such steps as
Servicer deems necessary to enforce such Physical Damage Insurance Policy,
including bringing suit in Issuer's name or the name of Indenture Trustee.
Servicer shall make all claims and enforce its rights under any lender's single
interest insurance policy (to the extent such claims or rights relate to
Receivables) for the benefit of the Issuer and shall treat as Collections all
related proceeds of such policies.
SECTION 4.5. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
Servicer, in accordance with the standard of care required under SECTION 4.1,
shall take such reasonable steps as are necessary and as are consistent with its
customary business practices to maintain perfection and priority of the security
interest created by each Receivable in the related Financed Vehicle for the
benefit of Issuer and the Indenture Trustee. Issuer hereby authorizes Servicer,
and Servicer hereby agrees, to take such reasonable steps as are necessary and
as are consistent with its customary business practices to re-perfect such
security interest on behalf of Issuer in the event Servicer receives notice of
the relocation of a Financed Vehicle out of one state to another.
SECTION 4.6. COVENANTS OF SERVICER. Servicer makes the following
covenants on which Issuer relies in acquiring the Receivables:
(a) SECURITY INTEREST TO REMAIN IN FORCE. Servicer shall not release
any Financed Vehicle from the security interest granted by the related
Receivable in whole or in part, except upon payment in full of the Receivable,
release of such security interest to the insurance company in connection with a
total loss claim under a Physical Damage Insurance Policy or as otherwise
contemplated herein.
(b) NO IMPAIRMENT. Servicer shall not impair in any material respect
the rights of the Issuer or the Holders in the Receivables, the Dealer
Agreements or the Physical Damage Insurance Policies or, subject to clause (c),
otherwise amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of Issuer and the Holders hereunder would be
materially adversely affected.
(c) AMENDMENTS. Servicer shall not amend or otherwise modify any
Receivable (including the grant of any extension thereunder), except in
accordance with SECTION 4.2.
SECTION 4.7. PURCHASE OF RECEIVABLES BY SERVICER UPON BREACH. Seller,
Servicer, Indenture Trustee or Owner Trustee, as the case may be, shall inform
the other parties promptly, in writing, upon the discovery (or, in the case of
the Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach by Servicer of its covenants under SECTION 4.5 or 4.6
hereof; provided that the failure to give such notice shall not affect any
obligation of Servicer. Unless the breach shall have been cured by the last day
of the Collection Period which includes the 60th day (or the 30th day, if
Servicer so elects) after the date on which Servicer becomes aware of, or
receives written notice of, such breach, and such breach materially and
adversely affects the interests of Issuer and the Holders in any Receivable,
Servicer shall purchase such Receivable from Issuer as of the last day of the
Collection Period at a purchase price equal to the Purchase Amount for such
Receivable as of the last day of such Collection Period; provided that in the
case of a breach of the covenant contained in SECTION 4.6(C), Servicer shall be
obligated to purchase the affected Receivable or Receivables on the Business Day
preceding the Deposit Date immediately succeeding the Collection Period during
which Servicer becomes aware of, or receives written notice of, such breach. In
consideration of the purchase of a Receivable hereunder, Servicer shall remit
the Purchase Amount of such Receivable in the manner specified in SECTION 5.4.
The sole remedy (except as provided in SECTION 7.2) of Issuer, Owner Trustee,
Indenture Trustee or the Holders against Servicer with respect to a breach
pursuant to SECTION 4.5 or 4.6 shall be to require Servicer to repurchase
Receivables pursuant to this Section.
With respect to all Receivables purchased pursuant to this SECTION
4.7, Issuer shall assign to Servicer, without recourse, representation or
warranty, all of Issuer's right, title and interest in and to such Receivables
and all security and documents relating thereto and Indenture Trustee shall
deliver an appropriate release of security interest or other claim with respect
to such Receivables and all security and documents relating thereto.
SECTION 4.8. SERVICING FEE. The servicing fee for each Payment Date
shall equal the product of (i) one-twelfth, (ii) the Servicing Fee Rate and
(iii) the Pool Balance as of the opening of business on the first day of the
related Collection Period (the "SERVICING FEE"). Servicer shall also be entitled
to retain a supplemental servicing fee equal to late fees and extension fees
collected during such Collection Period on the Receivables in an amount up to
$20 per Receivable (per occurrence) and payment holiday extension fees collected
during such Collection Period in an amount up to $15 per Receivable (per
occurrence) (collectively, the "SUPPLEMENTAL SERVICING FEE"). It is understood
and agreed that the Servicer shall not purchase any Physical Damage Insurance
Policies. It is understood and agreed that Available Collections shall not
include any amounts retained by Servicer which constitute Supplemental Servicing
Fees. The Servicing Fee in respect of a Collection Period (together with any
portion of the Servicing Fee that remains unpaid from prior Payment Dates), if
the Rating Agency Condition is satisfied, may be paid at the beginning of such
Collection Period out of Collections for such Collection Period.
SECTION 4.9. SERVICER'S REPORT.
(a) On or before each Determination Date, Servicer shall deliver to
Owner Trustee, Indenture Trustee, each Paying Agent and Seller, with a copy to
the Rating Agencies, a Servicer's Report for the immediately preceding
Collection Period, substantially in the form of EXHIBIT A, containing all
information necessary to make the transfers and distributions pursuant to
SECTIONS 5.4 and 5.5 (including amounts required to be transferred from the
Reserve Account to the Collection Account) for the Collection Period preceding
the date of such Servicer's Report, together with all information necessary for
the Owner Trustee to send statements to Certificateholders pursuant to SECTION
5.6 and Indenture Trustee to send copies of statements received by the Indenture
Trustee to Noteholders pursuant to the Indenture and SECTION 5.6 of this
Agreement. Receivables to be purchased by Servicer or to be repurchased by the
Seller (or an entity designated by the Seller) shall be identified by Servicer
by account number with respect to such Receivable (as specified in the Schedule
of Receivables).
(b) Servicer shall provide Indenture Trustee with a database file for
the Receivables at or prior to the Closing Date (but with information as of the
close of business on the Cutoff Date).
SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) Servicer shall deliver to Owner Trustee, Indenture Trustee and
each Rating Agency, on or before May 31 of each year beginning on May 31, 2002,
an Officer's Certificate, dated as of December 31 of the preceding year, stating
that (i) a review of the activities of Servicer during the preceding 12-month
period (or, in the case of the first such report, during the period from the
Closing Date to December 31, 2001) and of its performance under this Agreement
has been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, Servicer has fulfilled all its
obligations in all material respects under this Agreement throughout such year
or, if there exists any uncured 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 and the report referred to in
SECTION 4.11 may be obtained by any Noteholder by a request in writing to
Indenture Trustee addressed to the Corporate Trust Office.
(b) Servicer shall deliver to Owner Trustee, Indenture Trustee and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five (5) Business Days thereafter, written notice in an
Officer's Certificate of any event which constitutes, or with the giving of
notice or lapse of time, or both, would become a Servicer Termination Event
under SECTION 8.1.
SECTION 4.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
(a) The Servicer shall cause a firm of independent certified public accountants
(who may also render other services to the Servicer or Seller) to deliver to the
Seller, Owner Trustee, Indenture Trustee and each Rating Agency on or before May
31 of each year beginning on May 31, 2002, a report to the effect that, as to
objectively determinable matters, such firm has examined the Servicer's
assertion that it has fulfilled its obligations in all material respects under
this Agreement for the twelve months ended December 31 of the preceding year
(or, in the case of the first such certificate, from the Closing Date until
December 31, 2001 set forth in the Officer's Certificate delivered pursuant to
SECTION 4.10(A), and that (i) such examination was made in accordance with the
standards established by the American Institute of Certified Public Accountants,
(ii) except as described in the report, the assertions in the Officer's
Certificate are, as to objectively determinable matters, fairly stated in all
material respects and (iii) that the firm is independent of Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
(b) In the event such firm requires the Indenture Trustee or Owner
Trustee to agree to the procedures performed by such firm, Servicer shall direct
the Indenture Trustee or Owner Trustee, as the case may be, in writing to so
agree; it being understood and agreed that the Indenture Trustee or Owner
Trustee, as the case may be, will deliver such letter of agreement in conclusive
reliance upon the direction of Servicer, and the Indenture Trustee or Owner
Trustee, as the case may be, need not make any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
SECTION 4.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING RECEIVABLES. Servicer shall provide to the Owner Trustee, Indenture
Trustee, Certificateholders, Noteholders, Bank Regulatory Authorities, and the
supervisory agents and examiners of Bank Regulatory Authorities access to the
Receivable Files, as to the latter in such cases where the Certificateholders,
Noteholders or Bank Regulatory Authorities shall be required by applicable
statutes or regulations to review such documentation as demonstrated by evidence
satisfactory to Servicer in its reasonable judgment. Access shall be afforded
without charge, but only upon reasonable request and during the normal business
hours at the respective offices of Servicer. Nothing in this Section shall
affect the obligation of Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section. Any Holder, by its acceptance of a
Certificate or Note, as applicable, shall be deemed to have agreed to keep any
information obtained by it pursuant to this Section confidential and not to use
such information for any other purpose, except as required by applicable law.
SECTION 4.13. REPORTS TO THE COMMISSION. Servicer shall, on behalf of
the Issuer, cause to be filed with the Commission any periodic reports required
to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder. Seller shall, at its expense,
cooperate in any reasonable request made by Servicer in connection with such
filings.
SECTION 4.14. REPORTS TO THE RATING AGENCIES. Servicer shall deliver
to each Rating Agency a copy of all reports or notices furnished or delivered
pursuant to this Article and a copy of any amendments, supplements or
modifications to this Agreement and any other information reasonably requested
by such Rating Agency to monitor this transaction.
SECTION 4.15. SERVICER EXPENSES. Except as otherwise provided herein,
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder, including fees and disbursements of independent
accountants, taxes imposed on Servicer and expenses incurred in connection with
distributions and reports to Certificateholders and Noteholders.
SECTION 4.16. FEES AND EXPENSES OF THE INDENTURE TRUSTEE AND OWNER
TRUSTEE. (a) The Trust shall pay to (a) the Indenture Trustee a fee payable each
July Payment Date commencing with the Payment Date in July 2002 in an amount
equal to $5,000 and (b) the Owner Trustee a fee July Payment Date commencing
with the Payment Date in July 2002 in an amount equal to $4,000. Each fee,
together with any portion of the fee that remains unpaid from prior Payment
Dates, will be payable on each Payment Date from funds on deposit in the
Collection Account with respect to the Collection Period preceding such Payment
Date.
(b) The Trust shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their officers, directors, employees and
agents from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or incurred in connection with the acceptance or
performance of the trusts and duties set forth in the Basic Documents except to
the extent that such cost, expense, loss, claim, damage or liability shall be
due to, in the case of the Indenture Trustee and any of its officers, directors,
employees and agents, the willful misfeasance, bad faith or negligence of the
Indenture Trustee or in the case of the Owner Trustee and any of its officers,
directors, employees and agents, the willful misfeasance, bad faith or
negligence of the Owner Trustee. Amounts payable pursuant to this clause (b)
will be payable on each Payment Date from funds on deposit in the Collection
Account with respect to the Collection Period preceding such Payment Date.
(c) Amounts payable to the Owner Trustee and the Indenture Trustee
pursuant to this Section 4.16 shall be limited in aggregate amount for each
calendar year. Amounts payable pursuant to this Section 4.16 in any calendar
year to (a) the Indenture Trustee shall not exceed $225,000 and (b) the Owner
Trustee shall not exceed $50,000.
ARTICLE V.
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.1. ESTABLISHMENT OF COLLECTION ACCOUNT.
(a) Servicer shall cause to be established:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of Indenture Trustee, an Eligible
Deposit Account (the "COLLECTION ACCOUNT"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders, which Eligible
Deposit Account shall be established and maintained with the Indenture
Trustee or its designee.
(ii) For the benefit of the Noteholders, in the name of Indenture
Trustee, an Eligible Deposit Account (the "NOTE DISTRIBUTION
ACCOUNT"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders, which
shall be established and maintained with the Indenture Trustee or its
designee.
(iii) An administrative subaccount within the Note Distribution
Account at the Eligible Institution then maintaining the Note
Distribution Account, which subaccount shall be designated the
"INTEREST DISTRIBUTION SUBACCOUNT." The Interest Distribution
Subaccount is established and maintained solely for administrative
purposes.
(iv) An administrative subaccount within the Note Distribution
Account at the Eligible Institution then maintaining the Note
Distribution Account, which subaccount shall be designated the
"PRINCIPAL DISTRIBUTION SUBACCOUNT." The Principal Distribution
Subaccount is established and maintained solely for administrative
purposes.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account and the Reserve Account (collectively, the "TRUST ACCOUNTS") shall be
invested by Indenture Trustee with respect to the Trust Accounts and by the
Owner Trustee with respect to the Certificate Distribution Account (or any
custodian with respect to funds on deposit in any such account) in Eligible
Investments selected in writing by the holder of a majority of the Certificates
and of which the holder of a majority of the Certificates provides notification
(pursuant to standing instructions or otherwise); provided that it is understood
and agreed that neither the holder of a majority of the Certificates, Indenture
Trustee nor Owner Trustee shall be liable for any loss arising from such
investment in Eligible Investments. All such Eligible Investments shall be held
by or on behalf of Indenture Trustee for the benefit of the Noteholders and the
Certificateholders or by Owner Trustee for the benefit of Certificateholders, as
applicable. Funds on deposit in the Trust Accounts shall be invested in Eligible
Investments that, except for Qualified GICs, will mature so that such funds will
be available at the close of business on the Deposit Date preceding the next
Payment Date; PROVIDED, THAT upon satisfaction of the Rating Agency Condition
and with the approval of the Indenture Trustee, funds on deposit in the Trust
Accounts may be invested in Eligible Investments that mature on such Payment
Date. No Eligible Investment shall be sold or otherwise disposed of prior to its
scheduled maturity unless a default occurs with respect to such Eligible
Investment and the holder of a majority of the Certificates directs Indenture
Trustee in writing to dispose of such Eligible Investment. Funds deposited in
the Trust Accounts or Certificate Distribution Account on a Deposit Date shall
be invested overnight.
(c) The Indenture Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (excluding investment income thereon as provided in SECTION
5.1(E)) and all such funds, investments and proceeds shall be part of the Owner
Trust Estate. Except as otherwise provided herein, the Trust Accounts shall be
under the sole dominion and control of Indenture Trustee for the benefit of the
Noteholders and the Certificateholders; provided, however, the Indenture Trustee
shall not be charged with any obligation for the benefit of the
Certificateholders except as provided by the terms of this Agreement. If, at any
time, any of the Trust Accounts or the Certificate Distribution Account ceases
to be an Eligible Deposit Account, Indenture Trustee (or Servicer on its behalf)
or Owner Trustee, as applicable, shall within 10 Business Days (or such longer
period as to which each Rating Agency may consent) establish a new Trust Account
or Certificate Distribution Account, as applicable, as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new Trust
Account or new Certificate Distribution Account, as applicable. In connection
with the foregoing, Servicer agrees that, in the event that the Collection
Account is not an account with Indenture Trustee or its designee, Servicer shall
notify Indenture Trustee in writing promptly upon any of such Trust Accounts
ceasing to be an Eligible Deposit Account.
(d) With respect to the Trust Account Property, Servicer and the
Indenture Trustee agree that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in Eligible Deposit Accounts and, except as
otherwise provided herein, each such Eligible Deposit Account shall be
subject to the exclusive custody and control of Indenture Trustee,
and, except as otherwise provided in the Basic Documents, Indenture
Trustee and its designee shall have sole signature authority with
respect thereto;
(ii) any Trust Account Property that constitutes Physical
Property shall be delivered to Indenture Trustee or its designee, in
accordance with paragraph (a) of the definition of "Delivery" and
shall be held, pending maturity or disposition, solely by Indenture
Trustee or such designee, or a financial intermediary (as such term is
defined in Section 8-313(4) of the UCC) acting solely for Indenture
Trustee or such designee;
(iii) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by Indenture Trustee
or its designee of a financial intermediary (as such term is defined
in Section 8-313(4) of the UCC) acting solely for Indenture Trustee or
such designee, pending maturity or disposition, through continued
book-entry registration of such Trust Account Property as described in
such paragraph; and
(iv) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by
clause (iii) above shall be delivered to Indenture Trustee or its
designee in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by Indenture Trustee or such
designee, or a financial intermediary (as such term is defined in
Section 8-313 (4) of the UCC) acting solely for Indenture Trustee or
such designee, pending maturity or disposition, through continued
registration of Indenture Trustee's (or its designee's) ownership of
such security.
(e) Investment earnings, net of losses, attributable to the Trust
Accounts (other than the Reserve Account) shall be attributable to the Trust
Account Property shall be available to pay the distributions provided for in
Section 5.5, provided that investment earnings on funds on deposit in the
Collection Account from the Business Day prior to each Payment Date to the
Payment Date shall be paid to the Indenture Trustee.
Effective upon Delivery of any Trust Account Property, Servicer shall
be deemed to have represented that it has purchased such Trust Account Property
for value, in good faith and without notice of any adverse claim thereto.
SECTION 5.2. COLLECTIONS.
(a) Servicer shall remit within two Business Days of receipt thereof
to the Collection Account all payments by or on behalf of the Obligors with
respect to the Receivables (other than any amounts constituting Supplemental
Servicing Fees) and all Liquidation Proceeds, both as collected during the
Collection Period. Notwithstanding the foregoing, if Wells Fargo Bank, N.A. is
the Servicer and (i) shall have the Required Rating or (ii) Indenture Trustee
otherwise shall have received written notice from each of the Rating Agencies
that the then outstanding rating on the Notes would not be lowered, qualified or
withdrawn as a result, Servicer may deposit all amounts referred to above for
any Collection Period into the Collection Account not later than 1:00 p.m. New
York time on the Deposit Date with respect to such Collection Period; provided
that (i) if a Servicer Termination Event has occurred and is continuing, (ii)
Servicer has been terminated as such pursuant to SECTION 8.1 or (iii) Servicer
ceases to have the Required Rating, Servicer shall deposit such amounts
(including any amounts then being held by Servicer) into the Collection Account
as provided in the preceding sentence. For purposes of this ARTICLE V the phrase
"payments by or on behalf of Obligors" shall mean payments made with respect to
the Receivables by Persons other than Servicer, Seller, Transferor or any
Originator.
(b) With respect to each Receivable (other than a Purchased
Receivable), collections and payments by or on behalf of the Obligor (other than
any amounts constituting Supplemental Servicing Fees) for each Collection Period
shall be applied to interest and principal in accordance with the Simple
Interest Method, as applied by Servicer. Any excess shall be applied first to
any late charges and other fees due and second to prepay the Receivable.
(c) Notwithstanding the foregoing, if the Servicer does not remit
within two Business Days of receipt thereof to the Collection Account all
payments by or on behalf of the Obligors with respect to the Receivables and all
Liquidation Proceeds, both as collected during the Collection Period, the
Servicer shall remit to the Certificate Distribution Account no later than 1:00
p.m. on each Payment Date, an amount equal to the total amount of principal,
interest and fees collected during the Collection Period, times the Federal
Funds Rate, times a fraction, the numerator of which is the sum of (i) the
number of days during such Collection Period divided by two plus (ii) the number
of days elapsing from and including the last day of the Collection Period
through but excluding the Payment Date, and the denominator of which is 360 days
(the "Interest Equivalent Payment"), such amount to be certified to the Owner
Trustee by the Servicer on the Business Day prior to such Payment Date.
SECTION 5.3. [RESERVED].
SECTION 5.4. ADDITIONAL DEPOSITS. Servicer and Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Purchase Amounts
with respect to Purchased Receivables and Seller or Servicer shall deposit
therein all amounts, if any, to be paid under SECTION 9.1. All such deposits
shall be made not later than 1:00 p.m. New York time on the Deposit Date
following the end of the related Collection Period.
SECTION 5.5. DISTRIBUTIONS.
(a) On or before 1:00 p.m. New York time on the Business Day
immediately preceding the Deposit Date related to each Determination Date,
Servicer shall instruct Indenture Trustee in writing (based on the information
contained in the Servicer's Report delivered on the related Determination Date
pursuant to SECTION 4.9) to make a withdrawal from the Reserve Account and
deposit in the Collection Account, and Indenture Trustee shall so deposit by
1:00 p.m. New York time on such Deposit Date, the Reserve Account Transfer
Amount.
(b) Subject to the last paragraph of this SECTION 5.5(B), on or before
1:00 p.m. New York time on the Business Day immediately preceding the Deposit
Date related to each Payment Date, Servicer shall instruct Indenture Trustee in
writing (based on the information contained in the Servicer's Report delivered
on the related Determination Date pursuant to SECTION 4.9) to make, and
Indenture Trustee shall make, the following deposits, distributions and payments
from the Collection Account by 1:00 p.m. (New York time) on such Payment Date,
to the extent of the Total Distribution Amount, in the following order of
priority:
(i) to the Servicer, the Servicing Fee and all accrued and unpaid
Servicing Fees from prior Collection Periods;
(ii) to the Indenture Trustee and the Owner Trustee all accrued
and unpaid fees plus reimbursement for all amounts, in each case
payable pursuant to Section 4.16; provided that amounts payable
pursuant to this clause in any calendar year to (a) the Indenture
Trustee shall not exceed $225,000 and (b) the Owner Trustee shall not
exceed $50,000;
(iii) to the Interest Distribution Subaccount, the Accrued Class
A Note Interest;
(iv) to the Principal Distribution Subaccount, the First Priority
Principal Distribution Amount, if any;
(v) to the Interest Distribution Subaccount, the Accrued Class B
Note Interest;
(vi) to the Principal Distribution Subaccount, the Second
Priority Principal Distribution Amount, if any;
(vii) to the Interest Distribution Subaccount, the Accrued Class
C Note Interest;
(viii) to the Principal Distribution Subaccount, the Third
Priority Principal Distribution Amount, if any;
(ix) to the Interest Distribution Subaccount, the Accrued Class D
Note Interest:
(x) to the Interest Distribution Subaccount, the Accrued Class E
Note Interest:
(xi) to the Principal Distribution Subaccount, the Regular
Principal Distribution Amount;
(xii) to the Principal Distribution Subaccount, an amount
sufficient to cause the outstanding principal balance of the Notes
(after giving effect to all payments on the Payment Date) to equal the
Pool Balance as of the end of the related Collection Period;
(xiii) to the Reserve Account, an amount sufficient to cause the
amount on deposit in the Reserve Account to equal the Reserve Account
Required Amount;
(xiv) to the Class E Noteholders, an amount sufficient to pay the
Class E notes in full; and
(xv) to the Certificate Distribution Account, the Total
Distribution Amount, if any, remaining on deposit in the Collection
Account.
Notwithstanding any other provision of this SECTION 5.5, following the
occurrence and during the continuation of an Event of Default specified in
SECTION 5.1(A), 5.1(B), 5.1(D) or 5.1(E) of the Indenture, which has resulted in
an acceleration of the Notes, (or following the occurrence of any such event
after an Event of Default specified in SECTION 5.1(C) of the Indenture has
occurred and the Trust has been liquidated), the Servicer shall instruct the
Indenture Trustee at or before aforesaid time to transfer the funds on deposit
in the Collection Account pursuant to SECTION 5.4(B) of the Indenture. In the
event that the Collection Account is maintained with an institution other than
Indenture Trustee, the Servicer shall instruct and cause such institution to
make all deposits and distributions pursuant to this SECTION 5.5(B) on the
related Deposit Date.
(c) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to zero and
the Indenture has been discharged in accordance with its terms. The protections,
immunities and standard of care afforded the Indenture Trustee under the
Indenture shall apply to the performance of its duties hereunder.
SECTION 5.6. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to Owner Trustee to
forward to each Certificateholder of record, a statement substantially in the
form of EXHIBIT B setting forth at least the following information (based on the
information contained in the Servicer's Report delivered on the related
Determination Date pursuant to SECTION 4.9) as to the Notes and the Certificates
to the extent applicable:
(a) the amount of such distribution allocable to principal of each
class of Notes;
(b) the amount of such distribution allocable to interest on or with
respect to each class of Notes;
(c) the Reserve Account Transfer Amount, if any, for such Payment Date
and the balance of the Reserve Account (if any) on such Payment Date, after
giving effect to changes therein on such Payment Date;
(d) the amount of the Servicing Fee paid to Servicer with respect to
the related Collection Period and with respect to previously accrued and unpaid
Servicing Fees and the amounts paid to the Indenture Trustee and the Owner
Trustee with respect to the related Collection Period;
(e) the Noteholders' Interest Carryover Shortfall, if any, in each
case as applicable to each class of Securities, and the change in such amounts
from the preceding statement;
(f) the amount of any previously due and unpaid payment of principal
on the Notes, and the change in such amount from that of the prior Payment Date;
(g) the aggregate outstanding principal balance of each class of the
Notes and the Note Pool Factor for each such class after giving effect to
payments allocated to principal reported under clause (a) above;
(h) the aggregate Purchase Amounts paid by Seller or Servicer with
respect to the related Collection Period;
(i) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(j) the number, and aggregate Principal Balance outstanding, of
Receivables past due 30-59, 60-89, 90-119 and 120 and over days;
(k) the weighted average Contract Rates of the Receivables, weighted
based on the Principal Balance of each such Receivable as of the last day of the
related Collection Period;
(l) the weighted average of the remaining term to maturity of the
Receivables, weighted based on the Principal Balance of each such Receivable as
of the last day of the related Collection Period;
(m) the amount of the aggregate Principal Balances of any Receivables
that became Defaulted Receivables, if any, during such Collection Period;
(n) the aggregate net losses on the Receivables incurred during the
period from the Cutoff Date to and including the last day of the related
Collection Period;
(o) commencing on the Crossover Date, the Average Sixty-Day
Delinquency Ratio as of the last day of the related Collection Period,
Cumulative Realized Losses as of the last day of the related Collection Period
and whether a Trigger Event is in effect; and
(p) the amount distributed to Certificateholders.
Each amount set forth pursuant to PARAGRAPH (A), (B), (E) or (F) above
relating to the Notes shall be expressed as a dollar amount per $1,000 of the
initial principal balance of the Notes (or Class thereof).
SECTION 5.7. NET DEPOSITS. As an administrative convenience, unless
Servicer is required to remit Collections within two Business Days of receipt
thereof, Servicer will be permitted to make the deposit of Collections and
Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to Servicer with respect to the Collection Period.
Servicer, however, will account to Owner Trustee, Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.8. RESERVE ACCOUNT.
(a) Servicer shall cause to be established and maintain in the name of
the Indenture Trustee, as secured party of the Issuer and agent for the Issuer
and the Noteholders, an Eligible Deposit Account (the "RESERVE ACCOUNT"). The
Reserve Account and any amounts therein shall be pledged to the Indenture
Trustee and held for the benefit of the Noteholders and Certificateholders. The
Reserve Account shall be initially established and maintained with the Indenture
Trustee or its designee (the "SECURITIES INTERMEDIARY"). The Depositor shall
cause $1,540,360.23 to be deposited to the Reserve Account on the Closing Date.
(b) The Securities Intermediary hereby expressly agrees with the
Indenture Trustee that: (i) all matters relating to the Reserve Account shall be
governed by the laws of the State of New York; (ii) all Eligible Investments
held by the Securities Intermediary on behalf of the Indenture Trustee in the
Reserve Account shall be treated as "financial assets" (as defined in Article 8
of the New York Uniform Commercial Code; (iii) the Securities Intermediary will
treat the Indenture Trustee as entitled to exercise the rights comprising the
investments or financial assets credited to the Reserve Account; (iv) the
financial assets credited to the Reserve Account shall not be registered in the
name of, payable to the order of, or specially indorsed to the Indenture
Trustee; and (v) the Securities Intermediary will not agree to comply with
entitlement orders originated by any Person with respect to the investments or
financial assets held in the Reserve Account other than the Indenture Trustee.
(c) The Reserve Account shall be under the sole custody and control of
Indenture Trustee. If, at any time, the Reserve Account ceases to be an Eligible
Deposit Account, Seller 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 Reserve Account as an Eligible Deposit Account and shall
transfer or cause to be transferred any cash and/or any investments that are in
the existing account which is no longer an Eligible Deposit Account to such new
Reserve Account.
(d) Investment earnings attributable to the Reserve Account Property
and proceeds therefrom shall be held by Indenture Trustee in the Reserve
Account, shall be deposited into the Collection Account on each Payment Date,
and will be available to pay distributions provided for in Section 5.5. Amounts
on deposit in the Reserve Account on any Payment Date in excess of the Reserve
Account Required Amount shall be deposited into the Certificate Distribution
Account.
ARTICLE VI.
SELLER
SECTION 6.1. REPRESENTATIONS OF SELLER. Seller makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate and the Indenture Trustee is deemed to have relied in accepting
administration of its trusts. The representations speak as of the execution and
delivery of this Agreement and shall survive the sale of the Receivables to the
Issuer and the subsequent pledge thereof to the Indenture Trustee pursuant to
the Indenture.
(a) ORGANIZATION AND GOOD STANDING. Seller has been duly organized and
is validly existing as a Delaware corporation in good standing under the laws of
the State of Delaware, with the 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 has, full power,
authority and legal right to acquire, own and sell the Receivables and the other
properties and rights included in the Owner Trust Estate assigned to Issuer
pursuant to ARTICLE II.
(b) DUE QUALIFICATION. Seller is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property,
or the conduct of its business shall require such qualifications, except where
the failure to so obtain would not have a material adverse impact either on
Seller, the transactions contemplated in the Basic Documents or the Receivables.
(c) POWER AND AUTHORITY. Seller has the corporate power, authority and
legal right to execute and deliver this Agreement and the Basic Documents to
which it is a party and to carry out their respective terms and to sell and
assign the property to be sold and assigned to and deposited with Issuer as the
Owner Trust Estate; and the execution, delivery and performance of this
Agreement and the Basic Documents to which it is a party have been duly
authorized by Seller by all necessary corporate action.
(d) NO CONSENT REQUIRED. No approval, authorization, consent, license
or other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement or the Basic Documents to which it is
a party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the "blue sky" or securities laws of any
State or the Securities Act and (ii) the filing of UCC financing statements.
(e) VALID SALE; BINDING OBLIGATION. Seller intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the other
properties and rights included in the Owner Trust Estate conveyed by Seller to
Issuer hereunder, enforceable against creditors of and purchasers from Seller;
and each of this Agreement and the Basic Documents to which it is a party
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its respective terms, subject, as to enforceability,
to applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement of the
rights of creditors generally and to equitable limitations on the availability
of specific remedies.
(f) NO VIOLATION. The execution, delivery and performance by Seller of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under or result in the creation or imposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the certificate of
incorporation or bylaws of Seller, (ii) any material indenture, contract, lease,
mortgage, deed of trust or other instrument or agreement to which Seller is a
party or by which Seller is bound, or (iii) any law, order, rule or regulation
applicable to Seller of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having jurisdiction
over Seller.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending, or, to the knowledge of Seller, threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over Seller or its properties: (i) asserting
the invalidity of this Agreement, any other Basic Document, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or Certificates
or the consummation of any of the transactions contemplated by this Agreement or
any other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Seller of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable, or (iv) that
may materially and adversely affect the federal or state income, excise
franchise or similar tax attributes of Issuer, the Notes or the Certificates.
(h) PRINCIPAL PLACE OF BUSINESS. The principal place of business of
Seller is 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211.
SECTION 6.2. CONTINUED EXISTENCE. During the term of this Agreement,
subject to SECTION 6.4, Seller will keep in full force and effect its existence,
rights and franchises as a corporation organized under the laws of the State of
Delaware and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Basic Documents and each
other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.
SECTION 6.3. LIABILITY OF SELLER; INDEMNITIES. Subject to SECTION
10.5, Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by Seller under this Agreement.
(a) Seller shall indemnify, defend and hold harmless Issuer, Owner
Trustee (individually and in its capacity as such), Indenture Trustee
(individually and in its capacity as such), the Certificateholders and the
Noteholders and the respective officers, directors, employees and agents of
Issuer, Owner Trustee and Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent arising out of,
or imposed upon such Person through or as a result of (i) Seller's willful
misfeasance, bad faith or gross negligence (other than errors in judgment) in
the performance of its duties under this Agreement, or by reason of breach of
contract or reckless disregard of its obligations and duties under this
Agreement or any other Basic Document and (ii) Seller's violation of Federal or
state securities laws in connection with the offering and sale of the Notes and
the Certificates or in connection with any application relating to the Notes or
Certificates under any state securities laws.
(b) Seller shall pay any and all taxes levied or assessed upon the
Issuer or upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of Owner Trustee or Indenture Trustee and the termination of this
Agreement or any other Basic Document and shall include reasonable fees and
expenses of counsel and other expenses of litigation. If Seller shall have made
any indemnity payments pursuant to this Section and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to Seller, without
interest.
SECTION 6.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Any Person (a) into which Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Seller shall be a party or (c) which may succeed to the properties and assets of
Seller substantially as a whole, shall be the successor to Seller without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided that Seller hereby covenants that it will not
consummate any of the foregoing transactions except upon satisfaction of the
following: (i) the surviving entity, if other than ACE Securities Corp.,
executes an agreement of assumption to perform every obligation of Seller under
this Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to SECTION 3.1 or 6.1 shall have been
breached, (iii) Seller shall have delivered to Owner Trustee and Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Seller shall have a consolidated net worth at
least equal to that of the predecessor Seller, (v) such transaction will not
result in a material adverse federal or state tax consequence to Issuer, the
Noteholders or the Certificateholders and (vi) unless ACE Securities Corp. is
the surviving entity, Seller shall have delivered to Owner Trustee and Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of Owner Trustee and Indenture Trustee, respectively, in
the Receivables and reciting the details of such filings, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests.
SECTION 6.5. LIMITATION ON LIABILITY OF SELLER AND OTHERS. Seller and
any director or officer or employee or agent of 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 any
Basic Document (provided that such reliance shall not limit in any way Seller's
obligations under SECTION 3.2 or 6.3). Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion may involve it
in any expense or liability.
SECTION 6.6. SELLER MAY OWN CERTIFICATES OR NOTES. Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not Seller or an Affiliate thereof, except as expressly provided herein or
in any Basic Document. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to Seller or any such
Affiliate shall have an equal and proportionate benefit under the provisions of
this Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates of the same class.
SECTION 6.7. SECURITY INTEREST. During the term of this Agreement,
Seller will not take any action to assign the security interest in any Financed
Vehicles other than pursuant to the Basic Documents.
SECTION 6.8. INDEBTEDNESS OF SELLER. Seller shall provide written
notice to the Rating Agencies at least thirty (30) days prior to the date it
incurs any material indebtedness or assumes or guarantees any material
indebtedness of any other entity in connection with the acquisition or transfer
of receivables (other than the Receivables) or the issuance and sale of
securities (other than the Notes and Certificates) secured by or evidencing
beneficial ownership interests in such receivables or incurs any material,
non-incidental indebtedness in connection with the accomplishment of any of the
foregoing.
ARTICLE VII.
SERVICER
SECTION 7.1. REPRESENTATIONS OF SERVICER. Servicer makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate and the Indenture Trustee and the Owner Trustee are deemed to have relied
in accepting administration of their trusts. The representations speak as of the
execution and delivery of the Agreement and shall survive the sale, transfer and
assignment of the Receivables to Issuer and the pledge thereof to Indenture
Trustee pursuant to the Indenture:
(a) ORGANIZATION AND GOOD STANDING. Servicer has been duly organized
and is validly existing as a national banking association in good standing under
the laws of the United States of America, with the full 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 has had at all relevant
times, and shall have, the power, authority and legal right to service the
Receivables and the other properties and rights included in the Owner Trust
Estate.
(b) DUE QUALIFICATION. Servicer is duly qualified to do business and
in good standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the servicing of the Receivables as required by this
Agreement) shall require such qualifications.
(c) POWER AND AUTHORITY. Servicer has the power, authority and legal
right to execute and deliver this Agreement and the Basic Documents to which it
is a party and to carry out their respective terms; and the execution, delivery
and performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.
(d) NO CONSENT REQUIRED. No approval, authorization, consent, license
or other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement, the Basic Documents to which it is a
party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the "blue sky" or securities laws of any
State or the Securities Act and (ii) the filing of UCC financing statements.
(e) BINDING OBLIGATION. Each of this Agreement and the Basic Documents
to which it is a party constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
(f) NO VIOLATION. The execution, delivery and performance by Servicer
of this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under, or result in the creation or disposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the charter or bylaws of
Servicer, (ii) any material indenture, contract, lease, mortgage, deed of trust
or other instrument or agreement to which Servicer is a party or by which
Servicer is bound, or (iii) any law, order, rule or regulation applicable to
Servicer of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over Servicer.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending, or, to Servicer's knowledge, threatened, before any court, regulatory
body, administrative agency, or tribunal or other governmental instrumentality
having jurisdiction over Servicer or its properties: (i) asserting the
invalidity of this Agreement, any other Basic Document, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Certificates or the
Notes or the consummation of any of the transactions contemplated by this
Agreement or any other Basic Document, (iii) seeking any determination or ruling
that might materially and adversely affect the performance by Servicer of its
obligations under, or the validity or enforceability of, this Agreement, any
other Basic Document, the Notes or the Certificates, to the extent applicable,
or (iv) that may materially and adversely affect the federal or state income,
excise, franchise or similar tax attributes of the Certificates.
SECTION 7.2. INDEMNITIES OF SERVICER.
(a) Subject to SECTION 10.5, Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by
Servicer under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee (individually and in its capacity as such), Indenture Trustee
(individually and in its capacity as such), Seller, the Certificateholders and
the Noteholders and any of the respective officers, directors, employees and
agents of Issuer, Owner Trustee, Indenture Trustee or Seller from any and all
costs, expenses, losses, claims, damages and liabilities (including reasonable
attorneys' fees and expenses) to the extent arising out of, or imposed upon any
such Person through, the negligence, willful misfeasance, breach of contract or
bad faith (other than errors in judgment) of Servicer in the performance of its
obligations and duties under this Agreement or any other Basic Document or in
the performance of the obligations and duties of any subcustodian or subservicer
in the performance of its obligations and duties under any custody or
subservicing agreement. Notwithstanding the foregoing, if Servicer is rendered
unable, in whole or in part, by virtue of an act of God, act of war, fires,
earthquake or other natural disasters, to satisfy its obligations under this
Agreement, Servicer shall not be deemed to have breached any such obligation
upon the sending of written notice of such event to the other parties hereto,
for so long as Servicer remains unable to perform such obligation as a result of
such event. This provision shall not be construed to limit Servicer's or any
other party's rights, obligations, liabilities, claims or defenses which arise
as a matter of law or pursuant to any other provision of this Agreement.
(c) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee (individually and in its capacity as such), and Indenture Trustee
(individually and in its capacity as such) and their respective officers,
directors, employees and agents from and against any taxes that may at any time
be asserted against any such Person as a result of an action or inaction of the
Servicer with respect to the transactions contemplated in this Agreement or in
the other Basic Documents, including any sales, gross receipts, general
corporation, tangible or intangible personal property, franchise, privilege, or
license taxes, or any taxes of any kind which may be asserted (not including any
Federal or other income taxes arising out of transactions contemplated by this
Agreement and the other Basic Documents) against the Issuer, and costs and
expenses in defending against the same.
(d) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee (individually and in its capacity as such), Indenture Trustee
(individually and in its capacity as such), Seller, Certificateholders and the
Noteholders or any of the respective officers, directors, employees and agents
of Issuer, Owner Trustee, Indenture Trustee or Seller from any and all costs,
expenses, losses, claims, damages and liabilities (including reasonable
attorneys' fees and expenses) to the extent arising out of or imposed upon any
such Person as a result of any compensation payable to any subcustodian or
subservicer (including any fees payable in connection with the release of any
Receivable File from the custody of such subservicer or in connection with the
termination of the servicing activities of such subservicer with respect to any
Receivable) whether pursuant to the terms of any subservicing agreement or
otherwise.
(e) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee (individually and in its capacity as such), Indenture Trustee
(individually and in its capacity as such), Seller, the Certificateholders and
the Noteholders or any of the respective directors, officers, employees and
agents of Issuer, Owner Trustee, Indenture Trustee and Seller from and against
any and all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, arising out
of or resulting from the use, ownership, or operation by Servicer or any
Affiliate thereof of any Financed Vehicle.
Indemnification under this Section shall survive the resignation or
removal of Owner Trustee or Indenture Trustee and the termination of this
Agreement and the other Basic Documents, as applicable, and shall include
reasonable fees and expenses of counsel and other expenses of litigation. If
Servicer shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter shall collect
any of such amounts from others, such Person shall promptly repay such amounts
to Servicer, without interest.
SECTION 7.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. Any Person (a) into which Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Servicer shall be a party, (c) which may succeed to the properties and assets of
Servicer, substantially as a whole, or (d) 50% of the voting stock of which is
owned directly or indirectly by Wells Fargo & Company, may become the successor
to Servicer; provided that, unless Wells Fargo Bank, N.A. is the surviving party
to such transaction, Servicer hereby covenants that it will not consummate any
of the foregoing transactions except upon satisfaction of the following: (i) the
surviving Servicer, if other than Wells Fargo Bank, N.A., executes an agreement
of assumption to perform every obligation of Servicer under this Agreement, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to SECTION 7.1 shall have been breached and no Servicer
Termination Event, and no event that, after notice or lapse of time, or both,
would become a Servicer Termination Event shall have occurred and be continuing,
(iii) Servicer shall have delivered to Owner Trustee and Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and that the
Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Servicer shall have a consolidated net worth at
least equal to that of the predecessor Servicer, and (v) such transaction will
not result in a material adverse Federal or state tax consequence to Issuer, the
Noteholders or the Certificateholders.
SECTION 7.4. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to Issuer, the Noteholders or the Certificateholders, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action by Servicer or any subservicer pursuant to this Agreement
or for errors in judgment; provided that this provision shall not protect
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith, breach of contract or gross
negligence in the performance of duties (except for errors in judgment) under
this Agreement. Servicer or any subservicer and any of their respective
directors, officers, employees or agents may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement.
Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action that in its opinion may involve it in any expense or
liability; provided that Servicer may (but shall not be required to) undertake
any reasonable action that it may deem necessary or desirable in respect of the
Basic Documents to protect the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the legal
expense and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
Neither Servicer nor any of its directors, officers, employees or
agents shall be under any liability to Issuer, the Noteholders or the
Certificateholders for any losses, claims or damages arising solely from, out
of, or in connection with, the origination of a FreedomNation Receivable or the
servicing of a FreedomNation Receivable prior to the Cutoff Date.
SECTION 7.5. WELLS FARGO BANK, N.A. NOT TO RESIGN AS SERVICER. Subject
to the provisions of SECTION 7.3, Wells Fargo Bank, N.A. hereby agrees not to
resign from the obligations and duties hereby imposed on it as Servicer under
this Agreement except upon determination that the performance of its duties
hereunder shall no longer be permissible under applicable law or if such
resignation is required by regulatory authorities. Notice of any such
determination permitting the resignation of Wells Fargo Bank, N.A. as Servicer
shall be communicated to Owner Trustee and Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to Owner Trustee and Indenture Trustee concurrently with or promptly
after such notice. No such resignation shall become effective until the earlier
of Indenture Trustee or a Successor Servicer having assumed the responsibilities
and obligations of the resigning Servicer in accordance with SECTION 8.2 or the
date upon which any regulatory authority requires such resignation.
SECTION 7.6. EXISTENCE. Subject to the provisions of SECTION 7.3,
during the term of this Agreement, Wells Fargo Bank, N.A. will keep in full
force and effect its existence, rights and franchises as a national banking
association in all jurisdictions in which the ownership or lease of property or
the conduct of its business (including the servicing of Receivables as required
by this Agreement) shall require such qualifications.
SECTION 7.7. SERVICER MAY OWN NOTES OR CERTIFICATES. The Servicer, and
any Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Notes or Certificates with the same rights as it
would have if it were not the Servicer or an Affiliate thereof, except as
expressly provided herein or in any Basic Document. Except as set forth herein
or in the other Basic Documents, Notes and Certificates so owned by or pledged
to Servicer or any such Affiliate shall have an equal and proportionate benefit
under the provisions of this Agreement and the other Basic Documents, without
preference, priority, or distinction as among all of the Notes and Certificates
of the same class.
ARTICLE VIII.
SERVICER TERMINATION EVENTS
SECTION 8.1. SERVICER TERMINATION EVENT. If any one of the following
events (a "SERVICER TERMINATION Event") shall occur and be continuing:
(a) any failure by Servicer to deliver to Indenture Trustee and Owner
Trustee the Servicer's Report in accordance with SECTION 4.9, or any failure by
Servicer (either as such or under the Purchase Agreement) to deliver to
Indenture Trustee or Owner Trustee for deposit in any of the Trust Accounts or
the Certificate Distribution Account any required payment or to direct Indenture
Trustee or Owner Trustee to make any required distributions therefrom that shall
continue unremedied for a period of five Business Days after written notice of
such failure is received by Servicer from Owner Trustee or Indenture Trustee or
after discovery of such failure by an Authorized Officer of Servicer; or
(b) failure on the part of Servicer duly to observe or to perform in
any material respect any other covenants or agreements of Servicer, set forth in
this Agreement or any other Basic Document to which it is a party, which failure
shall (i) materially and adversely affect the rights of either the
Certificateholders or Noteholders and (ii) continue unremedied for a period of
60 days after discovery of such failure by an Authorized Officer of Servicer or
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to Servicer by Owner Trustee or Indenture
Trustee or (B) to Servicer and to Owner Trustee and Indenture Trustee by the
Holders of Notes evidencing not less than 25% of the Outstanding Amount of the
Notes of the Controlling Note Class or, if no Notes are outstanding, Holders of
Certificates evidencing not less than 25% of the outstanding Certificate
Percentage Interests, as applicable (or for such longer period, not in excess of
120 days, as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 120 days and Servicer delivers an
Officer's Certificate to Owner Trustee and Indenture Trustee to such effect and
to the effect that Servicer or Seller, as applicable, has commenced or will
promptly commence, and will diligently pursue, all reasonable efforts to remedy
such default); or
(c) an Insolvency Event occurs with respect to Servicer or any of its
respective successors;
(d) then, and in each and every case, so long as any Servicer
Termination Event shall not have been remedied, the Indenture Trustee may, and
at the direction of, the Holders of Notes evidencing greater than 50% of the
Outstanding Amount of the Notes of the Controlling Note Class (or, if no Notes
are then Outstanding, either the Owner Trustee or the Holders of Certificates
evidencing greater than 50% of the Certificate Percentage Interests) shall, by
notice then given in writing to Servicer (and to Owner Trustee or Indenture
Trustee, as applicable, if given by the Holders and the Rating Agencies)
terminate all the rights and obligations (other than the obligations set forth
in SECTION 7.2) of Servicer under this Agreement and the rights and obligations
of any subcustodian or subservicer pursuant to the terms of any related custody
or subservicing agreement. On or after the receipt by Servicer of such written
notice, all authority and power of Servicer under this Agreement, whether with
respect to the Notes, the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in Indenture Trustee or such
Successor Servicer as may be appointed under SECTION 8.2; and, without
limitation, Indenture Trustee and Owner Trustee are hereby authorized and
empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the Successor Servicer, Indenture
Trustee and Owner Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement, including the
transfer to the Successor Servicer for administration by it of all cash amounts
that shall at the time be held by the predecessor Servicer for deposit, or shall
thereafter be received by it with respect to a Receivable. Servicer shall
promptly transfer its electronic records relating to the Receivables to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the Successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses and if
not paid by the predecessor Servicer shall be reimbursable to the Person
incurring such costs and expenses from amounts held in the Collection Amount.
SECTION 8.2. APPOINTMENT OF SUCCESSOR.
(a) Upon Servicer's receipt of notice of termination, pursuant to
SECTION 8.1 or Servicer's resignation (if and to the extent permitted in
accordance with the terms of this Agreement), the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the earlier of (i) the date 45
days from the delivery to Owner Trustee and Indenture Trustee of written notice
of such resignation (or written confirmation of such notice) in accordance with
the terms of this Agreement and (ii) the date upon which the predecessor
Servicer shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of Servicer's
termination or resignation hereunder, Indenture Trustee shall appoint a
Successor Servicer (which may be the Indenture Trustee), and the Successor
Servicer shall accept its appointment by a written assumption in form acceptable
to Owner Trustee and Indenture Trustee. In the event that a Successor Servicer
has not been appointed at the time when the predecessor Servicer has ceased to
act as Servicer in accordance with this Section, Indenture Trustee without
further action shall automatically be appointed the Successor Servicer and
Indenture Trustee shall be entitled to the Servicing Fee. Notwithstanding the
above, Indenture Trustee shall, if it shall be unwilling or unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established institution, having a net worth of not less than $50,000,000 and
whose regular business shall include the servicing of consumer receivables, as
the successor to Servicer under this Agreement; provided, that the appointment
of any such Successor Servicer will not result in the withdrawal, qualification
or reduction of the outstanding rating assigned to the Certificates or Notes by
any Rating Agency.
(b) Upon appointment, the Successor Servicer (including Indenture
Trustee acting as Successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement. No Successor Servicer shall be liable for any acts or omissions of
any predecessor Servicer.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
the predecessor Servicer pursuant to SECTION 4.7 or 7.2) other than those
relating to the management, administration, servicing, custody or collection of
the Receivables and the other rights and properties included in the Owner Trust
Estate. The Successor Servicer shall, upon its appointment pursuant to this
SECTION 8.2 and as part of its duties and responsibilities under this Agreement,
promptly take all action it deems necessary or appropriate so that the
predecessor Servicer (in whatever capacity) is paid or reimbursed all amounts it
is entitled to receive under this Agreement on each Payment Date subsequent to
the date on which it is terminated as Servicer hereunder.
SECTION 8.3. PAYMENT OF SERVICING FEE. If Servicer shall be replaced,
the predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees and any Supplemental Servicing Fees accrued and unpaid or
received to the effective date of the termination of the predecessor Servicer,
in each case, in accordance with SECTION 4.8.
SECTION 8.4. NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon
any termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, Owner Trustee or its Paying Agent shall give prompt written notice
thereof to Certificateholders and Indenture Trustee shall give prompt written
notice thereof to Noteholders.
SECTION 8.5. WAIVER OF PAST DEFAULTS. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes of the
Controlling Note Class (or the Holders of Certificates evidencing not less than
a majority of the outstanding Certificate Percentage Interests, as applicable,
in the case of any default which does not adversely affect Indenture Trustee or
the Noteholders) may, on behalf of all Noteholders and Certificateholders, waive
in writing any default by Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any required deposits
to any of the Trust Accounts in accordance with this Agreement. Upon any such
waiver of a past default, such default shall cease to exist, and any Servicer
Termination Event arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
ARTICLE IX.
TERMINATION
SECTION 9.1. OPTIONAL PURCHASE OF ALL RECEIVABLES; TERMINATION NOTICE.
(a) On the last day of any Collection Period immediately preceding a
Determination Date as of which the then outstanding Pool Balance is 10% or less
of the Original Pool Balance, Servicer shall have the option to purchase the
Owner Trust Estate other than the Trust Accounts, the Certificate Distribution
Account and any funds or investments therein. To exercise such option, Servicer
shall deposit pursuant to SECTION 5.4 in the Collection Account an amount which,
when added to the amounts on deposit in the Collection Account for such Payment
Date, equals the sum of the unpaid Principal Balance of the Receivables, plus
accrued and unpaid interest thereon; provided that this amount is sufficient to
repay all outstanding principal and accrued and unpaid interest on the Notes and
a majority of the Certificate Percentage Interests consent to the purchase. The
Notes and the Certificates will be redeemed concurrently therewith.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.
(c) Notice of any termination of Issuer shall be given by Servicer to
Owner Trustee, Indenture Trustee and the Rating Agencies as soon as practicable
after Servicer has received notice thereof.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. AMENDMENT.
(a) This Agreement may be amended by Seller, Servicer, Issuer and
Indenture Trustee, but without the consent of any of the Noteholders or the
Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement any
provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; provided that such
action shall not, as evidenced by an Opinion of Counsel delivered to
Owner Trustee and Indenture Trustee, adversely affect in any material
respect the interests of any Noteholder or Certificateholder;
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of Issuer
to qualify as, and to permit an election to be made to cause all or a
portion of Issuer to be treated as, a "financial asset securitization
investment trust" under the Code, and (B) in connection with any such
election, to modify or eliminate existing provisions set forth in this
Agreement relating to the intended federal income tax treatment of the
Notes or Certificates and Issuer in the absence of the election; it
being a condition to any such amendment that the Rating Agency
Condition shall have been satisfied; and
(iii) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to Issuer
of all or any portion of the Receivables to be recognized as a sale
under generally accepted accounting principles ("GAAP") by Seller to
Issuer, (b) Issuer to avoid becoming a member of Seller's consolidated
group under GAAP or (c) the Seller, Transferor or any of their
Affiliates to otherwise comply with or obtain more favorable treatment
under any law or regulation or any accounting rule or principle; it
being a condition to any such amendment that the Rating Agency
Condition shall have been satisfied.
(b) This Agreement may also be amended from time to time by Seller,
Servicer, Issuer and Indenture Trustee, with the consent of the Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes and
the consent of the Holders of Certificates evidencing not less than a majority
of the Certificate Percentage Interests for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided that no such amendment shall (i) increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Percentage Interests, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the Holders of all the outstanding Certificates of each class affected thereby.
(c) Prior to the execution of any such amendment or consent, Servicer
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied and the Opinion
of Counsel referred to in SECTION 10.2(I)(1) has been delivered. Owner Trustee
and Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects Owner Trustee's or Indenture Trustee's, as applicable,
own rights, duties or immunities under this Agreement or otherwise and no such
amendment shall be made without any such affected entity's prior written
consent.
SECTION 10.2. PROTECTION OF TITLE TO TRUST PROPERTY.
(a) Seller shall execute and file such financing statements and cause
to be executed and filed such continuation statements, all in such manner and in
such places as may be required by law fully to preserve, maintain and protect
the interest of Issuer and the interests of Indenture Trustee in the Receivables
and the proceeds thereof. Seller shall deliver (or cause to be delivered) to
Owner Trustee and Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither Seller nor Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, or any
successor provision, unless it shall have given Owner Trustee and Indenture
Trustee at least thirty days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of Seller and Servicer shall have an obligation to give Owner
Trustee and Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive office or jurisdiction of organization,
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment or new financing statement. Servicer shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, Servicer's
master computer records (including any backup archives) that refer to a
Receivable shall indicate clearly the interest of Issuer and Indenture Trustee
in such Receivable and that such Receivable is owned by Issuer and has been
pledged to Indenture Trustee pursuant to the Indenture. Indication of Issuer's
and Indenture Trustee's interest in a Receivable shall be deleted from or
modified on Servicer's computer systems when, and only when, the related
Receivable shall have been paid in full or repurchased by Seller or purchased by
Servicer.
(f) If at any time Seller or Servicer shall propose to sell, grant a
security interest in or otherwise transfer any interest in retail receivables to
any prospective purchaser, lender or other transferee, Servicer shall give to
such prospective purchaser, lender or other transferee computer tapes, records
or printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate clearly that
such Receivable has been sold and is owned by Issuer and has been pledged to
Indenture Trustee.
(g) Servicer, upon receipt of reasonable prior notice, shall permit
Indenture Trustee, Owner Trustee and their respective agents at any time during
normal business hours to inspect, audit and make copies of and abstracts from
Servicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall
have reasonable grounds to believe that such request is necessary in connection
with the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to Owner Trustee or to Indenture Trustee,
within thirty Business Days, a list of all Receivables (by contract number and
name of Obligor) then owned by Issuer, together with a reconciliation of such
list to the Schedule of Receivables and to each of Servicer's Reports furnished
before such request indicating removal of Receivables from Issuer.
(i) Servicer shall deliver to Owner Trustee and Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment thereto, an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements
and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of Issuer and
Indenture Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such
details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect
such interest; and
(2) within 120 days after the beginning of each calendar year
which commences more than four months after the Cutoff Date, an
Opinion of Counsel, dated as of a date during such 120-day period,
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of
Issuer and Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and
protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) Servicer shall cause Seller, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time
periods specified in such sections.
SECTION 10.3. NOTICES. All demands, notices and communications upon or
to Seller, Servicer, Owner Trustee, Indenture Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered, sent by
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of Seller,
to ACE Securities Corp., 6525 Morrison Boulevard, Suite 318, Charlotte, North
Carolina 28211, (b) in the case of Servicer, to Wells Fargo Bank, N.A., 711 W.
Broadway, Tempe Arizona 85282, Attention: Dianne Breuer, (c) in the case of
Issuer or Owner Trustee, at the Corporate Trust Office, (d) in the case of
Indenture Trustee, at the Corporate Trust Office, (e) in the case of Moody's, to
Moody's Investors Service, Inc., to 99 Church Street, New York, New York 10007,
Attention of Asset Backed Securities Group, (f) in the case of Standard &
Poor's, to Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., 55 Water Street, New York, New York 10004, Attention of Asset
Backed Surveillance Department, (g) in the case of Wells Fargo Bank Northwest,
N.A., to 79 South Main Street, Salt Lake City, Utah 84111, Attention: Brad Hardy
and (h) in the case of Wells Fargo Bank New Mexico, N.A., to 200 Lomas
Boulevard, Albuquerque, New Mexico 87102, Attention: Victor Valdez. Any notice
required or permitted to be mailed to a Noteholder or Certificateholder shall be
given by first class mail, postage prepaid, at the address of such Person as
shown in the Note Register or the Certificate Register, as applicable. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder or
Certificateholder shall receive such notice.
SECTION 10.4. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in SECTIONS 3.4, 4.1, 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
Servicer, this Agreement may not be assigned by Seller or Servicer without the
prior written consent of the Owner Trustee, Indenture Trustee, the Noteholders
evidencing not less than 66 2/3% of the Outstanding Amount of the Notes and the
Certificateholders evidencing not less than 66 2/3% of the outstanding
Certificate Percentage Interests.
SECTION 10.5. LITIGATION AND INDEMNITIES. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against any Person in respect of which
indemnity may be sought pursuant to SECTIONS 6.3 and 7.2, such Person (the
"INDEMNIFIED PERSON") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PERSON") in writing, and the
Indemnifying Person, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such
proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding. Nothing herein shall limit or affect the right of
the Indemnified Person to retain counsel satisfactory to such Indemnify Person
in its sole and actual discretion. The Indemnifying Person shall not be liable
for any settlement of any claim or proceeding effected without written consent,
but if settled with such consent of if there be a final judgment of the
plaintiff, the Indemnifying Person agrees to indemnify any Indemnified Person
from and against any loss or liability by reason of such settlement or judgment.
No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
SECTION 10.6. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of Seller, Servicer, Issuer, Owner Trustee
(individually and in its capacity as such) and Indenture Trustee (individually
and in its capacity as such) and for the benefit of the Certificateholders and
the Noteholders, as third-party beneficiaries, and nothing in this Agreement,
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 10.7. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.
SECTION 10.8. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.9. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.11. ASSIGNMENT TO INDENTURE TRUSTEE. Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by Issuer to Indenture Trustee pursuant to the Indenture for
the benefit of the Noteholders of all right, title and interest of Issuer in, to
and under the Receivables and/or the assignment of any or all of Issuer's rights
and obligations hereunder to Indenture Trustee.
SECTION 10.12. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, Indenture Trustee, Servicer and Seller shall not,
prior to the date which is one year and one day after the termination of this
Agreement with respect to Issuer, acquiesce, petition or otherwise invoke or
cause Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against 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 Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of Issuer. This SECTION 10.12 shall survive the
termination of this Agreement.
SECTION 10.13. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE
TRUSTEE.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by U.S. Bank Trust National Association not in
its individual capacity but solely in its capacity as Owner Trustee of Issuer
and in no event shall U.S. Bank Trust National Association in its individual
capacity have any liability for the representations, warranties, covenants,
agreements or other obligations of 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 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 Issuer hereunder, Owner Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of ARTICLES VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank not in its individual
capacity but solely as Indenture Trustee and in no event shall The Chase
Manhattan Bank have any liability for the representations, warranties,
covenants, agreements or other obligations of 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 Issuer. For the purposes of
this Agreement, in the performance of its duties and obligations hereunder,
Indenture Trustee shall be subject to, and entitled to the benefits of, the
terms and provisions of ARTICLE VI of the Indenture.
SECTION 10.14. FURTHER ASSURANCES. Seller and the Servicer 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 Owner Trustee or
Indenture Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 10.15. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, Indenture Trustee,
the Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and year first above written.
ACE RV AND MARINE TRUST 2001-RV1
By: U.S. Bank Trust National Association,
not in its ndividual capacity, but
solely as Owner Trustee
By: /s/ MELISSA A. ROSAL
--------------------------------------
Name: Melissa A. Rosal
Title: Vice President
ACE SECURITIES CORP., as Seller
By: /s/ EVELYN ECHEVARRIA
--------------------------------------
Name: Evelyn Echevarria
Title: Vice President
WELLS FARGO BANK, N.A., as Servicer and
Custodian
By: /s/ PAUL TSANG
--------------------------------------
Name: Paul Tsang
Title: Vice President
THE CHASE MANHATTAN BANK, not in its
individual apacity but solely as Indenture
Trustee,
By: /s/ JENNIFER H. BARAN
--------------------------------------
Name: Jennifer H. Baran
Title: Assistant Vice President
WELLS FARGO BANK NORTHWEST, N.A.
By: /s/ BRAD D. HARDY
--------------------------------------
Name: Brad D. Hardy
Title: Executive Vice President
WELLS FARGO BANK NEW MEXICO, N.A.
By: /s/ EDWARD T. O'LEARY
--------------------------------------
Name: Edward T. O'Leary
Title: Executive Vice President
SCHEDULE A
(Delivered on Disk to Trustee and Owner Trustee)
SCHEDULE B
Location of Receivables Files
-------------------------------------------
The Receivables are located at the offices of the Custodian listed
below.
Wells Fargo Bank, N.A.
3033 Elder Street
Boise, Idaho 83705
Professional Records Management
1090 Boeing
Boise, Idaho 83705
SCHEDULE C
Permitted Exceptions in Receivable Files
Receivables with missing titles or copies of titles as of Cut-off Date
FSB LOAN NUMBER SHAW LOAN NUMBER
002002404194053 5043821007598
002002625300614 5043821147915
003003258373172 5043821161619
006006135306808 5043821402278
019019509942880 5043821765856
019019650799251 5043821876463
019019650978529 5043821876810
022022411938134 5043821898483
022022595211032 5043822270302
022022605256599 5043822283453
032032540609224 5043822548731
032032607557117 5043822563763
032039615721390 5043822583407
032093135722194 5043822600656
032140135872593 5043822609764
033033135862143 5043822685871
033033615734818 5043822705257
033033615830492 5043822705398
033330203508548 5043822842142
033330203585047 5043822842829
061054135830611 5043822859690
061069135726124 5043822862074
061089135830690 89135830690
061311203512706 5043822868998
061311555606291 5043823043674
061311579607893 5043823097290
061311579607909 5043823097316
071071586607490 5043823294996
071086136606612 5043823300942
137553135559691 5043823620562
143036135574973 5043823620752
143227135633768 5043823650015
143229555731826 5043823696026
143277135832956 5043823708607
143280136734324 5043823709662
143349133195898 5043823709969
143429223729498 5043823713904
143525608629172 5043823835996
170170136254830 5043823987615
281281135444642 5043824650162
753753136550577 5043825076888
800842136624034 5043825095664
800842136723353 5043825095748
800842136835415 5043825095946
Receivables with missing original retail installment sale contracts as of
Cut-off Date:
FSB LOAN NUMBER SHAW LOAN NUMBER
001274136982969 5043821006434
020020133791733 5043821877248
033059135734432 5043822803953
061035133621923 5043822858205
004208135109412 5043821394954
009009136285234 5043821495181
003095133422174 5043821325511
003157133203346 5043821326782
008008136271741 5043821427481
016016135108015 5043821578515
032233136538394 5043822681771
033164137627711 5043822814398
061188136322419 5043822866067
061198133545877 5043822866729
071071136073512 5043823259478
342342135207423 5043824650741
SCHEDULE D
FreedomNation Receivables Subject to Ship Mortgage Act
EXHIBIT A
Form of Servicer's Report
-------------------------------------------
APPENDIX X
DEFINITIONS
"ACCRUED CLASS A NOTE INTEREST" shall mean, with respect to any
Payment Date, the sum of the Class A Noteholders' Monthly Accrued Interest for
such Payment Date and the Class A Noteholders Interest Carryover Shortfall for
such Payment Date.
"ACCRUED CLASS B NOTE INTEREST" shall mean, with respect to any
Payment Date, the sum of the Class B Noteholders' Monthly Accrued Interest for
such Payment Date and the Class B Noteholders Interest Carryover Shortfall for
such Payment Date.
"ACCRUED CLASS C NOTE INTEREST" shall mean, with respect to any
Payment Date, the sum of the Class C Noteholders' Monthly Accrued Interest for
such Payment Date and the Class C Noteholders Interest Carryover Shortfall for
such Payment Date.
"ACCRUED CLASS D NOTE INTEREST" shall mean, with respect to any
Payment Date, the sum of the Class D Noteholders' Monthly Accrued Interest for
such Payment Date and the Class D Noteholders Interest Carryover Shortfall for
such Payment Date.
"ACCRUED CLASS E NOTE INTEREST" shall mean, with respect to any
Payment Date, the sum of the Class E Noteholders' Monthly Accrued Interest for
such Payment Date and the Class E Noteholders Interest Carryover Shortfall for
such Payment Date.
"ACT" is defined in SECTION 11.3(A) of the Indenture.
"ADMINISTRATION AGREEMENT" means the Administration Agreement, dated
June 1, 2001, among the Administrator, ACE RV and Marine Trust 2001-RV1, as
Issuer, and The Chase Manhattan Bank as Indenture Trustee, as the same may be
amended and supplemented from time to time.
"ADMINISTRATION FEE" is defined in SECTION 4 of the Administration
Agreement.
"ADMINISTRATOR" means Wells Fargo Bank Minnesota, National Association
and each successor Administrator.
"AFFILIATE" means, 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. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
or act as servicer with respect to the financial assets of such specified Person
unless such other Person controls the specified Person through equity ownership
or otherwise.
"AUTHENTICATING AGENT" is defined in SECTION 2.13 of the Indenture.
"AUTHORIZED OFFICER" means, with respect to Issuer and Servicer, any
officer of Owner Trustee or Servicer, as applicable, who is authorized to act
for Owner Trustee or Servicer, as applicable, in matters relating to Issuer and
who is identified on the list of Authorized Officers delivered by each of Owner
Trustee and Servicer to Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
"AVAILABLE COLLECTIONS" means, for any Payment Date, the sum of the
following amounts with respect to the Collection Period preceding such Payment
Date: (i) all payments collected with respect to the Receivables; (ii) all
Liquidation Proceeds attributable to Receivables which became Liquidated
Receivables during such Collection Period and all recoveries in respect of
Liquidated Receivables which were written off in prior Collection Periods; (iii)
the Purchase Amount received with respect to each Receivable that became a
Purchased Receivable during such Collection Period; and (iv) partial prepayments
of any refunded item included in the Principal Balance of a Receivable, such as
extended warranty protection plan costs, or physical damage, credit life or
disability insurance premiums; provided, however, that in calculating the
Available Collections the following will be excluded: (1) all payments and
proceeds (including Liquidation Proceeds) of any Receivables, the Purchase
Amount of which has been included in the Available Funds in a prior Collection
Period and (2) amounts consisting of the Supplemental Servicing Fee.
"AVAILABLE FUNDS" shall mean, for any Payment Date, the sum of
Available Collections for such Distribution Date and any investment earnings
accrued in the Reserve Account since the prior Payment Date.
"AVERAGE SIXTY-DAY DELINQUENCY RATIO" means the ratio of the average
of the aggregate Principal Balances of Receivables delinquent 60 days or more
during the preceding three Collection Periods to the average Pool Balance during
such preceding Collection Periods.
"BANK REGULATORY AUTHORITIES" means the Federal Reserve Board, the
Federal Deposit Insurance Corporation and Office of the Comptroller of Currency.
"BASIC DOCUMENTS" means the Purchase Agreement, the Indenture, the
Note Depository Agreement, the Sale and Servicing Agreement, the Trust
Agreement, the Administration Agreement, the Notes, the Certificates and other
documents and certificates delivered in connection therewith.
"BENEFIT PLAN" is defined in SECTION 3.12 of the Trust Agreement.
"BOOK ENTRY NOTE" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in SECTION 2.10 of the Indenture.
"BUSINESS DAY" means a day that is not a Saturday or a Sunday and that
in the States of New York, California and the State in which the Corporate Trust
Office is located is neither a legal holiday nor a day on which banking
institutions are authorized by law, regulation or executive order to be closed.
"CERTIFICATE" means a certificate evidencing the beneficial interest
of a Certificateholder in the Trust, substantially in the form of Exhibit A to
the Trust Agreement.
"CERTIFICATE ACCOUNT PROPERTY" means the Certificate Distribution
Account, all amounts and investments held from time to time therein (whether in
the form of deposit account, Physical Property, book entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"CERTIFICATE DISTRIBUTION ACCOUNT" is defined in SECTION 5.1 of the
Trust Agreement.
"CERTIFICATE PAYING AGENT" shall mean any paying agent or co-paying
agent appointed pursuant to SECTION 3.10 of the Trust Agreement and shall
initially be the Indenture Trustee.
"CERTIFICATE PERCENTAGE INTEREST" shall mean with respect to any
Certificate, the percentage interest of ownership in the Issuer represented
thereby as set forth on the face thereof.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" means the register
mentioned and the registrar appointed pursuant to SECTION 3.4 of the Trust
Agreement.
"CERTIFICATEHOLDER" means the Person in whose name a Certificate is
registered on the Certificate Register.
"CLASS" shall mean a class of Notes, which may be the Class A-1 Notes,
the Class A-2, Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5
Notes, the Class B Notes, Class C Notes, Class D Notes or Class E Notes.
"CLASS A NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, for any
Payment Date, the excess of the Class A Noteholders' Monthly Accrued Interest
for the preceding Payment Date and any outstanding Class A Noteholders' Interest
Carryover Shortfall on such preceding Payment Date, over the amount in respect
of interest that is actually paid to Noteholders of the Class A Notes on such
preceding Payment Date, plus interest on the amount of interest due but not paid
to Noteholders of Class A Notes on the preceding Payment Date, to the extent
permitted by law at the respective Interest Rates borne by such Class A Notes
for the related Interest Period.
"CLASS A NOTEHOLDERS' MONTHLY ACCRUED INTEREST" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes and the Class A-5 Notes at the respective Interest
Rate for such Class and on the outstanding principal amount of the Notes of each
such Class on the immediately preceding Payment Date or the Closing Date, as the
case may be, after giving effect to all payments of principal to the Noteholders
of such Class on or prior to such preceding Payment Date.
"CLASS A NOTES" shall mean, collectively, the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5
Notes.
"CLASS A-1 FINAL SCHEDULED PAYMENT DATE" shall mean the April 2006
Payment Date.
"CLASS A-1 INTEREST RATE" means 4.05% per annum. Interest with respect
to the Class A-1 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"CLASS A-1 NOTEHOLDER" shall mean the Person in whose name a Class A-1
Note is registered on the Note Register.
"CLASS A-1 NOTES" means the Class A-1 Asset Backed Notes,
substantially in the form of Exhibit A-1 to the Indenture.
"CLASS A-2 FINAL SCHEDULED PAYMENT DATE" shall mean the April 2008
Payment Date.
"CLASS A-2 INTEREST RATE" means 4.85% per annum. Interest with respect
to the Class A-2 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"CLASS A-2 NOTEHOLDER" shall mean the Person in whose name a Class A-2
Note is registered on the Note Register.
"CLASS A-2 NOTES" means the Class A-2 Asset Backed Notes,
substantially in the form of Exhibit A-2 to the Indenture.
"CLASS A-3 FINAL SCHEDULED PAYMENT DATE" shall mean the January 2011
Payment Date.
"CLASS A-3 INTEREST RATE" means 5.36% per annum. Interest with respect
to the Class A-3 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"CLASS A-3 NOTEHOLDER" shall mean the Person in whose name a Class A-3
Note is registered on the Note Register.
"CLASS A-3 NOTES" means the Class A-3 Asset Backed Notes,
substantially in the form of Exhibit A-3 to the Indenture.
"CLASS A-4 FINAL SCHEDULED PAYMENT DATE" shall mean the May 2012
Payment Date.
"CLASS A-4 INTEREST RATE" means 5.75% per annum. Interest with respect
to the Class A-4 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"CLASS A-4 NOTEHOLDER" shall mean the Person in whose name a Class A-4
Note is registered on the Note Register.
"CLASS A-4 NOTES" means the Class A-4 Asset Backed Notes substantially
in the form of Exhibit A-4 to the Indenture.
"CLASS A-5 FINAL SCHEDULED PAYMENT DATE" shall mean the September 2021
Payment Date.
"CLASS A-5 INTEREST RATE" means 6.30% per annum. Interest with respect
to the Class A-5 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"CLASS A-5 NOTEHOLDER" shall mean the Person in whose name a Class A-5
Note is registered on the Note Register.
"CLASS A-5 NOTES" means the Class A-5 Asset Backed Notes substantially
in the form of Exhibit A-5 to the Indenture.
"CLASS B FINAL SCHEDULED PAYMENT DATE" shall mean the September 2021
Payment Date.
"CLASS B INTEREST RATE" means 6.61% per annum. Interest with respect
to the Class B Notes shall be computed on the basis of a 360-day year consisting
of twelve 30-day months for all purposes of the Basic Documents.
"CLASS B NOTEHOLDER" shall mean the Person in whose name a Class B
Note is registered on the Note Register.
"CLASS B NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" shall mean, with
respect to any Payment Date, the excess of the Class B Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class B
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
B Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class B Notes on the preceding Payment Date,
to the extent permitted by law at the Class B Rate for the related Interest
Period.
"CLASS B NOTEHOLDERS' MONTHLY ACCRUED INTEREST" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class B Notes at the Class B Note Rate on the outstanding
principal amount of the Class B Notes on the immediately preceding Payment Date
or the Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Class B Notes on or prior to such preceding
Payment Date.
"CLASS B NOTES" means the Class B Asset Backed Notes, substantially in
the form of Exhibit B to the Indenture.
"CLASS C FINAL SCHEDULED PAYMENT DATE" shall mean the September 2021
Payment Date.
"CLASS C INTEREST RATE" means 6.85% per annum. Interest with respect
to the Class C Notes shall be computed on the basis of a 360-day year consisting
of twelve 30-day months for all purposes of the Basic Documents.
"CLASS C NOTEHOLDER" shall mean the Person in whose name a Class C
Note is registered on the Note Register.
"CLASS C NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" shall mean, with
respect to any Payment Date, the excess of the Class C Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class C
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
C Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class C Notes on the preceding Payment Date,
to the extent permitted by law at the Class C Rate for the related Interest
Period.
"CLASS C NOTEHOLDERS' MONTHLY ACCRUED INTEREST" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class C Notes at the Class C Note Rate on the outstanding
principal amount of the Class C Notes on the immediately preceding Payment Date
or the Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Class C Notes on or prior to such preceding
Payment Date.
"CLASS C NOTES" means the Class C Asset Backed Notes, substantially in
the form of Exhibit C to the Indenture.
"CLASS D FINAL SCHEDULED PAYMENT DATE" shall mean the September 2021
Payment Date.
"CLASS D INTEREST RATE" means 7.58% per annum. Interest with respect
to the Class D Notes shall be computed on the basis of a 360-day year consisting
of twelve 30-day months for all purposes of the Basic Documents.
"CLASS D NOTEHOLDER" shall mean the Person in whose name a Class D
Note is registered on the Note Register.
"CLASS D NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" shall mean, with
respect to any Payment Date, the excess of the Class D Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class D
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
D Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class D Notes on the preceding Payment Date,
to the extent permitted by law at the Class D Rate for the related Interest
Period.
"CLASS D NOTEHOLDERS' MONTHLY ACCRUED INTEREST" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class D Notes at the Class D Note Rate on the outstanding
principal amount of the Class D Notes on the immediately preceding Payment Date
or the Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Class D Notes on or prior to such preceding
Payment Date.
"CLASS D NOTES" means the Class D Asset Backed Notes, substantially in
the form of Exhibit D to the Indenture.
"CLASS E FINAL SCHEDULED PAYMENT DATE" shall mean the September 2021
Payment Date.
"CLASS E INTEREST RATE" means 8.70% per annum. Interest with respect
to the Class E Notes shall be computed on the basis of a 360-day year consisting
of twelve 30-day months for all purposes of the Basic Documents.
"CLASS E NOTEHOLDER" shall mean the Person in whose name a Class E
Note is registered on the Note Register.
"CLASS E NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" shall mean, with
respect to any Payment Date, the excess of the Class E Noteholders' Monthly
Accrued Interest for the preceding Payment Date and any outstanding Class E
Noteholders' Interest Carryover Shortfall on such preceding Payment Date, over
the amount in respect of interest that is actually paid to Noteholders of Class
E Notes on such preceding Payment Date, plus interest on the amount of interest
due but not paid to Noteholders of Class E Notes on the preceding Payment Date,
to the extent permitted by law at the Class E Rate for the related Interest
Period.
"CLASS E NOTEHOLDERS' MONTHLY ACCRUED INTEREST" shall mean, with
respect to any Payment Date, the aggregate interest accrued for the related
Interest Period on the Class E Notes at the Class E Note Rate on the outstanding
principal amount of the Class E Notes on the immediately preceding Payment Date
or the Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Class E Notes on or prior to such preceding
Payment Date.
"CLASS E NOTES" means the Class E Asset Backed Notes, substantially in
the form of Exhibit E to the Indenture.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, 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" means July 10, 2001.
"CODE" means the Internal Revenue Code of 1986 and Treasury
Regulations promulgated thereunder.
"COLLATERAL" is defined in the Granting Clause of the Indenture.
"COLLECTION ACCOUNT" means the account designated as such, established
and maintained pursuant to SECTION 5.1 of the Sale and Servicing Agreement.
"COLLECTION PERIOD" means, (a) in the case of the initial Collection
Period, the period from but not including the Cutoff Date to and including June
30, 2001 and (b) thereafter, each calendar month during the term of the Sale and
Servicing Agreement. With respect to any Determination Date, Deposit Date or
Payment Date, the "related Collection Period" or the "preceding Collection
Period" means the Collection Period preceding the month in which such
Determination Date, Deposit Date or Payment Date occurs and the "second
Collection Period preceding" means the Collection Period two months preceding
the month in which such Determination Date or Payment Date occurs.
"COLLECTIONS" means all collections on the Receivables and any
proceeds from Insurance Policies and lender's single interest insurance
policies.
"COMMISSION" means the Securities and Exchange Commission.
"CONTRACT RATE" means, with respect to a Receivable, the rate per
annum of interest charged on the outstanding principal balance of such
Receivable.
"CONTROLLING NOTE CLASS" means, with respect any Notes Outstanding,
the Class A Notes (voting together as a single class) as long as any Class A
Notes are Outstanding, and thereafter the Class B Notes, as long as any Class B
Notes are outstanding, and thereafter the Class C Notes, as long as any Class C
Notes are Outstanding, and thereafter the Class D Notes, as long as any Class D
Notes are Outstanding and thereafter the Class E Notes, as long as any Class E
Notes are Outstanding (excluding Notes held by Seller, the Transferor, the
Servicer or their Affiliates).
"CORPORATE TRUST OFFICE" means:
(a) as used in the Indenture, or otherwise with respect to Indenture
Trustee, the principal office of Indenture Trustee at which at any particular
time its corporate trust business shall be administered which office at date of
the execution of the Indenture is located at 450 West 33rd Street, New York, New
York 10001, Attention: Institutional Trust Services, ACE RV and Marine Trust
2001 - RV 1 Telephone: (212) 946-3200; Facsimile: (212) 946-3916 or at such
other address as Indenture Trustee may designate from time to time by notice to
the Noteholders, Servicer and Issuer, or the principal corporate trust office of
any successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and Issuer); and
(b) as used in the Trust Agreement, or otherwise with respect to Owner
Trustee, the corporate trust office of Owner Trustee located at 111 East Wacker
Drive, Suite 3000, Chicago, IL 60601, Attention: Melissa Rosal; Facsimile: (312)
228-9401 or at such other address as Owner Trustee may designate by notice to
the Certificateholders and Depositor, or the principal corporate trust office of
any successor Owner Trustee (the address of which the successor owner trustee
will notify the Certificateholders and Depositor).
"CROSSOVER DATE" means the July 2005 Payment Date.
"CUMULATIVE REALIZED LOSSES" means with respect to any Payment Date
(1) the aggregate Principal Balance of all Receivables that have become
Defaulted Receivables during any Collection Period from the Cutoff date through
the Collection Period preceding the Payment Date minus (2) all Liquidation
Proceeds.
"CUSTODIAN" means, Wells Fargo Bank, N.A., in its capacity as
custodian of the Receivable Files.
"CUTOFF DATE" means June 1, 2001.
"CUTOFF DATE PRINCIPAL BALANCE" means, with respect to any Receivable,
the Initial Principal Balance of such Receivable minus the sum of the portion of
all payments received under such Receivable from or on behalf of the related
Obligor on or prior to the Cutoff Date and allocable to principal in accordance
with the terms of the Receivable.
"DEALER" means, with respect to any Receivable not originated directly
by an Originator, the seller of the related Financed Vehicle.
"DEALER AGREEMENT" means an agreement between an Originator and a
Dealer pursuant to which such Originator acquires Loans from the Dealer or
agrees to originate Loans in connection with the retail sale of Vehicles by such
Dealer.
"DEALER RECOURSE" means, with respect to any Dealer, any rights and
remedies against such Dealer under the related Dealer Agreement (other than with
respect to any breach of representation or warranty thereunder) with respect to
credit losses on a Receivable secured by a Financed Vehicle sold by such Dealer.
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFAULTED RECEIVABLE" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which Servicer has determined to
charge off during such Collection Period in accordance with its customary
servicing practices (and, in no event later than the end of the Collection
Period during which any payment on a Receivable shall have become 120 days past
due).
"DEFINITIVE NOTES" is defined in SECTION 2.10 of the Indenture.
"DELIVERY" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(l)(i) of the UCC (or any successor
provision) and are susceptible of physical delivery, transfer thereof to
Indenture Trustee or its nominee or custodian by physical delivery to Indenture
Trustee or its nominee or custodian endorsed to, or registered in the name of,
Indenture Trustee or its nominee or custodian or endorsed in blank, and, with
respect to a "certificated security" (as defined in Section 8-102 of the UCC)
transfer thereof (i) by delivery of such certificated security endorsed to, or
registered in the name of, Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section 8- 313 of
the UCC, and which may be the Indenture Trustee) and the making by such
"financial intermediary" of entries on its books and records identifying such
certificated securities as belonging to Indenture Trustee or its nominee or
custodian and the sending by such financial intermediary of a confirmation of
the purchase of such certificated security by Indenture Trustee or its nominee
or custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(3) of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate securities
account of a financial intermediary by the amount of such certificated security,
the identification by the clearing corporation of the certificated securities
for the sole and exclusive account of the financial intermediary, the
maintenance of such certificated securities by such clearing corporation or a
"custodian bank" (as defined in Section 8-102(4) of the UCC) or the nominee of
either subject to the clearing corporation's exclusive control, the sending of a
confirmation by the financial intermediary of the purchase by Indenture Trustee
or its nominee or custodian of such securities and the making by such financial
intermediary of entries on its books and records identifying such certificated
securities as belonging to Indenture Trustee or its nominee or custodian (all of
the foregoing, "Physical Property"), and, in any event, any such Physical
Property in registered form shall be in the name of Indenture Trustee or its
nominee or custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership of any
such Trust Account Property to Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any securities issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a financial intermediary which is also a "depository" pursuant to
applicable Federal regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such book-entry registration to
Indenture Trustee or its nominee or custodian of the purchase by Indenture
Trustee or its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records identifying such
book entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations as belonging to Indenture Trustee or its nominee or
custodian and indicating that such custodian holds such Trust Account Property
solely as agent for Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Trust Account Property to
Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by 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
certificates as belonging to Indenture Trustee or its nominee or custodian.
"DEPOSIT DATE" means, with respect to any Collection Period, two
Business Days preceding the related Payment Date.
"DEPOSITOR" means Seller in its capacity as Depositor under the Trust
Agreement.
"DETERMINATION DATE" means, with respect to any Collection Period, two
Business Days preceding the related Payment Date.
"DOLLAR" and the sign "$" mean lawful money of the United States.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution acting in its fiduciary capacity
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as the long-term unsecured debt of such depository
institution shall have a credit rating from each Rating Agency in one of its
generic rating categories which signifies investment grade. Any such trust
account may be maintained with Owner Trustee, Indenture Trustee or any of their
respective Affiliates and any such trust account (other than the Reserve
Account) may be maintained with Wells Fargo Bank, N.A., or any of its
Affiliates, if such accounts meet the requirements described in clause (a) of
the preceding sentence.
"ELIGIBLE INSTITUTION" means a depository institution (which may be
Servicer (or any Affiliate of Servicer) Owner Trustee or Indenture Trustee, or
any of their respective Affiliates) organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), (a) which has (i) either a long-term
senior unsecured debt rating of AA or a short-term senior unsecured debt or
certificate of deposit rating of A-1 or better by Standard & Poor's and (ii)(A)
a short-term senior unsecured debt rating of A-l or better by Standard & Poor's
and (B) a short-term senior unsecured debt rating of P-1 or better by Moody's,
or any other long-term, short-term or certificate of deposit rating acceptable
to the Rating Agencies and (b) whose deposits are insured by the Federal Deposit
Insurance Corporation. If so qualified, Servicer, any Affiliate of Servicer,
Owner Trustee or Indenture Trustee may be considered an Eligible Institution.
"ELIGIBLE INVESTMENTS" shall mean any one or more of the following
types of investments:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution (including any Affiliate of Seller and Indenture Trustee,
Owner Trustee or any Affiliate of Indenture Trustee or Owner Trustee) or trust
company incorporated under the laws of the United States of America or any state
thereof or the District of Columbia (or any domestic branch of a foreign bank)
and subject to supervision and examination by United States federal or state
banking or depository institution authorities (including depository receipts
issued by any such institution or trust company as custodian with respect to any
obligation referred to in clause (a) above or a portion of such obligation for
the benefit of the holders of such depository receipts); provided that at the
time of the investment or contractual commitment to invest therein (which shall
be deemed to be made again each time funds are reinvested following each Payment
Date), the commercial paper or other short-term senior unsecured debt
obligations (other than such obligations the rating of which is based on the
credit of a person other than such depository institution or trust company) of
such depository institution or trust company shall have a credit rating from
Standard & Poor's of A-1 and from Moody's of P-1;
(c) commercial paper (including commercial paper of any Affiliate of
Seller and Indenture Trustee, Owner Trustee or any Affiliate of Indenture
Trustee or Owner Trustee) having, at the time of the investment or contractual
commitment to invest therein, a rating from Standard & Poor's of A-1 and from
Moody's of P-1;
(d) investments in money market funds (including funds for which
Indenture Trustee or Owner Trustee or any of their respective Affiliates or any
of Seller's Affiliates is investment manager or advisor) having a rating from
Standard & Poor's of AAA-m or AAAm-G and from Moody's of Aaa;
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
referred to in clause (b) above;
(g) a Qualified GIC; and
(h) any other investment with respect to which each Rating Agency has
provided written notice that such investment would not cause such Rating Agency
to downgrade or withdraw its then current rating of any class of Notes or the
Certificates.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EVENT OF DEFAULT" is defined in SECTION 5.1 of the Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any limited
liability company or partnership, a similar official with respect to any direct
or indirect member or general partner thereof.
"FEDERAL FUNDS RATE" means for each applicable date of determination,
the applicable effective Federal Funds rate, determined from the Board of
Governors of the Federal Reserve System at its internet website at
HTTP://WWW.BOG.FRB.FED.US/RELEASES/H15/CURRENT, or such other address as shall
replace such address, specified as the average rate for the preceding calendar
month. If such average rate is not so published on or before 3:00 p.m. New York
time on the date of determination, the Federal Funds Rate shall be the average
of the daily rates for each business day of the previous calendar month as
published on the date of determination on Telerate Page 118 under the heading
"Federal Funds Effective Rate." If such average rate is not published on the
Federal Reserve Board's website by 3:00 p.m. New York time on the date of
determination, or cannot be calculated due to the fact that Telerate Page 118 by
such time on the date of determination does not include a daily rate for each
Business Day in the previous calendar month, the Federal Funds Rate shall be the
average of the daily rates for the Business Days during the previous calendar
month for which rates are available on the date of determination on either the
Federal Reserve Board's website, or if not available there, Telerate Page 118.
"FINANCED VEHICLE" means a Vehicle, together with all accessions
thereto, securing an Obligor's indebtedness under the respective Receivable.
"FIRST PRIORITY PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with
respect to any Payment Date" an amount equal to the excess, if any, of (a) the
aggregate outstanding principal amount of the Class A Notes as of the preceding
Payment Date (after giving effect to any principal payments made on the Class A
Notes on such preceding Payment Date) over (b) the Pool Balance at the end of
the related Collection Period; PROVIDED, HOWEVER, that the First Priority
Principal Distribution Amount shall not exceed the sum of the aggregate
outstanding principal amount of all of the Notes on such Payment Date (prior to
giving effect to any principal payments made on the Notes on such Payment Date);
and PROVIDED, FURTHER, that the First Priority Principal Distribution Amount on
or after the Final Scheduled Payment Date of a Class of Class A Notes shall not
be less than the amount that is necessary to reduce the outstanding principal
amount of such Class of Class A Notes and all earlier maturing classes of Class
A Notes to zero.
"FIRST SECURITY ORIGINATOR" shall mean each ofo Wells Fargo Bank
Northwest, N.A., successor to First Security Bank, N.A. and Wells Fargo Bank New
Mexico, N.A., successor to First Security Bank of New Mexico, N.A.
"FIRST SECURITY RECEIVABLE" shall mean each Receivable that was
acquired by the Transferor from a First Security Originator.
"FREEDOMNATION ORIGINATOR" shall mean FreedomNation Financial LLC.
"FREEDOMNATION RECEIVABLE" shall mean each Receivable that was
acquired by the Transferor directly or indirectly from the FreedomNation
Originator.
"GAAP" is defined in SECTION 10.1 of the Sale and Servicing Agreement.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto. Other forms of the verb "to Grant"
shall have correlative meanings.
"HOLDER" means, as the context may require, a Certificateholder or a
Noteholder or both.
"INDEMNIFIED PARTIES" is defined in SECTION 8.2 of the Trust
Agreement.
"INDENTURE" means the Indenture dated as of June 1, 2001, between
Issuer and Indenture Trustee, as the same may be amended and supplemented from
time to time.
"INDENTURE TRUSTEE" means The Chase Manhattan Bank, a New York banking
corporation, not in its individual capacity but as trustee under the Indenture,
or any successor trustee under the Indenture.
"INDEPENDENT" means, when used with respect to any specified Person,
that the person (a) is in fact independent of Issuer, any other obligor upon the
Notes, Seller and any Affiliate of any of the foregoing persons, (b) does not
have any direct financial interest or any material indirect financial interest
(other than less than 5% of the outstanding amount of any publicly traded
security) in Issuer, any such other obligor, Seller or any Affiliate of any of
the foregoing Persons and (c) is not connected with Issuer, any such other
obligor, 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" means a certificate or opinion to be
delivered to 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 Administrator in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"INITIAL PRINCIPAL BALANCE" means, in respect of a Receivable, the
amount advanced under the Receivable toward the purchase price of the Financed
Vehicle and related costs, including accessories, service and warranty
contracts, insurance premiums, other items customarily financed as part of
retail loans and/or retail installment sales contracts and other fees charged by
an Originator or the applicable Dealer and included in the amount to be
financed, the total of which is shown as the initial principal balance in the
note and security agreement or retail installment sale contract evidencing and
securing such Receivable.
"INSOLVENCY EVENT" means, for a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver (including any
receiver appointed under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended), liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"INSURANCE POLICIES" means, all credit life and disability insurance
policies maintained by the Obligors and all Physical Damage Insurance Policies.
"INTEREST DISTRIBUTION SUBACCOUNT" shall mean the administrative
subaccount of the Note Distribution Account established and maintained as such
pursuant to SECTION 5.1 of the Sale and Servicing Agreement.
"INTEREST PERIOD" means, with respect to any Payment Date, the period
from and including the Closing Date (in the case of the first Payment Date) or
from and including the twentieth day of the calendar month preceding each
Payment Date to, but excluding, the twentieth day of the following calendar
month.
"INTEREST RATE" means, (a) with respect to the Class A-1 Notes, the
Class A-1 Interest Rate, (b) with respect to the Class A-2 Notes, the Class A-2
Interest Rate, (c) with respect to the Class A-3 Notes, the Class A-3 Interest
Rate, (d) with respect to the Class A-4 Notes, the Class A-4 Interest Rate, (e)
with respect to the Class A-5 Notes, the Class A-5 Interest Rate, (f) with
respect to the Class B Notes, the Class B Interest Rate, (g) with respect to the
Class C Notes, the Class C Interest Rate, (h) with respect to the Class D Notes,
the Class D Interest Rate and (i) with respect to the Class E Notes, the Class E
Interest Rate.
"IRS" means the Internal Revenue Service.
"ISSUER" means ACE RV and Marine Trust 2001-RV1.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request
signed in the name of Issuer by any one of its Authorized Officers and delivered
to Indenture Trustee.
"LIEN" means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind, other than liens for taxes
not yet due and payable, mechanics' or materialmen's liens and other liens for
work, labor or materials, and any other liens that may attach by operation of
law.
"LIQUIDATION PROCEEDS" means, with respect to any Receivable that has
become a Defaulted Receivable, (a) insurance proceeds received by Servicer with
respect to the Insurance Policies, (b) amounts received by Servicer in
connection with such Defaulted Receivable pursuant to the exercise of rights
under that Receivable and (c) the monies collected by Servicer (from whatever
source, including proceeds of a sale of a Financed Vehicle, a deficiency balance
recovered after the charge-off of the related Receivable or as a result of any
Dealer Recourse) on such Defaulted Receivable net of any expenses incurred by
Servicer in connection therewith and any payments required by law to be remitted
to the Obligor.
"LOAN" means a retail installment sales contract secured by a Vehicle
originated by a Dealer and purchased by an Originator or originated directly by
an Originator.
"LSE SERVICING AGREEMENT" means the Portfolio Servicing Agreement
dated as of September 14, 2000 between CSC Logic/MSA LLP d/b/a Loan Servicing
Enterprise and the Transferor.
"MOODY'S" means Moody's Investors Service, Inc., or its successor.
"NOTE" means a Class A Note, Class B Note, Class C Note, Class D Note
and Class E Note.
"NOTE DEPOSITORY AGREEMENT" means the letter of representations among
the Issuer, the Note Paying Agent and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to the Notes, as
the same may be amended or supplemented from time to time.
"NOTE DISTRIBUTION ACCOUNT" means the account designated as such,
established and maintained pursuant to SECTION 5.1 of the Sale and Servicing
Agreement.
"NOTE OWNER" means, with respect to a Book-Entry Note, the person who
is the owner of such Book-Entry Note, 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).
"NOTE PAYING AGENT" shall mean 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
payments to and distributions from the Trust Accounts, including payment of
principal of or interest on the Notes on behalf of the Issuer.
"NOTE POOL FACTOR" for each class of Notes as of the close of business
on a Payment Date means a seven-digit decimal figure equal to the outstanding
principal balance of such class of Notes divided by the original outstanding
principal balance of such class of Notes. The Note Pool Factor for each class of
Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor
for each class of Notes will decline to reflect reductions in the outstanding
principal balance of such class of Notes.
"NOTE REGISTER" and "NOTE REGISTRAR" are defined in SECTION 2.4 of the
Indenture.
"NOTEHOLDER" means the Person in whose name a Note is registered on
the Note Register.
"OBLIGOR" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the Receivable or
other Person who owes or may be primarily or secondarily liable for payments
under such Receivable.
"OFFICER'S CERTIFICATE" means: (a) for purposes of the Indenture, a
certificate signed by any Authorized Officer of Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of
SECTION 11.1 and TIA Section 314, and delivered to Indenture Trustee; and (b)
otherwise, a certificate signed by the chairman, the president, any vice
president or the treasurer of Seller or Servicer, as the case may be, and
delivered to 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 Issuer.
"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be employees of or
counsel to Issuer and who shall be satisfactory to Issuer, Owner Trustee or
Indenture Trustee, as applicable, and which opinion or opinions shall be
addressed to Issuer, Owner Trustee, or Indenture Trustee, as applicable and
shall be in form and substance satisfactory to the Issuer, Owner Trustee, and
Indenture Trustee, as applicable, which shall in no event be at the expense of
the Owner Trustee or Indenture Trustee.
"ORIGINAL POOL BALANCE" means the Pool Balance as of the Cutoff Date,
which was $308,072,046.00.
"ORIGINATOR" means, with respect to any Loan, as applicable, a First
Security Originator or the FreedomNation Originator.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(a) Notes theretofore canceled by Note Registrar or delivered to Note
Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with Indenture Trustee or any
Paying Agent in trust for the Holders of such Notes (provided that if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant to
the Indenture or provision therefor, satisfactory to Indenture Trustee); and
(c) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to Indenture Trustee is presented that any such Notes are held by a bona fide
purchaser;
provided 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 Issuer, any other obligor upon the Notes, Seller or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of Indenture
Trustee either actually knows to be so owned or has received written notice
thereof 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 Indenture Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not Issuer, any other obligor upon the Notes,
Seller or any Affiliate of any of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"OWNER TRUST ESTATE" means all right, title and interest of Issuer in
and to the property and rights assigned to Issuer pursuant to Article II of the
Sale and Servicing Agreement, all funds on deposit from time to time in the
Trust Accounts and the Certificate Distribution Account and all other property
of Issuer from time to time, including any rights of Owner Trustee and Issuer
pursuant to the Sale and Servicing Agreement.
"OWNER TRUSTEE" means U.S. Bank Trust National Association, a national
banking association, not in its individual capacity but solely as owner trustee
under the Trust Agreement, and any successor Owner Trustee hereunder.
"PAYING AGENT" means: (a) when used in the Indenture or otherwise with
respect to the Notes, Indenture Trustee or any other Person that meets the
eligibility standards for Indenture Trustee specified in SECTION 6.11 of the
Indenture and is authorized by Issuer to make the payments to and distributions
from the Collection Account and the Note Distribution Account, including payment
of principal of or interest on the Notes on behalf of Issuer; and (b) when used
in the Trust Agreement or otherwise with respect to the Certificates, Owner
Trustee or any other paying agent or co-paying agent appointed pursuant to
SECTION 3.9 of the Trust Agreement.
"PAYMENT DATE" means the 20th day of each month (or, if the 20th day
is not a Business Day, the next succeeding Business Day), commencing July 2001.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PHYSICAL DAMAGE INSURANCE POLICY" means a theft and physical damage
insurance policy maintained by the Obligor under a Receivable, providing
coverage against loss or damage to or theft of the related Financed Vehicle.
"PHYSICAL PROPERTY" is defined in the definition of "Delivery" above.
"POOL BALANCE" means, at any time, the aggregate Principal Balance of
the Receivables (excluding Purchased Receivables and Defaulted Receivables) at
such time.
"PREDECESSOR NOTE" means, 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 BALANCE" means, as of any time, for any Receivable, the
principal balance of such Receivable under the terms of the Receivable
determined in accordance with the Servicer's customary practices.
"PRINCIPAL DISTRIBUTION SUBACCOUNT" shall mean the administrative
subaccount of the Note Distribution Account established and maintained as such
pursuant to SECTION 5.1 of the Sale and Servicing Agreement.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PURCHASE AGREEMENT" means the agreement dated as of June 1, 2001
between Transferor and Seller under which Transferor sells Receivables to
Seller.
"PURCHASE AMOUNT" of any Receivable means, with respect to any Deposit
Date and the last day of the related Collection Period, an amount equal to the
sum of (a) the outstanding Principal Balance of such Receivable as of the last
day of such Collection Period and (b) the amount of accrued and unpaid interest
on such Principal Balance at the related Contract Rate from the date a payment
was last made by or on behalf of the Obligor through and including the last day
of such Collection Period, in each case after giving effect to the receipt of
monies collected on such Receivable in such Collection Period.
"PURCHASED RECEIVABLE" means a Receivable purchased as of the close of
business on the last day of a Collection Period by Servicer pursuant to SECTION
4.7 of the Sale and Servicing Agreement or repurchased by Seller (or an entity
the Seller caused to repurchase) pursuant to SECTION 3.3 of the Sale and
Servicing Agreement.
"QUALIFIED GIC" means a guaranteed investment contract or surety bond
providing for the investment of funds in the Collection Account or the Reserve
Account and insuring a minimum, fixed or floating rate of return on investments
of such funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two highest
rating categories or, if such insurance company has long-term debt, whose claims
paying ability is rated by each Rating Agency in one of its two highest rating
categories, and whose short-term debt is rated by each Rating Agency in its
highest rating category;
(b) provide that the Indenture Trustee may exercise all of the rights
under such contract or surety bond without the necessity of taking any action by
any other Person;
(c) provide that if at any time the then current credit standing of
the obligor under such guaranteed investment contract is such that continued
investment pursuant to such contract of funds would result in a downgrading of
any rating of any Class of Notes, the Indenture Trustee shall terminate such
contract without penalty and be entitled to the return of all funds previously
invested thereunder, together with accrued interest thereon at the interest rate
provided under such contract to the date of delivery of such funds to the
Indenture Trustee;
(d) provide that the Indenture Trustee's interest therein shall be
transferable to any successor indenture trustee; and
(e) provide that the funds reinvested thereunder and accrued interest
thereon be returnable to the Collection Account or the Reserve Account, as the
case may be, not later than the Business Day prior to any Payment Date.
"RATING AGENCIES" means Moody's and Standard & Poor's.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified Seller, Servicer, Owner Trustee or
Indenture Trustee in writing that such action will, in and of itself, result in
a reduction, qualification or withdrawal of the then current rating of any class
of Notes, or the Certificates.
"RECEIVABLE" means each Loan described in the Schedule of Receivables,
but excluding (i) Defaulted Receivables to the extent the Principal Balances
thereof have been deposited in the Collection Account and (ii) any Purchased
Receivables.
"RECEIVABLE FILES" is defined in SECTION 3.4 of the Sale and Servicing
Agreement.
"RECORD DATE" means, with respect to any Payment Date or Redemption
Date, the close of business on the Business Day immediately preceding such
Payment Date or Redemption Date; or, with respect to Definitive Notes or
Definitive Certificates, the last day of the month preceding such Payment Date
or Redemption Date.
"REDEMPTION DATE" means in the case of a redemption of the Notes
pursuant to SECTION 10.1(A) of the Indenture or a payment to Noteholders
pursuant to SECTION 10.1(B) of the Indenture, the Payment Date specified by
Servicer or Issuer pursuant to such SECTION 10.1(A) or (B).
"REDEMPTION PRICE" means, in the case of a redemption of the Notes
pursuant to SECTION 10.1(A) of the Indenture, an amount equal to the unpaid
principal amount of the then outstanding Notes plus accrued and unpaid interest
thereon to but excluding the Redemption Date and any amounts owing to the
Indenture Trustee pursuant to the Basic Documents.
"REGULAR PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with respect to
any Payment Date, an amount not less than zero equal to (x) the sum of (a) the
decrease in the Pool Balance during the related Collection Period plus (b) the
portion, if any, of the Regular Principal Distribution Amount payable on the
prior Payment Date that was not paid on the prior Payment Date minus (y) the sum
of the First Priority Principal Distribution Amount, if any, the Second Priority
Principal Distribution Amount, if any, and the Third Priority Principal
Distribution Amount, if any, previously deposited to the Principal Distribution
Subaccount each with respect to such Payment Date; provided, however, that the
Regular Principal Distribution Amount shall not exceed the sum of the aggregate
outstanding principal amount of all of the Notes on such Payment Date (after
giving effect to any principal payments made on the Notes on such Payment Date
in respect of the First Priority Principal Distribution Amount, if any, the
Second Priority Principal Distribution Amount, if any and the Third Priority
Principal Distribution Amount, if any); and provided, further, that the Regular
Principal Distribution Amount on or after the Class D Final Scheduled Payment
Date shall not be less than the amount that is necessary to reduce the
outstanding principal amount of the Class D Notes to zero and on or after the
Class E Final Scheduled Payment Date shall not be less than the amount that is
necessary to reduce the outstanding principal amount of the Class E Notes to
zero.
"RELATED AGREEMENTS" shall have the meaning specified in the recitals
to the Administration Agreement.
"REQUIRED RATING" means a rating with respect to short term deposit
obligations of at least P-1 by Moody's and at least A-1 by Standard & Poor's.
"RESERVE ACCOUNT" means the account designated as such, established
and maintained pursuant to SECTION 5.8 of the Sale and Servicing Agreement.
"RESERVE ACCOUNT PROPERTY" means the Reserve Account and all proceeds
of the Reserve Account, including all securities, investments, general
intangibles, financial assets and investment property from time to time credited
to and any security entitlement to the Reserve Account.
"RESERVE ACCOUNT REQUIRED AMOUNT" means, with respect to any Payment
Date, the lesser of (1) $3,080,720.46 (1.00% of the Pool Balance as of the
Cutoff Date) and (2) the then outstanding principal amount of the Notes.
"RESERVE ACCOUNT TRANSFER AMOUNT" means, with respect to any Payment
Date, an amount equal to the lesser of (a) the amount of cash or other
immediately available funds on deposit in the Reserve Account on such Payment
Date, and (b) the amount, if any, by which (1) the Total Required Payments for
such Payment Date exceeds (2) the Available Funds for such Payment Date.
"RESPONSIBLE OFFICER" means, with respect to Indenture Trustee, any
officer within the Corporate Trust Office of Indenture Trustee and having
responsibility with respect to the Notes and the other Basic Documents,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary, or any other officer of Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject and, in each case, having direct
responsibility for the administration of the Basic Documents.
"SALE AGREEMENTS" means the agreements pursuant to which the
Transferor acquired the Receivables.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
among Issuer, Indenture Trustee, the Servicer, the First Securities Originators
and the Seller, dated as of June 1, 2001, as the same may be amended and
supplemented from time to time.
"SCHEDULE OF RECEIVABLES" means, with respect to the Loans to be
conveyed to Seller to Issuer, the list identifying such Loans delivered to
Indenture Trustee at the Closing.
"SECOND PRIORITY PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with
respect to any Payment Date, an amount not less than zero equal to (i) the
excess, if any, of (a) the sum of (1) the aggregate outstanding principal amount
of the Class A Notes and Class B Notes as of the preceding Payment Date (after
giving effect to any principal payments made on the Class A Notes and the Class
B Notes on such preceding Payment Date) over (b) the Pool Balance at the end of
the related Collection Period, minus (ii) the First Priority Principal
Distribution Amount, if any, previously deposited to the Principal Distribution
Subaccount with respect to such Payment Date; provided, however, that the Second
Priority Principal Distribution Amount shall not exceed the aggregate
outstanding principal amount of the Notes on such Payment Date (after giving
effect to any principal payment made on the Notes on such Payment Date in
respect of the First Priority Principal Distribution Amount, if any); and
provided, further, that the Second Priority Principal Distribution Amount on or
after the Class B Final Scheduled Distribution Date shall not be less than the
amount that is necessary to reduce the outstanding principal amount of the Class
B Notes to zero.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES INTERMEDIARY" is defined in SECTION 5.8 of the Sale and
Servicing Agreement.
"SELLER" means ACE Securities Corp., a Delaware corporation, and any
successor pursuant to SECTION 6.4 of the Sale and Servicing Agreement.
"SERVICER" means Wells Fargo Bank, N.A. and each Successor Servicer.
"SERVICER TERMINATION EVENT" means an event specified in SECTION 8.1
of the Sale and Servicing Agreement.
"SERVICER'S REPORT" means a report of Servicer delivered pursuant to
SECTION 4.9 of the Sale and Servicing Agreement, substantially in the form of
Exhibit A to that agreement.
"SERVICING FEE" is defined in SECTION 4.8 of the Sale and Servicing
Agreement.
"SERVICING FEE RATE" means 1.00% per annum.
"SIMPLE INTEREST METHOD" means the method of allocating a fixed level
payment monthly installments between principal and interest, pursuant to which
such payment is allocated first to accrued and unpaid interest at the Contract
Rate on the unpaid principal balance and the remainder of such payment is
allocable to principal.
"SIMPLE INTEREST RECEIVABLE" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., or its successor.
"STATE" means any one of the 50 states of the United States of America
or the District of Columbia.
"SUCCESSOR SERVICER" is defined in SECTION 3.7(E) of the Indenture.
"SUPPLEMENTAL SERVICING FEE" is defined in Section 4.8 of the Sale and
Servicing Agreement.
"THIRD PRIORITY PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with
respect to any Payment Date, an amount not less than zero equal to (i) the
excess, if any, of (a) the sum of (1) the aggregate outstanding principal amount
of the Class A Notes, Class B Notes and the Class C Notes as of the preceding
Payment Date (after giving effect to any principal payments made on the Class A
Notes, Class B Notes and the Class C Notes on such preceding Payment Date) over
(b) the Pool Balance at the end of the related Collection Period, minus (ii) the
First Priority Principal Distribution Amount, if any, and the Second Priority
Principal Distribution Amount, if any, previously deposited to the Principal
Distribution Subaccount with respect to such Payment Date; provided, however,
that the Third Priority Principal Distribution Amount shall not exceed the
aggregate outstanding principal amount of the Notes on such Payment Date (after
giving effect to any principal payment made on the Notes on such Payment Date in
respect of the First Priority Principal Distribution Amount, if any and the
Second Priority Principal Distribution Amount, if any,); and provided, further,
that the Third Priority Principal Distribution Amount on or after the Class C
Final Scheduled Distribution Date shall not be less than the amount that is
necessary to reduce the outstanding principal amount of the Class C Notes to
zero.
"TOTAL DISTRIBUTION AMOUNT" means, for each Payment Date, the sum of
(a) the Available Funds and (b) the Reserve Account Transfer Amount, in each
case in respect of such Payment Date.
"TOTAL REQUIRED PAYMENTS" shall mean, with respect to any Payment
Date, the sum of the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods, amounts payable to the Owner Trustee and the Indenture
Trustee with respect to such Payment Date pursuant to Section 4.16 of the Sale
and Servicing Agreement, the Accrued Class A Note Interest, the First Priority
Principal Distribution Amount, the Accrued Class B Note Interest, the Second
Priority Principal Distribution Amount, the Accrued Class C Note Interest, the
Third Priority Principal Distribution Amount, the Accrued Class D Note Interest,
the Accrued Class E Note Interest and the Regular Principal Distribution Amount;
provided, however, that following the occurrence and during the continuance of
an Event of Default which has resulted in an acceleration of the Notes, on any
Payment Date until the Payment Date on which the outstanding principal amount of
all of the Notes has been paid in full, the Total Required Payment shall mean
the sum of the Servicing Fee and all unpaid Servicing Fees from prior Collection
Periods, amounts payable to the Owner Trustee and the Indenture Trustee with
respect to such Payment Date pursuant to Section 4.16 of the Sale and Servicing
Agreement, the Accrued Class A Note Interest, the Accrued Class B Note Interest,
the Accrued Class C Note Interest, the Accrued Class D Note Interest, the
Accrued Class E Note Interest and the amount necessary to reduce the outstanding
principal mount of all notes to zero.
"TRANSFEROR" means German American Capital Corporation.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code.
"TRIGGER EVENT" will be in effect for a Payment Date commencing with
the Crossover Date if one of the following conditions occur:
o the Average Sixty-Day Delinquency Ratio as of the last day of the
related Collection Period exceeds 5.00%;
o the Cumulative Realized Losses as of the last day of the related
Collection Period exceeds the following percentages of the
Original Pool Balance for the specified Payment Date:
July 2005 through June 2006.................. 3.50%
July 2006 through June 2007.................. 4.25%
July 2007 and after.......................... 5.00%;
o the amount on deposit in the Reserve Account for two consecutive
Payment Dates is less than the Reserve Account Required Amount
provided that this Trigger Event will no longer be in effect if
the amount on deposit in the Reserve Account for three
consecutive Payment Dates thereafter equals the Reserve Account
Required Amount; or
o the aggregate outstanding principal amount of the Notes
immediately preceding the Payment Date is greater than the Pool
Balance as of the last day of the second Collection Period
preceding the Payment Date.
"TRUST" shall mean ACE RV and Marine Trust 2001-RV1, a Delaware
business trust established pursuant to the Trust Agreement.
"TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"TRUST ACCOUNTS" is defined in SECTION 5.1 of the Sale and Servicing
Agreement.
"TRUST AGREEMENT" means the Trust Agreement dated as of June 1, 2001,
between Seller, Owner Trustee, Certificate Registrar and Paying Agent, as the
same may be amended and supplemented from time to time.
"TRUST ESTATE" means 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 (including all property and
interests Granted to Indenture Trustee), including all proceeds thereof.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939
and the rules and regulations promulgated thereunder, as in force on the date
hereof, unless otherwise specifically provided.
"TRUST PROPERTY" shall have the meaning set forth in SECTION 2.1 of
the Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect from time to
time in the relevant jurisdiction. References to specific provisions of the UCC
are based on the provisions of the UCC as in effect in the State of New York as
of the date hereof, and shall be deemed to include any successor provisions.
"VEHICLE" means a new or used recreational vehicle, trailer, boat or
other sport recreational vehicle.